The Cincinnati Reds Don't Want to Pay Taxes Ohio Says They Owe for Promotional Giveaways
Minus a winning season since 2013 and not expected to break that streak this year, the Cincinnati Reds do not figure to make many headlines for their play as they look to emerge from the National League Central Division’s basement. However, as the 2018 campaign unfolds, one can expect to read about what the Ohio Supreme Court thinks about the franchise’s promotional products. Yesterday, the judicial entity decided to entertain oral arguments regarding said goods, which the Buckeye State’s department of taxation feels warrant the collection of fees based on the organization’s distribution of them.
The Reds figure to meet stiff competition on the diamond from the Chicago Cubs and St. Louis Cardinals, but the Queen City occupants might meet the most resistance from the aforementioned department and the state’s Board of Tax Appeals. The legal battle stems from the assertion that the Reds should pay $88,000 in taxes for promotional items given to their fan base between 2008 and 2010. The team’s courtroom adversaries hold that by not charging supplemental costs for products such as bobbleheads, cards, T-shirts and other commemorative tokens, the Reds are not able to invoke the argument that they sold a commodity they had purchased specifically to complement game action at Great American Ball Park.
— Cincinnati Reds (@Reds) February 21, 2018
Heading the cause to collect cash from a franchise valued last April at $915 million, the state tax commissioner is not buying the claim from team attorneys that people should treat bobbleheads like McDonald’s Happy Meal toys, which incentivize food purchases but are not taxed. Rather, the official and his peers believe the team, in deciding to make the bobbleheads a freebie that a normal ticket purchase would guarantee fans, made a faux pas. In other words, it appears as if authorities are positing that no matter how endearing people find bobbleheads, aficionados should have either paid more for stadium entrance when the commemoratives became available or the Reds should have peddled them separately. Either way, simply giving away the ubiquitous products put the Reds in the wrong, its adversaries assert.
The Reds, like many teams, regardless of their sporting identity, use myriad products and promotions to draw larger crowds, and, yes, many of the items are often part of packages that require end-users to put out a few more bucks than they normally would. It appears, then, that the state’s financial trackers feel each special promotion should come with a heftier price tag so as to keep an organization from having to grow red in the face when tax enthusiasts come questioning their actions. Going to a sporting event can prove costly enough without a family having to worry about breaking the bank by paying for a promotion. The whole object of bobbleheads and other giveaways is to attract larger crowds, which, in turn, should mean more money somehow reaching a given city’s tax collectors.
Ohio, however, is going to argue that the Reds are not completely competent capitalists and must literally pay the price for not having forced fans to fork over more dollars. Its supreme court has not selected an oral arguments date, but this situation, whenever, it gains momentum, figures to have repercussions not only for the Reds but also other squads, suppliers and distributors. Someone might have to play hardball to emerge the winner in this matter. Who will prove the more clutch performer in your estimation?