Congress quietly exempts sports franchises from tax cap on athlete pay
H.R. 10682 — To amend the Internal Revenue Code of 1986 to provide parity in the taxation of professional sports franchises under the limitation on the deduction for certain employee remuneration, and for other purposes. · Filed by Nicole Malliotakis (R-NY) · 5 cosponsors · Introduced Oct 1, 2026 · Referred to committee
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What it does
This bill amends the tax code to exempt professional athletes from the $1 million cap on corporate tax deductions for executive compensation. Currently, companies can only deduct up to $1 million per year in pay for their top five executives; this bill carves out anyone who 'performs services in the field of athletics,' allowing sports franchises to deduct unlimited athlete salaries as a business expense. The change takes effect for tax years after December 31, 2026.
Why we flagged it
The bill's operative mechanism is a targeted tax exemption for a single industry—professional sports—removing athlete compensation from the general $1 million deduction cap that applies to all other employers. This is a classic tax carve-out benefiting a narrow private sector.
What the text implies
- The exemption applies to 'any individual who performs services in the field of athletics' — potentially broader than just star players; could extend to coaches, trainers, and other sports-industry personnel employed by franchises.
- Creates a permanent structural advantage for sports franchises over other industries in deducting employee compensation, widening the tax gap between sectors.
- The reference to CFR section 1.199A–5(b)(2)(viii) anchors the definition to existing regulatory language, but that regulation's scope and any future amendments to it will silently alter the bill's reach without requiring new legislation.
- No corresponding revenue offset or public benefit is specified; the bill is pure tax expenditure with no quid pro quo for the public.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Ordinary taxpayers bear the cost of foregone federal revenue from unlimited athlete-salary deductions claimed by sports franchises, while the benefit flows narrowly to wealthy team owners and highly compensated athletes. The public receives no offsetting service or protection; this is a direct transfer of tax burden from a specific industry to the general taxpayer base.
Who stands to gain
- professional sports franchises (NFL, NBA, MLB, NHL, MLS teams)
- highly compensated professional athletes
- sports team ownership groups
Named in the bill
Internal Revenue Code Section 162(m), 26 CFR 1.199A–5(b)(2)(viii), professional sports franchises, IRS
Where it stands
5 cosponsors: 3 Republicans, 2 Democrats.
- Oct 1, 2026 — Introduced · Congress.gov: “Introduced in House”
- Oct 1, 2026 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (822 characters) on Oct 6, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
As of — page rendered 2026-10-20.
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