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Cost of Government: How Many NBA Games Are Needed to Pay Home Game Tax Liability?


Posted by Matt Blumenfeld on Wednesday, July 24th, 2013, 9:15 AM PERMALINK


With the NBA’s summer league and free agency underway, rookies and veterans will be signing lucrative contracts with new teams around the league. While many first-year players join their new squads expecting to make millions in their professional debuts, the truth of the matter is the paychecks for their first few games will most likely be handed directly to the state tax collectors.

As Americans for Tax Reform points out in the chart below, NBA players can expect the state to collect taxes from the first few home games before they begin to keep their earnings. Some of key findings include:

  • NBA players on California-based teams must play the most games – five and a half – to pay off home game tax liability.
  • The Portland Trail Blazers have the second highest tax rate – 10.53 percent - due to a city income tax liability.
  • Players on teams based in Florida, Texas, and Tennessee are able to keep their earnings from the start of the regular season.

State

Team(s)

Combined State and Local Income Tax Rate

Home Games Played to Pay State Tax Liability

California

Clippers

Kings

Lakers

Warriors

13.3%

5.5 games

Oregon

Trail Blazers

10.53%

4.3 games

Minnesota

Timberwolves

9.85%

4 games

District of Columbia

Wizards

8.95%

3.7 games

New York

Knicks

Nets

8.82%

3.6 games

Ohio

Cavaliers

7.93%

3.3 games

Wisconsin

Bucks

7.75%

3.2 games

Pennsylvania

76ers

7.05%

2.9 games

Louisiana

Pelicans

6%

2.5 games

Georgia

Hawks

6%

2.5 games

North Carolina

Bobcats

5.75%

2.4 games

Michigan

Pistons

5.5%

2.3 games

Massachusetts

Celtics

5.25%

2.2 games

Oklahoma

Thunder

5.25%

2.2 games

Illinois

Bulls

5%

2.1 games

Utah

Jazz

5%

2.1 games

Colorado

Nuggets

4.63% + $5.75 per month on income earned over $500

1.9 games

Arizona

Suns

4.54%

1.8  games

Indiana

Pacers

3.4%

1.4 games

Texas

Mavericks

Rockets

Spurs

0%

0 games

Florida

Heat

Magic

0%

0 games

Tennessee

Grizzlies

0%

0 games

 

 

 

 

For illustrative purposes, the Toronto Raptors are not included due to being headquartered in Ontario Canada where a different tax code is used. The combined state and local income tax rate multiplied by the number of regular season home games equals the number of games that need to be played to pay off state tax liability.

As seen above, NBA players on California-based teams must play five and a half games before they can begin to earn a paycheck that does not go straight towards paying their state income tax liabilities. Conversely, players in no-income-tax states are able to keep their earnings from the start of the regular season. With states such as Florida, Texas, and Tennessee leading the way in economic competitiveness, more players will begin to factor state income tax rates with respect to signing with new teams. As is the case with former Los Angeles Laker Dwight Howard signing with the Houston Rockets, players will see their tax burdens decrease, allowing them to increase their take-home pay.

The same competitive forces impact the everyday, economic decisions of businesses and taxpayers. Individuals continue to flee high-income-tax states such as California, Illinois, and New York in favor of pro-growth, pro-job creation states.

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