KC Chiefs are champs again, this time with a tax victory
Wednesday, June 03, 2020
Kansas City Chiefs quarterback Patrick Mahomes celebrating his team's victory. (Image via GIPHY)
The Kansas City Chiefs are champions again, this time coming out victorious in a courtroom tax match-up.
Exactly four months after the Chiefs won Super Bowl LIV, the Missouri Supreme Court delivered the National Football League franchise a decisive victory in its effort to avoid paying sales taxes.
It ends the tax fight that began in 2014 when the Chiefs appealed a Missouri Department of Revenue panel's decision that the team owes more than $1 million in back taxes related to the refurbishment of Arrowhead Stadium.
Sales tax responsibility questions: As noted in the ol' blog's prior coverage of this sales tax fight, at issue was sales tax due on $23 million in purchases made to upgrade the NFL team's facility.
Missouri tax officials argued that the Chiefs improperly used some of a Jackson County Sports Authority tax exemption during the stadium renovation.
The team countered that it was just a contractor and therefore not responsible for the state sales tax bill. All expenditures for the renovation officially were made by Jackson County and not the Chiefs.
In addition, according to the Chiefs' lawyers, the Missouri Finance Development Board had granted a tax credit specifically for the fund covering the stadium's upgrades. The tax break, the noted, exempted both the team and the county authority from specific state taxes.
Late-game, and courtroom, victory: The Chiefs' tax attorneys, like the team they represented, had to come from behind for this legal victory. An earlier Administrative Hearing Commission (AHC) had gone against them.
This time, though, the KC counselors' arguments before the Missouri high court apparently were as persuasive as the on-filed actions of the team's players back on Feb. 2. Back then in South Florida, the Chiefs put up 21 unanswered fourth quarter points to capture the professional U.S. football league title.
"[T]he AHC's decision was not authorized by law," wrote Jude Laura Denvir Stith in finding in her June 2 ruling in favor of the Chiefs and the Jackson County Sports Complex Authority.
"The team was not the source of the consideration for the contested items and, therefore, was not the purchaser of the items for sales and use tax purposes. The AHC’s decision is reversed, and judgment is entered in the team's favor," concluded Stith, with her fellow jurists all concurring.
The high court decision likely won't get as much popular attention as the Kansas City Chiefs players hoisting the Vince Lombardi trophy earlier this year. And there definitely won't be a victory parade.
But I suspect one thing was the same this month. Team owners and their attorneys likely popped some champagne corks to celebrate their tax victory.
You also might find these items of interest:
- Tax subsidies for sports facilities under fire again
- Super Bowl rooting reasons and tax residency implications
- 'Justin' Bieber and other collectible baseball cards face a special capital gains tax rate
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