Tax time nearing; some Razorback tickets deductible

Sunday, February 11th 2007, 2:30 pm

By: News On 6

FAYETTEVILLE, Ark. (AP) _ For almost two decades, Arkansas football fans, like their counterparts in other states, have purchased tickets for premo seats at the stadium and deducted the ``charitable'' contribution off their federal income taxes.

A law passed by Congress in 1988 specifically granted a tax deduction on the extra amount paid for special seating. Now the practice is being scrutinized.

In the House Ways and Means Committee last year, then-chairman Bill Thomas, R-Calif., raised questions about tax breaks fueling big-time college sports. And at a U.S. Senate Finance Committee hearing in December, James Duderstadt, president emeritus at the University of Michigan, said some of the tax benefits colleges enjoy have drifted far from the tax-exempt purpose of education.

Last month, finance committee member, Sen. Chuck Grassley, R-Iowa, said he was looking into donations tied to premium tickets as part of a review of higher-education tax breaks.

Arkansas Athletic Director Frank Broyles says the extra money helps keep the university competitive with rivals who bring in more ticket revenue, and allows football to cover the costs of less popular sports at the university.

When an Internal Revenue Service agent disallowed a skybox deduction claimed by an Iowa State booster in 1999, Broyles called then-President Clinton's office. Broyles says the office set up a meeting with an IRS official that helped preserve the deduction.

On a football Saturday in Fayetteville, the total possible tax deduction amounts to more than $750,000, the Arkansas Democrat-Gazette reported Sunday. That's counting fans in the skyboxes and club seats, not those who make required donations for the right to priority seats that move them closer to the 50-yard line. For a six-game season, the tax deductible total would come to $4.5 million.

Broyles says the premium seats added when the stadium expanded in 2001 are vital to the economic health of the athletic department. The expansion took the stadium from 51,000 seats to 72,000, and included the club sections and 68 new skyboxes. Ticket revenue has gone from just under $1 million per game before the expansion to $3 million per game last season.

Associate Athletic Director Tom Dorre compares the football games with a charity golf tournament in which a player pays an outsized fee to tee off but can deduct everything above the actual value of his golf cart and green fees.

AQ Chicken House owner Dick Bradley, who rents a 12-seat sky box on the stadium's east side, says the tax deduction figured into his decision to rent the box. He says he would have to rethink it if Congress eliminated the write-off.

Under the federal law, the thousands of Arkansas fans who sprang for club seats _ those with chair backs, cup holders and access to a restricted dining lounge _ can write off $85 on a ticket that cost $150. The others who paid $35 for a seat in the upper-deck aluminum benches get no write off.