Jock Tax: Pro-Athletes Must Pay If They Play (SLIDESHOW)

In 1991, when the Chicago Bulls beat the Lakers in the NBA finals, they received more than just their rings. They got stuck with tax bills from the state of California for three games they played in Los Angeles.

That tax bill was the start of what's now dubbed the jock tax. The Los Angeles Times reports that 20 of the 24 states with professional sports teams require athletes who play games in their states to pay income taxes. And with the average salary for pro athletes at $2.9 million, that translates into a windfall.

California, for example, has 15 professional teams, received $102 million in taxes from visiting athletes in 2006-7, the paper reported.

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Tax day is fast approaching, and one group that will be feeling the pinch is professional athletes. Twenty of the 24 states with a pro sports league require athletes pay state income tax for each game they play there.
Known as the "jock tax," it can be traced the 1991 NBA Finals when the Chicago Bulls beat the Lakers, only to receive tax bills from California for the three games the team played there.

Comments

[init]

Putting aside the tax issue for the moment. I miss watching M.J.'s finesse.

[laborgrunt]

Im not the usual anti-Tax type but this is over doing it. How about if a business man does a deal in California to buy a hotel in Colorado, should he have to pay taxes to the state the deal was made in?

[AN2009]

I doubt these athletes are seriously hurting over the jock tax; after all, they are being paid millions of dollars a year.

[DRaymond]

If this were not the case then athletes would buy some little shack in the smallest tax state and call that their home.

And why shouldn't they pay California Tax? Whose law enforcement is securing their games, building the roads, often contributing to building the stadium? Whose residents are shelling out the ticket prices that are making their pay?

But if you think athletes have a tough tax situation consider airline flight crews. Unless more than 50 percent of their arrivals and departures are from the same state they have to prorate their income over every state that they take off or land from! And then if they fly international routes they have foreign source income.

(and Rush whines about how New York wants him to document how many days he spends in the Big Apple. Cry me a river Rushbo.)

[Mintcondition]

Tax the owners.

[breakfast]

Pro athletes are not here being singled out. Most states tax, or at least try to tax non residents who earn income in the non resident state. Plus, the taxpayer gets to exclude from taxable income on his state return the amount which was taxed by another state. S.O.P.

[Gumpster]

Agree. If a consultant performs work in multiple states, even if working for a consulting firm, s/he must file taxes in the states where the work was performed.

Minnesota, being a great Republican Governor state with a high income tax rate, adds insult to injury by charging you the difference between the tax rates should the work performed in another state be subject to a lower rate. For example, work performed in Illinois is taxed at 3% state income rate. That income is then subject another 5% penalty to reach the 8% marginal rate in MN. Gotta love it.

[swensonj]

Finally: one issue that truly should be non-partisan. Sorry, trolls: this article does not show that either party is evil. Settle down.

I usually work in Wisconsin. Last year, I took a job in Missouri for a week, with a different employer. I paid income tax in both states: as a non-resident in Missouri (where I was only taxed on the income I earned in Missouri), and as a resident in Wisconsin (where I got a deduction for paying Missouri taxes). That's the way it should work.

Pro athletes are an interesting in-between case. They get paid by a single employer, which should be registered in a single home state. But they work all over the country. I'd support consistency: either states shouldn't tax visiting athletes, or all states should tax visiting athletes, who would then get credit on taxes in their home states. I think I prefer the second option, because it makes free agency marginally more fair. (Would you prefer to sign with a team in a no-tax state?) But (1) I don't see an argument in principle that one system would be more moral than the other, and (2) both systems should bring in about the same amount of state tax revenue nationwide. [Taxes on visiting players would be approximately equal to taxes forgone when home-team players pay in other states.]

Players should pay their share. It's not obvious where they should do it. Can't we all just get along?

[ditchdigger]

why not hte owners too.i love sports.i do believe that the money a figure gets for playing a game is ridicules.if we paid professions that really make a difference that kind o money it would be better spent.teac­her,nurse,­fierman,po­liceman,ca­re givers,and parents.

[Rinehart]

The jealousy and animosity directed at pro athletes is amazing. And the easy indignation is getting tired. Mostly sour grapes from haters. No other group garners as much animosity. Not actors, ceo's, rouge priest, etc., etc.,

FACT: they ARE paying those taxes, PERIOD. What's the big deal. Guess if they were hiding money off shore it'd be no big deal....no­ne of the high brow indignation.

Seriously, the glee factor at anything negative that happens to pro athletes is really weird. Most of the time the ha ha reaction is about the only thing you get out of it. After about 2 mins you're back to your stale grind of a life and they're still enjoying their $$$. So do yourself a favor and let it go because it says more about you than any athlete.

question: if a sales person goes out of state, conducts business does he or she pay income tax in that state?

[indy100]

Mostly sour grapes from haters? What?? As a full-time working mother, married to a small business owner husband, and with a self-employed father, I fully support these guys being taxed. WE pay plenty in taxes and we don't have multi-million dollar salaries. I don't hate anything, not sports, not athletes. These people play games for a living though, so quit expecting anyone to feel bad for them. I know people who would play pro sports for 1/50th of the average salary, some that would probably do it for free. Jealousy and animosity? Are you kidding???

[Hank10303]

Okay, and this is the proper taxation on the rich - whats the problem - hell they get millions to play a game. Most common sense people don't have a problem with taxing the rich. They can afford it.

[Zyzzygowski]

Are you kidding?

This policy means that an individual professional athlete will have to file twenty state tax returns. Whatever the law is, I wish it were consistent. If you spend a day or week in California at a conference, should you be obligated to pay taxes on your salary? If an athlete has to pay taxes on income while in California, then any and everyone who spends time there, or anywhere else, should have to pay taxes, too.

[WorldGoneWild]

How ironic is it that HuffPost shows a picture of one of the world wealthiest athletes Michael Jordan on this piece about the jock tax who probably gambled away $102M during and after his career. The jock tax is not hurting these multimillionaires.

[Zyzzygowski]

Not the issue. It is about right and wrong, and consistentcy. If you tax the athlete, then tax the sales person who does business in California for a day, tax the politicians who visit for a day, and tax those who attend conferences, too.

[ProgressiveMinded]

Anyone who claims this is unfair is unaware of how it works. As others have posted this applies to all multi-state workers. For the little guy it is a pain to file in multiply states but one is never double taxed. All taxes paid outside of your residence get credited.

Without this all high wage earners would buy condos in Nevada or New Hampshire and never owe a dime in income taxes to any state. Many of these athletes don't live in the state of their home team. Who do you think should benefit then. You owe where you earn, fair and square.

It troubles me that this is covered as news and ends up on Huffington's home page. I look here for opinions I value. Sure there is lots of news I don't care about and wish got less exposure, i.e. octomom. But this is crap that some misinformed sports writer or editor places on the front page as news.

Everyone is responsible for their share or the system won't work. America is still so deluded by Reaganonmics. Many continue to believe we deserve a great and powerful nation filled with just the benefits we want and that only those we don't approve of should pay for it. Grow up. We all benefit to varying degrees and we must all contribute in varying degrees.

[tierone]

AWESOME!!

[keene]

Well why Not?? If I do a temp job in NJ, I live in Pa., I pay taxes.

[i5kfun]

Good, they make the $$ in these states so they should have to pay income taxes in these states.

[rblaquinta]

Good, its about time!!!