July 9, 2004
Study Finds "Jock Taxes" Continue Spreading to Non-Jock Professions
NEWS RELEASE
WASHINGTON—A new report from the Tax Foundation finds more and more state governments are using controversial “jock taxes” to extend state income taxes to residents of other states. So-called "jock taxes” require traveling professional athletes and other team employees to pay income taxes in every state where games are played.
“The jock tax began with California trying to get revenge on Michael Jordan and the Chicago Bulls for beating the Lakers in 1991,” said David Hoffman, adjunct scholar with the Tax Foundation and co-author of the new report. “Illinois fought back with a retaliatory tax the next year. Since then, many other states have joined in.”
Today, of the 24 states with pro teams, 20 have enacted jock taxes, as have a half dozen cities.
The report shows that states are expanding the jock tax concept to include other types of nonresident income from non-sports-related professions. For example, New Jersey has begun taxing visiting attorneys, and Cincinnati has levied a tax on touring skateboarders. Several jurisdictions have begun taxing traveling entertainers.
“First, it was just Michael Jordan and the Chicago Bulls, then all professional athletes, and now trainers, scouts, lawyers, and even amateur skateboarders are being taxed when they leave their home state,” said Hoffman.
The report is released to coincide with Major League Baseball’s All-Star Game in Houston, Texas. Texas is one of the few states with a professional sports team that does not have a jock tax, as it has no income tax. This increases the tax bite for Texas players, since they pay sales and use taxes at home as well as other states' income taxes on the road, with no offsetting deduction.
The study gives three major reasons the jock tax is ill-conceived:
- The tax is poorly targeted. Advertised as one that hits only ultra-rich athletes, the jock tax has quickly spread to many people with moderate incomes, such as trainers and scouts, and to other professions.
- The tax is arbitrary. Professionals in other occupations with comparable incomes over their working lives, such as doctors and corporate executives, are not penalized by a “doc tax” or “exec tax,” though that is changing. New Jersey has recently started taxing visiting lawyers.
- The tax imposes an unrealistic administrative burden on people who have to file more than a dozen state income tax returns.
Best known for its annual calculation of Tax Freedom Day®, the Tax Foundation is a nonprofit, nonpartisan organization that has monitored tax policy at the federal, state and local levels since 1937
Media Contact: Bill Ahern (202) 464-6200
Attached Files
- Special Report No. 130, PDF, 101.5 KB
