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Lawmakers OK bill to remove tax deduction for pro sports owners’ fines

Then-Clippers owner Donald Sterling watches his team play the Utah Jazz in a 2010 game in Los Angeles.
Then-Clippers owner Donald Sterling watches his team play the Utah Jazz in a 2010 game in Los Angeles.
(Mark J. Terrill / Associated Press)

A bill that would prevent professional sports team owners from deducting league fines from their taxes cleared the California Legislature on Thursday.

The measure was introduced soon after then-Clippers owner Donald Sterling came under fire for his recorded comments about African Americans. The National Basketball Assn. imposed an historic $2.5-million fine on Sterling and banned him from the league for life. Sterling’s wife recently sold the team to former Microsoft Chief Executive Steve Ballmer for $2 billion.

Assemblymen Raul Bocanegra (D-Pacoima) and Reggie Jones-Sawyer (D-Los Angeles) introduced the proposal to prevent Sterling and other sports franchise owners from writing off such penalties as an operating expense.

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“I found it amazing that under current tax law, a fine like this by a much larger institution like a sports league can be written off as a business expense,” said Bocanegra after Thursday’s vote. “I found it too problematic and I wanted to close that loophole.”

Bocanegra said the bill, should it be signed into law, would take effect Jan. 1, 2015, meaning Sterling would not be able to write off the massive fine on his taxes next year.

The measure, AB 877, passed the Assembly, 54-12. It now heads to Gov. Jerry Brown’s desk.

Follow @melmason for more on California government and politics.


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