Finance

NBA, NHL Reps Grill Tennessee 'Jock Tax'

Representatives for the Memphis Grizzlies, the National Basketball Players Association and the National Hockey League Players’ Association appeared at a hearing in Legislative Plaza on Tennessee’s “jock tax,” a surcharge of $2,500 per game levied on pro basketball and hockey players.
July 26, 2013
 

The NBA, the NHL and the Tennessee legislature may all be in their off-seasons, but they each took time Thursday to take up a subject that never takes a vacation — money.

Representatives for the Memphis Grizzlies, the National Basketball Players Association and the National Hockey League Players’ Association appeared at a hearing in Legislative Plaza on Tennessee’s “jock tax,” a surcharge of $2,500 per game levied on pro basketball and hockey players.

The state’s jock tax has become a widespread gripe among NBA and NHL players, in part because the proceeds go to team owners. They also say the tax — by some measures, the highest in the U.S. or Canada — means players at the bottom of their league’s pay scale wind up paying more in taxes than they receive in wages for playing in Tennessee.

“Because of this tax, 43 percent of the players in the league have to pay out of pocket when they play in Tennessee,” Mathieu Schneider, a 20-year NHL defenseman who now works for the players’ union, told state lawmakers. “If other states in the U.S. and other provinces in Canada decided to tax hockey players in the same fashion, the National Hockey League as we know it would cease to exist.”

Tennessee lacks a state income tax, but it does charge a number of professionals, such as dentists, lawyers and stockbrokers, a “privilege tax” of $400 a year to ply their trade. In 2009, Gov. Phil Bredesen and state lawmakers agreed to extend the privilege tax to NBA and NHL players as a way of raising money for municipal arenas.

The tax, which does not apply to NFL players, was set at $2,500 per game, with a maximum cap of $7,500 a year.

The sum does not cause much duress to superstars making salaries in the tens of millions, opponents of the tax concede. But the tax can take a bite out of the paychecks of those making their league’s minimum.

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