Wednesday, April 15, 2009

Athletes and Taxes

It's income tax day across America, and if it's not your favorite day of the year, just be thankful you're not a professional athlete. A recent article in the LA Times explains that 20 of the 24 states with major league franchises (the NFL, NBA, NHL and Major League Baseball) have laws that require visiting athletes to pay state income tax for each game they play there. Kevin Baxter of the Los Angeles Times took an in-depth look at the issue.

Considering that top-level athletes in football, basketball, hockey and baseball now make an annual average salary of $2.9 million, that means big bucks for states such as California. Home to 15 major professional teams, the state raked in $102 million in taxes from visiting athletes in 2006-07, the last year for which records are available.

Ryan Howard of the Philadelphia Phillies will play in 16 different states this year, plus the District of Columbia and the Canadian province of Ontario. How'd you like to be the accountant in charge of that tax return?

"The book's like this big," says Angels' pitcher Darren Oliver, holding his thumb and index finger a couple of inches apart, says of the tax documents he filed this year. Each April, he pays a small army of accountants to file more than a hundred pages of returns -- and sometimes checks -- to as many as a dozen states and one province in Canada, covering taxes on income he earned on the road.