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Wings' Brian Rafalski slams Tennessee's new 'jock tax'

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Old
03-29-2010, 03:53 PM
  #51
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Originally Posted by Dado View Post
How are these "wild taxes"?

They've been around for a long time, many many states/countries have them, they aren't fundamentally any different than the way other entertainers (eg, touring bands, or actors coming to town to make a movie) are taxed.

And yes, these taxes do exist in Canada, covering US athletes/entertainers crossing the border.
Most in Canada are taxed by the city itself and not the provincial government. Athletes are going to want to stop going to states with this kind of tax. Bands and other entertainers did it here when the taxes in Winnipeg were outrageous.

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03-29-2010, 03:59 PM
  #52
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If Tennessee has this tax, why don't all the other states get it too?

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03-29-2010, 04:07 PM
  #53
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Originally Posted by klaze View Post
If Tennessee has this tax, why don't all the other states get it too?
Because most other states already tax visiting players - through their state income tax.

Tennessee does not have a state income tax (at least not w.r.t. regular income). They instituted this tax in lieu of an income tax - to capture the same revenues that most other states are already collecting, but they were not.

Anw w.r.t. Nashville players you are blowing it way out of proportion with the pathological McKenzie case. The tax is capped @ $7,500. For a Minimum Salary ($500k) NHL Player, that comes to only 1.5%. Do you think the Preds would rather pay that or the 4-9% state income tax that most other US players pay.

And I have little sympathy for Rafalski. For his 3 games in Nashville he pays $7,500. For his 6 games in CA, he's paying ~40K to the California Franchise Tax Board - the FTB calculates visiting athletes incomes on a per game, not per day, basis and the top income tax rate is 9.3% ($6M * 6/82 * 9.3% = $40,829).


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Old
03-29-2010, 04:08 PM
  #54
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That's a stupid tax, and I won't refute anyone's calculations, but the tax is per game, and NHL pay is per day. Of course, on the day of the game, the guys at minimum salary will pay more in tax than they earn in salary. But on the day before and/or the day after, when those guys are in Nashville and practicing, they're not paying that tax, but they're still earning their NHL salary. Overall, unless they fly in on game day and out right after the end of the game, their trip to Nashville means net $ in their pockets. So again, this is dumb and unfair, but I don't buy this "pay to play" argument.

Same with Ian MacKenzie. Unless he's brought up after 7 pm (5 pm?) on the day of a game and/or sent back down right after the game, he'll likely have at least 3 days of NHL pay for each game/tax day.

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03-29-2010, 11:19 PM
  #55
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Originally Posted by BigFatCat999 View Post
This is illegal under the US constitution but that would only truly apply to Federal taxes. As for states they operated under their tax codes and their state constitutions.
Not quite correct. There are several flies in the ointment. Primarily, that the whole US Constitution applies to the states via the incorporation clause, 14th amendment, except parts of the 2nd, 3rd, 5th and 8th amendments (I might be forgetting one or two somewhere). You also have to consider the Supremacy Clause, the P&I Clause, Due Process and perhaps easiest of all, Equal Protection whenever one group is singled out, in this case, professional athletes. I really see this getting overturned in a federal court quite possibly.


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03-30-2010, 12:30 AM
  #56
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Originally Posted by kdb209 View Post
Because most other states already tax visiting players - through their state income tax.
Question...don't you have to be a resident of that state to pay income tax in that state? How does a state income tax collect tax revenue from people visiting the state a few times a year?

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03-30-2010, 01:15 AM
  #57
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Originally Posted by Jeffrey93 View Post
Question...don't you have to be a resident of that state to pay income tax in that state? How does a state income tax collect tax revenue from people visiting the state a few times a year?
Nope.

If you earn income working in a state, that state can tax you.

All states (with income taxes) have both resident and non-resident tax return forms.

I guess it's time to C&P this article again:

Quote:
Originally Posted by kdb209
Quote:
Originally Posted by mouser View Post
Would I be correct in guessing that NHL players are treated the same as other major professional atheletes (and entertainers)--being taxed by most of the road jurisdictions that they play in and filing a dozen+ different tax returns?
Yup.

The CA Franchise Tax Board taxes visiting players (at a top rate of 9.3%) based on 1/82 of their NHL salary for every game played in San Jose, LA, or Anaheim.

Most other states (with state income taxes) do the same.

I would be very surprised if Provincial tax authorities didn't do the same.

http://www.thehockeynews.com/article...an-cometh.html

Quote:
Of course, players are subject to withholding tax like the rest of us but an NHL player's paystub does not include just one line for tax withheld. In fact, players are responsible for paying tax in every state (and some cities) in which they play and earn above a certain income threshold. It is not uncommon for a player to file a dozen or more tax returns a year.

One player whose file I was working on recently and is currently with the St. Louis Blues had to file all the following returns in 2006: United States and Canadian Federal, States of Arizona, North Carolina, Minnesota, Missouri, Ohio, California, Colorado, New Jersey, New York, Massachusetts, Illinois, Pennsylvania and the City of St. Louis.

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Old
03-30-2010, 03:30 AM
  #58
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The Alberta government introduced the Alberta NHL players tax in 2002. This tax is controversial in two respects. First, it exclusively targets a single profession, namely, players in the National Hockey League. Second, the revenue generated from the tax is channelled directly back to the owners of the Alberta NHL franchises, the Calgary Flames and the Edmonton Oilers. For players employed by the Alberta teams, the tax collects approximately 3 percent of the players' salaries and transfers it back to their employers.


The purpose of this paper is to examine the Alberta NHL players tax in the larger context of the taxation of professional athletes. Owing to their large salaries and high public profile, professional athletes have often attracted the attention of taxation authorities.

At the federal level, Canadian and US authorities have worked out a fairly simple and effective compromise under the Canada-US tax treaty to deal with the taxation of professional athletes. However, at the subnational level in the United States, the taxation of professional athletes has become complicated and retaliatory as a result of the imposition of jock taxes by many states and cities. Essentially, jock taxes require visiting professional athletes to pay income tax on the portion of their salary attributable to the time spent in that particular state or city.
http://papers.ssrn.com/sol3/papers.c...ract_id=580002

Also see:
Quote:
The Alberta NHL tax targets hockey players who are currently playing in the NHL. A player is taxed on his "NHL hockey income," which includes any income received for performing hockey duties for an NHL team. The income apportioned to Alberta includes income earned during any game in which the player participates or is in the facility in which an NHL game is being played for all or part of the game.

If an NHL player is a US resident, and plays only a limited number of games in the province of Alberta, they will be fully credited on their US federal tax return, thus lowering their US taxes by the same amount.

In conclusion, a player who plays for a US based hockey team and files his income taxes as a US resident will be fully reimbursed. The reimbursement will be in the form of foreign tax credit on his US federal tax return for the amount of Alberta NHL tax he paid to the Oilers and Flames hockey clubs.

Therefore it can be claimed that it is not only the NHL players that are supplementing the Alberta hockey teams, but in many instances it is the US government.
http://afpconsultingllc.com/news2.html

The Alberta government repealed the tax in 2005:
http://www.sportsbusinessdaily.com/article/99456


Last edited by Wetcoaster: 03-30-2010 at 03:38 AM.
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Old
03-30-2010, 03:32 AM
  #59
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Originally Posted by Jeffrey93 View Post
Question...don't you have to be a resident of that state to pay income tax in that state? How does a state income tax collect tax revenue from people visiting the state a few times a year?
The NHL team will withhold and remit the tax to the taxing authority.

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Old
03-30-2010, 08:58 AM
  #60
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Don't you have to be here for 10 days total for the tax to take effect? If so, doesn't that blow the example above and couldn't the Wings work it out so that they are here less than 10 days for 3 games?

Also, TN charges doctors, lawyers and engineers a "professional privilege tax" to be licensed in this state, so you apparently can tax specific groups.


Last edited by nashpred: 03-30-2010 at 09:04 AM.
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Old
03-30-2010, 10:01 AM
  #61
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Originally Posted by MooseHunter View Post
Athletes are going to want to stop going to states with this kind of tax.
Most states have these taxes.

Where else, exactly, are the athletes going to go?

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Old
03-30-2010, 10:29 AM
  #62
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Originally Posted by JustWingIt19 View Post
yup, this phase should ring a bell to all Americans...."no taxation without representation"

Ummm, when you drive to Ohio and pay sales tax on that coffee, did you have a vote on that?

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03-30-2010, 10:31 AM
  #63
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Originally Posted by Jeffrey93 View Post
Pretty unfair. These games theoretically make a considerable amount of money for local businesses and generate a pile of tax revenue. And you have to tax the players like this? Where it actually costs them money to play there?!?

Reminds me of when 'FLIM SPRINGFIELD' gouged those Hollywood folk with a pile of taxes because they were outsiders.

It'd be funny to see a team forfeit a meaningless game against Nashville as a protest. I'm not sure what penalty the team would face for a stunt like that, but it would look good on them. It'd damage the NHL pretty bad....but I'd still chuckle.
Leaving town tax.

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03-30-2010, 10:41 AM
  #64
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Originally Posted by Captain Bob View Post
Ummm, when you drive to Ohio and pay sales tax on that coffee, did you have a vote on that?

Sure you did. You can choose to not buy the coffee. Consumption tax is a red herring, CB.

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03-30-2010, 10:45 AM
  #65
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Originally Posted by nashpred View Post
Don't you have to be here for 10 days total for the tax to take effect? If so, doesn't that blow the example above and couldn't the Wings work it out so that they are here less than 10 days for 3 games?
No, I do think it's a per game tax, regardless of the number of days spent in the state. There are taxes that have a minimum number of days 'working' in a country or state to have the tax kick in.

The Wings cannot control the schedule, since that is set by the NHL, and as a division rival, they're in town more frequently. Compare that to an Eastern conference team that visits once every other year, and you can see the difference.

Quote:
Also, TN charges doctors, lawyers and engineers a "professional privilege tax" to be licensed in this state, so you apparently can tax specific groups.
I think I mentioned above that it's discriminatory since the NFL and MLB are exempt, but the NBA and NHL players aren't. They're all in the same group, professional athletes, but in this case the state is picking and choosing among which leagues to tax.

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Old
03-30-2010, 11:03 AM
  #66
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From the article the OP linked:

Quote:
The tax was designed to tap into the wallet of anyone playing for an NHL or NBA team for more than 10 days in a tax period and within the state's boundaries -- the same way the other 17 states hit up pros who play for Tennessee teams.

From The Detroit News: http://detnews.com/article/20100326/...#ixzz0jfydLfFC
Also, the big beef here is that the tax is not deductible, right? Seems like that's a problem with the player's local or federal govt. I'm sure TN isn't intentionally making it non-deductible. We just don't have an income tax. Shouldn't the players effected fight their local govt. to have it recognized as an income tax. After all, that's essentially what it is.

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03-30-2010, 11:24 AM
  #67
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Originally Posted by nashpred View Post
From the article the OP linked:

"The tax was designed to tap into the wallet of anyone playing for an NHL or NBA team for more than 10 days in a tax period and within the state's boundaries -- the same way the other 17 states hit up pros who play for Tennessee teams."
The bolded part above is ambiguous. Here is the actual quote from the TN gov't website:

Quote:
Persons Subject to the Tax

The new tax applies to players who are employed by NBA and NHL clubs for more than ten days during the annual tax year and who are available for participation in a game in Tennessee.

Players on minor league or “two-way” contracts only become subject to the tax when they have been on the parent club’s active roster for more than ten days during the tax year. Once a player has been on the parent club’s active roster for more than ten days, the tax is due retroactively for any games played for the parent club prior to the player having been on the active roster for the ten-day threshold.
Players don't need to be in TN for 10 days, they need to be on the club's active roster for 10 days during the year (anytime, anywhere). If that's the case, they need to pay the tax if they were on the active roster when the team played in TN.

Funny thing I learned by reading this flyer -- it probably sucks enough to be a healthy scratch, but now you can be a healthy scratch AND pay this privilege tax..

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03-30-2010, 11:30 AM
  #68
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The tax is basically to support the Predators because they can't be self sufficient. They need local gov't support. The NHLPA really needs to take this up with the league. They are subsidizing the Nashville franchise.

The reason why MLB and the NFL are exempt is quite simple, because those franchises don't need subsidies like the Predators do.

The second problem lies in that TN has no state tax, whereas every other state gives other states deductions.

The players can take them to court and they probably should, but its equally as much the league's fault imo.

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03-30-2010, 11:41 AM
  #69
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The tax is basically to support the Predators because they can't be self sufficient. They need local gov't support. The NHLPA really needs to take this up with the league. They are subsidizing the Nashville franchise.

The reason why MLB and the NFL are exempt is quite simple, because those franchises don't need subsidies like the Predators do.

The second problem lies in that TN has no state tax, whereas every other state gives other states deductions.

The players can take them to court and they probably should, but its equally as much the league's fault imo.

No, that's quite inaccurate.

The state of Tennessee instituted this tax. As far as I know, the state doesn't support the Predators, but the city of Nashville owns the arena and has some agreement with the team on who pays for what, etc. The state also taxes the NBA, showing this is not a Predators support issue whatsoever.

Quote:
Tennessee, which does not have a state income tax, joined a handful of states in taxing professional athletes with what it calls a "privilege" tax that took effect July 1, 2009.


Earlier posts explain that the MLB and NFL were able to negotiate an exemption (probably with a threat of pulling out).

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03-30-2010, 11:47 AM
  #70
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Ok I was wrong.

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03-30-2010, 12:31 PM
  #71
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Yes, it's important to remember that the tax does apply to NBA players playing in Memphis as well.

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03-30-2010, 12:46 PM
  #72
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Not quite correct. There are several flies in the ointment. Primarily, that the whole US Constitution applies to the states via the incorporation clause, 14th amendment, except parts of the 2nd, 3rd, 5th and 8th amendments (I might be forgetting one or two somewhere). You also have to consider the Supremacy Clause, the P&I Clause, Due Process and perhaps easiest of all, Equal Protection whenever one group is singled out, in this case, professional athletes. I really see this getting overturned in a federal court quite possibly.
If what you say is true, I really hope so. This is a horrible tax.

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03-30-2010, 01:12 PM
  #73
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If what you say is true, I really hope so. This is a horrible tax.
I agree completely. The problem is, mounting a federal constitutional challenge is something no attorney does cheaply. I also think the bad publicity for the athlete might be enough to scare them off. Plus, it would be very time intensive for the named Claimant. They'd have to reveal a lot of financial information, find a good lawyer, show up to court etc.

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03-30-2010, 01:37 PM
  #74
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Sure you did. You can choose to not buy the coffee. Consumption tax is a red herring, CB.
And a NHL or NBA athlete can choose not to play in that particular state. I guess the Jock Tax is a red herring as well.

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03-30-2010, 01:41 PM
  #75
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Which part is lame? The tax or complaining about a 100% tax? If you think this through to the logical conclusion, if every state did this, players wouldn't have much money left.

I'm not a tax expert but there are couple of sniff tests this doesn't appear to pass, namely that taxation is usually based on the portion earned in a given location, not to mention the lack of representation or recourse. An individual or company could choose not to operate in a state where they don't like the tax laws, but these pros seem to be completely at the mercy of the local politics to tap into someone's wallet.

What right do the states actually have to levy arbitrary taxes?
Exactly.

When you think about how hard these guys have to work to be professional athletes - they deserve every single penny of their salary.

NHL players are vastly underpaid compared to other athletes.

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