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June 03, 2024

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Paloma Ave

Seeing the word "Taxachusetts", brought back a joke from many years ago.

Where was Ted's last wife registered at, for wedding gifts?

Answer: Scuba World!

Joe

Our tax status even hurts some of our pro sports teams! From the WSJ:

In theory, taxes should affect all North American professional sports equally. But that’s not the case with hockey, which has different salary cap rules and geographic dynamics than the NFL, NBA and Major League Baseball.

All of which means that income taxes are now playing a bigger role on the ice.

Since 2020, as the NHL’s salary cap has increased just 2.4%, the teams making deep playoff runs have tended to be from states with lower tax rates. Of the 20 teams that made it to the conference finals or an equivalent round, 11 hailed from Florida, Texas or Nevada—all states without personal income tax.

Professional athletes owe taxes in every jurisdiction where they work each season, but the bulk of their salary is taxed at the rate of their home state. This means teams in states with the lowest income-tax rates have suddenly discovered they possess a meaningful advantage.

According to Sean Packard, tax director at accounting firm Octagon Financial Services, which represents over 100 hockey players, if a skater signed a $3 million contract with the Nashville Predators, he would pay zero dollars in state income tax (he’d still owe about $1.14 million in federal taxes). Had he signed that same contract with the San Jose Sharks, he would fork over roughly $371,000 more to cover California state income tax.
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For non-hockey fans, even though the number of players on the ice is small compared to other sports, hockey relies on a longer roster because the sport is so tiring that they run with four "lines" or shifts. Being able to pay the guys on the fourth line a bit more ups the skill set of the line. Go Sharks---let's hope they get out of the cellar with some good, cheap draft picks that can move up to the NHL quickly.

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