Eliot Spitzer and Alleged Valentine Likely to Pay “Jock Tax”

March 10, 2008

Governor Spitzer and his alleged valentine “Kristen” have more in common than you know. They’ll both be filing personal income tax returns in the District of Columbia, or at least they will if they follow the ridiculous “jock tax” policy that both cities apply to visiting athletes.

When the Mets travel to DC to play the Nationals, for example, all the players, coaches, trainers—all employees who travel with the team—have to pay income tax to DC for those days. They are permitted to deduct those payments on their New York state tax returns, so it’s mostly a silly mountain of paperwork that accomplishes nothing. The Nationals go through the same rigmarole in reverse.

That’s probably what “Kristen” and Eliot will have to do. Her athletic endeavors and his coaching (allegedly a stern coach who demands some acrobatics that are “not safe”) will be taxed here in DC in what might be called the g-string tax or maybe the jockless tax. “Kristen” will deduct that payment on her New York return, with a notation, Client-9. Spitzer’s notation might be a heart.

Not so clear-cut is the tax fate of the Emperor Club’s corporate tax return. Indecipherable nexus rules will decide if the District can tax Emperor. The District’s Office of Tax Revenue has some making up to do after recent embezzlement scandals by its employees, so the Emperor’s Club will probably be hearing from the District of Columbia. In the jargon of state tax collectors, DC “provided the market” for her services. See here for more on the possible application of the physical presence rule to this situation.

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