News: Kiplinger ranking 32 NFL teams for best tax advantage for players

[Jake]

People are running out of offseason material. Bring on camp.

 

[OmerV]

Here's the state of Georgia state income tax filing requirements.........



Part-year Residents 1. If you are a legal resident of Georgia for only a portion of the tax year and are required to file a Federal income tax return, you are required to file a Georgia income tax return. 2. Part-year residents who claim a credit for taxes paid to another state for income earned while a resident must include a copy of the individual income tax return filed with that state(s) with their Georgia return. Otherwise the credit will not be allowed. Nonresidents 1. Nonresidents who work in Georgia or receive income from Georgia sources and are required to file a Federal return are required to file a Georgia income tax return. 2. Legal residents of other states are not required to file a Georgia tax return if their only activity for financial gain or profit in Georgia consists of performing services for an employer as an employee where the wages for such services does not exceed the lesser of five percent of the income received from performing services in all places during the taxable year or $5,000.

Thanks for posting this. Using rough math, if a player makes $10MM/year, and works 210 days/year (7 months X 30 days/mo.), and plays a game in Georgia, and assuming 2 days in Georgia, that's $95,238 earned in Georgia, which far exceeds the $5,000 threshold that would exempt him from Georgia state income tax. Even a guy making $1MM/year would exceed that.

Even so, road games do not account for anything close the 1/2 of a player's income that some on this site have attributed to it.

 

[OmerV]

But sales tax isn't an issue, period. The average NFL salary is 2.7 Million and it isn't going to register on the player if they buy groceries or clothes with a sales tax of 0% or 5% or 15%. It would a bit if they are buy cars or jewelery but its a small factor in that case and even then, it may not be in the County they live in.

The article was just trying to provide the entire tax picture. It wasn't saying sales tax by itself was a significant factor. I'm sure whoever wrote the article would agree that the difference in sales taxes from one city to the next is way too small to be a stand alone factor.

 

[JoeKing]

That's the reason I refuse to do business in a "state-tax" paying State. You got to come to me in Texas if you want to do business. Being an NFL accountant has got to be a complicated job. An MLB accountant even more so.

 

[Reid1boys]

You don’t want to play in California if you’re in the NFL. Ouch.

There is a significance negative to playing in Ca... but , I have never heard a team complain about it, or say they didnt get player X due to high taxes. Strange.

Jimmy G didnt seem to mind. People complain about California, but yet all those living in California that complain are still here. Add in more people keep coming to Ca.... when I look on the news and see states back east in blizzard conditions as I am in shorts and flip flops... yeah, ill pay my higher tax rate for where I live. i also make 2 times what a teacher is making in mississippi.

 

[Cover 2]

Are you sure? State income is based on residency ( full or part-time ). It's why the question is asked on all state income tax returns. Unless you know something I don't, pretty sure a player with an established full-time home residence in a no state income tax city does not pay any state income tax. "Away" games have no bearing on this. Players are paid via their home base team ( Bucs, Texans, Seahawks etc.). Visiting another team/city has no impact on their income with regard to state taxes as long residency was never established. Again, if there's something missing/off base, I'm all ears.......lol

You're taxed in the state the income is earned. I'm working on a tax return right now, and the client is paying state income tax in around 40 states.

 

[JJHLH1]

There is a significance negative to playing in Ca... but , I have never heard a team complain about it, or say they didnt get player X due to high taxes. Strange.

Jimmy G didnt seem to mind. People complain about California, but yet all those living in California that complain are still here. Add in more people keep coming to Ca.... when I look on the news and see states back east in blizzard conditions as I am in shorts and flip flops... yeah, ill pay my higher tax rate for where I live. i also make 2 times what a teacher is making in mississippi.

Millions of people are leaving California:

“Between 2007 and 2016, some 5 million people moved in to California and 6 million people moved out to other states — a net loss of about 1 million residents.

California is losing residents who are moving to states all over the country but, between 2007 and 2016, the top state of destination for ex-Californians has been Texas, followed by Arizona, Nevada and Oregon, in that order.”

https://www.sandiegouniontribune.co...thy-people-per-report-20180221-htmlstory.html

California is beautiful though. And the weather is wonderful. I wouldn’t mind being there right now given how hot it is where I live haha.

 

[BatteryPowered]

Here's the state of Georgia state income tax filing requirements.........



Part-year Residents 1. If you are a legal resident of Georgia for only a portion of the tax year and are required to file a Federal income tax return, you are required to file a Georgia income tax return. 2. Part-year residents who claim a credit for taxes paid to another state for income earned while a resident must include a copy of the individual income tax return filed with that state(s) with their Georgia return. Otherwise the credit will not be allowed. Nonresidents 1. Nonresidents who work in Georgia or receive income from Georgia sources and are required to file a Federal return are required to file a Georgia income tax return. 2. Legal residents of other states are not required to file a Georgia tax return if their only activity for financial gain or profit in Georgia consists of performing services for an employer as an employee where the wages for such services does not exceed the lesser of five percent of the income received from performing services in all places during the taxable year or $5,000.

Noticed a couple of things in this. First, professional athletes are not employees...they are contract workers and liable for all their taxes. Second, professional athletes (or the overwhelming majority of them) are paid in "game checks" and even if the player is making the league minimum their "wages" exceed "the lesser of five percent of the income received...or $5,000." For that not to be true, an NFL player would need to be earning less than $80,000 a season.

 

[xwalker]

Notice a few questions regarding the effect of state taxes for players on a no-state tax team. Please note, these players pay NO state income tax but are subject to many other local and state taxes.

https://www.kiplinger.com/slideshow...ate-taxes-will-nfl-free-agents-pay/index.html

Unfortunately players rarely think in those terms.

Bragging rights are a big part of contracts and those are not enhanced by not having a state income tax.

It does not benefit agents when players pay less tax.

 

[Red Dragon]

Meh, it is a minimal advantage wherever someone plays since half of the games is actually in that state. The worst scenarios are if a player lives in Cali or NY AND plays for a team in that state. They make enough money for it not to be much of a worry though.

I'm trying to picture the sad face of an NFL player who plays for the Niners, and knows that the upcoming schedule includes games against the Jets, Giants, Chargers, Raiders, Bills and Rams (if such a schedule were possible)

 

[JD_KaPow]

I'm trying to picture the sad face of an NFL player who plays for the Niners, and knows that the upcoming schedule includes games against the Jets, Giants, Chargers, Raiders, Bills and Rams (if such a schedule were possible)

It's not. Could be either Chargers+Raiders or Bills+Jets but not both. Could be Chargers, Raiders, Giants, Ramsx2 and Vikings (#27 on that list), though.

 

[Reid1boys]

Millions of people are leaving California:

“Between 2007 and 2016, some 5 million people moved in to California and 6 million people moved out to other states — a net loss of about 1 million residents.

California is losing residents who are moving to states all over the country but, between 2007 and 2016, the top state of destination for ex-Californians has been Texas, followed by Arizona, Nevada and Oregon, in that order.”

https://www.sandiegouniontribune.co...thy-people-per-report-20180221-htmlstory.html

California is beautiful though. And the weather is wonderful. I wouldn’t mind being there right now given how hot it is where I live haha.

California is projected to surpass 40 million residents by 2019, and represents approximately 1 out of every 8 US citizens. By 2050, the population is projected to surpass 50 million.

Uhoh.... were in trouble. People are headin to Texas....lol

 

[JJHLH1]

California is projected to surpass 40 million residents by 2019, and represents approximately 1 out of every 8 US citizens. By 2050, the population is projected to surpass 50 million.

Uhoh.... were in trouble. People are headin to Texas....lol

California has been the most populous state for decades. That’s old news. What is new is that people aren’t flocking to go there like they used to. In fact people are actually moving from California on a net basis, which is why California’s population growth is the slowest in recorded history.

https://www.latimes.com/local/lanow/la-me-ln-population-growth-20190501-story.html

 

[Cowpolk]

You spurn the bleak Metroplex, the soulless Houston and the eager to please Austin- San Antonio area? All that for soft Pacific breezes and laid-back people in California?
What, are you, picky?

I would not live in California even if they offered to pay me to live there

 

[Hawkeye0202]

Yes I'm sure. See above.

I understand but it still doesn't say professional players have to pay state income tax in a no-state-income-tax state. Let put it this way......No-state-income tax states DO NOT have a state tax return ( I'm a born Floridian ). Bottom line, as a full-time Florida residence, no one will pay state income tax regardless of their source of income. Notice I said full-time residence......again I'm speaking only of the seven no-income-tax states.


From your article

The most important issue for an athlete is domicile. This is where a person lives and plans on living into the future. A person can have only one domicile at a given time, and it remains that place until domicile is established somewhere else. Establishing domicile in a low- or no-tax state can save an athlete thousands in taxes by sheltering their endorsement and investment income in a lower tax jurisdiction than where their team is located. Establishing domicile entails acquiring a permanent residence, be it a 12-month apartment lease or buying a house, getting a driver’s license, voter registration and doing other things that show a connection to that location like joining a religious organization or donating to a local charity. But completing all of these tasks is not enough. The athlete must also spend their offseason at their domicile home

 

[Bohuntr97]

I understand but it still doesn't say professional players have to pay state income tax in a no-state-income-tax state. Let put it this way......No-state-income tax states DO NOT have a state tax return ( I'm a born Floridian ). Bottom line, as a full-time Florida residence, no one will pay state income tax regardless of their source of income. Notice I said full-time residence......again I'm speaking only of the seven no-income-tax states.


From your article

The most important issue for an athlete is domicile. This is where a person lives and plans on living into the future. A person can have only one domicile at a given time, and it remains that place until domicile is established somewhere else. Establishing domicile in a low- or no-tax state can save an athlete thousands in taxes by sheltering their endorsement and investment income in a lower tax jurisdiction than where their team is located. Establishing domicile entails acquiring a permanent residence, be it a 12-month apartment lease or buying a house, getting a driver’s license, voter registration and doing other things that show a connection to that location like joining a religious organization or donating to a local charity. But completing all of these tasks is not enough. The athlete must also spend their offseason at their domicile home

It's the "jock tax" and players who reside in Florida do pay them when they play in another state. They are paid on a per game basis. Likewise though, I believe when players from another state play in Florida (or any non-tax income state) that the pro-rated game check is not reported as income for the state they reside in. That's the way I understand it.

I think it goes back to the late 80's when California taxed Michael Jordon for games played in their state. They felt that since a portion of income he earned was in their borders, he was subject to state income tax for games played in Cali. Now most states are doing it as well with the exception of the seven you mentioned. Each state is different which is why CPA's of pro athletes make the big bucks, they have to learn the tax code in many different states and file multiple state returns.

 

[Diehardblues]

California has been the most populous state for decades. That’s old news. What is new is that people aren’t flocking to go there like they used to. In fact people are actually moving from California on a net basis, which is why California’s population growth is the slowest in recorded history.

https://www.latimes.com/local/lanow/la-me-ln-population-growth-20190501-story.html

Yep

But if you dig a little deeper you’d find the largest demographic which is leaving are retirees for on their fixed income they are getting more bang for their buck in Texas.

They can sell their home in Cali for example and buy one similar in Texas for half to a third and pocket the cash for security during retirement. And if they stay out of the fastest growing counties property taxes aren’t as high and cost of living is low.

 

[Diehardblues]

It's the "jock tax" and players who reside in Florida do pay them when they play in another state. They are paid on a per game basis. Likewise though, I believe when players from another state play in Florida (or any non-tax income state) that the pro-rated game check is not reported as income for the state they reside in. That's the way I understand it.

I think it goes back to the late 80's when California taxed Michael Jordon for games played in their state. They felt that since a portion of income he earned was in their borders, he was subject to state income tax for games played in Cali. Now most states are doing it as well with the exception of the seven you mentioned. Each state is different which is why CPA's of pro athletes make the big bucks, they have to learn the tax code in many different states and file multiple state returns.

Correct... known as Jock Tax.

Professional athletes will file several tax returns for the states with Income Tax in games played there.

If they live in one of the states that don’t have state income taxes then any income derived from other sources aren’t subjected to be taxed, just the games they play in those states.

It’s not that complicated for a CPA. They will have the amount of the games played there and amount of checks. Players salaries are divided into game checks. Like NFL players are paid each year in 16 installments following each game.