Yes, professional sports players can owe state income tax in multiple states where they play or work. However, they do not simply pay the same percentage of their entire salary to every state they visit.
This complicated system is sometimes called the “jock tax.” It generally means that a professional athlete’s income can be allocated among different states based on where the athlete performs services. The exact rules vary by state, and not every state has an individual income tax.
For example, an NFL, NBA, MLB, or NHL player who lives and plays in one state may travel to several other states during a season. Depending on those states’ tax laws, the player may have state tax obligations associated with income earned for work performed there.
The athlete’s home state can also tax income under its own residency rules. As a result, professional athletes can have considerably more complicated tax returns than people who work in only one location.
What Is the Jock Tax?
The term “jock tax” is an informal name for state and sometimes local income taxes that can apply to professional athletes who earn income while working in different jurisdictions.
The basic idea is not unique to athletes. States can generally tax income connected with work performed within their borders, subject to their own laws and constitutional limitations.
Professional athletes receive unusual attention because they may work in many different states during a single season.
A basketball player, for example, might play home games in one state and road games in 20 or more other states. A baseball player can travel across the country throughout a long season. Football players also travel to different states for regular-season games and other team activities.
California’s tax guidance specifically describes using a “duty days” method for allocating professional athletes’ compensation between California and other locations. Duty days can include days involving practices, travel, and games during the relevant season.
Do Players Pay Taxes Every Time They Visit a State?
Not necessarily in the simple way people sometimes imagine.
A player does not normally calculate a tax bill by saying, “I spent two days in this state, so I owe tax on two days of my entire annual salary.”
Instead, states can use allocation formulas to determine what portion of an athlete’s income is associated with services performed in that state.
One approach is based on duty days.
Suppose an athlete has a season involving hundreds of working days, including training, practices, travel, and games. A state may determine the proportion of the athlete’s workdays connected with that state and apply that proportion to the relevant compensation.
The actual formula depends on the state’s rules.
That distinction is important because athletes are paid under annual contracts rather than being paid separately for each game in most professional sports.
How Does This Work for an NFL Player?
Consider an NFL player who lives in a state with an individual income tax and plays home games there.
The player may have state tax obligations in the home state based on residency and other applicable rules. When the team travels to another state for a road game, the player’s compensation may also be subject to that state’s nonresident income tax rules.
The player may therefore have to account for income earned from work performed in several jurisdictions.
The calculation can involve more than games themselves. Depending on the state and the applicable allocation method, training, practices, travel, and other workdays may matter.
This is one reason professional athletes often need tax professionals who understand multistate taxation.
What About NBA and MLB Players?
The same general concept can apply to players in other professional leagues.
NBA players regularly travel across the country during the season, while MLB players can spend a large number of days working in different states because of the length of the baseball season.
The basic tax principle remains similar: where an athlete performs services can matter for determining which state can tax part of the athlete’s income.
However, the details can differ significantly between states.
An athlete’s tax situation may depend on:
- State residency
- Where the athlete performs services
- Number of duty days
- State income-tax rules
- Local income taxes
- Tax credits
- The athlete’s contract
- Endorsement and appearance income
- Whether the athlete has income from other activities
Do States Without Income Tax Matter?
Yes.
Some states do not impose a broad individual state income tax. This can affect professional athletes who live or work there.
For example, if a player is a resident of a state without an individual income tax, that does not necessarily mean the player will avoid state income taxes everywhere.
The player can still travel to states that impose income taxes and potentially owe taxes on income associated with work performed there.
This is why simply looking at the state where an athlete lives does not tell the whole story.
The opposite can also be true: living in a state with an income tax does not necessarily mean the athlete pays that state’s tax on every dollar earned from every game played around the country without considering credits and allocation rules.
Do Athletes Get Tax Credits for Taxes Paid to Other States?
Often, states have mechanisms that can reduce double taxation when the same income is taxed by more than one state.
The exact rules vary.
For example, an athlete’s resident state may provide a credit for qualifying income taxes paid to another state. The credit is designed to help prevent the same income from being fully taxed twice, although it does not necessarily eliminate every difference between state tax systems.
This is one of the reasons professional athletes’ tax returns can become complicated.
Two states may have different tax rates, definitions, deductions, filing requirements, and allocation methods.
An athlete can therefore have several state filings even when tax credits reduce the ultimate amount owed.
Do Athletes File Tax Returns in Multiple States?
They can.
A professional athlete who earns income in multiple states may have to file nonresident tax returns in states where the athlete has taxable income, in addition to a resident-state return when applicable.
The exact filing requirements depend on the state’s rules and the athlete’s circumstances.
This can produce a large administrative burden for players who travel frequently.
A player may have one primary state of residence but work in many other states during a season. Tax professionals can track the player’s schedule and determine which jurisdictions need to be considered.
What Happens With Endorsement Income?
Endorsements create another layer of complexity.
An athlete can earn money from:
- Sponsorships
- Commercial appearances
- Personal appearances
- Autograph events
- Social media work
- Speaking engagements
- Licensing
- Other business activities
Where those services take place can matter for state taxation.
The IRS specifically notes that athletes and entertainers can have U.S.-source income connected with performances, endorsements, merchandise, royalties, and related activities.
For athletes who earn money through name, image, and likeness activities, the IRS also advises keeping track of locations where services are performed because state taxes can apply where the income is earned.
What About College Athletes With NIL Income?
College athletes have a different situation because NIL income is not the same as a professional player’s salary.
NIL income can come from endorsements, appearances, autograph sessions, sponsorships, content creation, and other commercial activities. The IRS states that NIL income is taxable income and that athletes may have federal and state tax responsibilities.
A college athlete may also have a home state and attend school in another state. If the athlete performs NIL services in multiple states, those states may have different tax rules.
The IRS explains that a student’s state of residence can continue to be the home state even when the athlete attends college elsewhere, depending on residency rules.
So the multistate tax issue is not limited to professional athletes.
Does the Athlete’s Salary Get Taxed by Every State?
No.
This is one of the biggest misconceptions about the jock tax.
A player does not generally owe each state tax on the athlete’s entire annual salary simply because the player played one game there.
Instead, the relevant state’s rules determine whether the athlete has taxable income connected to that state and how much income should be allocated there.
The allocation may be based on workdays or another method established by the state.
The result is usually a fraction of the athlete’s compensation rather than the entire salary.
What If an Athlete Plays in a State Only Once?
A single game can potentially create a state tax filing or tax obligation, depending on the state’s rules and the amount and type of income involved.
Professional athletes can earn very high salaries, so even a small allocation of annual compensation can produce a meaningful amount of taxable income.
However, the precise outcome cannot be determined simply from the number of games played.
Residency, income level, state rules, thresholds, credits, and allocation methods can all matter.
Are Local Taxes Also Possible?
Yes.
State taxes are not necessarily the end of the calculation.
Some cities and local jurisdictions impose their own income taxes or similar taxes. Professional athletes playing in those locations may have additional tax considerations.
This can make the tax situation even more complicated.
An athlete might therefore need to consider federal taxes, a resident-state return, nonresident state returns, and potentially local tax obligations.
Why Do Professional Athletes Need Tax Specialists?
A typical employee may work primarily in one city or state and have relatively straightforward state tax obligations.
Professional athletes can have a completely different working pattern.
Their schedules may include:
- Training camp
- Practices
- Home games
- Road games
- Travel
- Promotional appearances
- Endorsement activities
- Offseason work
Those activities can occur in multiple jurisdictions.
A professional athlete’s tax team may therefore need to track the player’s schedule and compensation carefully throughout the year.
Mistakes can be expensive because the athlete may owe additional tax, interest, or penalties if required returns or payments are not handled correctly.
Do International Athletes Have Different Tax Rules?
Yes.
Foreign athletes competing or working in the United States can face additional U.S. tax rules.
The IRS states that nonresident alien athletes performing independent personal services in the United States generally have U.S. federal tax obligations on U.S.-source income. Special withholding rules can apply as well.
International athletes may also have tax obligations in their home countries, depending on their circumstances and applicable tax treaties.
That makes international professional sports taxation even more complicated than the typical domestic athlete’s situation.
Frequently Asked Questions
Do sports players pay taxes in every state they play?
They can owe state taxes in multiple states where they perform services, but they do not automatically pay the same tax on their entire salary to every state. Each state’s rules determine the taxable amount.
What is a jock tax?
“Jock tax” is an informal term commonly used for state and local taxes that can apply to professional athletes based on income associated with work performed in different jurisdictions.
Do athletes pay taxes on road games?
A road game can contribute to the income allocation for the state where the game is played, depending on that state’s tax rules. The calculation is usually more complicated than taxing the athlete’s entire salary for one game.
Do athletes pay taxes where they live?
An athlete’s state of residence can have an important role in determining state income-tax obligations. The resident state may tax income under its own rules, while other states can potentially tax income connected with services performed there.
Can athletes be taxed twice on the same income?
Potentially, but states may provide credits or other mechanisms to reduce double taxation. The exact rules vary by state.
Do college athletes pay state taxes on NIL money?
NIL income is taxable, and college athletes may have federal and state tax responsibilities. State obligations can depend on residency and where NIL services are performed.
Do professional athletes pay federal taxes too?
Yes. State taxes are separate from federal income taxes. Professional athletes who are U.S. taxpayers generally have federal income-tax obligations in addition to applicable state and local taxes.
The Bottom Line
So, do sports players pay taxes in each state they play? Professional athletes can owe state income taxes in multiple states where they play or perform services, but they do not simply pay the full tax on their entire salary to every state they visit.
Instead, states generally determine what portion of an athlete’s income is connected to work performed within their jurisdiction. The calculation can involve duty days, residency, games, practices, travel, endorsements, and other factors.
Because tax laws differ from state to state, there is no single formula that applies to every professional athlete. A player with a national schedule can therefore have a much more complicated tax situation than an employee who works in one state.
For athletes, the important point is that where they work can matter for taxes, not just where they live.