Income Tax Rates on Some Athletes Could Approach LIII%

The “Big Game” and taxes

The Super Bowl is the biggest single sporting event of the year. Not only do professional teams compete all season for the chance to play, cities compete for the chance to host. With all the money associated with the “Big Game”, it’s not surprising that the tax man also gets involved.

Targets for taxation

Professional athletes and sporting events are an attractive target for states seeking tax revenue.  For one, athletes are highly paid. Secondly, their activity in each state is relatively easy to track. The Super Bowl also draws a lot of fans who spend money on taxable items such as lodging, food and souvenirs. All activities considered, the taxes can really start to add up.

Share these tax facts with your fellow fans

  • The typical player in the Super Bowl can owe state income taxes not only to the state of Georgia (where the Super Bowl is being played), but also to the state a team resides in (California or Massachusetts). Taxes can also be owed to the state of domicile of the player, and to every other state in which the player has played a game that year (if the state has an income tax, as all except nine do)
  • The states use a “duty days” calculation or a “games played” calculation, but the calculation in each state is a little different
  • If an athlete has changed teams during the year, it gets a little more complicated
  • Some cities where professional athletes play also have a city income tax
  • Professional athletes also have to pay a federal income tax with a top rate of 37 percent
  • Georgia has a top income tax rate of 5.75 percent, and Atlanta has a sales tax rate of 8.9 percent. However, to win the right to host the Super Bowl, the sales tax on Super Bowl tickets had to be waived

Don’t get tackled by complex tax rules. Wolters Kluwer Tax and Accounting is your best teammate for staying tax compliant. Visit our CCH® Publications page to stay current on the latest tax rules and regulations.

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