The Jock Tax
American professional athletes face what is commonly known as the “jock tax.” The jock tax, rather than being a single tax as its name implies, is actually a collection of state and local tax measures that apply to professional athletes (as well as other travelling professionals) who play, practice, and work in many different states every year. This greatly impacts both an athlete’s earnings and the states in which they must file tax returns. Athletes are a prime target for taxes on their earnings because of the transparency surrounding their high salaries and easily verified travel schedule. To assess taxes on their earnings, the athletes’ tax professionals divide income by number of days worked in each state. Days worked include only “duty days”, or days spent in a game function, such as practicing, playing, meeting, or training. Duty days are generally counted from spring training or pre-season until playoffs. As a result, some athletes end up filing tax returns in more than 20 states, plus a federal return.
The jock tax include more than just tax measures that apply only to professional athletes. For example, income taxes in many states diminish the earnings of athletes, many of whom are in a high tax bracket. In California, the 13.3% income tax rate for income above $1 million in a year, often described as a jock tax, should give pause to any athlete considering a move there. California’s jock tax will take a chunk out of Kevin Durant’s income when he moves to play basketball with the Warriors, and when Cam Newton played the Super Bowl in California, the jock tax nailed even the out-of-state quarterback. Taxes are also assessed on games played outside the United States, further decreasing player income.
Of course, athletes have incentives to play their sports that overcome the taxes due come April. Even after taxes, their earnings are high, and for those working primarily in high jock tax states, being on a successful team outweighs the downside of higher taxes.
— By Julia Damron, Esq., Barnes Law
Julia Damron is an associate attorney with Barnes Law, licensed to practice law in California.
The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
 One jock tax was found unconstitutional because it used only games played in the city as the metric. Cole, Alan, “Cleveland's Taxes on NFL Players Ruled Unconstitutional”, Tax Policy Blog, April 30, 2015, http://taxfoundation.org/blog/clevelands-taxes-nfl-players-ruled-unconstitutional.
 Ambord, Teresa, “NFL Players versus the IRS: It's a Tough Tackle”, Accounting Web, October 30, 2013, http://www.accountingweb.com/tax/sales-tax/nfl-players-versus-the-irs-its-a-tough-tackle.
 Tankersley, Jim, “What Kevin Durant tells us about tax rates”, Washington Post Wonkblog, July 4, 2016, https://www.washingtonpost.com/news/wonk/wp/2016/07/04/what-kevin-durant-tells-us-about-tax-rates/.
 Raiola, Robert, “Newton to feel effects of California's taxes”, Sports Illustrated, February 7, 2016, http://www.si.com/nfl/2016/02/06/super-bowl-50-california-jock-tax-cam-newton.
 Tankersley, supra.