Bay Area Estate And Tax Planning Law Firm

For pro athletes, taxes aren’t all fun and games p2

On Behalf of | Jul 4, 2015 | Uncategorized |

We are talking about the “jock tax” and its provenance. As we said in our last post, the jock tax is a nonresident tax on professional athletes’ income. Fewer than half of all states, along with a handful of municipalities, impose the tax, according to the Tax Foundation, an independent nonprofit. Pro players, though, are beginning to object.

States had the authority to levy the taxes for decades before they decided to exercise the power. It all started in 1991 with California, it seems, being a little bitter about the Los Angeles Lakers losing the NBA Finals to the Chicago Bulls. The state taxed the players for the first time, and Illinois retaliated. About a dozen states jumped on the bandwagon after that.

That they are taxed at all is certainly a problem, but more and more pros are complaining about the paperwork involved with filing an annual return. Some also complain that the states aren’t consistent in their approaches. The tax may be calculated the same way, but Arizona, for example, does not include the time spent in spring training as taxable “duty” days, according to a 2013 article on

In April, the Ohio Supreme Court removed Cleveland from the roster of cities that levy their own jock taxes. Two retired NFL players challenged the fairness of the city’s tax scheme, arguing that they were taxed by Cleveland when they did not play in Cleveland. In one case, the Indiana Colts player was taxed even thought he had been in Indianapolis when his team played in Cleveland.

The other case is more complicated. The issue was the formula used to calculate the income subject to the tax. We’ll explain the basic formula and the specifics of the case in our next post.

Source: Forbes, “Pro Athlete ‘Jock Tax’ Is Struck Down,” Robert W. Wood, May 1, 2015