The Taxing LIfe of a Pro Athlete

THE TAXING LIFE OF A Pro Athlete For professional athletes across the U.S., April 15th is a day many do not look forward to. But for some, a recent signing or move to a state like Florida, where state income tax is nonexistent, puts their minds at ease. While pros don't necessarily sign a new contract solely because of how much more of their high salaries they can keep, who can argue that it doesn't cross their minds? Let's take a closer look at which states tax individual income the most and which ones don't tax income at all. STATE INCOME TAXES AND PROFESSIONAL ATHLETES AVERAGE PLAYER SALARY, BY MAJOR U.S. PROFESSIONAL SPORTS TEAM NBA $5.15 MILLION MLB $3.34 MILLION NHL $2.4 MILLION NFL $1.9 MILLION (2010-2011) (2010) (2010-2011) (2010) TOP NBA TEAM EARNERS, 2011 L.A. LAKERS AVERAGE ANNUAL SALARY PER PLAYER: $6.54 MILLION AVERAGE WEEKLY SALARY PER PLAYER: $125,780 STATE INCOME TAXES OWED IN CALIFORNIA: $673,620 TOP MLB TEAM EARNERS, 2011 NEW YORK YANKEES AVERAGE ANNUAL SALARY PER PLAYER: $6.76 MILLION AVERAGE WEEKLY SALARY PER PLAYER: $129,930 STATE INCOME TAXES OWED IN NEW YORK: $606,370 TOP NHL TEAM EARNERS, 2011 DETROIT RED WINGS AVERAGE ANNUAL SALARY PER PLAYER: $2.96 MILLION AVERAGE WEEKLY SALARY PER PLAYER: $56,880 STATE INCOME TAXES OWED IN MICHIGAN: NONE ($128,760 IN FEDERAL TAXES) TOP NFL TEAM EARNERS, 2011 WASHINGTON REDSKINS AVERAGE ANNUAL SALARY PER PLAYER: $2.91 MILLION AVERAGE WEEKLY SALARY PER PLAYER: $56,020 STATE INCOME TAXES OWED IN MARYLAND**: $160,050 *FIGURES ARE THE RESULTS OF DIVIDING TOTAL PLAYER ÇOMPENŞATION FOR EACH LEAGUE BY THE NUMBER OF PARTICIPANTS IN A GIVEN SEASON. **THE WASHINGTON REDSKINS HOME GAMES ARE PLAYED IN LANDOVER, MD HOW MUCH A $3 MILLION PRO ATHLETE SALARY WOULD BE TAXED, BY STATE State Individual Income Tax Rates Taxes Owed (Based on $3 Million Salary) ID 7.8% ME 8.5% MO 6% $255,000 $180,000 NJ 8.97% OK 5.5% SD NONE $269,100 AL 5% $150,000 $234,000 $165,000 sO AK NONE IL 5% ** $0 MD 5.5% MT 6.9% NM 4.9% OR 11% $207,000 TN 6% $150,000 $165,000 $147,000 $330,000 $180,000 AZ 4.54% IN 3.4% ** MA 5.3% NE 6.74% NY 8.97% PA 3.07% TX NONE $136,200 $102,000 $159,000 $202,200 $269,100 $92,100 $0 AR 7% UT 5% $150,000 HI AK $210,000 WA NH VT ME MA VT 8.95% RI $268,500 MT ND CA 10.3% OR MN ID WI $309,000 SD WY MI Ст IA PA CÓ 4.63%* $138,900 VA 5.75% $172,500 NV NE OH ZDE UT IL IN MD CA CO KS VA DC KY NC CT 6.5% $195,000 w TN u WA NONE AZ NM OK sC AR $0 MS AL GA TX WV 6.5% DE 6.95% IA 8.98% $208,500 $269,400 LA FL $195,000 NC 7.75% $232,500 WI 7.75% FL NONE KS 6.45% MI 4.35% ** $193,500 $0 $130,500 uu $232.500 GA 6% KY 6% MN 7.85% NV NONE ND 4.86% RI 5.99% WY NONE $235,500 $180,000 $180,000 $0 $145,800 $179,700 $0 MS 5% NH 5% *DC 8.5% $255,000 HI 11% LA 6% OH 5.925% SC 7% $330,000 $180,000 $150,000 $150,000 $177,750 $210,000 * % OF FEDERAL TAXABLE INCOME ** % OF FEDERAL ADJUSTED GROSS INCOME WITH MODIFICATION ON THE ROAD: JOCK TAXES FOR TRAVELING ATHLETES 000000000 What is a "Jack Jax"? 20 OF THE 24 STATES with franchises in at least one of the four major pro leagues-the It's a trend among tax authorities toward levying NFL, NBA, NHL and MLB-have state and local income taxes on traveling profes- sionals, particularly visiting professional athletes. laws that require visiting athletes to pay state income tax for each game they play there. Jock taxes require that traveling professionals pay income taxes in every state where they earn income. Not only are the working schedules of famous sports players public, so are their salaries. The state can compute collect the amount with very little investment of time and effort. This can become a complicated filing process when April 15th rolls around, with players playing and earning their income while on the road in various states. SOURCES: TAXFOUNDATION.ORG, 2011 | IRS.GOV, 2011 | SPORTINGINTELLIGENCE.COM, 2011 | NBA.COM, 2011 | SPORTS.ESPN.GO.COM, 2011 | LATIMES.COM, 2009 TurboTax Choose Easy.