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Legislature set to give tax breaks to big events: NCAA asks for 'super' perk that NFL already requires

March 3, 2008

Lawmakers last year approved a bill that would have given the NFL a onetime tax break on spending and revenue tied to the 2011 Super Bowl, a moot point once team owners awarded the game to Dallas.

Now, similar legislation has passed both chambers of the General Assembly-this time extending the exemption to the NCAA, which has committed to hosting its Final Four basketball championships in Indianapolis regularly through 2039.

If signed into law, the measure would allow the NFL and NCAA to keep any sales- or ticket-tax revenue collected in connection with their games beginning in 2012. It also would give a tax exemption

to any event-related purchases the organizations make.

Although the NCAA hasn't asked for tax breaks in the past, they're now a bid requirement to "parallel the privileges the Super Bowl people are getting," said Noblesville Republican Luke Kenley, who is carrying the bill in the Senate.

"In the past, they've not been as demanding, but they're taking a page out of the NFL's book," Kenley said.

The NFL also includes the tax exemption as part of its Super Bowl bidding requirements. Indianapolis is vying to host the 2012 game.

It's difficult to calculate the value of the tax breaks. Even the Legislative Services Agency, which estimates the fiscal impact of bills for lawmakers, couldn't come up with a figure, calling it "indeterminable."

The main perk appears to be the break on the ticket taxes. At this year's Super Bowl in Glendale, Ariz., for example, the NFL saved $4.3 million by not remitting sales tax on tickets, league spokesman Greg Aiello said. When Arizona won the bid, that was the only required tax exemption.

Observers said the perk would amount to much less for the NCAA, perhaps topping out at $300,000 per event since tickets are less expensive.

There's little controversy about the legislation at the Statehouse, where many lawmakers think the breaks will pay off. A Super Bowl could bring $120 million to $150 million in direct spending to the region, and an Indiana University study found that basketball fans spent $40 million during the 2006 Men's Final Four in Indianapolis. Women's Final Four attendees spent $19 million here in 2005.

"What's good for Indianapolis is good for Indiana," said state Rep. Terry Goodin, the Crothersville Democrat who authored the legislation that originally changed only how recreational vehicles are taxed. The Senate added the NFL and NCAA tax breaks, but Goodin supports them.

"The investment is minimal compared to the money we get back," he said.

Although the Indianapolis-based NCAA agreed in 2004 to host a Men's Final Four in its hometown on average once every five years from 2012 through 2039, the city still must bid and meet the bid requirements.

An NCAA committee is expected to pick the 2012-2016 host cities in November; Indianapolis is among the bidders.

One expert said the tax breaks are not a case of the NFL or NCAA demanding more from host cities as much as the organizations codifying perks they're already being offered.

"The cities that want these events are becoming more aggressive and the bid specs are changing to reflect that," said consultant Marc Ganis, president of Chicago-based Sportscorp Ltd.

Still, the question remains whether other event organizers will get in the taxbreak game, too. Kenley admitted he asked himself that question when he was approached about adding the NCAA exemption.

"Where is this going to stop?" he said. "It's an open question."

But Ganis said few events could make the case the way a Super Bowl or Final Four can.

"Those are the only two big ones out there [for bidding] right now," he said.

The tax-exemption legislation, meanwhile, likely is headed to a conference committee where House and Senate leaders can hammer out differences in an unrelated portion of the bill.
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