9 States with No Income Tax - NHL CAP

[Golden_Jet]

Yes, they collect USD in CAD in Canada, but doesn't it switch on whichever one is higher? Or is it just strictly based on USD?

No strictly US funds , regardless of rate.

 

[T REX]

To be clear I didn't say it was a problem, I'm saying if it is, there can be simple ways to integrate this into the system. If you want to know what I think: people of any industry in that income bracket have many ways to minimize taxation far more effectively than me.

So like I said, apply it to everyone. State tax + federal tax, in Canada too. Provincial tax + federal tax. Omit the rest. This is purely for salary cap. Even if there are no state taxes like people say is the case in Florida, the cap hit of those teams' players will drop based on the federal tax rate.

WHy not other taxes like property tax? Sales tax? You could go on forever. Let's include endorsement money then as well.

This is old and tired and useless. No other sport's fans complain like hockey fans. It's pathetic.

 

[T REX]

There are too many variables. Not easily done. Local tax laws change and when they do, they change mid-season, secondly they have a jock-tax where they pay taxes in each state they play. Different states have different rules for how these are calculated. Now, a player gets traded from the Rangers to the Red Wings in December. Rangers made their trip to California in November and the player has already played in California for the season. Red Wings do not visit the 3 Cali teams til March. This player's calculation is different than the player coming from the Red Wings to the Rangers.

In NY, the tax rate for someone earning $1,077,550 to $5,000,000 is $72,166 plus 9.65% of the amount over $1,077,550. For someone making $5,000,001-$25,000,000 it is $450,683 plus 10.3% of the amount over $5,000,000. However, it is based on his taxable NY income. Then there are different write-offs, and each person's write-offs are different. I guarantee the money MacKinnon spends on his nutritionist and massage therapist are all written off as business expenses. Realistically speaking, they would need to change the cap to run from Jan 1st-Dec 31st rather season to season and then calculate AFTER either April 15th in the US and whatever tax deadline day in Canada is (if they have one, honestly do not know). Then, you can actually calculate each player's after-tax earnings and determine each team's expenditures, and then calculate whether the players are owed more or have to pay more to escrow. Which in-turn screws up their actual earnings and impacts their tax liabilities the following year.

Tip of the iceberg.

We are just going around in circles.

Tampa wins and everything is now a problem...taxes...LTIR...

Get a decent GM and ownership and compete.

Stop making excuses.

 

[triggrman]

WHy not other taxes like property tax? Sales tax? You could go on forever. Let's include endorsement money then as well.

This is old and tired and useless. No other sport's fans complain like hockey fans. It's pathetic.

I blame hockey media. It’s the laziest most hometown biased least informative of the major sports

 

[Gamimenos]

Tax rates are maximums that nobody pays. So you're just giving extra advantages to the high tax areas. For example, highest tax rate in NY is 10.9%. Florida's tax rate is 0%. You can't just assume that a Florida salary of $89.1 is the same as a NY salary of $100, because there isn't a single person paying 10.9% of their total gross income to the state of New York. The person getting paid $100 in NY is coming out ahead.

Right, so we just assume everyone pays 0 and this is somehow better?

 

[glovesave_35]

This is old and tired and useless. No other sport's fans complain like hockey fans. It's pathetic.

Right. Do you ever hear about how the Rockets, Mavs, Heat, etc. have a leg up on literally any team in any state that has a higher income tax situation? The Lakers are a premier destination. Even the Clippers became one when they got a couple really good/great players. This is never a discussion among NFL or NBA fans that I'm aware of.

 

[glovesave_35]

I blame hockey media. It’s the laziest most hometown biased least informative of the major sports

Of all the major sports, hockey fans exist in a bubble more than any of the others in my experience. I know plenty of hockey fans, probably many posters here, who are hockey fans and consume virtually no other sports. Most fans of the other major sports are cross-pollinators. I think that has a lot to do with it.

 

[triggrman]

Right, so we just assume everyone pays 0 and this is somehow better?

There are so many loopholes this is basically what you have to do. Every market has it's pluses and minuses, financially and other.

It's also way overblown.

 

[glovesave_35]

Right, so we just assume everyone pays 0 and this is somehow better?

Yes. Do you want to add into the equation property taxes. Anything else?

 

[VivaLasVegas]

You do realize that professional athletes pay state income tax for revenue earned based on where they play and not on where the team is located, i.e., VKG players at California games pay California tax for the revenue they earned at those games, and California players don't pay California state income tax on the games they play in Vegas. Or maybe you don't realize that.

 

[VivaLasVegas]

Yes. Do you want to add into the equation property taxes. Anything else?

Higher sales taxes in Seattle.

 

[Lazlo Hollyfeld]

Shouldn't this be in the business of hockey forum?

I feel like there the discussion would be more likely to involve people who actually have a decent understanding of how taxes work.

 

[triggrman]

Tell me if I’m right here..
Let's keep the numbers simple.
Let's say $1000 is my annual salary.
agent is taking 5% off the top.
So I'm at $950. Fed is taking 40%.
I'm at $570. Let's say 40% those game are against a team in a state with a 10% state income tax. So that's what $23 in taxes?.
So in a no state income tax state, I'm paying $23 in taxes.
Now let's say I play a state with income tax of 10 and let's say I only get to play 25% of my games against none state income tax states. I'm now paying a whopping $43 dollars. So an advantage of what 2%?
I’d say the bigger disadvantage is the cost of living differences between markets. Maybe that’s where the focus should be.

 

[patnyrnyg]

Of all the major sports, hockey fans exist in a bubble more than any of the others in my experience. I know plenty of hockey fans, probably many posters here, who are hockey fans and consume virtually no other sports. Most fans of the other major sports are cross-pollinators. I think that has a lot to do with it.

That has not been my experience. I know of only 1 person who was only a hockey fan and not a fan of any other sport. My chemistry teacher from 10th grade. He passed away in either 1997 or 1998 so I now literally do not know anyone who ONLY likes hockey.

 

[patnyrnyg]

Tell me if I’m right here..
Let's keep the numbers simple.
Let's say $1000 is my annual salary.
agent is taking 5% off the top.
So I'm at $950. Fed is taking 40%.
I'm at $570. Let's say 40% those game are against a team in a state with a 10% state income tax. So that's what $23 in taxes?.
So in a no state income tax state, I'm paying $23 in taxes.
Now let's say I play a state with income tax of 10 and let's say I only get to play 25% of my games against none state income tax states. I'm now paying a whopping $43 dollars. So an advantage of what 2%?
I’d say the bigger disadvantage is the cost of living differences between markets. Maybe that’s where the focus should be.

Even the cost of living I am not so sure matters for these guys. Even cities which are relatively cheap have their expensive neighborhoods or suburbs and that is where these guys are living. I have never looked too deeply into any of the studies, but when they compare cost of living and they say things like $100,000 in NYC is the equvialent of $40,000 in Raleigh" I believe they are comparing the median neighborhoods. These guys are not living there.

 

[tarheelhockey]

Tell me if I’m right here..
Let's keep the numbers simple.
Let's say $1000 is my annual salary.
agent is taking 5% off the top.
So I'm at $950. Fed is taking 40%.
I'm at $570. Let's say 40% those game are against a team in a state with a 10% state income tax. So that's what $23 in taxes?.
So in a no state income tax state, I'm paying $23 in taxes.
Now let's say I play a state with income tax of 10 and let's say I only get to play 25% of my games against none state income tax states. I'm now paying a whopping $43 dollars. So an advantage of what 2%?
I’d say the bigger disadvantage is the cost of living differences between markets. Maybe that’s where the focus should be.

I haven’t checked the math, but your thinking is more or less right. Taxes are assessed by where the work takes place, so living in a no-tax state has less impact than it seems at first. Road schedules wipe out a lot of the difference.

Of course it’s always possible to game the system in one way or another. I assume that signing bonuses are taxed according to the local jurisdiction only, so a front loaded contract with a big signing bonus can look different depending where it’s signed. But that bonus is also being taxed very heavily no matter where it’s made, so we’re still talking about a small percentage of the whole.

And then the other factor is that places with no income tax usually put a lot of weight on their sales tax. So if the player is actually living in that state, they are spending a bunch of money into that bucket instead of the income tax bucket. It might not even out completely, but again the difference is smaller than it looks on the surface.

It is still an advantage for those teams, but you’re absolutely right that a low cost of living usually makes much more of a difference than the tax rate.

Also, I would guess real property taxes make a big difference for guys who have million dollar homes. Just as an example, NJ taxes real estate at nearly four times the rate of Tennessee, and real estate itself is about twice as expensive in NJ. So a Predators player will pay $1M plus $7100 annually for the same home that costs a Devils player $2M plus $49800 annually. That adds up really fast, we’re talking some $1.2M difference on real estate alone after five years.

 

[patnyrnyg]

You do realize that professional athletes pay state income tax for revenue earned wherever they play if that state has an income tax, i.e., VKG players at California games pay California tax for the revenue they earned at those games, and California players don't pay California state income tax on the games they play in Vegas. Or maybe you don't realize that.

How the jock tax is calculated varies state to state. Some base it only on games, while others base it on days spent in the city/state.

 

[Gamimenos]

Yes. Do you want to add into the equation property taxes. Anything else?

Why? Property taxes are based on your dwelling.

 

[glovesave_35]

That has not been my experience. I know of only 1 person who was only a hockey fan and not a fan of any other sport. My chemistry teacher from 10th grade. He passed away in either 1997 or 1998 so I now literally do not know anyone who ONLY likes hockey.

Look around this forum. It is obvious that a good number of people only follow hockey with any modicum of deep interest.

 

[glovesave_35]

Why? Property taxes are based on your dwelling.

Why not? Do you think millionaire professional athletes in "tax haven" states are going to own a little 2 bed, 1.5 bath?

 

[Gamimenos]

Why not? Do you think millionaire professional athletes in "tax haven" states are going to own a little 2 bed, 1.5 bath?

Because personal choices like what house you live in would create another loophole.

Don't get me wrong though, Molson subsidizing his players to purchase estates to lower their cap hits would be wonderful.

 

[patnyrnyg]

Look around this forum. It is obvious that a good number of people only follow hockey with any modicum of deep interest.

This site is not an indicator of hockey fans everywhere.

 

[Golden_Jet]

Tell me if I’m right here..
Let's keep the numbers simple.
Let's say $1000 is my annual salary.
agent is taking 5% off the top.
So I'm at $950. Fed is taking 40%.
I'm at $570. Let's say 40% those game are against a team in a state with a 10% state income tax. So that's what $23 in taxes?.
So in a no state income tax state, I'm paying $23 in taxes.
Now let's say I play a state with income tax of 10 and let's say I only get to play 25% of my games against none state income tax states. I'm now paying a whopping $43 dollars. So an advantage of what 2%?
I’d say the bigger disadvantage is the cost of living differences between markets. Maybe that’s where the focus should be.

Fed tax - 40% of $1000 is $400
State tax - 10% is a $100, $100 x 75% with states with taxes is $75

You don’t take the percentage of what’s left each time.

 

[VivaLasVegas]

What pulls players in different directions has a lot more to do with other circumstances than just tax differentials. If it were me, I'd be telling my agent something like "anywhere that doesn't require me to warm up my car in the winter or have ice fishing within 500 miles."

 

[theimmortal1]

What about adding endorsement income to the cap?