Sports Law Blog
All things legal relating
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Wednesday, February 01, 2006
SuperBowl Players Stuck Up in Michigan For $200K
The state of Michigan and city of Detroit, both of whom are in desperate need for revenue, are taxing the participants in this Sunday's SuperBowl. Because they work in the state on that day, the players have sufficient contact with the state and are thus subject to income taxes. Additionally, they increase the rate for nonresident athletes, the "jock tax".
They are neither the first nor the only. The word is, California first imposed this type of tax in the early 90s, targeting the Chicago Bulls. Illinois reciprocated in an attempt not to raise revenue but to "protect our athletes". Of the 24 states that have major professional league sports teams, 20 of them impose an extra tax on athletes, with rates almost as high as 10%. Michigan's rate is actually among the lowest. Washington state does not have an income tax and no jock tax. But that may change according to a Washingtonian legislator.
According to the Tax Foundation, "The principles of sound tax policy dictate that taxes be neutral, fair and levied on the broadest base possible. A tax, such as the jock tax, that is levied on just one group of people violates all these tenets. " Also, in some states the statutory language permits the extension of this tax to others for whom it was arguably not intended: the low- to mid- salaried cameraman, etc. It is even being extended into other professions, such as (gasp!) nonresident lawyering.If they come after the lawyers, we'll finally see how these taxes stand up against the Privilegs and Immunities Clause. (I have no idea whether this challenge has already been undertaken.)
According to FreedomWorks, here are some other "ridiculous" taxes:
10. The Amusement Tax (Most States)
9. Fountain Soda Drink Tax (Illinois)
8. Fur Tax (Minnesota)
7. Take-Out Tax (Chicago, Washington, D.C.)
6. Blueberry Tax (Maine)
5. Playing Card Tax (Alabama)
4. Sparkler and Novelties Tax (West Virginia)
3. Jock Tax (Many States)
2. Facial Hair Tax (Massachusetts)
1. Illegal Drug Tax (Alabama, North Carolina, Nevada)
(Much info for this post was gathered at the Tax Professor Blog, http://taxprof.typepad.com)