An actual breakdown on taxes per team

[Crede777]

For an nhl player only their endorsement and other side gig can be used that way, but not for the teams salary.

Should NHL Players Open a Corporation? - Wealth Management | Retirement Planning for Canadians

[vc_row][vc_column][vc_video link="https://youtu.be/VdvTNRxlKl4" css=".vc_custom_1644946091219{padding-top: 20px !important;padding-bottom: 20px !important;}"][vc_column_text css=".vc_custom_1644944455867{padding-top: 20px !important;padding-bottom: 20px !important;}"]Tax Season: Part 5...

transcanadawealthmanagement.com

According to gpt ...THe NHL would consider circumventing the cap to pay a corporation instead of the player and player (say unlike actor on a movie that tend to do this) are really the opposite of independent contractors, but full on union-employees (that cannot even change employer or take a contract to play pro sport for a different team during the summer break) with health insurance, holidays, pension plan, etc... If they could do this, who could not ?

IIRC - setting up a corporation is for deferring income until you're earning less, not for straight avoiding taxes.

If you want to minimize taxes, my guess is that players want to structure their salary into signing and performance bonuses and set up residences in a state with low income tax. Then they get those bonuses paid in the off-season while they're living in that low income tax state. Since this is an obvious maneuver, I would also guess that Canadian provinces still get a cut in some form of tax (albeit smaller).

 

[vancityluongo]

rich people don't really pay taxes, they just complain about them lol. this is something that hfboards posters care about. nhl'ers have accountants.

op did some great work and it's interesting at a high level, but there's a lot of incorrect information floating around here.

I do not imagine Dallas to be particularly expensive versus say Toronto or Seatles, San Josee, Vancouver...

only know this because a buddy just moved from toronto to dallas... it is more expensive

Cost of Living Comparison Between Toronto, Canada And Dallas, TX, United States

www.numbeo.com

perception wise, most people would never think that, given how much people bitch about canadian taxes and think texas is some sort of low cost haven lol

 

[Nikishin Go Boom]

Before that. The 2 biggest teams. The leafs and rangers had 1 cup in 100 years. The devils had 3. I guess there was no advantagr
To rich teams in a no cap system?

When teams could add cheater years to make more money, rich teams could make up the difference. Now that loophole is closed. No state tax teams have a systemic and unfair artificially imposed advantage



Yep. He open admitted to taking in about 1.5 million more a 4.9 x 2 salary.



That’s not the question. The question is if they take less cap hit and keep the same money as they would for an unfair advantage.

These aren’t mutually exclusive. Guys are taking less to be in more favorable markets

 

[Legion34]

These aren’t mutually exclusive. Guys are taking less to be in more favorable markets

Except. Those were never more favourable markets until the tax advantage.

LA. Anaheim. SJ. Chicago. NYR. Toronto.

Those all had some combination of weather/prestige/competitiveness.

No one ever took less to play there.

They literally only take less to play in no state tax markets.

 

[Nikishin Go Boom]

Except. Those were never more favourable markets until the tax advantage.

LA. Anaheim. SJ. Chicago. NYR. Toronto.

Those all had some combination of weather/prestige/competitiveness.

No one ever took less to play there.

They literally only take less to play in no state tax markets.

To you. Almost every canes player interviewed positively mentions being able to go to the store or out to eat and not be bothered.

 

[MadLuke]

Player agents have stated that the actual differences are minimal. There are so many different tax breaks and ways to get around things. This is more of a media driven thing than anything else.

If player agents take percentage on the gross player salary they would not like their players taking advantageous pay cut but end up with higher effective revenues post-tax because of the state they play in....

Not really a disinterested party.

only know this because a buddy just moved from toronto to dallas... it is more expensive

When you look at the price of housing when you buy like an nhler (-60/70% in Dallas) and the income after tax difference, I doubt it is really more expensive, electricity cost more but that such a small thing versus those 2.

rich people don't really pay taxes, they just complain about them lol.

That a myth (why spend fortune on politician with tax cut politics if you already do not pay taxes..., just by conviction for the public good ?), specially for an hockey player type of rich people (person that made money via a big salary).

depend where, in the US, rich people pay a giant disproportional amount of the federal income taxes for example.

It often find them, in 2021 Elon Musk paid 12 billions in personal income tax (plus everything his company pay, municipal tax, consumption tax on purchase and so on)

 

[Legion34]

To you. Almost every canes player interviewed positively mentions being able to go to the store or out to eat and not be bothered.

And did they say they took less to do so? Players openly admit they take less in gross to play in tax free markets because it’s the same in their pocket.

 

[Nikishin Go Boom]

And did they say they took less to do so? Players openly admit they take less in gross to play in tax free markets because it’s the same in their pocket.

Again there is a system in place to stop the tax differential yet people getting beating the drum

 

[Legion34]

Again there is a system in place to stop the tax differential yet people getting beating the drum

??? No there isn’t???? Tell that to Tavares who is literally getting sued by the Canadian IRS.
There is absolutely nothing in place that stops the tax advantage. According to players. GMs coaches and accountants

 

[Icarium]

Except. Those were never more favourable markets until the tax advantage.

LA. Anaheim. SJ. Chicago. NYR. Toronto.

Those all had some combination of weather/prestige/competitiveness.

No one ever took less to play there.

They literally only take less to play in no state tax markets.

Don't you get tired of playing the victim card day after day?

 

[Legion34]

Don't you get tired of playing the victim card day after day?

I get tired of explaining the undisputable and clearly calculable tax advantages that have been acknowledged by players agents gms insiders and literal NHL accountants.

I get tired of foolishness of people making erroneous comparisons to unrelated advantages (weather/fanbases/media/endorsments) that the NHL did NOT cap. And compare them to the artificial cap they imposed.

I also get tired of the hypocrisy of the same fans/owners who were crying about how unfair the pre cap system was having no issues with how unfair the current system is.

Beyond that I think I’m good.

 

[dekelikekocur]

??? No there isn’t???? Tell that to Tavares who is literally getting sued by the Canadian IRS.
There is absolutely nothing in place that stops the tax advantage. According to players. GMs coaches and accountants

Maybe he shouldn't commit tax fraud.

 

[AnInjuredJasonZucker]

Toronto's numbers need to be reduced to account for the John Tavares tax credit.

 

[MadLuke]

Again there is a system in place to stop the tax differential yet people getting beating the drum

What system ?

Maybe he shouldn't commit tax fraud.

That quite complicated to say that it was fraud:
On July 1, 2018, Tavares received a total of USD $11,395,792 from MLSE, owner of the Toronto Maple Leafs. That amount represented Tavares' total signing bonus, less a 15% withholding tax of USD $2,024,438 remitted by MSLE to the Canada Revenue Agency, and USD $1,753,750 held in escrow as required by the NHL Collective Bargaining Agreement. Tavares reported his full signing bonus on his 2018 U.S.A. tax return, and claimed a foreign tax credit for the 15% withholding tax paid in Canada on that bonus. Tavares subsequently declared that he departed the U.S. on his 2018 U.S. tax return, and filed tax returns in Canada as a resident from 2019 onward. (His employment income, including his signing bonus, received from 2019 onward were fully reported and taxed in Canada.)

The CRA later initiated an audit of Tavares' 2018 taxation year. The CRA found that Article XVI(4) of the Canada-U.S.A. Tax Treaty did not apply to Tavares' 2018 signing bonus, and that he was not eligible for the reduced treaty rate of 15%. As a result, in November 2022, the CRA reassessed Tavares' 2018 taxation year and increased his taxable income in Canada by $17,771,862, resulting in total taxes payable of $6,847,428.

Arguing that the big signing bonus was to attract an american to work in canada, is not obviously fraud, thus a trial (and why does he do any of this, if rich people do not pay taxes to start with ?)

Those laws are quite complicated and up to interpretation quite often, enough to have expert on both side quite often and can require a judge making a judgement about it.

 

[Curufinwe]

It often find them, in 2021 Elon Musk paid 12 billions in personal income tax (plus everything his company pay, municipal tax, consumption tax on purchase and so on)

https://www.cnn.com/2022/02/10/investing/elon-musk-tesla-zero-tax-bill/index.html

 

[dekelikekocur]

What system ?


That quite complicated to say that it was fraud:
On July 1, 2018, Tavares received a total of USD $11,395,792 from MLSE, owner of the Toronto Maple Leafs. That amount represented Tavares' total signing bonus, less a 15% withholding tax of USD $2,024,438 remitted by MSLE to the Canada Revenue Agency, and USD $1,753,750 held in escrow as required by the NHL Collective Bargaining Agreement. Tavares reported his full signing bonus on his 2018 U.S.A. tax return, and claimed a foreign tax credit for the 15% withholding tax paid in Canada on that bonus. Tavares subsequently declared that he departed the U.S. on his 2018 U.S. tax return, and filed tax returns in Canada as a resident from 2019 onward. (His employment income, including his signing bonus, received from 2019 onward were fully reported and taxed in Canada.)

The CRA later initiated an audit of Tavares' 2018 taxation year. The CRA found that Article XVI(4) of the Canada-U.S.A. Tax Treaty did not apply to Tavares' 2018 signing bonus, and that he was not eligible for the reduced treaty rate of 15%. As a result, in November 2022, the CRA reassessed Tavares' 2018 taxation year and increased his taxable income in Canada by $17,771,862, resulting in total taxes payable of $6,847,428.

Arguing that the big signing bonus was to attract an american to work in canada, is not obviously fraud, thus a trial (and why does he do any of this, if rich people do not pay taxes to start with ?)

I mean, odds are they're bringing into question his residency for the 2018 year. If they have proof he didn't maintain residency in the US for at least 181 days, it's probably what they're basing it on. I honestly don't pay any attention to that stuff because 1: I don't care about Toronto, 2: I'm not really familiar with all/any of the clauses within the US/Canada Tax Treaty. Being from the US though, I assume the Canadian version of the IRS is similar to our IRS in that they typically don't go after situations like this without a substantial amount of proof.

 

[Legion34]

Maybe he shouldn't commit tax fraud.

Literally the whole point. People who have swore up and down that the players will have loopholes and cited articles showing what JT did as ways to get around taxes (not the whole difference but some)

Now he did it and it’s fraud. Soooooo the tax advantages are real and can’t be erased by accounting

 

[dekelikekocur]

Literally the whole point. People who have swore up and down that the players will have loopholes and cited articles showing what JT did as ways to get around taxes (not the whole difference but some)

Now he did it and it’s fraud. Soooooo the tax advantages are real and can’t be erased by accounting

Tax avoidance isn't the same as tax fraud/evasion. There are plenty of tax avoidance mechanisms that can be taken advantage of. One is legal, the other, well, ask Tavares.

 

[Golden_Jet]

Literally the whole point. People who have swore up and down that the players will have loopholes and cited articles showing what JT did as ways to get around taxes (not the whole difference but some)

Now he did it and it’s fraud. Soooooo the tax advantages are real and can’t be erased by accounting

Tax loopholes is different than tax fraud, in JT’s case. He tried to get away with something he wasn’t entitled too, now CRA wants their money.

 

[Legion34]

Tax loopholes is different than tax fraud, in JT’s case. He tried to get away with something he wasn’t entitled too, now CRA wants their money.

Exactly. Posters magically decided that doing this was legal.

And therefore there was no tax advantage. There was even an article about it.

Clearly those posters were wrong. As I said a thousand times. The government wants its money.

Now making up magical “other” loopholes that supposedly exist is just as silly. But people will still do it

 

[MadLuke]

https://www.cnn.com/2022/02/10/investing/elon-musk-tesla-zero-tax-bill/index.html

There is many ways company pay taxes (municipals, employees salary tax income, clients purchase taxes, stockholder capital gain), like the article say about this specific year:
Although Tesla indicates its foreign tax bill came to $839 million, its state tax bill was only $9 million. And its federal tax bill was zero.

That around 12 billions in direct talked about tax that year according to the article, I am sure a company like that has years of lost accumulated from when they were bleeding money... and will pay $0 for a while at some tax level.

Exactly. Posters magically decided that doing this was legal.

And therefore there was no tax advantage.

How something legal would not be a tax advantage and vice versa, seem quite orthogonal. And the government wanting money obviously does not make the goverment right about it. And the government can right and can still not have been fraud but an honest mistake (or a financial team simply trying to aggressively maximize taxation by stretching the law ), it is not like it was obviously illegal to do or something common to use precedant about it.

 

[JaegerDice]

They definitely make you pay to live in a place as beautiful as Vancouver. Yeesh.

 

[Icarium]

I get tired of explaining the undisputable and clearly calculable tax advantages that have been acknowledged by players agents gms insiders and literal NHL accountants.

I get tired of foolishness of people making erroneous comparisons to unrelated advantages (weather/fanbases/media/endorsments) that the NHL did NOT cap. And compare them to the artificial cap they imposed.

I also get tired of the hypocrisy of the same fans/owners who were crying about how unfair the pre cap system was having no issues with how unfair the current system is.

Beyond that I think I’m good.

You could have just "No", you know.

 

[JianYang]

??? No there isn’t???? Tell that to Tavares who is literally getting sued by the Canadian IRS.
There is absolutely nothing in place that stops the tax advantage. According to players. GMs coaches and accountants

There needs to be some due diligence done, but if done with care, you can bridge the tax gap significantly.

The Tavares situation most likely has to do with his residency status and that becomes a question of fact on various primary and secondary ties to Canada. I am sure he is not nearly the only one playing in Canada with that status.

Edit just read the article, and it seems like he actually declared Canadian residency after the signing bonus, which is interesting in itself. This is going into the treaty now and out of my scope.

I'd be interested if there is any case law floating around over a similar situation.

 

[KovalchukFistPump]

Rangers get free agents all the time. Granted they do overpay a little but I don't think it's blatantly bad. Devils have also historically re-signed their players to fair deals and they are in the same tax rate as Toronto. Montreal does seem to be at a huge disadvantage because of their much higher rate + the francophone thing.

Seeing the rates really affirms to me how bad Dubas was at negotiating.