NFL Players Tax Nightmare

[Leave No Doubt]

Never gave this much thought but it must be mind-boggling. Also,I wonder if there's any truth or validity to a player choosing a team due to that particular state's tax laws? Interesting at least for some (seemingly endless)offseason reading

The states without income tax, I felt, always had an advantage in recruiting free agent players. Teams in Florida, Tennessee and Texas used the fact that their states had no income tax to show players how much more they would take home than teams in high income tax states (like Wisconsin). In some cases, agents actually showed me data from other teams showing how much more the player would make over the life of the same contract in one of those states.

Players and agents would also try to use their residence in those states toward better treatment on signing bonus payments.

The National Football Post | A Taxing Day For NFL Players

 

[jmt57]

It's one of those things that I personally think would be part of a player's decision, but does not appear to be. I don't see free agent players flocking to Miami, Jacksonville, Tampa or Houston, or taking a bit of a discount to play there with the idea they will net more without a state income tax.

Then again, perhaps those teams use it as part of their sales pitch and end up losing out with what appears to be a lowball offer.

 

[PatsWickedPissah]

It's one of those things that I personally think would be part of a player's decision, but does not appear to be. I don't see free agent players flocking to Miami, Jacksonville, Tampa or Houston, or taking a bit of a discount to play there with the idea they will net more without a state income tax.

Then again, perhaps those teams use it as part of their sales pitch and end up losing out with what appears to be a lowball offer.

Sadly with many of these guys it's ALL about the BIG NUMBER. I think Ty Law was one. Coulda made more $ with the Pats but took the larger seeming offer to leave and then made less than if he'd taken BB's #. Not a tax example but the idea's the same.

It's not just the player's fault as some of these 'agents' have players sign contracts that they, the agents, either did not read or did not understand, q.v. Arrington.

 

[Box_O_Rocks]

I'm always puzzled over the nation's refusal to opt for a flat tax. As for players, I assume very few do anything but hand off their tax burden to their agent for the accounting and tax law staff to clear-up and provide him with a nice tidy signature block. The agents really do have more than one job to cover in their fee.

 

[Patsfanin Philly]

It's one of those things that I personally think would be part of a player's decision, but does not appear to be. I don't see free agent players flocking to Miami, Jacksonville, Tampa or Houston, or taking a bit of a discount to play there with the idea they will net more without a state income tax.

.

Wih some states like NY and NJ raising their highest tax rate to 10%, versus Florida's 0%, you'd be a fool not to take it into consideration, if all other things were equal....

 

[jmt57]

Wih some states like NY and NJ raising their highest tax rate to 10%, versus Florida's 0%, you'd be a fool not to take it into consideration, if all other things were equal....

One reason I thought for sure that Albert Haynesworth would go to Tampa Bay rather than the Redskins, but perhaps the big cleater is not the sharpest blade in the drawer.

 

[WhiZa]

In states without income tax, that's like saying they have extra cap space. They can offer less, but still match another team's offer. I'm sure there is some financial loophole we don't know about.

 

[jmt57]

In states without income tax, that's like saying they have extra cap space. They can offer less, but still match another team's offer. I'm sure there is some financial loophole we don't know about.

I guess it is less of an advantage than it would appear to be, as players are taxed on where they play; i.e., eight home games in that state (not 16) and another eight state income tax forms to fill out for away games. Plus a couple more if you have road playoff games, and who knows how they handle preseason games where the owners make money but the players don't.

Regardless, there still seems to be a larger quantity of players that want to see an article stating they are the highest paid at their position than there are players that are interested in how much their net pay is, or understand that they will probably never see the money on the last two years of that contract they just signed.

 

[PatsWickedPissah]

I'm always puzzled over the nation's refusal to opt for a flat tax. As for players, I assume very few do anything but hand off their tax burden to their agent for the accounting and tax law staff to clear-up and provide him with a nice tidy signature block. The agents really do have more than one job to cover in their fee.

You can't be serious about your puzzlement. NFW congresscritters want a flat tax because without the power of writing tax code laws with tax policy benefits for group X, how would they pander to the various groups to get re-elected?

 

[TheGodInAGreyHoodie]

Could be a factor, but I doubt an particularly big one.

Playing for a NJ team also means you will get more endoursement money everytime you show up at a the grand opening of a mall than you would playing for the Chiefs.

While it could be a factor. I would say all of the following would be bigger...

1) Do I want to play for that team (coach, chances to win, playing time).
2) How much can I make beyond the contract (endoursement)
3) Do I want to live in that city. Some folks like big cities like Boston and NYC, others would prefer to live in a place like Buffalo or Indy.
4) Do I like the climate. Hate the heat, might want to skip Miami, hate the cold Packers might not be the first choice.

 

[Leave No Doubt]

I guess it is less of an advantage than it would appear to be, as players are taxed on where they play; i.e., eight home games in that state (not 16) and another eight state income tax forms to fill out for away games. Plus a couple more if you have road playoff games, and who knows how they handle preseason games where the owners make money but the players don't.

The wage tax was news to me; apparently it's mostly enforced for the higher bracketed such as athletes and entertainers but it also includes anyone with the team who travels to that state;coaches,administrators,trainers,equip people,etc. I'd imagine that applies also to an entertainer's crew.

Brandt seems to feel the tax codes had some effect on negotiations,if not even having some degree of influence over how tax-attractive certain states were.

In some cases, agents actually showed me data from other teams showing how much more the player would make over the life of the same contract in one of those states. In recruiting players for Green Bay, I would always hear from agents how much more a player would make from, say, the Buccaneers or Texans compared to the 6.6-percent state income tax that Wisconsin would take from Packer players.


Players and agents would also try to use their residence in those states toward better treatment on signing bonus payments

Personally all this probably comes more into play from an agent/financial advisor's perspective rather than the actual player himself but no doubt it all may come into play when contracts etc get to the nitty-gritty point, the final nitpicking points.

Now that the NFL is dabbling in going global, does any of this have an effect on international games? Is the team/player required to pay any taxes or monies to that country I wonder?

 

[jmt57]

I wonder if the agent is state-taxed the same way the player is? I would think he would not be; in that case he derives no benefit by advising his client that the player is better off signing with a team from Florida or Texas. And if he can use the state income tax as leverage to get another team elsewhere to pay more, then the agent makes 3% of a larger contract - while the player nets less due to the additional state income tax.

As pointed out elsewhere there are other factors as well, but I would be curious to know how many players are completely unaware of this, and how many actually consider it as part of their decision making process.

 

[PatsCanDoIt]

I read a similar article a couple years ago in the Sporting News. It was written by MLB pitcher Todd Jones about his unique expenses.

Taxes. Some state and local governments believe that if we earn money in their jurisdictions, we should pay taxes there, too. So we pay something in almost every city in which we play. Six games at Fenway Park a season means paying state tax in Massachusetts and city tax to Boston. Of course, we're also taxed by the home cities in which we play as well as the places where we live in the offseason. We like road games in Texas and Florida because there's no state income tax in those places.

SportingNews.com - Your expert source for MLB Baseball stats, scores, standings, blogs and fantasy news from MLB Baseball columnists

 

[upstater1]

I'm always puzzled over the nation's refusal to opt for a flat tax. As for players, I assume very few do anything but hand off their tax burden to their agent for the accounting and tax law staff to clear-up and provide him with a nice tidy signature block. The agents really do have more than one job to cover in their fee.

The reason there's no flat tax is because of state sovereignty rights. As long as states insist on making their own laws, you can't have a flat tax. Proponents of flat tax typically also remove deductions for mortgage interest, property tax, etc.

Imagine the havoc that would wreak in the wealthiest states. Incentives for home ownership, gone. Plus, northern states like Massachusetts and New York would be forced to fund their schools at the level of Alabama in such an environment, and the federal government would then be forced to pick up the slack (with another giant bureaucracy).

A flat tax would be fairer for everyone, but the massive upheaval state to state and especially the huge transfer of wealth from northern states to southern states would be a political killer.

 

[upstater1]

I receive income from multiple states every year and it's a huge huge headache. I've been audited by states 3 times and each time I proved I was a primary resident of another state.

Also, the deferral of salary as in the signing bonus situation is something I have to deal with every year and it has nothing to do with a bonus. Instead, because I'm a teacher on a 10 month salary (from September through June) there's an imbalance that I have to deal with every year when it comes to prepaying taxes from my salary. The gov't looks at some of my salary as though I'm trying to defer it. It's a huge headache.