Why it matters that players in Super Bowl will pay taxes on game

posted at 6:31 pm on February 7, 2016 by Taylor Millard

While (almost) everyone is sitting down to watch the Super Bowl, not everyone is going to realize the Carolina Panthers and Denver Broncos will have to pay to participate in the game. Forbes first pointed out this ridiculousness, blaming, you guessed it, California’s insane taxes:

Win on Sunday, and [ Panthers QB Cam ] Newton will pay California a total of $159,560 in taxes in 2016. Lose, and he will pay $159,200, based on an income reduction of $51,000…
In looking at the seven days Newton will spend in California this week for Super Bowl 50, he will pay the state $101,600 on $102,000 of income should the Panthers be victorious or $101,360 on $51,000 should they lose.
The result: Newton will pay California 99.6% of his Super Bowl earnings if the Panthers win. Losing means his effective tax rate will be a whopping 198.8%. Oh yeah, he will also pay the IRS 40.5% on his earnings.

Cam Newton isn’t just going to have to pay California and the federal government for what he earns at the Super Bowl. The Libertarian Republic points out Newton will also have to pay North Carolina for what he does in California because that’s where he lives. There are plenty of people who will sit there and say, “So what? Cam Newton and the rest of the NFL can afford to pay this stuff.” The players may not even realize how much the have to pay because they’ve got accountants to do their taxes and don’t have to worry about sweating the April 15th deadline. This may be the case, but California’s taxes don’t just go after players, but others who visit California on business (the ones who aren’t paid millions to play a game or oversee a game). It isn’t just California where this is an issue. TurboTax has an entire FAQ dedicated to nonresident state returns (emphasis mine).

Every state has its own rules regarding nonresident returns. For example, nonresidents with more than $33 in Pennsylvania-sourced income must file a return, while nonresidents with less than $600 in Missouri income don’t have to file. If you’re not sure, your best bet is to contact the Department of Revenue in that state, or visit their website. Most state websites have a section devoted to nonresidents and part-year residents.

Note: If the other state happens to be Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming, you won’t be able to file a nonresident return because those states don’t collect income tax. However, you’ll still need to report that income on your resident state return (assuming your resident state collects income tax) as well as your federal return.

This is just ridiculous. It makes no sense to me for someone who works in one state (even if it’s for a day or a week or two), but lives in another state to have to pay taxes twice. It’s just the government trying to soak up as much money as possible. For all the talk of “fair share” by the Left, this isn’t a situation of being fair at all. Why should people be punished for doing two days worth of work in the state they don’t live in? Why should people who work in one state, but live in another state, have to pay taxes twice? Isn’t this the government hurting the people they claim to want to “protect” by taking as much as possible? It just seems like a failure of logic for a government to tax people who don’t even live in their state (let alone really use their services). The solutions are sadly not as simple as they seem. Yes, it’s easy to just proclaim, “Elect fiscally responsible leaders,” but politicians want to appear like they’re doing something to “help the community.” This means changing the definition of “helping the community,” and making sure it’s more from a freedom and liberty standpoint instead of just a “I got more money from others” standpoint. People who prefer low (or no) taxes will have to explain to others why it doesn’t make sense for the government to take money out of their pockets (and that a “tax refund” is just the government giving taxpayers back cash they already earned). It also means being willing to look at what the government (federal, state, and local) spends it money on, and deciding whether the spending needs to be cut or not. This means people can keep more of their own money and have more wiggle room in their own budgets, which isn’t a bad thing. It means the individual has more power over the government, which isn’t a bad thing either. It’s just something to remember AFTER the game is over and the players are celebrating the Super Bowl.

After all, tax season is right around the corner and plenty of people are going to have to deal with the headache of multiple forms and multiple checks. There’s a better way, but people have to be willing search for it.


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Comments

Friggin’ Bush

307wolverine on February 7, 2016 at 6:35 PM

Woe to those multi-millionaires. Golly, I’d sure hate to be them with all of that wealth and fame, having to only be insanely rich rather than stupid rich due to all those taxes. Yep, it’s a rough life.

Now where’s that tube of Restasis, Crocodile Tears edition that I have?

Stoic Patriot on February 7, 2016 at 6:35 PM

Taylor, pffft

IDontCair on February 7, 2016 at 6:35 PM

“No lyin'” -the IRS

Flange on February 7, 2016 at 6:37 PM

…just wait till Bernie’s President!

JugEarsButtHurt on February 7, 2016 at 6:42 PM

What?

HornetSting on February 7, 2016 at 6:49 PM

What?

HornetSting on February 7, 2016 at 6:49 PM

I think we are supposed to care deeply.
Shall we?

katy the mean old lady on February 7, 2016 at 6:52 PM

This is just ridiculous. It makes no sense to me for someone who works in one state (even if it’s for a day or a week or two), but lives in another state to have to pay taxes twice.

You are not a state legislator. These are the easiest taxes to raise: by definition, you’re taxing non-residents — people who cannot vote against you.

I live in the northeast. States over here go to great lengths to try to figure out how to levy taxes and fees on out-of-state individuals who happen to work in a state where they do not reside (or merely on travelers passing through). I believe that New York, for example, requires a married couple, where only one of the spouses work in New York, and neither is a New York resident, to file a joint New York income tax return (even though it may include non-New York income earned by the spouse). New Jersey legislators are trying to turn the downturn in gas prices into an opportunity to raise gas taxes — one argument they have is that it would bring in income from out-of-state drivers who otherwise would use New Jersey’s roads “for free.”

If the taxpayers can’t vote against them, state legislators consider them nothing more than a pig set up for slaughter.

Revenant on February 7, 2016 at 7:07 PM

You are not a state legislator. These are the easiest taxes to raise: by definition, you’re taxing non-residents — people who cannot vote against you.

Revenant on February 7, 2016 at 7:07 PM

This. It makes perfect sense if you’re a politician whose job it is to spend taxpayer money.

gryphon202 on February 7, 2016 at 7:11 PM

What?

HornetSting on February 7, 2016 at 6:49 PM

I think we are supposed to care deeply.
Shall we?

katy the mean old lady on February 7, 2016 at 6:52 PM

My give a fig is all figged out.

HornetSting on February 7, 2016 at 7:18 PM

This. It makes perfect sense if when you’re a politician whose job it is to spend taxpayer money.

gryphon202 on February 7, 2016 at 7:11 PM

Corrected for clarity. I know it’s what you meant.

Kraken on February 7, 2016 at 7:22 PM

We’ll still have QoTD shortly.

Jazz Shaw on February 7, 2016 at 7:44 PM

We’ll still have QoTD shortly.

Jazz Shaw on February 7, 2016 at 7:44 PM

…thank gawd!

JugEarsButtHurt on February 7, 2016 at 7:49 PM

…is AP at the Kitty Bowl?

JugEarsButtHurt on February 7, 2016 at 7:50 PM

taxation w/o representation.

dmacleo on February 7, 2016 at 7:54 PM

Was this ultra-nerdy article about the Super Bowl really necessary?

Paperclips on February 7, 2016 at 7:55 PM

Well at least now Cam and all the other players get to vote in the next California election, right?

Otherwise, we’ve got taxation without representation.

SaveFarris on February 7, 2016 at 7:56 PM

It is ridiculous. Good piece despite those apathetically saying the government is fine stamping its boot on high-income earners.

theperfecteconomist on February 7, 2016 at 7:58 PM

We’ll still have QoTD shortly.
.
Jazz Shaw on February 7, 2016 at 7:44 PM

.
Will it be about “Calvin and Hobbes”?

listens2glenn on February 7, 2016 at 8:00 PM

I think we are supposed to care deeply.
Shall we?

katy the mean old lady on February 7, 2016 at 6:52 PM

I’m just a middle class business woman, but this affects me.

I travel for business. I have clients and properties in my ‘managed portfolio’ in other states, and I need to go see these time to time. Because of states’ stepped up enforcement of their tax laws, my company required me to report where I spend the majority of each day of work. If I’m in any state for more that 14 days in a calendar year, my company will issue a W-4 for that state, and I’ll be required file State Income Tax forms for that state. I have some co-workers who now have to file state income tax forms for several states each year. I handle this by traveling less. If I’m getting close to the magic 14 days, I just don’t go.

California’s income tax form is a bear, and I’d do anything I can to avoid it.

LilyBart on February 7, 2016 at 8:03 PM

It is ridiculous. Good piece despite those apathetically saying the government is fine stamping its boot on high-income earners.

theperfecteconomist on February 7, 2016 at 7:58 PM

I agree.

LilyBart on February 7, 2016 at 8:05 PM

LilyBart on February 7, 2016 at 8:03 PM

.
Excellent education on the matter … thank you.

listens2glenn on February 7, 2016 at 8:06 PM

live in the northeast. States over here go to great lengths to try to figure out how to levy taxes and fees on out-of-state individuals who happen to work in a state where they do not reside (or merely on travelers passing through). I believe that New York, for example, requires a married couple, where only one of the spouses work in New York, and neither is a New York resident, to file a joint New York income tax return (even though it may include non-New York income earned by the spouse). New Jersey legislators are trying to turn the downturn in gas prices into an opportunity to raise gas taxes — one argument they have is that it would bring in income from out-of-state drivers who otherwise would use New Jersey’s roads “for free.”

If the taxpayers can’t vote against them, state legislators consider them nothing more than a pig set up for slaughter.

Revenant on February 7, 2016 at 7:07 PM

It’s even worse than that. If you live in NY state outside of NY city but work in the city, you pay an extra city tax. I’m sure other cities do this as well. Wherever the powers that be can tax, they will.

hopeful on February 7, 2016 at 8:12 PM

California’s state income taxes may be insane, but so is posting statements like

Newton will also have to pay North Carolina for what he does in California because that’s where he lives

without bothering to check the facts. The North Carolina Department of Revenue website states,

If you are a resident of North Carolina and have income reportable to North Carolina that is also being taxed by another state or country, you may be entitled to claim a tax credit on your North Carolina return. This tax credit gives you relief from being taxed twice on the same income. It will either increase your refund or decrease the tax you owe.

bgoldman on February 7, 2016 at 8:47 PM

It’s not just states, cities pull the same BS. For years I had to pay a Philadelphia wage tax as well as that of the locality in which I actually resided.

Didn’t we have a tea party due to taxation without representation?

I couldn’t vote for Philadelphia’s mayor, city council, or even dog catcher. But sure enough there they were with their hands all up in my wallet.

I’m sure the people having states treat them similarly feel even worse. Since the income tax is a much higher rate than the wage tax. Heck they’re probably getting double dipped by both.

Oxymoron on February 7, 2016 at 9:06 PM

Best strategy at this point is to leave the state to one with no income tax, leave the country or quit working (on the books).

Being productive doesn’t pay anymore. Unless you can hide the income or dodge the taxes.

And either way, you will send a very strong message to those in power.

Whether they heed it or not is something else.

jake1246 on February 7, 2016 at 10:15 PM

bgoldman on February 7, 2016 at 8:47 PM

It is Taylor, so we’ll pick up the yellow flag on this play.

Limerick on February 7, 2016 at 10:37 PM

This all started with states trying to gouge Michael Jordan 20 years ago, iirc.

segesta on February 7, 2016 at 10:54 PM

So, I’m guessing although you used Cam as the example, this goes for every other team member on both teams as well. Monetarily (other than future endorsements and contracts), what is the point of playing in the Super Bowl as far as having a winner’s prize? Why even give them a prize if the state is going to charge them double whatever it is if they lose and all of it if they win? And if you’re the player’s union, why do you agree to have the Super Bowl in a city/state that does this? Why would you not lobby to play it in Texas?

YAY! I won! … Hand over all your money. It makes no sense.

UnderstandingisPower on February 8, 2016 at 12:26 AM

What about Peyton being paid millions to say Budweiser was his party plan

Mormontheman on February 8, 2016 at 12:59 AM

I don’t care how much money they make. That’s not the point. It is thievery.

Keep wondering when they’ll lower the tax boom on us big time.

I can envision Sen/Rep Crook being interviewed:

“We just realized we’re $XX,000,000,000,000 in debt! This is outrageous! Unfortunately, the American public has to pony up and pay their fair share for the good lives they’ve been living all these years.”

Oh, then a few reports about homeless Veterans and how our Army’s down to 10 rounds per man, our aircraft carriers are leaking…oh yeah, and IIIIIIISSSSSSIIIISSSS! and even most Cons will be on board.

Never fails.

Dr. ZhivBlago on February 8, 2016 at 2:02 AM

Taxation without representation….yeah, I see how that works…..

ProfShadow on February 8, 2016 at 7:05 AM

Cam won’t have to pay. He wasn’t there. This is taxation without representation since Cam, Peyton and the host of others involved in the game don’t live in Cali. Rush has talked about it for years as the reason he no longer does his show at times in NYC.

Kissmygrits on February 8, 2016 at 8:25 AM

I found Peyton’s comment about a Bud party after the game a slap in the face to COORS since he lives in CO. They must have offered more than Disney this year.

Kissmygrits on February 8, 2016 at 8:28 AM

Not to mention all the TOT tax paid on the hotel rooms booked by either team, and the various forms of transportation taxes paid on the buses, limos, taxis, and car rentals.
Governor Moonbeam, and his Choo-Choo, thank you.

Another Drew on February 8, 2016 at 10:13 AM

Yea baby, feel the Bern. Just imagine the rest of us who actually Earn an income being subjected to such liberal inspired insanity. All to support a bunch of spoiled rotten idealistic pinheads who think that their College education should be free and so on in nauseating demand waves.

stuartm80127 on February 8, 2016 at 10:57 AM

You might want to check your assumption that a person who lives in one state but works in another pays taxes in both. I imagine most if not all states have reciprocity-like provisions in their tax codes. (As much as I hate to have to defend taxing authorities)

I only have experience with Pennsylvania, which, like most states, taxes residents on income earned in other states. However, it also provides a credit for the amount of taxes paid to those other states (up to the amount of the PA income tax rate — 3.07%). A PA resident earning income in another state includes that income on their return as taxable income and 3.07% of that is included in their tax bill. But, on another portion of the return, either the whole 3.07% they were taxed on the out-of-state income is given back by way of a tax credit (if the other state’s tax rate was at least 3.07%) or the actual amount of tax paid the other state is given back by way of a credit (if the other state’s tax rate is lower than 3.07%).

Essentially, while it’s accurate to say they’re “taxed” twice on that income, it’s not accurate to state they pay twice — they only pay a maximum of Pennsylvania’s 3.07% tax rate on that income. See PA-40 Schedule G-L to see the calculation of the credit for Pennsylvania’s resident tax return (PA-40). http://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/Documents/Personal%20Income%20Tax/pa-40g-l.pdf

P Opus on February 8, 2016 at 11:04 AM

…live in the northeast. States over here go to great lengths to try to figure out how to levy taxes and fees on out-of-state individuals…

Revenant on February 7, 2016 at 7:07 PM

If you doubt the states’ proclivity for theft, consider the shape chosen for Maryland. The state boundaries were designed (even before the Articles of Confederation) to intercept every north/south route between the Atlantic ocean and the Appalachians so they could extract maximum tribute from all those traveling through the state.

…and they’re STILL DOING IT!!! But they use the Baltimore/Washington bridge/tunnel system (once on, you can’t get off without paying maximum toll) instead of the old toll gates.

landlines on February 8, 2016 at 11:42 PM