Kill the Umpire?With State Income Taxes
November 3, 2005
In the same sort of vengeful way that California enforced the first “jock tax” in 1991 after the Chicago Bulls beat the Lakers, Missouri legislators are now being urged to tax the umpires to retaliate for the Cardinals’ loss to Houston. From the St. Louis Post-Dispatch:
Jeff Roorda, D-Barnhart, says he’ll make a pitch to the Missouri Legislature to force Major League umpires and National Football League officials to pay the state’s athletes and entertainers tax.
A self-proclaimed baseball fanatic and lifelong Cardinals fan, Roorda says he hit upon the idea while stewing over the “inexcusably poor officiating” by umpires Phil Cuzzi and Greg Gibson during the National League Championship Series, which the Cardinals lost to the Houston Astros.
“I won’t lie and say this isn’t the product of a disgruntled fan,” Roorda said. “But it is sound policy.”
Most umpires do not exactly resemble “jocks,” but they may soon be filing 20 or 30 state and city tax returns every year, as the jocks and other team employees already do. The so-called jock tax is really just an aggressive application of a state’s income tax to more and more nonresidents who just work for a few days in each state.
The jock tax began with California trying to get back at Michael Jordan for beating the Lakers in 1991, and Illinois fought back with a retaliatory tax the next year that the Chicago press dubbed “Michael Jordan’s Revenge.”
California hasn’t just taxed the star athletes but has extended this non-resident taxation to coaches, scouts, and all the other employees of the sports franchises— anyone whose travel schedule is easily determined in advance. A half dozen cities have also passed their own jock taxes.
Three major reasons the jock tax is ill-conceived:
• The tax is poorly targeted. Advertised as one that hits only ultra-rich athletes, the jock tax has quickly spread to many people with moderate incomes, such as trainers and scouts, and to other professions.
• The tax is arbitrary. Professionals in other occupations with comparable incomes over their working lives, such as doctors and corporate executives, are not penalized by a “doc tax” or “exec tax,” though that is changing. New Jersey has recently started taxing visiting lawyers.
• The tax is unreasonably burdensome. It imposes an unrealistic administrative burden on people who have to file state income tax returns in every state they work in for a few days.
A rational policy for state tax administrators is to tax athletes only in the state of their home team. More generally, states should concentrate their nonresident income tax enforcement on people who commute into their states and spend a significant fraction of the year working there.
A 2004 Tax Foundation Special Report gives examples of how much money professional athletes were paying in extra taxes to states where they travel to play games. The athletes who pay the most are those who make their homes in states that have no state income tax or a low rate.
Umpires may call foul, but the Departments of Revenue in the dozens of states and cities with professional franchises already consider the tax fair for athletes, coaches and trainers, so they’ll probably be taxing the men in blue as well.