The players who will enter the field for Super Bowl LX Sunday will face a significant tax bill due to the location of the match triggering what is known as a “jock tax.”
Super Bowl LX will be played in Santa Clara, California, and the Golden State is one of several states that have implemented what’s called a tax on athletes on Professional Athletes, which assesses players’ taxes based on the number of days they spend playing or training in a given jurisdiction – including those outside their home state.
The NFL collective bargaining agreement sets the bonuses paid to players on the winning and losing Super Bowl teams: Players on the winning team each receive a payday of $178,000 while players on the losing team will receive $103,000.
Jeffrey Degner, an economics researcher at the American Institute for Economic Research, told FOX Business that while these bonuses are “nothing to sneeze at,” the amount players will actually earn after taxes like the sports tax and other state and federal debts is considerably lower.
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Super Bowl LX will be broadcast on February 8 at Levi’s Stadium in California. (Kirby Lee-Imagn Images via Reuters)
“What that means here is that the winning team’s take-home pay will be around $86,000. If you’re on the losing side, the take-home pay will be around $49,800,” Degner said.
Athlete taxes apply to NFL players throughout the season in jurisdictions where they are in effect, so any time they play or train in an area where a sports tax has been implemented, they will be subject to tax on the income earned that day.
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Super Bowl LX will be held at Levi’s Stadium in Santa Clara, California, triggering the state’s jock tax. (Ishika Samant/Getty Images)
States and cities can implement fictitious taxes, adding layers of complexity to the player’s tax burden, although they remain more popular at the state level than at municipalities.
Most sports taxes are implemented under a “day of service” standard, as other frameworks have faced difficulties in court as well as feasibility issues.
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Super Bowl winners earn larger bonuses than players on the losing team, who still receive a sizable check. (Timothy A. Clary/AFP via Getty Images)
THE day of service The format uses the number of days an athlete spends “on duty” playing a game, practicing, participating in team meetings, traveling and – in the case of the Super Bowl – fulfilling team-related media obligations.
Total earnings are multiplied by a ratio of days of service spent in a given jurisdiction to the athlete’s total days of service to determine the athlete tax liability.
“Duty days include days when you practice or, in the case of the Super Bowl, even media day counts as a duty day and if that activity takes place in California, you are subject to those tax rules,” Degner said.
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“Players have a very complex tax situation where they may have 10 or more different states that they need to file their taxes for,” he said. “That’s why it’s very important for a lot of these young players that teams set them up with sound financial and tax advisors so they don’t lose their jersey, so to speak.”