Tax-exempt stadium bonds back in Congressional crosshairs

Graeme Sloan/Bloomberg

The use of tax-exempt bonds for professional sports stadiums is once again under scrutiny from skeptical federal lawmakers. A pair of bipartisan Senate and House bills are taking aim at stadium bonds while last week a Congressional report highlighted the financing tool ahead of a House Ways and Means Committee hearing set for Tuesday.

The hearing, titled "The growing business of sports: reviewing federal tax policy in the multi-billion dollar industry," will "examine the rapidly evolving business of sports and the tax issues implicated by its growth and transformation," a committee notice said. The Joint Committee on Taxation, a research arm of the committee, released a briefing book for the hearing that includes tax-exempt stadium financing as one of six topics that the JCT was apparently asked to research.

Meanwhile, the House and Senate both have active bills that would eliminate the ability of governments to issue tax-exempt bonds for the construction of professional sports stadiums, which are defined broadly in the legislation.

"Congress is sometimes criticized for providing special tax breaks for wealthy individuals and when it comes to sports stadiums, it is true," said Rep. Glenn Grothman, R-Wis., one of the sponsors of the House bill, in a press release. "We should no longer allow provisions that were intended to help local communities build infrastructure, like roads, be abused to help subsidize multi-billion dollar sports franchises and owners. Hardworking Americans should not be forced to finance billion-dollar sports stadiums."

Lawmakers have floated several bills over the years, many of which have been bipartisan, to eliminate the use of tax-exempt private activity bonds for the financing of sports stadiums. All have failed to gain traction but the issue continues to pop up during almost every Congressional session.

The closest that previous efforts to target stadium bonds came to fruition was in 2017, in the House version of the Tax Cuts and Jobs Act. The provision, which included state or private college athletic stadiums, was dropped during the House-Senate conference committee on final legislation.  

The National Football League, which has lobbied on the issue, is a member of the Public Finance Network, said Emily Brock, federal liaison for the Government Finance Officers Association, who talked about the issue Saturday to the GFOA's debt committee during the association's 2026 conference in Chicago.

The GFOA is closely tracking the issue, Brock said. The National Association of Bond Lawyers is also working on it, according to NABL chief policy officer Brian Egan.

"We're paying significant attention to this because, in reality, let's just take the NFL out of the discussion, let's take sports out of the discussion — this is a federal government preemption of the local government's decision to issue tax-exempt bonds," Brock said.

"The ultimate impact, I think, of this bill is to penalize professional sports and to the extent that we are a conduit or an acting agent in the issuance of bonds that help to erect their facilities, we may be shrapnel, we may be collateral," she said.

The invited witnesses who will testify at Tuesday's hearing are Sam Acho, former NFL linebacker and director at the athlete-focused investment office AWM Capital; Thad Madden, NIL tax consultant and former IRS officer; Robert Raiola, director of the sports and Entertainment group at PKF O'Connor Davis, LLP; and Dennis Coates, an economics professor at the University of Maryland.

The office of committee chair Rep. Jason Smith, R-Mo., did not respond to requests for comment.

"We know the hearing may have some consequence, but it will be an ongoing conversation that we don't likely see as definitive action that will head over to the Senate necessarily from this singular hearing," Brock said.

The legislation, the No Tax Subsidies for Stadiums Act, was introduced last April in the House with a Senate companion bill by Sen. James Lankford, R-Okla., and Sen. Cory Booker, D-N.J.

The measure features a broad definition of professional sports stadiums, said GFOA senior policy advisor Paige Mellerio. The definition includes any facility that "during at least five days during any calendar year, is used as a stadium or arena for professional sports exhibitions, games, or training."

"The definition here of a professional sports stadium could capture a lot of facilities that might not necessarily be what we would view as professional sports stadiums," Mellerio told the debt committee. The five-day provision "could affect a lot of other facilities beyond big mega sports stadiums," she said.

Since 2000, 43 professional sports stadiums have been financed with tax-exempt municipal bonds, "costing American taxpayers an estimated $4.3 billion in lost federal revenue," according to an April 2025 press release from Grothman and Rep. Don Beyer, D-W. Va.

The release may be relying on numbers from a March 2020 paper from the National Tax Journal arguing against the subsidies that estimated $16.7 billion of tax-exempt bonds have been issued since 2000 to finance 43 new or majorly renovated stadiums. The present value federal tax revenue loss from those deals totaled $4.3 billion, assuming a 3% discount rate, in 2018 dollars, the journal said.