Super Bowl tax bite: Broncos, Seahawks must pay NJ taxes

[FarCenter]

When Peyton Manning takes the field at MetLife Stadium for the Super Bowl next weekend, there is one defender he will have absolutely no chance of evading.

The tax man.

The state Division of Taxation will be taking a cut of the Denver Bronco quarterback’s estimated $15 million salary, as well as a portion of the $7 million paid to Seahawks running back Marshawn Lynch, and a piece of the $662,434 Seattle starting quarterback Russell Wilson will earn next season.

Indeed, every member of the two Super Bowl teams coming here this week will take a tax hit during their brief stay in New Jersey — every player, every coach and trainer and anyone else who regularly travels with two organizations.

Unlike Florida — which has hosted 15 Super Bowls and had been vying for this one too, will see temperatures this week in the 70s and has no personal income tax for National Football League players (or anyone else for that matter) — New Jersey imposes an 8.97 percent tax bite on all out-of-state athletes that come here to play.

...

California, which has five major league baseball teams, three NFL teams, four NBA teams and three NHL teams, receives more than $100 million annually in taxes from visiting athletes.

Raiola said states with an income tax have always had provisions to collect from nonresidents earning money while working in those states. But it was not until 1991 that professional athletes playing away from home became a major revenue stream for those states. That’s when California sent a tax bill to Michael Jordan and the Chicago Bulls after they had the temerity to beat the Los Angeles Lakers in the NBA Finals.

California’s income tax was (and still is) much higher than the Illinois tax rate, which meant Jordan — who received a credit for any out-of-state taxes applied against his Illinois return — was out of pocket for the difference. Jordan’s fans in the Illinois legislature were outraged.

They came up with a bill to get back at California, taxing athletes who came to Illinois to play, said Raiola. The bill was informally dubbed "Michael Jordan’s Revenge."

http://www.nj.com/super-bowl/index.ssf/2014/01/not_even_the_broncos_and_seahawks_can_evade_the_tax_man_when_super_bowl_2014_comes_to_nj.html

[monmouth3]

1. Well for gawds sake people, we have legal fees and stuff to pay out! Hope I don't need the sarcasy..

[RB TexLa]

2. Manning's bill including the Jets game next fall

Those 10 days in New Jersey, divided by an estimated 235 total duty days, means that Manning’s accountant will have to allocate 4.26 percent of the quarterback’s salary to New Jersey — about $646,000 if he wins the Super Bowl, and $644,000 if he loses, according to Raiola. His New Jersey tax bill (with the top individual tax rate here at 8.97 percent) will come to about $57,000 for his 10 days in the Garden State, whether he wins or loses.

[BlueStreak]

4. Corrrect me if I am wrong, but he doesn't pay double taxes on that, right?

If some of his income is earned in New Jersey, then he pays taxes on it there, but he doesn't pay taxes on that same money in Colorado.

I'm having trouble seeing where there is any injustice here.

Colorado is 4.65% flat income tax rate
New Jersey has a progressive income tax going from 1.4% to 8.97

It is going to net out about the same for him either way. And if he has to pay a little more tax for his time in NJ, sorry, he gets no sympathy from me. No doubt his accountant is already hiding most of his income in his Papa John's empire.

[Igel]

7. Probably not.

If you move between states you have to file tax returns in all the states you earned money in. You don't pay taxes (in most states) for money you earned in another state.

If you do, you deduct the amount you already paid in taxes in the other state from the taxes you own in your primary state.

I think every time I had to do this I actually had to allocate earnings to a specific time, and that meant to a specific state. So when I earned $30k in Texas for the last five months of a particular year and $10k in NY for the first 7 months I paid NYS taxes on $10k and Texas taxes on the $30k (Texas has no income tax, so that was easy).

I think I had the option of averaging the income, but that would have been silly.


This is a bit different, because IIRC that was taxes owed as a resident. The Seahawks aren't residents of Jersey. Principle's going to be the same, though. Even if it is the case that states really, really like to make as much money as they possibly can.

[RB TexLa]

11. .

GENERAL INFORMATION
In certain situations a taxpayer can earn income while residing in Colorado, but the income is taxable in another
state. Residency and income tax rules could require the income be included on the Colorado income tax return. To
prevent double taxation of the income, Colorado residents can claim a credit for the taxes paid to the other state.
[§39-22-108, C.R.S.]
To claim this credit, taxpayers must complete and submit Form 104CR with their Colorado Individual Income Tax
Return, Form 104. A copy of each tax return filed in the other state must accompany the Colorado forms. Submit
supporting documentation when you file your return using the E-Filer Attachment function of Revenue Online, or
attached to your paper return.


http://www.colorado.gov/cms/forms/dor-tax/Income17.pdf

[BlueStreak]

20. Thanks. So basically that whole article is bugus.

[RB TexLa]

23. As far as the net cost to the players, yes. But it's a battle between the states over the money

things would be simpler for the players accountants and the states if they just paid the taxes to their home states. I guess if you did the math states with low payroll teams do marginally better with this way of doing it, just seems like a lot of paper work and time by both the states to fight each other over.

The players regardless of their enthusiasm over paying taxes might be happier having those tax dollars going to their state.

[Cirque du So-What]

3. Please, stop

I'm getting a little weepy, thinking about Peyton Manning having to pony-up a few bucks

[BlueStreak]

6. Oh, the humanity ...

[world wide wally]

5. That's why God created accountants

[edhopper]

8. And all deductible

from Federal tax.

[NutmegYankee]

13. Well, deductible from your federal taxable income.

Practically a requirement if one is going to live in the Northeast.

[edhopper]

14. Yes, taxable income, that's what i meant

thanks for the correction.

[rustydog]

9. I'm sure that is a bridge they will be glad to cross

wait a minute...

[BlueStreak]

10. What's the point? That the right-wing anti-gummint machine never takes a day off?

The article is just right wing bullshit to keep whipping up the idea that government is evil and oppressive. Why are we posting that here?

[CBGLuthier]

12. and of course the owners will not have to pay a penny more

Tax the shit out of labor and kiss money's green fat ass.

[liberal_at_heart]

15. +1

[11 Bravo]

16. I wonder if it would be possible to structure a contract so that a player ...

was paid a salary for their home games, but agreed to play for free at away contests ... you know ... "for the love of the game".

[jmowreader]

18. I think the governments of the several states would be wise to that one

This isn't something that JUST hits pro athletes; anyone who works in more than one state is required to pay taxes to each of those states.

Worry not for the poor downtrodden Marshawn Lynch, whose $4 million annual salary is sufficient to hire a tax lawyer. Worry instead for all the independent truckers who have to record every mile driven in every state traveled through so they can correctly file their returns. It is for them the Two Month Extension was invented.

[11 Bravo]

19. Trust me, I shed no tears for Marshawn or any other pro athlete. They'll do just fine.

I was engaging in more of an intellectual "what if" exercise. (And I completely agree with you regarding the plight of the long-haul independent rig operator.)

[geek tragedy]

17. How did I know who posted this when

I saw the headline?

[BlueStreak]

21. Well, I won't speculate on motives of the OPer. But let's be clear about the motives of the author

As far as I know, the OPer simply felt it was an interesting angle on the Super Bowl. So be it. But let's get real about what this article really is.

The right wing media machine never takes a day off. This is just more of their usual garbage designed to turn the people against their government. And why does the right wing do that? Because they hate the government? Not, of course not. They LOVE the government. That's why spending and deficits explode every time we have a Republican President. There is no defense contractor that isn't worth a half trillion in contracts when the Republican money machine is running full bore.

The reason they go with the anti-government message is because their research tells them that the only people who will vote for these miserable bastards are ignorant, scared, relatively uneducated people, and those people respond to the anti-government message big time. "I'm mad as hell, and I can't even tell you why -- that's how mad I am."

[NoGOPZone]

24. .

[1000words]

22. The bonus shares from the league will easily cover the bill.

No one is walking away poorer, after visiting NJ.