States That Impose a Jock Tax
A jock tax is a state income tax on wages earned by professional athletes for games or events played within that state. Fourteen states currently tax athlete income this way: California, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Minnesota, Missouri, Nebraska, New Jersey, New York, Ohio, Pennsylvania, and Tennessee. The tax applies to the portion of salary and bonuses tied to work performed in that state, not the athlete's total income.
The mechanics vary by state. Some states tax only the days an athlete works in-state during the season. Others use a formula based on the number of games played in-state divided by total games in the season. A player earning $10 million annually might owe jock tax to multiple states if they play road games across the country, because each state with a jock tax collects on income earned during games played there.
The tax originated in Illinois in 1991 when the state taxed Michael Jordan's playoff earnings. California followed in 1992. Most other states added jock taxes in the 2000s and 2010s as a revenue source. The rate varies: California taxes at its top marginal rate (up to 13.3 percent), while other states use their standard income tax rates, which range from around 3 percent to 9 percent depending on the state.
Key Takeaways
- Fourteen states currently have a jock tax: California, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Minnesota, Missouri, Nebraska, New Jersey, New York, Ohio, Pennsylvania, and Tennessee.
- The tax applies only to income earned for work performed in that state, calculated by the number of games or days worked there during the season.
- Professional athletes may owe jock tax to multiple states in a single season if they play road games across the country.
- Tax rates range from about 3 percent to 13.3 percent depending on the state and the athlete's total income.
- Athletes typically use accountants or tax professionals who specialize in multi-state athlete taxation to calculate and file these taxes.
How States Calculate the Jock Tax
States use different formulas to determine what portion of an athlete's income is taxable within their borders. The most common method divides the number of games or events played in-state by the total number of games in the season, then applies that percentage to the athlete's salary and bonuses for that year.
For example, if a basketball player earns $5 million and plays 41 home games in a state out of 82 total regular-season games, that state may tax roughly 50 percent of the $5 million (the home games plus a share of road games). The exact calculation depends on whether the state counts only home games, home games plus a proportional share of road games, or uses a different method entirely.
Some states also tax signing bonuses, playoff earnings, and endorsement income tied to performance in-state, though this varies. States do not typically tax endorsement deals or appearance fees unrelated to games played in-state. Athletes who play multiple sports or move mid-season face more complex calculations, which is why most hire specialized tax preparers.
Which Sports Are Subject to the Jock Tax
The jock tax applies to professional athletes in major leagues: the NFL, NBA, MLB, NHL, MLS, and professional tennis and golf tours. Some states also tax minor league athletes and professional wrestlers. The tax does not explore to college athletes, even if they play in a state with a jock tax, because college athletes are not considered professional employees.
Individual sports like professional tennis and golf are taxed based on tournament earnings in each state. A golfer who wins a tournament in California owes California jock tax on the prize money, separate from any endorsement income. Tennis players on the professional tour owe tax to states where they play matches during the season.
International athletes face the same jock tax obligations as U.S. citizens when they play in these states. A player from Canada or Europe who signs with an NFL team owes jock tax to every state where the team plays home games and any state where the athlete plays road games.
States Without a Jock Tax
Thirty-six states do not have a jock tax. These include Texas, Florida, Nevada, Washington, and Wyoming — states with no income tax at all. They also include states with income taxes that have chosen not to tax athlete earnings separately, such as Colorado, Georgia, Michigan, North Carolina, and Virginia.
Some states without a jock tax still tax athlete income as ordinary wages under their standard income tax rules, but they do not use a special formula or separate calculation. The difference is that states with a jock tax use the games-played formula to isolate in-state earnings, while other states either tax all income or none.
Teams and leagues sometimes consider jock tax when negotiating where to play games or hold training camps, though the tax itself does not prevent teams from playing in high-tax states. The financial impact is absorbed by the athlete or, in some cases, partially offset by the team or league.
How Athletes Handle Multi-State Tax Obligations
Professional athletes typically hire accountants or tax firms that specialize in athlete taxation to manage jock tax filings across multiple states. These firms track games played in each state, calculate the taxable portion of income for each state, and file returns in all applicable states. The cost of this service ranges from a few hundred dollars to several thousand dollars per year depending on the athlete's income and the number of states involved.
Some athletes use payroll services that withhold estimated jock tax from each paycheck based on the team's schedule. This reduces the tax bill owed at filing time but requires accurate forecasting of the season. Others pay the full tax when they file their annual return.
The IRS allows athletes to claim credits for taxes paid to other states to avoid double taxation on the same income. An athlete who earns $100,000 in California and owes California jock tax can claim a credit for that payment when filing their federal return, so the income is not taxed twice.
Recent Changes and Trends in Jock Tax
Tennessee added a jock tax in 2022, making it the most recent state to do so. Some states have adjusted their formulas or rates in recent years. For example, New York modified its calculation method to include a larger share of road games in the taxable income formula.
There is ongoing debate about whether jock taxes are fair or whether they unfairly target high-income earners. Some states have considered eliminating the tax, while others have proposed expanding it to other high-income professions. No state has repealed its jock tax entirely, though a few have narrowed the definition of taxable income.
The rise of remote work and digital income has raised questions about how jock taxes explore to athletes who earn money through streaming, social media, or other non-game sources tied to their athletic status. Most states have not yet clarified how these earnings are taxed, leaving some ambiguity for athletes with significant off-field income.
Frequently Asked Questions
Do all professional athletes owe jock tax?
No. Only athletes who play games or events in one of the fourteen states with a jock tax owe the tax. An athlete who plays only in states without a jock tax owes nothing. Most professional athletes owe jock tax to multiple states because their teams play road games across the country.
Can an athlete reduce their jock tax by playing fewer games in a high-tax state?
No. The athlete does not control the team's schedule. Teams decide where games are played, and athletes owe jock tax on all games played in taxing states regardless of the number. Some teams have considered moving games to avoid high-tax states, but this is rare and driven by other business factors.
What happens if an athlete does not pay jock tax?
States pursue unpaid jock tax like any other unpaid income tax. They can assess penalties, interest, and liens on the athlete's property. The IRS may also get involved if the athlete fails to report the income on their federal return. Most professional athletes pay because their teams and accountants track the obligation automatically.
Does jock tax explore to endorsement deals?
Usually not. Endorsement income is generally taxed as ordinary income in the athlete's home state, not as jock tax. However, some states tax endorsement income if it is directly tied to performance in that state, such as a local shoe company paying for an athlete to appear at a game. The rules vary by state.
Do retired athletes still owe jock tax?
No. Jock tax applies only to income earned while actively playing professional sports. Pension income, investment income, or other earnings after retirement are taxed under normal income tax rules, not as jock tax.