Super Bowl LIV: New Teams and New Tax Issues

Wolters Kluwer Tax & Accounting looks at Super Bowl tax issues

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 game, it is not surprising that the tax man also gets involved.

Sporting events pose an attractive target for tax authorities

Professional athletes and sporting events are an attractive target for states seeking revenue since the athletes are highly paid and it is relatively easy to track the amount of their activity in each state. The Super Bowl also draws a lot of fans who spend money on taxable items like hotel rooms, food and souvenirs. The taxes can really start to add up.

  • The typical player in the Super Bowl can owe state income taxes not only to the state where the Super Bowl is played, but also to the state of residence of the team (this year, California or Missouri), 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
  • One of those nine states without an income tax is Florida, where Super Bowl LIV is being played this year
  • 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
  • Many states have introduced sports betting over the last couple of years, following a Supreme Court victory in a case brought by New Jersey. Those sports betting statutes typically include a fee for the sports betting permit and a tax on each bet placed in the state

To read the full press release, click here.

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Tax experts are available to discuss the potential tax issues surrounding Super Bowl LIV. To arrange interviews with state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact.

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