NHL monitoring teams’ income-tax advantages, but ‘there are no easy fixes’

[Peasy]

Four of the past five Stanley Cup championship teams have come from states that don’t collect state income taxes — and seven of the past 10 finalists.

“It’s an issue that comes up from time to time in our room at the board level and general managers level,” NHL deputy commissioner Bill Daly said last month at the NHL’s European player media tour in Prague. “There are no easy fixes. It’s not like we can just pick from Column A and fix the problem overnight. Players make decisions on where they want to play for a variety of reasons. Their bottom line is one of them, but the quality of life and the communities they live in is probably more important.”

Daly echoed that sentiment Tuesday at the NHL’s North American player media tour in Las Vegas. He said while it’s too early to determine if this is something that may have to be addressed, he has talked to the NHL Players’ Association about the subject and the mutual feeling is that leveling the playing field would be too complicated.

“They have to find a way to tweak it, honestly,” Ottawa Senators forward Shane Pinto said Tuesday. “If you look at all these free agents, you don’t blame them for going down south. It’s just what it is, and it’s best for their families and taxes and lifestyle-wise. But I do think they have to find a way, especially for the Canadian teams. They’ve got to overpay guys to come to Canada every time, and that messes up with the cap. I think they do have to find a way to try to just even it out. “I know it’s not easy because it’s been like that forever, but I think it’d be nice to have an even playing field.”

“Obviously there’s chatter out there, specifically in the Canadian media, that the Canadian franchises are disadvantaged. We take that chatter seriously and we always look for ways to make the system better. I just don’t have any obvious answers to it.” Daly was asked if he could envision a scenario where teams in Florida, Vegas, Nashville, Dallas or Seattle have a lower cap ceiling than other teams. He said, “I don’t think we could ever have a different cap for different teams, even though we kind of do in some respects with respect to how the CBA works and bonus overages and the like. So I suppose maybe there’s a formula that you could think of that way. “I have other ideas that I put ahead of that one.”

https://www.nytimes.com/athletic/5760827/2024/09/12/nhl-panthers-lightning-income-tax-advantages/

Oh look, teams and players clearly see and feel the tax advantages. I remember people being adamant for yearssssss that it doesnt matter and players don't care about it. "Just get a good accountant and you'll make the same!!!!!" they would preach. Are those people still going to try and deny this advantage ?

Click to read more...

 

[x Tame Impala]

Just make the cap based on net salary

 

[andora]

Monitoring it.. yeah ok

 

[PuckG]

Monitoring it like they monitor cap circumvention, cheating and sexual assault in that they know it’s there but won’t actively do anything about it?

 

[Mr Kot]

Monitoring, uh huh

 

[Suntouchable13]

It's a thing, sure, but I think it's overblown. If Matthews was a free agent, would he take less money than he is making with Toronto in lower tax place? Doubtful. Drai would be making 14-15 M on the cap anywhere in the NHL. Goalie Bob would take up more than 10M in cap space if he signed with NYR? Or in California? Or somewhere in Canada? Instead of signing in Florida? I don't think so.

 

[Gaylord Q Tinkledink]

They won't do anything about it.

 

[Bear of Bad News]

Oh look, teams and players clearly see and feel the tax advantages. I remember people being adamant for yearssssss that it doesnt matter and players don't care about it. "Just get a good accountant and you'll make the same!!!!!" they would preach. Are those people still going to try and deny this advantage ?

This feels like you intend it to be a dunk, but it's important to realize (and is pointed out in every thread on the topic) that income taxes are not the only advantage/disadvantage that certain markets have, and possibly not even the most meaningful one.

 

[Kshahdoo]

Just let teams be domiciled wherever they want...

 

[Pavel Buchnevich]

Just let teams be domiciled wherever they want...

This is the best solution I’ve seen so far.

 

[Foppberg]

I mean yeah, it is a problem but it definitely isn't a simple solution that'll get a majority of the owners on board.

 

[MoneyManny]

https://www.nytimes.com/athletic/5760827/2024/09/12/nhl-panthers-lightning-income-tax-advantages/

Oh look, teams and players clearly see and feel the tax advantages. I remember people being adamant for yearssssss that it doesnt matter and players don't care about it. "Just get a good accountant and you'll make the same!!!!!" they would preach. Are those people still going to try and deny this advantage ?

These people mostly live in Florida and Texas, i wonder why?

 

[Howboutthempanthers]

Well obviously the only reason those teams won was because of the tax advantage. How could they possibly compete with the awesomeness of teams like Toronto, otherwise?

 

[Captain Mountain]

OP, did you read the article? Its less that it has no effect, but more that its impact gets overblown.

I mean yeah, it is a problem but it definitely isn't a simple solution that'll get a majority of the owners on board.

The concern may also be keeping the majority of owners on board with the status quo.

 

[Shane Diesel]

https://www.nytimes.com/athletic/5760827/2024/09/12/nhl-panthers-lightning-income-tax-advantages/

Oh look, teams and players clearly see and feel the tax advantages. I remember people being adamant for yearssssss that it doesnt matter and players don't care about it. "Just get a good accountant and you'll make the same!!!!!" they would preach. Are those people still going to try and deny this advantage ?

This is great news for Canadian hockey fans, you have a built in excuse for your years of failure. Always someone else's fault.

 

[Toby91ca]

Just let teams be domiciled wherever they want...

I don't see how that does anything. Incorporation of the entity in "x" location doesn't really have any impact on how the individual is taxed. If they are earning their income in "y" location, that's what's important.

 

[Silky Johnson]

Just make the cap based on net salary

There are tax planning/sheltering schemes in some jurisdictions that are advantageous but take years or decades to show benefit. It truly is not that simple.

 

[Jared Dunn]

It's a thing, sure, but I think it's overblown. If Matthews was a free agent, would he take less money than he is making with Toronto in lower tax place? Doubtful. Drai would be making 14-15 M on the cap anywhere in the NHL. Goalie Bob would take up more than 10M in cap space if he signed with NYR? Or in California? Or somewhere in Canada? Instead of signing in Florida? I don't think so.

UFAs sure, but they're getting 10-20% discounts on virtually every re-signing. It's definitely not nothing

 

[Johnny Rifle]

If the owners really had a problem with the current situation they would just abandon the cap entirely. They didn't deprive us of an an entire season and a half of hockey just so they could get rid of the cap a decade later once a few people started complaining.

Cost certainty is what the owners wanted, not competitive balance. If it's advantageous to small market teams with lower taxes so be it.

 

[hangman005]

This feels like you intend it to be a dunk, but it's important to realize (and is pointed out in every thread on the topic) that income taxes are not the only advantage/disadvantage that certain markets have, and possibly not even the most meaningful one.

I have it on good authority the many players refuse to play for Vegas because they don't want me as fan.... especially an onlyfan.

 

[Empoleon8771]

Turns out players on Canadian teams are just as whiney as Canadian fans and media.

No one gave a shit about the tax advantages of places like Florida, Nevada and Texas when Pittsburgh, LA and Chicago were dominating the cups in the 2009-2019 range. But now that there has coincidentally been cup winners from income tax free states in the past few years, fans just want to whine about how unfair it is.

It's funny that we never hear fans or media from teams from California (12.3% state income tax). It's always just Canadian teams, as Daley even says:

Obviously there’s chatter out there, specifically in the Canadian media, that the Canadian franchises are disadvantaged.

I also find it hilarious that Shane Pinto of the Ottawa Senators is complaining about the tax advantages, as if the only issue that is causing the Senators to be bad is taxes

 

[Captain Mountain]

If the owners really had a problem with the current situation they would just abandon the cap entirely. They didn't deprive us of an an entire season and a half of hockey just so they could get rid of the cap a decade later once a few people started complaining.

Cost certainty is what the owners wanted, not competitive balance. If it's advantageous to small market teams with lower taxes so be it.

If a person really had a problem with the shape of their nose, they'd just cut off their nose.

God forbid there be more options and nuance than owners either not having a problem or abandoning the cap entirely.

 

[Golden_Jet]

This is great news for Canadian hockey fans, you have a built in excuse for your years of failure. Always someone else's fault.

Is it a great excuse for California and New York teams as well.

 

[x Tame Impala]

There are tax planning/sheltering schemes in some jurisdictions that are advantageous but take years or decades to show benefit. It truly is not that simple.

I was being sarcastic, hence the emoji. It's a very, very, complex system and the "net pay" solution is often touted around here as some sort of solution when in reality it's nothing of the sort

 

[Captain Mountain]

Turns out players on Canadian teams are just as whiney as Canadian fans and media.

No one gave a shit about the tax advantages of places like Florida, Nevada and Texas when Pittsburgh, LA and Chicago were dominating the cups in the 2009-2019 range. But now that there has coincidentally been cup winners from income tax free states in the past few years, fans just want to whine about how unfair it is.

It's funny that we never hear fans or media from teams from California (12.3% state income tax). It's always just Canadian teams, as Daley even says:

Its coming from American teams too.

I think people aren't highlighting the fact that we had a flat cap from about 2020 to this offseason. With less growth in the cap, being able to maximize cap space became more important.