Football season is back in full swing, and football loyalists will likely agree that nothing beats the opportunity to experience game day in the flesh. In 2016, the NFL sold over 30 million tickets at an average price at $81.54 apiece, according to Statistic Brain Research Institute. One would think that the athletic stadiums that professional sports teams call home may also have the capacity to generate a tremendous amount of property tax revenue for state and local governments, but this is not always the case. Hundreds of sports stadiums have popped up in the U.S. over the last two decades, and many of them were constructed with public funding, according to Pacific Standard. It is likely that many of them are exempt from property tax, as property owned by states, counties, cities and other political subdivisions is often exempt when held for a public purpose.
Take AT&T stadium in Arlington, Tex., for example. The stadium is owned by the city, making it public property. And, although most sports fans know it as the home of the Dallas Cowboys, it also contains an art museum and offers educational tours for the public. Texas law explicitly provides that property owned by the state or a political subdivision is exempt from property tax if it is used for a public purpose. As such, the stadium fits the bill and qualifies for an exemption from property tax based on its ownership and use.
Despite complaints over the use of public monies to build sporting facilities, there are those that have been constructed using private funds. But that doesn’t mean that cities and counties that are home to these privately-owned stadiums are maxing out on potential property tax revenue. Gillette Stadium, for instance, home to this year’s Super Bowl champs, the New England Patriots, is owned and controlled by The Kraft Group. Massachusetts law generally provides that privately owned for-profit athletic facilities, amusement parks, and water parks are subject to property tax; however, reports indicate that the Foxborough, the town where the stadium is located, accepted a payment in lieu of taxes (PILOT) from a portion of ticket sales made at the stadium. In February 2016, The Kraft Group pointed out that “[t]he stadium’s event season for Fiscal Year 2016 … generated the most … [PILOT] revenue in town history.” Moreover, a June 6, 2017, Standard and Poor’s increased the town’s credit rating, reporting that that town officials anticipated a surplus based primarily on the Gillette Stadium PILOT and building permit revenues.
Met Life Stadium, located in East Rutherford, N.J., and home to both the New York Giants and Jets, was also financed with private revenue. Similarly, rather than paying property taxes, the borough agreed to accept a sizeable payment in lieu of taxes paid through the New Jersey Sports and Exposition Authority, the state agency which owns the land on which the stadium is constructed.
Although stadium owners’ payments can be quite substantial, generally speaking, PILOT contributions generate less revenue than what property taxes would if they were assessed against all or part of the property’s value. But such agreements are often tradeoff for the economic growth and/or increase in tax revenue generated by other tax types, which is anticipated to result from the activities these stadiums have to offer. That being said, this situation is not necessarily the same for all teams. The Miami Dolphins, the Carolina Panthers, and the Washington Redskins reportedly “pay property taxes on their stadiums,” according to the Miami Herald.
Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Does your favorite sports team pay property taxes on its stadium?
Get a free trial to Bloomberg BNA Tax &
State Tax solution, a comprehensive research service that
provides deep analysis and time-saving practice tools to help practitioners
make well-informed decisions.
 The facility was reportedly constructed using revenue generated by the city’s sale of more than $200 million dollars’ worth of bonds, which are being paid with from a percentage of sales and excise taxes collected.
 Tex. Tax Code Ann. §11.11(a).
 The land beneath the stadium belongs to the town of Foxborough and is tax-exempt.
 Mass. Gen. L. ch. 59, §2.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)