MANY STATES USE "JOCK TAX" SO THOSE WHO PLAY WILL PAY

The Washington Post via The Houston Chronicle ^ | 03/03/2003

[MeneMeneTekelUpharsin]

When Texas Rangers shortstop Alex Rodriguez stepped onto the field at the All-Star Game last July in Milwaukee, there was a huge cheer from the crowd. There may have been cheering at the Wisconsin Department of Revenue as well: By appearing in the event, Rodriguez obligated himself to pay more than $8,000 in Wisconsin income taxes.

Rodriguez and hundreds of other athletes and entertainers are finding that some of their biggest fans are state tax collectors. A growing number of states -- and some cities as well -- are aggressively pursuing high-income nonresidents who earn income from within the states' borders. This ultimate commuter tax -- often dubbed the "jock tax" -- is creating a major headache for its targets and has spawned a cottage industry of accountants and bookkeepers who advise high-profile figures on how to minimize their state taxes, prepare returns and make payments for taxes they cannot escape.

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[MeneMeneTekelUpharsin]

Of particular interest is the amount of income tax they avoid from no-income tax states. Can't say I can argue with that strategy. Funny how all of the little people (most of us) have to pay all kinds of taxes but don't have the superior income to buffer the effect. Things like the tire taxes, battery taxes ($3.00 per battery in Texas), Federal phone line access charges, etc., etc. We're being taxed to death.

[Glenn]

"Maybe 10 years ago no one should have done this, but since others have done it, we felt we owed it to our citizens to be collecting this tax," said Cincinnati city councilman David Pepper, who in December helped pass a law applying a 2.1 percent earnings tax to out-of-state professional athletes, which is expected to bring in about $750,000 to the city. "If we don't do whatever anyone else does, we're the ones with the `kick me' sign on us."

Priceless.

[NautiNurse]

I was slapped with a New Mexico income tax this year--and I am not a professional athlete. I just wonder whether I would have been double taxed if I also lived in an income tax state.

[raybbr]

Sorry. I have no sympathy for these guys. They make millions and produce nothing. No sympathy, here.

[Mr. Bird]

If you are taxed for income earned in one state, that income is exempt from taxes in another. For entertainers, the loathsome part of this type of taxation is the cost of compliance. Imagine if you had to file in 30 or 40 states every year.

[NautiNurse]

Thanks for the info--I would find myself filing in about 18 states annually--and I am not an actor.

[buccaneer81]

Sorry. I have no sympathy for these guys. They make millions and produce nothing. No sympathy, here.

A tad bitter, are we? You know, there's such a thing as a free market economy. I'm sure there are some welfare types who believe that I don't deserve my 50k per year.

As for producing nothing, they produce entertainment. Last time I checked, that was a valuable commodity in America.

Jealousy is quite unbecoming.

[meyer]

Frankly, the tax should be due in the jurisdiction in which it was earned unless a reciprocity agreement has been worked out among the jurisdictions. Way back when I worked for the local utility in Ohio, my city income tax statement would list about 30 cities in which I had worked (they were nice enough to break it down for me). Theoretically, I owed each city a portion of my city tax. Fortunately, we had reciprocity agreements among the cities so I didn't have to file except in my home town.

I can understand the burden of filing in each state, but state tax laws tend to be way, way simpler than the federal code. It is the same for the cities (and I'm sure that Cincinnatti wants their cut, if nothing else than to pay for that new stadium).

[raybbr]

Bitter?

You sure read a lot more into my response than is actully there. I said "no sympathy", not "I hate these guys for all the money they make!"

If you would rather pay your hard earned money to watch someone else play a sport then be my guest. I choose to spend money participating rather than watching.

I'm not jealous, I just don't put these people on a pedestal for what they do.

[TexRef]

Sorry. I have no sympathy for these guys. They make millions and produce nothing. No sympathy, here.

Don't expect sympathy from anyone else when you find yourself in a similar situation.

And don't think that they aren't going after everyone else next... This is just the camel's nose, as usual.

[cynicom]

They take money out of every state. You play, you pay.

[NautiNurse]

the tax should be due in the jurisdiction in which it was earned unless a reciprocity agreement has been worked out among the jurisdictions

I pay occupancy tax for the hotel, sales tax on everything purchased in the locale, fuel charge and airport surcharge taxes for car rental, etc..

By your logic, I still haven't paid enough to the state and local governments for the "privilege" of working in that state when I reside in another.

[meyer]

By your logic, I still haven't paid enough to the state and local governments for the "privilege" of working in that state when I reside in another.

Do you think that just because you stayed in a hotel means that your income should be exempt from the taxes that residents are forced to pay? Now, I'm not arguing that the taxes aren't too high in most every state. They are. What I'm saying is that a state's income tax is based on income earned while in that state, just as its sales tax is based on items purchased while in that state.

[NautiNurse]

I do not reside in your state, therefore I do not derive benefit from income taxes paid in your state. The gasoline and sales and surcharge taxes paid are gracious plenty for my brief time spent there.

Do you believe you should pay income tax for working one or two days in Texas or Florida if you live full time in another state?

[Just another Joe]

But where the tax can be collected easily and in large amounts, states are interested.

This is what it comes down to.

IMO, the only state that should be able to tax the income of ANYBODY, is the state of residence, or the state where the corporation pays you your wages.

[GGpaX4DumpedTea]

Texas and Florida have it right when it comes to state income taxes - they do not tax income of residents or non-residents. It is too bad that the states who levy state income taxes think they have a right to that money - it is not theirs - it belongs to the persons (ourselves and the ball players) earning it.

[Wolfie]

Seems to me any lawyer worth his salt could sue, saying that if the State isn't taxing ALL out-of-State workers earning x amount of pay on any given day, they can't tax ANY. Equal protection, and all that.

As for pro athletes: add it up, tack it on to the next signing bonus.

[meyer]

I do not reside in your state, therefore I do not derive benefit from income taxes paid in your state. The gasoline and sales and surcharge taxes paid are gracious plenty for my brief time spent there.

Be sure not to call the police, drive on the roads, or enter buildings that adhere to state-enforced fire codes. Those are all items paid for by income taxes in many states. Residents pay the same sales and gasoline taxes. They generally pay property taxes as well.

Do you believe you should pay income tax for working one or two days in Texas or Florida if you live full time in another state?

If a state I work in requires an income tax, then it should be paid to the state worked in. It is an income, not a residence tax. I will add that if one is working in and paying a state income tax to a foreign state, then they should not be required to also pay an income tax on the same money in their home state.

[NautiNurse]

Your logic is extraordinarily regressive. Gasoline tax is about $.20/gallon--accounting for about 9% of your state's revenue, sales tax is 7%--accounting for about 56% of your state's revenue, a 5% occupancy tax for the "privilege" of staying in a hotel...good grief! On top of it all, I haven't paid enough to your state? You have got to be kidding.

About 67% of the sales tax goes to education. I do not send my children to your schools. Nor do I care to support your welfare recipients along with those in my state. I'll take my business elsewhere.