PGA Tour in danger of losing tax privileges

According to Golf Channel on July 27, Senator Ron Wyden, as Chairman of the Senate Finance Subcommittee, has introduced two bills titled "Tax Exempt Restrictions on Sports Arenas" and "Dots" end tax incentives for large-scale investment funds belonging to foreign governments". These are two tools that are expected to have a direct impact on tax obligations for the legal entity that owns and operates the PGA Tour as well as the Saudi Public Investment Fund (PIF) - the owner of the LIV Golf League, when the two sides are promoting the agreement. preliminary in the project to combine commercial activities with DP World Tour.

PGA Tour registers with code 501(c)(6). This category is tax exempt. By 2022, the total net worth of the PGA Tour is more than one billion USD, while the Saudi PIF holds about 650 billion USD when combining wealth and multinational investment activities. But it is the current financials that push these two institutions into a new pair of bills from the Senate.

The bill "Restrictions on Tax Exemptions for Sports Arenas" is proposing to impose taxes on sports organizations with assets over $500 million. The bill "Ending tax incentives for large-scale investment funds belonging to foreign governments" will apply to foreign economic organizations with more than 100 billion USD of investment globally.

"An organization has disqualified itself from tax exemption for its act of betraying its word and accepting money for the repressive regime in Saudi Arabia," Senator Wyden alluded to the PGA Tour during the announcement of the new mechanism.

The US government is concerned about golf being taken over and affecting national security when the PGA Tour agreed to do business with PIF Saudi after a year of conflict.

On July 11, the Senate Specialized Subcommittee opened an interview with the leaders of the two sides. They invited PGA Tour special envoy Jay Monahan, PIF Saudi President Yasir Al-Rumayyan and LIV Golf League CEO Greg Norman by name. However, all three litigants were absent, in which Monahan was still on sick leave until July 17, Al-Rumayyan and Norman could not arrange their own affairs. And so, the PGA Tour sent two leaders of Monahan's subordinates to testify. Yesterday, the US Senate authorities sent a letter asking Al-Rumayyan to confront the second session, scheduled for September. The supreme figure in PIF Saudi was given a deadline to respond on August 4.