Professional Priviledge Tax: NHL and NBA Players

[timothy]

Effective July 1, 2009, the State of Tennessee tax code (Public Chapter 530, Sections 64-66) was changed to impose a "professional privilege" tax on NBA and NHL players who play games in the state with the tax proceeds allocated to the municipality that the game was played.

The total tax per player is equal to $2,500 per game with a 3 game annual cap. This means players for Western Conference Central Division teams (who visit Nashville three times per season) each pay a total of $7,500 to the Metro Government of Nashville and Davidson Co. Players from other Western conference teams play a total of $5,000 for the "privilege" of playing in Nashville.

Ref: http://tennessee.gov/revenue/legsumm...mm.htm#pc530cc

Which begs the questions... do other states/municipalities levy a similar tax? If so, are the min salary guys actually making a living playing hockey anymore between income taxes, professional privilege taxes, agent fees, NHL escrow, NHLPA dues, etc.? A quick and dirty math review would say that if six to eight NHL cities levy such a tax and a player ends up paying ~20 games worth of taxes -- that's about $50k, which is 10% of minimum salary player's seasonal pay on top of the other taxes, fees, dues, and withholdings.

[CTLightning26]

Originally Posted by timothy

Effective July 1, 2009, the State of Tennessee tax code (Public Chapter 530, Sections 64-66) was changed to impose a "professional privilege" tax on NBA and NHL players who play games in the state with the tax proceeds allocated to the municipality that the game was played.

The total tax per player is equal to $2,500 per game with a 3 game annual cap. This means players for Western Conference Central Division teams (who visit Nashville three times per season) each pay a total of $7,500 to the Metro Government of Nashville and Davidson Co. Players from other Western conference teams play a total of $5,000 for the "privilege" of playing in Nashville.

Ref: http://tennessee.gov/revenue/legsumm...mm.htm#pc530cc

Which begs the questions... do other states/municipalities levy a similar tax? If so, are the min salary guys actually making a living playing hockey anymore between income taxes, professional privilege taxes, agent fees, NHL escrow, NHLPA dues, etc.? A quick and dirty math review would say that if six to eight NHL cities levy such a tax and a player ends up paying ~20 games worth of taxes -- that's about $50k, which is 10% of minimum salary player's seasonal pay on top of the other taxes, fees, dues, and withholdings.

move the team

[Donnie D]

I know that most states and cities that have income taxes charge players for the games played in their community. So when in Cleveland, a city that I used to live in, they would pay income tax to the city and the state. That's pretty common.

However, those are income taxes paid by anyone working in the state, not just players. So an artist performing in the state has to pay state and local income tax.

This seems to be a tax on specific occupations that has been expanded to included professional NHL and NBA players. The other occupations pay $400 and include Realtors, dentists, doctors, etc.

These are pretty good stories

http://articles.latimes.com/2009/apr.../sp-jock-tax12

http://money.cnn.com/2005/04/14/comm...sbiz/index.htm

Tennessee apparently doesn't have an income tax, so they are looking for some way to cash in on the visiting players just like those states that do have a state income tax. I'm sure they would justfify it as we think it is awful that you are doing it to our players, so if you don't stop, we'll do it to your players. Oh, and pick up a little local cash to compensate for the municipal costs associated with the team.

[Sotnos]

Originally Posted by timothy

Which begs the questions... do other states/municipalities levy a similar tax?

I've honestly never heard of such a thing before, but I think Donnie is on to something re: there being no state income tax so they're trying to get something. Like he also said, athletes already have to pay taxes in each state (with state income tax) they're earning money in, that's nothing new.

If so, are the min salary guys actually making a living playing hockey anymore between income taxes, professional privilege taxes, agent fees, NHL escrow, NHLPA dues, etc.?

Yeah, a 6 figure salary. Honestly if they didn't think it was worth it they wouldn't be there.

[Flycoon]

Originally Posted by Donnie D

I know that most states and cities that have income taxes charge players for the games played in their community. So when in Cleveland, a city that I used to live in, they would pay income tax to the city and the state. That's pretty common.

However, those are income taxes paid by anyone working in the state, not just players. So an artist performing in the state has to pay state and local income tax.

This seems to be a tax on specific occupations that has been expanded to included professional NHL and NBA players. The other occupations pay $400 and include Realtors, dentists, doctors, etc.

These are pretty good stories

http://articles.latimes.com/2009/apr.../sp-jock-tax12

http://money.cnn.com/2005/04/14/comm...sbiz/index.htm

Tennessee apparently doesn't have an income tax, so they are looking for some way to cash in on the visiting players just like those states that do have a state income tax. I'm sure they would justfify it as we think it is awful that you are doing it to our players, so if you don't stop, we'll do it to your players. Oh, and pick up a little local cash to compensate for the municipal costs associated with the team.

Prorated on a per game played per locale. Very involved tax returns, particularly when dealing with places like Philly that have state and city tax. Then mix in the Canadien taxes and their provincial and local taxes and you have quite a job ahead of you.

This applies to anyone who works in multiple locales. We do a return for a guy who does stage production work for various concert venues; 18 state tax returns in addition to the federal with total gross income of around $45K. Pain in the ass.

The professional privilege tax is a new one on me.

[Top Shelf]

"We do a return for a guy who does stage production work for various concert venues; 18 state tax returns in addition to the federal with total gross income of around $45K. Pain in the ass."

Yet another cogent argument against the unwieldy and tyrannical behemoth that is income taxes. Fact: Govt. can be funded far more simply, fairly and more cheaply with consumption taxes. More money in your paycheck; pay as you go; save billions (with a B) every year in fees to...people getting paid for doing tax returns, which are a "pain in the ass."

QED

Sorry flycoon Worth a try, anyway...we gave the current system 75 yrs to become the incomprehensible, irreparable mess it is today; time to give the alternative, simple method a few yrs, then evaluate how well it works (for everyone, not just the wealthy)

Until then the guys getting paid to play hockey just have to tough it out and enjoy it while it lasts, and $ave $ave $ave for what's coming

[the_narrow_way]

I'm on board for a consumption tax, versus income. Necessities like fresh food, bread, and milk would have a very low tax, pre-processed, frozen foods, and soda would be higher, beer, wine, cigarettes even higher, non-work vehicles, higher, and so on.

[Sotnos]

This is moving

[Flycoon]

Originally Posted by Top Shelf

Sorry flycoon Worth a try, anyway...we gave the current system 75 yrs to become the incomprehensible, irreparable mess it is today; time to give the alternative, simple method a few yrs, then evaluate how well it works (for everyone, not just the wealthy)

The current system of taxation is with us until we see public financing of election campaigns and the eradication of pacs. I'll be 54 in a couple of weeks; I'll be long retired or have taken a dirt nap when either happens regardless fo the party in power. I'm more worried about the prophecies of the Mayan calendar than change on the horizon to our system of taxation.

Just wait until you see a 5-4 Supreme Court decision in the next year giving corporations all of the rights of any individual. Then you will see your Congressmen dressed like NASCAR drivers or Soccer players with their sponsors proudly displayed on their suits.

[Hoek]

Originally Posted by Flycoon

Just wait until you see a 5-4 Supreme Court decision in the next year giving corporations all of the rights of any individual. Then you will see your Congressmen dressed like NASCAR drivers or Soccer players with their sponsors proudly displayed on their suits.

That would make voting a LOT easier and make politicians a LOT more honest at least.