University of Minnesota vs. President Obama

University of Minnesota vs. President Obama

Today the White House released 2016 budget documents for the United States Government. Included within those documents was at least one measure that may have college sports fans on opposite sides of the political spectrum agreeing with each other.

Currently, seat donation fees and similar “required donations” to universities as a prerequisite to buying tickets to sporting events are generally 80% deductible as deemed charitable contributions.

President Obama’s budget would eliminate this, as he puts it, “loophole.”

We’d guess the uproar over this may become significant and – all things considered and without delving deep into politics – we think it’s likely that Obama will not get his way on this one. But he could.

Many college and universities have seat donation fees. The University of Minnesota is relatively new to the “game”, but they are stepping things up in a risky way: the ‘U’ recently announced they’d be dramatically increasing the football “scholarship seating” fees over the next three years. 

On their pricing maps for the next three season, Minnesota displays the current facts: “80% of your preferred seating fee is tax deductible.”… but what if that changes?

Should or would the U change their pricing? How would consumer behavior change?

Tax law is always a significant area of risk management for individuals, companies and yes – not-for-profits. Today, college sports fans were reminded of this by the President.

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