Assessing the Impact of the 2017 Tax Reform on College Athletic Donations Related to Ticket Sales

Abstract

The Tax Cuts and Jobs Act (TCJA) of 2017 affected many traditional tax deductions for a variety of organizations. One that went under the radar for many, except those in the college sport ecosystem, was the removal of a deduction for donations related to college sport ticket sales. Developed from the Technical and Miscellaneous Revenue Act of 1988, IRC §170(l) provided individual taxpayers the ability to claim 80% of the amount paid over the value of tickets to college athletic events as a charitable contribution. TCJA eliminated this itemized deduction, which concerned several university athletic directors about the long-term effects of this change on their program’s revenue generation. This article assesses the history of the development and application of IRC §170(l) and determines whether these contributions should have been allowed as a charitable deduction overall. The article also examines the impact of IRC §170(l) after TCJA’s implementation, finding the athletic directors’ collective feared impact of reduced contribution revenues was not significant based on available data. Donors appear motivated by more than just the tax benefit, and the removal of the deduction did little to affect overall contributions.