Question about NFL players....

[rocknrobn26]

My cuz's SO claims that NFL players have to pay city/state taxes in every city/state that they play in over the course of a season.

 

I find that hard to believe, based on the fact that if I work for Company 'A' from Chicago, and they send me to Newark, NJ to do work I don't pay NJ's taxes.

 

Yo momma, et. al., What's your interpretation?

Curious w/ a small bet on the answer.

TIA

rr26

[yo mama]

My cuz's SO claims that NFL players have to pay city/state taxes in every city/state that they play in over the course of a season.

 

I find that hard to believe, based on the fact that if I work for Company 'A' from Chicago, and they send me to Newark, NJ to do work I don't pay NJ's taxes.

 

Yo momma, et. al., What's your interpretation?

Curious w/ a small bet on the answer.

TIA

rr26

 

Do you mean state income taxes?

 

If so, an athelete's salary and bonuses are generally "apportioned" between the states the athelete peforms in. In California, for example, the law looks to "duty days." A "duty day" is defined as "any day services performed under the contract from the beginning of an official preseason activity until the last game played." The "duty days" in California are then divided by the total "duty days" to create a ratio. This ratio is then multiplied by the total compensation (salary and bonuses). This then is deemed to be the California source income. In addition, most states adopt a system of reciprocal credits, so that you don't end up paying double-tax in CA for income earned in another states, assuming you paid tax on the income earned in that other state.

Edited April 11, 2007 by yo mama

[chiefjay]

My cuz's SO claims that NFL players have to pay city/state taxes in every city/state that they play in over the course of a season.

 

I find that hard to believe, based on the fact that if I work for Company 'A' from Chicago, and they send me to Newark, NJ to do work I don't pay NJ's taxes.

 

Yo momma, et. al., What's your interpretation?

Curious w/ a small bet on the answer.

TIA

rr26

 

 

I don't believe that's the case. My interpretation is you pay taxes based on the location of your employer. Our contractors don't pay these out of state / city taxes.

[H8tank]

That is a flat out lie.

 

One of the draws to playing in FL is no state income tax. It can means many thousands of dollars.

[chiefjay]

Do you mean state income taxes?

 

If so, an athelete's salary and bonuses are generally "apportioned" between the states the athelete peforms in. In California, for example, the law looks to "duty days." A "duty day" is defined as "any day services performed under the contract from the beginning of an official preseason activity until the last game played." The "duty days" in California are then divided by the total "duty days" to create a ratio. This ratio is then multiplied by the total compensation (salary and bonuses). This then is deemed to be the California source income. In addition, most states adopt a system of reciprocal credits, so that you don't end up paying double-tax in CA for income earned in another states, assuming you paid tax on the income earned in that other state.

 

 

I have an accounting degree and I have no idea what you just wrote. Of course I barely squeeked by.

[Easy n Dirty]

Do you mean state income taxes?

 

If so, an athelete's salary and bonuses are generally "apportioned" between the states the athelete peforms in. In California, for example, the law looks to "duty days." A "duty day" is defined as "any day services performed under the contract from the beginning of an official preseason activity until the last game played." The "duty days" in California are then divided by the total "duty days" to create a ratio. This ratio is then multiplied by the total compensation (salary and bonuses). This then is deemed to be the California source income. In addition, most states adopt a system of reciprocal credits, so that you don't end up paying double-tax in CA for income earned in another states, assuming you paid tax on the income earned in that other state.

 

 

But is there some sort of minimum threshhold? Would a NY Jet who had one road game for the season (maybe 2 "duty days") in Massachusetts really have to go to the trouble of filing and paying taxes in that state? I am a CPA, but I don't do taxes and don't know the answer to this - just seems so unlikely to me that these guys would have to file in that many different states (throw in Hawaii for those who make the Pro Bowl?).

[yo mama]

That is a flat out lie.

 

One of the draws to playing in FL is no state income tax. It can means many thousands of dollars.

 

That just means Florida isn't goint to tax you. Other states that have an income might try to.

[yo mama]

But is there some sort of minimum threshhold? Would a NY Jet who had one road game for the season (maybe 2 "duty days") in Massachusetts really have to go to the trouble of filing and paying taxes in that state? I am a CPA, but I don't do taxes and don't know the answer to this - just seems so unlikely to me that these guys would have to file in that many different states (throw in Hawaii for those who make the Pro Bowl?).

 

All I'm telling you is that the state of California is going to impose income tax on that Jet player for the days he was under contract to play in California. States with no income tax (like Texas and Florida) won't. There are 50 different state tax regimes out there, so it's difficult for me to provide a uniform answer.

 

Generally speaking, there are two fundamental grounds upon which a state may impose its income tax: (1) the income was earned by a resident of that state; or (2) a nonresident earned the income within that state. California, for example, taxes income "derived from sources in this state." New York similarly taxes nonresidents on income "derived from or connected with New York sources." Of course, there are a myriad of state-specific exceptions/exemptions, not to mention a complicated federal constitutional framework that applies to all multistate taxation.

Edited April 11, 2007 by yo mama

[yo mama]

I have an accounting degree and I have no idea what you just wrote. Of course I barely squeeked by.

 

Perhaps its time for that masters degree.

Edited April 11, 2007 by yo mama

[yo mama]

My cuz's SO claims that NFL players have to pay city/state taxes in every city/state that they play in over the course of a season.

 

I find that hard to believe, based on the fact that if I work for Company 'A' from Chicago, and they send me to Newark, NJ to do work I don't pay NJ's taxes.

 

Yo momma, et. al., What's your interpretation?

Curious w/ a small bet on the answer.

TIA

rr26

 

Okay, just to get back on track here, I did a little nosing around in Illinois law (because your hypo assumed a Chicago home base, if you will). Here is an administrative letter from the Illinois department of revenue addressing how the state of Illinois would tax a pro football player, depending on whether he was a resident or a nonresident of Illinois. Click me.

 

As you can see, this area of tax law is very complex. Technically, I don't think NFL players have to pay state income tax in EVERY state they play, because not every state imposes an income tax. So someone is probably going to lose your bet based on that technically, as Texas has two stadiums and Florida has three. Chances are every team plays at least one game a year in at least one of those stadiums.

 

Hope that resolves your bet.

Edited April 11, 2007 by yo mama

[boat_hacked]

Here's a few links to what Yo mama is talking about:

Jock Tax

 

Jock Tax 2

[yo mama]

Here's a few links to what Yo mama is talking about:

Jock Tax

 

Jock Tax 2

 

Phew. Thanks man. Even I was starting to doubt the crap I was saying.

[chiefjay]

Perhaps its time for that masters degree.

 

 

I do just not in Accounting

[xMRogers]

Yea - pro athletes actually have special tax laws due to the high dollar amounts and travel involved - was discussed in a book about the Balt. Ravens I posted about a while back. Some states go after the money, some don't. Players don't ever get double taxed, but if they didn't need an accountant for another reason, they do for this.

[muck]

I believe these laws apply to all entertainers, regardless of the type of entertainment.

[chiefjay]

Yea - pro athletes actually have special tax laws due to the high dollar amounts and travel involved - was discussed in a book about the Balt. Ravens I posted about a while back. Some states go after the money, some don't. Players don't ever get double taxed, but if they didn't need an accountant for another reason, they do for this.

 

 

This is specifically the reason I didn't become a Pro Athlete, too much BS tax stuff.

[nogohawk]

Here's a few links to what Yo mama is talking about:

Jock Tax

 

Jock Tax 2

 

 

Ah yes ... that's why us accountants will never be out of a job.

 

 

Time to thank our wonderful system of taxation.

[xMRogers]

This is specifically the reason I didn't become a Pro Athlete, too much BS tax stuff.

 

 

 

That made me laugh....doesn't happen too much these days.

 

I'm actually not sure if it's all entertainers (ie, if you make a film in a city, or a concert). I do know it started due to the athletes - one state in particular started it (not sure which).

[detlef]

That is a flat out lie.

 

One of the draws to playing in FL is no state income tax. It can means many thousands of dollars.

 

Even if the OP's question is true, it would still be a draw because over half your income would not be subject to state income tax.

[KevinL]

Many cities in Ohio also have city income tax.

 

When teams (Browns, Cavs) build training facilities outside of the Cleveland city limits, there is an agreement between the cities on how the city taxes will be apportioned between games and practices.

 

Here is a press release from Cleveland Mayor Frank Jackson describing an agreement between Cleveland and Independence (where the Cavs are building a new practice facility).

[rocknrobn26]

Thanks for all the replies. The article on the "Jock Tax" nailed. I lose $10, but I'm still way ahead of my bets w/ him.

I was really surprised! There's a gagillion people who work for a company in one state but travel as their job to other states and they're not taxed. The big $$$$ makes the diff.. Man our tax system is really f'd up.

 

Thanks again.

[SteelBunz]

Many cities in Ohio also have city income tax.

 

When teams (Browns, Cavs) build training facilities outside of the Cleveland city limits, there is an agreement between the cities on how the city taxes will be apportioned between games and practices.

 

Here is a press release from Cleveland Mayor Frank Jackson describing an agreement between Cleveland and Independence (where the Cavs are building a new practice facility).

 

City taxes in Ohio can get sort of screwy. In Columbus....our tax is 2%. But if you live in an incorporated suburb, yet work in Columbus...the two cities split your local tax @ 1% each.

 

The nice thing is you can pay the full 2% to the city in which you live.....then the other city has to go get their 1% from your residential city. Or vice verse. Easy for the taxpayer....for once.

 

Around here....unless you claim Unreimbursed Business Expenses....no one files local. Companies just withhold exactly 2% where you designate it, and let the locals figure it out.