NCPA - National Center for Policy Analysis

Taxes on Visiting Professional Athletes Spread

October 28, 2003

State and city governments are trying to maximize revenue by extending their income taxes to nonresidents who just work for a few days in their states, according to a new report from the Tax Foundation.

Economist David Hoffman explains that states started with "jock taxes" because it was politically popular to tax young, famous, high-income athletes. Unfortunately, state officials are now targeting all workers who cross their borders.

Hoffman has three major objections to taxing nonresidents:

  • The tax is poorly targeted; while advertised as one that hits only ultra-rich athletes, it has quickly spread to many people with moderate incomes, such as trainers and scouts, and to other professions.
  • The tax is arbitrary; professionals in other occupations with comparable incomes over their working lives, such as doctors and corporate executives, are not penalized by a "doc tax" or "exec tax."
  • The tax imposes an unrealistic administrative burden; travelers can end up filing dozens of state and city income tax returns.

The tax has spread from California to 20 states and half a dozen cities, as well as Puerto Rico and Alberta. Hoffman indicates that professional athletes are the most famous but not the only targets.

Source: David Hoffman, "'Jock Taxes' Spread to Other Professions As State and City Governments Maximize Revenue: Routine Business Travel Triggers Income Tax Liability in Many States," Tax Features, Tax Foundation, July/August 2003.


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