S. 5661Senate119th Congress (2025-2027)In Committee

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.

AI-Generated Summary

Updated October 9, 2026 at 3:42 AM UTC

The bill changes the tax code so that professional sports teams are treated the same as other businesses when it comes to the limit on deducting certain employee compensation. It removes athletes from the list of employees who are counted among the five highest‑paid workers for this deduction limitation. The change would apply to tax years starting after December 31, 2026 and affects the way sports franchises calculate their federal income‑tax deductions.

Key Provisions

Amends IRC §162(m)(3)(C) to exclude anyone who performs services in the field of athletics from being counted among the five highest‑compensated employees for the deduction limitation.
Adds a clarifying phrase to §162(m)(3)(D) by inserting the words “such employee” before “was a covered employee.”
Sets the effective date of these changes to taxable years beginning after December 31, 2026.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

September 30, 2026

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SenateIntro Referral

Introduced in Senate

September 30, 2026

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

September 30, 2026

Bill Text

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Introduced in SenateIssued September 30, 2026

119th CONGRESS

2d Session

S. 5661

IN THE SENATE OF THE UNITED STATES

September 30, 2026

Mr. Warnock (for himself and Mrs. Britt) introduced the following bill; which was read twice and referred to the Committee on Finance

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 remuneration, and for other purposes.

Establishing parity in taxation of professional sports franchises

(a)

In general

Section 162(m)(3)(C) of the Internal Revenue Code of 1986 is amended to read as follows:

(C)

such employee is among the 5 highest compensated employees for the taxable year other than—

(i)

any individual described in subparagraph (A) or (B), or

(ii)

any individual who performs services in the field of athletics (within the meaning of section 1.199A–5(b)(2)(viii) of title 26, Code of Federal Regulations (as in effect on the date of the enactment of this subparagraph)) for the taxpayer, or

(b)

Technical amendment

Section 162(m)(3)(D) of such Code is amended by inserting such employee before was a covered employee.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.