State/Federal Tax issues with contracts

Post #1 » by **Mr. E** » Sat May 2, 2009 6:05 pm

Do we have any accountant-types in this place???

Me and a bunch of friends were talking about the playoffs, which turned into a discussion about the business of basketball, contracts, etc...

A few years back, Doc Rivers used that famous sales pitch for free agents in Orlando: "80 degrees and no State Taxes." A few of the guys talking about this were convinced that the NBA has some sort of system that allows teams from high-tax states (or Canada) to offset the impact of salary-loss against teams with low or no state taxes.

For some reason they all looked at me. I had the ol' Deer in the Headlights look, because I don't know if I've ever heard of anything like that.

Help me, RealGM...you're my only hope!

FGump · Post #2 » by **FGump** » Sun May 3, 2009 5:23 am

There are special rules for Canada only.

http://members.cox.net/lmcoon/salarycap.htm#Q63
...since Florida has no state income tax, an offer from Orlando will offer a higher net income than the same offer from Los Angeles. However, the league added a regulation to help neutralize the tax disadvantage of Canadian teams. All teams are permitted to offer a signing bonus of up to 20% (see question number 62). For U.S. residents in Canada, this bonus is taxed at just 15%. Using this bonus, Canadian teams can nearly achieve tax neutrality.

Dunkenstein · Post #3 » by **Dunkenstein** » Sun May 3, 2009 5:59 pm

It should also be noted that NBA players have to pay state taxes when they are on the road playing in states with income tax. So, for example, an Orlando player has to pay tax on 3/82 of his annual salary to California when he plays one game each against the Clippers, Lakers and Warriors.

By the same token a Lakers player only pays taxes on half his salary to California for the 42 home games plus a percentage for any games he plays against the Clippers and the Warriors.

Needless to say, it's a nightmare for each player's accountant, having to file over a dozen state tax forms.

Joana · Post #4 » by **Joana** » Sun May 3, 2009 11:44 pm

Dunkenstein wrote:It should also be noted that NBA players have to pay state taxes when they are on the road playing in states with income tax. So, for example, an Orlando player has to pay tax on 3/82 of his annual salary to California when he plays one game each against the Clippers, Lakers and Warriors.

By the same token a Lakers player only pays taxes on half his salary to California for the 42 home games plus a percentage for any games he plays against the Clippers and the Warriors.

Needless to say, it's a nightmare for each player's accountant, having to file over a dozen state tax forms.

Nice info. You definitely need a fiscal reform though.

moofs · Post #5 » by **moofs** » Thu May 14, 2009 5:20 pm

Dunkenstein wrote:It should also be noted that NBA players have to pay state taxes when they are on the road playing in states with income tax. So, for example, an Orlando player has to pay tax on 3/82 of his annual salary to California when he plays one game each against the Clippers, Lakers and Warriors.

By the same token a Lakers player only pays taxes on half his salary to California for the 42 home games plus a percentage for any games he plays against the Clippers and the Warriors.

Needless to say, it's a nightmare for each player's accountant, having to file over a dozen state tax forms.

In spite of the fact that the player's employer is still in, say, Florida? Does it work like this for regular jobs that require travel? I'm not familiar with it.

bgassassin · Post #6 » by **bgassassin** » Sat May 16, 2009 6:48 pm

moofs, I live in Memphis, TN and primarily work in the Memphis area as a merchandiser (TN does not have a state tax) and I do work in both Northen MS and Eastern AR and I do not get taxed.

NetsForce · Post #7 » by **NetsForce** » Mon May 18, 2009 5:24 pm

moofs wrote:In spite of the fact that the player's employer is still in, say, Florida? Does it work like this for regular jobs that require travel? I'm not familiar with it.

http://www.salestaxsupport.com/sales-ta ... .php#Nexus

Google "Nexus + Taxes" if you're interested in learning more, maybe I'll pull the paragraph out of my intro. to taxes book later.

Dunkenstein · Post #8 » by **Dunkenstein** » Mon May 18, 2009 6:26 pm

bgassassin wrote:moofs, I live in Memphis, TN and primarily work in the Memphis area as a merchandiser (TN does not have a state tax) and I do work in both Northen MS and Eastern AR and I do not get taxed.

Have you or your company informed the state tax officials in MS and AR that you do work in their states?

bgassassin · Post #9 » by **bgassassin** » Mon May 18, 2009 7:02 pm

Uhhhhhh ...

*runs away*