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119-s-5661119th CongressWALLET

A bill 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 renumeration, and for other purposes.

Sponsored By: Senator Warnock, Raphael G. [D-GA]

Introduced

Summary

Exempts athletes from the 'top-five' $1 million deduction cap calculation under Section 162(m). This bill would exclude employees who perform services in athletics from being counted among the five highest compensated employees, which can let franchises deduct more player pay.

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  • Professional sports teams and players: Teams could deduct more athlete compensation because athletes would not count toward the five highest compensated employees for the $1 million deduction limit.
  • Non-athletic executives and staff: Executives and other non-athletic employees would still be counted for the five-person test and remain subject to the $1 million cap.
  • Rules and timing: The exclusion uses the athletics definition at 26 C.F.R. 1.199A-5(b)(2)(viii) as in effect on enactment and applies to taxable years beginning after December 31, 2026.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 1 benefits, 0 costs, 0 mixed.

More deductible pay for sports teams

If enacted, this bill would exclude employees who perform services in athletics, as defined by the cited Treasury regulation, from a top-five pay test used in tax law. That test determines who is subject to the $1,000,000 deduction cap on compensation under Section 162(m). Excluding athletes could let professional sports franchises deduct more pay for those workers. The change would apply to tax years beginning after December 31, 2026.

Sponsors & CoSponsors

Sponsor

Warnock, Raphael G. [D-GA]

GA • D

Cosponsors

  • Sen. Britt, Katie Boyd [R-AL]

    AL • R

    Sponsored 9/30/2026

Roll Call Votes

No roll call votes available for this bill.

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