H.R. 10767: Fair Play Enforcement Act

This bill would add a new federal excise tax for colleges and universities that let certain people play in intercollegiate sports when the school knows they fall into one of two categories:

• someone who has placed a wager on an intercollegiate athletic event or competition; or
• someone who has been employed as an athlete by a professional sports team and appeared on that team’s roster for a similar event or competition.

What triggers the tax

The tax would apply if an eligible educational institution commits an “athletic participation violation,” meaning it knowingly allows one of those specified individuals to actively participate in a college athletic event or competition.

The bill does not treat the following as violations:

• the person only practices, but does not actually play in the event;
• the person is listed on a roster but does not actively participate; or
• the person plays because a court orders it.

How the tax would be calculated

The tax would be based on the school’s gross athletic receipts, meaning the receipts tied to the school’s athletic programs. The percentage depends on how many violations the school has during the current tax year and the previous five tax years:

• 1 violation: 5%
• 2 violations: 10%
• more than 2 violations: 20%

If multiple violations arise from the same set of facts and circumstances, the Secretary of the Treasury could treat them as one violation.

Other provisions

The bill directs the Treasury Department to issue rules or guidance needed to carry out the tax. It would take effect for taxable years ending after the date the bill is enacted.

Relevant Companies

None found.