Everybody pays taxes. But professional athletes pay … and pay … and pay.

Pro athletes are not like your everyday taxpayer, and players at all levels get a piece taken from them in just about every place they visit.

Known as the “jock tax,” it is additional source of revenue for states and a hassle for many athletes filing their first taxes.

Dylan Reese, a defenseman for the Portland Pirates last season, can attest to that. An eight-year pro, he said he wrote some checks to pay taxes for little more than the cost of a stamp.

“I’ve written checks for cents sometimes, under a dollar,” he said. “The whole concept is kind of strange to me. I don’t see how it makes sense financially for states to be doing it that way.”

A some levels it certainly makes sense. Billy McMillon, manager of the Portland Sea Dogs, remembers filing hefty tax returns during his six-year major league career.


“My tax returns were as big as encyclopedias,” he said, holding his fingers a couple inches apart.

Unlike Reese, Pittsburgh Pirates star center fielder Andrew McCutchen does not work in pennies. The general public got a glimpse into McCutchen’s world when he left his pay stub in the visiting locker room at Chicago’s Wrigley Field a couple weeks ago. Someone took a photo and posted it on Reddit, a social networking website.

McCutchen, who makes $10 million a year, didn’t seem to care. “That money is in my account,” he said in an Associated Press story. But the pay stub gave everyone a look into just how much he makes every two weeks – and how much professional athletes pay in taxes around the country. Not only was McCutchen’s pay withholding taxes to Pennsylvania, but also to Illinois, Missouri, Arizona and Ohio – as well as the cities of Pittsburgh, St. Louis, Philadelphia and Cincinnati – all the places he had played in the previous two weeks.


Most athletes know nothing about the jock tax when they turn pro, and few understand its concept.

“I think probably the tax code ranks, if not at the bottom, then very close to the bottom in terms of priority of things that guys are learning when they come to this country for the first time or are on their own for the first time,” said Craig Breslow, a reliever for the Boston Red Sox. “It’s one of those things that, no matter how much time you spend thinking about it, unless the IRS changes the tax code, you’re going to pay.”


Francis Wathier has played pro hockey for 10 years, including this past season with the Portland Pirates. His first tax season was an eye-opener.

“When I left home (in Ontario) coming from juniors, it was a shock,” he said of the tax laws. “The first time you see all those (forms) from the different states, you’re like, ‘Whoa, whoa, whoa!’

“But it was never for a huge amount.”

Brad Church, now the chief operating officer for the Pirates, said he had no idea what to do concerning his taxes when he made his debut as a 19-year-old with the Pirates in 1996. All he knew was the taxes took chunks out of his salary, which was about $40,000.

“At the time I played it wasn’t huge money,” he said of the taxes, “but we’re not making huge money, either.”

Yet in the end, much of what pro athletes make goes to taxes and fees.


“Don’t get me wrong, playing in the NFL you get good money,” said Matthew Mulligan, the West Enfield native who has had a seven-year career as an NFL tight end. “But you don’t even get half of it by the time the states, cities, the state you reside in, the agencies, (and) the union dues are figured in. All those things, you don’t take home as much.”

And, he added, NFL careers aren’t that long.

“You’re doing it in a relatively short period,” said Mulligan, who recently signed with the Buffalo Bills. “You try to make it last the rest of your life. You know, after football, you have to go out and get a job for the rest of your life. We’re just guys trying to make a living and when it’s done, it’s done.”

Michael McCann, a Massachusetts lawyer who is the director of the Sports and Entertainment Law Institute at the University of New Hampshire, and a legal analyst and writer for Sports Illustrated, said it may seem that athletes are taxed differently, but “states have wide latitude in how they tax workers. Historically, states have been given, maybe not carte blanche, but significant discretion in their tax rates and how they determine who they tax.”


That’s why it’s important to be surrounded by people who know what they’re doing.


“I’ve had years when I’ve had nine, 10, 11 places that I played in and had to pay (taxes),” said Mike McKenna, a goalie for the Pirates last season. “My average the last three, four years has been eight, 10 states, which makes a (certified public accountant) the most important person in your life.”

Robert Raiola, a New York CPA who is regarded as an expert on the jock tax and its implications (and is a must-follow on Twitter at @SportsTaxMan), said it’s not just important to have an accountant, but the right one.

“At the end of the day,” he said, “you’ve got to make sure you’ve got an accountant who’s familiar with all the laws.”

While the jock tax has been around since the late 1960s, few states pursued it until the 1990s. In 1991, California taxed the earnings of the Michael Jordan-led Chicago Bulls after they defeated the Los Angeles Lakers in the NBA finals. Illinois responded by imposing a tax on out-of-state players. Other states soon followed.

The taxes are calculated on a “duty days” basis, that is, on the number of days they are in a state as part of their job, be it playing, practicing or attending meetings.

There are four states with major league franchises that do not have personal income taxes: Florida, Texas, Tennessee and Washington. So a trip to Texas is more beneficial financially for Red Sox players than a trip to California, which has a 13.3 percent tax rate.


Teams and leagues do their best to prepare athletes. The NFL holds rookie symposiums. The Professional Hockey Players Association, the union for minor league hockey, also holds seminars and offers services to members.

“We just try to educate them as best we can,” said Larry Landon, the president of the PHPA.

“I speak every year at the NFL symposium for rookies,” said Stephen Kidder, a Boston lawyer who represents players’ associations in every major U.S. sports league. “And one of the things that we cover is taxes, what their tax obligations are and how their world has changed. All of a sudden they’re going to have 10 states coming at them.”

Mike McCarthy, a pitcher for the Portland Sea Dogs, said players often talk about taxes, especially when it comes to filing them in spring training or early in the season. “There’s a lot of misunderstandings about it,” he said.

He files his own taxes and each year realizes he’s filing in more and more states. “It doesn’t always make sense to me but that’s the way it’s set up,” said McCarthy. “I just try to make sure I’m not getting in trouble with the IRS.”



Some athletes have challenged the jock tax. In early May the Ohio Supreme Court struck down the method in which Cleveland collected its jock tax, which could result in millions of dollars in refunds from the city to pro athletes who played there the last three years. Before that, Tennessee lawmakers repealed the jock tax, which targeted NHL and NBA players but not NFL players. The tax – a $2,500 tax on visiting players each time they played in Tennessee (up to a maximum of $7,500) – was repealed immediately for NHL players but remains in effect until June 1, 2016, for NBA players.

Kidder, who represented two former NFL players (Hunter Hillenmeyer and Jeff Saturday) in their suits against Cleveland, said if the players are going to be taxed, they want to be taxed fairly and equally.

“From the players’ perspective, they’re properly focused on everything else,” he said. “They’ve got to the point where they recognize this is part of the challenge of being a professional athlete, that they’re going to be treated in a different manner when it comes to taxation.”

While all states have tax laws regarding non-resident income earned in that state, they are more likely to chase after athletes or entertainers for taxes.

“It’s a group of workers in a high-profile, high-paying occupation, where their presence in the state is discernible by proof of them being at the game,” said McCann, the Massachusetts lawyer. “Other workers, you don’t know when they’re in your state. If LeBron James is in a state, it’s clear that he’s there.

“And it’s not a group of individuals who have, necessarily, a lot of political capital in the state. They play for the opposing team.”


The jock tax, which applies to anyone who travels with the team (including coaches and trainers), can provide significant revenues. California, for example, collected $229.2 million in 2013 from visiting major leaguers, according to the California Franchise Tax Board.


Maine does not collect taxes on visiting minor league players. While the state has had a jock tax in its tax code since 1991, according to Dennis Doiron of the Maine Department of Revenue, it does not differentiate between visiting athletes and other non-resident workers. According to Maine tax law, a non-resident has to work in Maine for more than 12 days and earn $3,000 or more for that income to be taxable.

“The thresholds are for everyone, all non-residents,” said Doiron. “It doesn’t matter what you are, a doctor, a lawyer, an athlete, coming into the state. If you don’t meet the threshold, we won’t tax you.”

Overall there is some inconsistency when it comes to taxing minor league players. Some states tax them, others do not. And some players, such as Red Sox catcher Blake Swihart (who played for the Sea Dogs last year), say they have paid the jock tax in the minors while others, such as Red Sox pitcher Justin Masterson (another former Sea Dog), say they only started paying it when they reached the big leagues.

But there is a general sense that the minor leaguers aren’t taxed regularly.


“You can understand why they don’t focus on minor leaguers,” said Kidder. “The return for effort is nowhere near what is it for major league clubs.”

Minor league salaries are much smaller. Monthly salaries in minor league baseball range from $1,500 to $2,150. The NBA Development League has a three-tier salary system – $13,000, $19,000 and $25,000 – for the season. Play in the AHL is better, with a minimum annual salary of $43,000.

California does tax visiting minor league players, according to Dan Tahara in the public affairs office of the Franchise Tax Board. The state has a department that specifically handles the taxation of professional athletes, called the Sports Division. “The sole responsibility of that section is to make sure pro athletes who come to California do pay their taxes,” he said.

California has 17 minor league baseball teams, three NBA Development League teams and, for the first time, will have five AHL teams next season. Of Portland’s three minor league teams, only the Red Claws play in California.

Tahara said the state provides information to either the leagues or organizations that will play in California, as well as on its website.

“We try to get the information to as many people as possible so that they’re not caught off guard,” he said.

Even then, athletes don’t always understand why they’re paying the tax. But as Mookie Betts, the dynamic Red Sox center fielder, said, they deal with it.

“When it happens to you, you see that there is a lot of business things that go along with playing the game,” he said. “Everybody has to go through it. It’s not just our sport, it’s every sport.”


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