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Athletes paying taxes in states they are not employed by/reside in?
Posted on 12/18/24 at 9:28 pm
Posted on 12/18/24 at 9:28 pm
What is the reasoning for this? Not that I am a defender of the many entitled athletes.
For example, if Joe Smith lives in Texas, works for a team in Houston, and pays no state income tax in Texas (due to their state law).
However, when his employer (Houston Texans) travels to California for example, he has to pay income taxes to California. What is California's claim to his earnings?
I sincerely ask this, because if you take a traveling sales person and apply this same scenario, the traveling sales person would not pay income taxes to California.
For example, if Joe Smith lives in Texas, works for a team in Houston, and pays no state income tax in Texas (due to their state law).
However, when his employer (Houston Texans) travels to California for example, he has to pay income taxes to California. What is California's claim to his earnings?
I sincerely ask this, because if you take a traveling sales person and apply this same scenario, the traveling sales person would not pay income taxes to California.
22
Posted on 12/18/24 at 9:30 pm to Will Cover
quote:
However, when his employer (Houston Texans) travels to California for example, he has to pay income taxes to California. What is California's claim to his earnings?
Because they worked and earned the money in California.
quote:
because if you take a traveling sales person and apply this same scenario, the traveling sales person would not pay income taxes to California.
Well that depends
Posted on 12/18/24 at 9:31 pm to Will Cover
quote:
I sincerely ask this, because if you take a traveling sales person and apply this same scenario, the traveling sales person would not pay income taxes to California.
idk about traveling salesmen but I know plenty of consultants who file taxes in every state they work in.
Posted on 12/18/24 at 9:32 pm to Will Cover
High tax states like Cali are very aggressive about this, and it’s not just athletes.
Posted on 12/18/24 at 9:33 pm to Mingo Was His NameO
quote:
Because they worked and earned the money in California.
I understand what you are getting at here. However, there are plenty of businesses who hire people to travel for them, and they "earn" an income for themselves and the business they work for in the state they are traveling to, but pay zero taxes, because the employer is not based out of the state they traveled to, and the employee does not live in the state he/she traveled to.
This post was edited on 12/18/24 at 9:36 pm
Posted on 12/18/24 at 9:35 pm to SloaneRanger
quote:
High tax states like Cali are very aggressive about this, and it’s not just athletes.
I just used California as an example. You can essentially substitute almost all states, minus the ones that I know of that don't have a state income tax -- Florida, Texas, Tennessee --- and I think Mississippi will soon be included.
Posted on 12/18/24 at 9:35 pm to Will Cover
quote:
they "earn" an income in the state they are traveling to, but pay zero taxes, because the employer is not based out of the state they traveled to, and the employee does not live in the state he/she traveled to.
It’s complicated in some situations, but put simply this isn’t true
Posted on 12/18/24 at 9:36 pm to Will Cover
quote:
I understand what you are getting at here. However, there are plenty of businesses who hire people to travel for them, and they "earn" an income for themselves and the business they work for in the state they are traveling to, but pay zero taxes, because the employer is not based out of the state they traveled to, and the employee does not live in the state he/she traveled to.
I'm sure there are some exceptions, but generally this is wrong.
Posted on 12/18/24 at 9:36 pm to Mingo Was His NameO
quote:
It’s complicated in some situations, but put simply this isn’t true
I'm sure it is. I know from my own experiences when I worked for two large companies that required travel, I did not pay any income tax to the states I traveled to.
I imagine the companies I worked for were legitimate in terms of how they handled payroll.
Posted on 12/18/24 at 9:39 pm to Will Cover
I learned recently what you're describing is literally called the "jock tax"
Posted on 12/18/24 at 9:39 pm to Will Cover
quote:
I know from my own experiences when I worked for two large companies that required travel, I did not pay any income tax to the states I traveled to.
Some states there are day or income thresholds, or you may should have. My prior firm you had to put your work location for this exact reason, but often times this isn’t tracked like it should be. You’d be shocked at how bad all companies are, big or small, at tracking their tax obligations
This post was edited on 12/18/24 at 9:40 pm
Posted on 12/18/24 at 9:41 pm to rt3
quote:
I learned recently what you're describing is literally called the "jock tax"
I knew that athletes were taxed, but I didn't know the name of the tax.
Posted on 12/18/24 at 9:42 pm to Mingo Was His NameO
quote:
You’d be shocked at how bad all companies are, big or small, at tracking their tax obligations
This is most likely true.
Posted on 12/18/24 at 9:42 pm to Will Cover
I don’t know if that’s right. I worked (not selling product) in many states that had income taxes, which my company paid, but I’d file 6-7 different state income taxes a year. I didn’t pay NYC a disgusting amount of money for the four months I spent there, but the partners sure did. There is usually a threshold (they design it for athletes so that if you “work” in Ohio for three hours as a steeler, they will tax the shite out of that) of a relatively low threshold (invented numbers, bit representative) of something like 100 hours or 5% of work hours, so they don’t have to deal with tax returns from people that spent 16 hours in Cleveland to sell widgets. All of that got accounted for in our rates that we charged, to have my tax return figured out and filed on my behalf in one jurisdiction after another.
It’s a classic tax case of, it’s a hotel tax, it only applies to outsiders, my peeps! Except in my case, all those taxes got billed back to the company that signed the SoW with us anyway, but it makes the voters go for more taxes on everything travel related, and hard.
The defense is that it makes them money. Nothing else matters.
It’s a classic tax case of, it’s a hotel tax, it only applies to outsiders, my peeps! Except in my case, all those taxes got billed back to the company that signed the SoW with us anyway, but it makes the voters go for more taxes on everything travel related, and hard.
The defense is that it makes them money. Nothing else matters.
Posted on 12/18/24 at 9:42 pm to Will Cover
quote:
I'm sure it is. I know from my own experiences when I worked for two large companies that required travel, I did not pay any income tax to the states I traveled to.
I imagine the companies I worked for were legitimate in terms of how they handled payroll.
Same for me. Never have paid taxes to the 3 other states I’ve worked in for my company. Countries also, except for one when I was there more than half a year. Had to pay taxes then.
Posted on 12/18/24 at 9:43 pm to Mingo Was His NameO
quote:
You’d be shocked at how bad all companies are, big or small, at tracking their tax obligations
I recently moved from a no income tax state into an income tax state, but stayed with my same employer. We have a few people in my new state already so I asked how they handle the state income tax withholding and stuff and the HR woman was just like "oh we don't do anything with that. You just handle all that yourself when you file"
So my company's policy is to just ignore state income taxes lmao.
Posted on 12/18/24 at 9:47 pm to Will Cover
The City of Philadelphia has historically been very aggressive in collecting these taxes from visiting teams’ employees.
Posted on 12/18/24 at 9:47 pm to LemmyLives
quote:
There is usually a threshold (they design it for athletes so that if you “work” in Ohio for three hours as a steeler, they will tax the shite out of that) of a relatively low threshold (invented numbers, bit representative) of something like 100 hours or 5% of work hours, so they don’t have to deal with tax returns from people that spent 16 hours in Cleveland to sell widgets.
This isn’t even close
Posted on 12/18/24 at 9:49 pm to Will Cover
Joel Myers once told me he had about 20 something W-2s. One for each state they broadcasted in on the road.
Posted on 12/18/24 at 9:49 pm to ChEgrad
quote:
Countries also
That’s the best spot to be in. I got seconded (transferred) from the US firm to Europe, while the company paid all European taxes, which I could count against my US tax liability, which meant I paid a load less than normal that year, since I spent four or five months in the EU on that gig.
Bad part is that Belgium? Essentially accepts your returns but reserves the right to not finalize it for 2+ years (IIRC.) but the company paid PwC to fix and respond to whatever was needed, and it was nice I be serviced, rather than the alternative.
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