New tax law makes PSD donations non-tax-deductable

Submitted by JamieH on

So, I just found out about this when I made my PSD payment for the 2018 season. Apparently PSD donations are no longer 80% tax deductible as donations to the university. I realize that with demand for Michigan tickets high, people will probably not care and will still foot the bill. But some schools have really tapped this out. For example, the ESPN article I link here says Duke basketball requires a $4,000 per seat donation. If you can't write that off anymore, that is a huge price increase.

 

What effect do people think this will have on ticket pricing? Will people just suck it up and pay anyway? Will schools adjust and find a different way to get money from people? Nothing ever gets cheaper so I can't imagine the tickets will. I only have 4 tickets in the Blue, so my PSD was only $840. The tax savings writing off $672 was not that big, but I know lots of people are getting hit much harder than me on this.

 

http://www.espn.com/college-sports/story/_/id/21437392/college-administ…

 

Please try not to make this into a political thread--try to keep it to a discussion of how the new tax law will affect college athletics.  Also, i realize this is insignificant next to the crap going on in EL. Just happened to find out about it as I paid my PSD.  

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m1817

January 27th, 2018 at 6:31 AM ^

NFL teams have been selling non-tax deductible PSL's for years and they still sell out.  Non-deductiblity of PSD may dampen demand initially but there will still be a lot of fans that will be willing to buy them.  As Bob Ufer sad, "Michigan football is a religion, and Saturday is the holy day of obligation."

Colleges may restructure the PSD/PSL model, i.e., allowing a PSD/PSL to be bought and sold, similar to a stock.  Don't be surprised if someone creates a stock exchange for PSD/PSL's.  PSD/PSL's could be viewed as an investment that could be resold in the future to recover part or all the inital purchase price.

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I dumped the Dope

January 27th, 2018 at 7:12 AM ^

but I'll handle this adversity and move on

I had this pipe dream that someday when retired and access to 401 funds and mortgage paid that a little tax break would be nice since the mortgage interest expense was tapped out and I would be in financial position to aspire to the club level seats.

Pipe dream has now been capped.

I think its a much bigger deal for peeps dropping what, $60k/season for a lux box (?)

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Goggles Paisano

January 27th, 2018 at 7:31 AM ^

The PSD was an itemized deduction.  The new tax laws nearly the double the Standard Deduction.  Married filing joint for example went from 12,700 to $24,000.  So, if your itemized deductions don't exceed $24,000, you get to use the $24,000 Standard Deduction.  If that is the case, you wouldn't have gotten any tax benefit from your PSD.  Some of you will fall into this category and thus don't feel slighted by not being able to write off your PSD.  

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Sione For Prez

January 27th, 2018 at 7:33 AM ^

They never should have been deductible in the first place. The universities took advantage of it but I imagine some places will have to adjust.

The PSDs no longer being deductible may be the straw that breaks the camel's back for a number of people already frustrated with higher prices, a worse home schedule and long tv time outs.

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kweb

January 27th, 2018 at 7:48 AM ^

Initially the PSD was a tax credit on your Michigan tax return, meaning you got the full amount credited as tax paid. I fear that colleges are pricing themselves out of the market. Why sit in a cold stadium, or HOT stadium, during thunderstorm delays, snow, wind, not knowing from week to week when the start time is,etc., when we could sit at home and turn it off when things get ugly? I've been a season ticket holder since Harbaugh was a junior, I've been asking myself "do I really want these tickets?"  I could play alot of golf for what we pay now.

Oh heck, it's only money, gotta pay up! At least until win #1000, then I'm probably done.

 

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Section 1.8

January 27th, 2018 at 8:17 PM ^

...Michigan eliminated the credit in about 2011. It was bad, and made a substantial negative change for me. I’d like to see it brought back in light of the federal changes. With a doubled personal exemption and a state credit, my $2520 PSD might hurt a little less. If somebody is reading this in an office in 1000 South State Street, note well; I’m tired and so are a lot of my friends who have had season tickets for 20 or 30 or more years. It isn’t a matter of “Harbaugh” or 4 losses or 0 losses. It’s the cost, and the declining stock of game day parking, and our schedules being jerked around for television. I look at Athletic Department revenues and it is clear that alumni donors and PSD subscribers are the absolute backbone of your budget. Not tv. Not apparel licensing. Not Tim Horton’s or Arby’s. A lot of people don’t understand that. Everybody down at 1000 S. State should understand that. I could have fun playing golf on six or seven nice fall Saturdays. And with the $5000 or $6000 I spend on Michigan football games, I could pay for another nice golf trip.

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shoes

January 27th, 2018 at 8:29 AM ^

will miss it, but there was little justification for it. Why should those who didn't get the deduction, subsidize those of us that did?  I will purchase tickets, taking into account their value to me, as I do any non essential purchasing decision.

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old98blue

January 27th, 2018 at 10:21 AM ^

It was never a donation in the first place donations are voluntary it was an advance ticket pricing I guess it's voluntary in the way that you could have given up your tickets

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DennisFithian

January 27th, 2018 at 10:43 AM ^

This is great to know... I know the federal income tax is has gone down and screwed up a lot of people's payroll

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AMazinBlue

January 27th, 2018 at 10:55 AM ^

A donation and call it what it is a Personal Seat LICENSE. Or just add that to the price of the seats and have one cost per seat instead of two and give each ticket holder full credit for what they are spending to go to the games.

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lmgoblue1

January 27th, 2018 at 11:30 AM ^

But not having it isn't going to make me quit buying tickets. Losing to our rivals constantly, now THAT is a problem. 2019 will be the 50th year that we've been sitting in the same seats.

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M-jed

January 27th, 2018 at 11:52 AM ^

Saying people who can afford high fees should pay high fees is lame. A dollar is a dollar. Some people who can afford the nicety of season tix got there by being dollar-wise.
The athletic dept was proactive in communicating and I paid on 12/31 to get the deduction and buy time to see what the university response will be for 2019. If the total price of seats doesn’t correspond to the value I place on going, then I won’t renew.

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gbdub

January 27th, 2018 at 2:01 PM ^

I don’t disagree that tickets are too expensive, but why should it fall upon the federal tax budget to make a luxury good like sports tickets more affordable? Most of the schools charging significant PSDs have AD budgets well in the black. They’ve made it clear they care more about getting even more cash than about making tickets affordable for average alums.

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RLARCADIACA

January 27th, 2018 at 12:35 PM ^

So not living in Michigan I don't have Michigan season tickets but I do live 7 miles from the Rose Bowl here in beautiful Southern Taxifornia. That said to fill my up front college football experience need (regardless of the teams results) I've had season tickets to UCLA football for 14 years. I pay 339 each seat (2 seats for my son and I) on the west side 15 yard line down low. The "seat fee" which funds the Wooden Athletic Fund is 200/seat which was previously 80% deductible as your Big Blue seat fees were. Will this make me change; no it's a fee (probably should not have been deductible anyway) and it gets me some extras (summer movie night on the grass of Rose Bowl, UCLA bobble heads, various pins, some free tickets to various non UCLA FB sports etc) and in reality it's a small fee to sit where I am and enjoy up front college football. If I was paying 1600/seat fee for 50 yd line seats (which is the going rate) and I was not über rich I might be switching seat zones.

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Late Bluemer

January 27th, 2018 at 2:17 PM ^

Putting politics aside, there are alot of things that changed in the new tax law, some beneficial (AMT levels, standard deductions, rates) some not (seat psd's, etc.) so you have to look at it in total on a net basis.

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Solecismic

January 28th, 2018 at 2:54 PM ^

That's true. I never thought I'd see an Ann Arbor-based message board discussion where people seem genuinely upset about the loss of a tax loophole that only benefits relatively wealthy people. I didn't know people had to pay to "license" their season tickets. I'm glad that's a relatively recent thing, because my dad and I were in section 5 every year. Each summer, he'd give me the choice of going to one Lions game or season tickets to Michigan games. I doubt the Lions were that expensive, but I'm also glad I always chose the Michigan games. For an average family in Ann Arbor, is it still financially feasible to get season tickets, or has it become more alumni and out-of-town people at games?

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JamieH

January 28th, 2018 at 3:31 PM ^

So is that the take now, that only "relatively wealthy" people buy college football season tickets? I mean, I won't lie. I do well for myself. I don't really care that much about losing the tax break, other than I will always choose to keep any money that I can over losing it. But when my dad started buying these tickets 40 years ago, we were decidedly not "relative wealthy". Far far from it. So have things just changed, and only rich people buy tickets now? My point with this thread was not to bitch about myself losing a few hundred dollars. My point was more of the fact that the whole college system is based on overinflated prices due to people getting tax breaks on the ridiculous PSD prices. With that gone, I suspect the system will have to change in some way, and I'm curious how that will happen. But maybe it won't change and people will just pony up.

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