The U.S. Supreme Court declined to hear an appeal from the Cleveland Board of Review last week, cementing the Ohio Supreme Court’s ruling that the “jock tax” applied to visiting N.F.L. players violated their due process rights. As a result, the Cleveland city government may be on the hook for millions of dollars owed back to professional athletes, according to data from the Cleveland Collections Agency.
The two former NFL players, Jeff Saturday and Hunter Hillenmeyer, both won their cases against a levy the Tax Foundation calls “arbitrary,” “unrealistic,” and “poorly targeted,” in the Ohio Supreme Court earlier this year. The Court’s decision in the former case struck down the tax Cleveland levied on Saturday even though he did not accompany his team, the Indianapolis Colts, to their game there. Calling the regulation “ambiguous at best,” the justices ordered the city to refund Saturday for the tax applied to his salary because he neither played in the scheduled game nor was present in Cleveland at the time.
In Hillenmeyer’s case, the justices took a more nuanced approach, finding the formula the city used to tax players unconstitutional, not the tax itself. Cleveland, grossly overstepping the bounds of its powers of taxation, argued that a 2% tax levied on the players entire salary, or 1/20th of their total salary, came from a calculation of the amount of games played in the preseason and regular season, 20, with one of those taking place in Cleveland. The court disagreed with this faulty logic, asserting that a NFL player’s total salary is derived from attendance at practices, off-season trainings, and a myriad of other duties.
This victory, though, is merely a drop in the bucket and may have far greater consequences nationally. Sports Illustrated writes, “Of the 26 states with professional sports teams, 22 have adopted a jock tax of some sort or another. Eight cities have instituted their own jock taxes.”
Government efforts to extract revenue from businesses and individuals, regardless of borders and the physical presence of payees often run awry of Fifth and Fourteenth Amendment protections. The reality is that professional sports teams can bring numerous economic benefits associated with the jobs and small business growth in an area without needlessly targeting the athletes making above average incomes with discriminatory tax policies. Cities and states would do better getting their hands out of players’ pockets and put them to work reforming their outdated, abusive tax codes to become more competitive nationally.