OLYMPIA, Wash. — When Seattle quarterback Matt Hasselbeck plays in the Super Bowl on Sunday, Michigan's Department of Revenue will be waiting to intercept 3.4 percent of his earnings for the days he works in Detroit.
Hasselbeck's $8 million salary and potential $73,000 in payout from the NFL could force the Seattle signal-caller to hand off $10,000 in taxes to a state where he has no residence and no affiliation.
Like 19 other states, the Wolverine State imposes a "jock tax," which could cost the Seahawks nearly $300,000 just to play at Ford Field — and that doesn't include every coach, trainer and water boy. Piling on, the city of Detroit leverages a 1.275 percent tax on athletes, which could bring in $200,000 for hosting the Super Bowl.
Washington is one of just four states — along with Texas, Tennessee and Florida — with major professional teams that don't have an income tax, and subsequently do not impose a jock tax on nonresident athletes.
That may soon change. Rep. Chris Strow, R-Clinton, has proposed a bill to impose a surcharge on out-of-state professional players when they play in Washington state.
"We have to try and protect our athletes," Strow said.
Strow's measure will be aired in the House Economic Development Committee on Tuesday, just as the Seahawks settle into Detroit for Super Bowl media day. He doesn't give it much chance of passing this year.
Michigan's tax is on the low end of the spectrum. California levies up to a 9.3 percent rate, the highest in the nation. Pennsylvania, home of the Pittsburgh Steelers, charges 3.07 percent.
To abide by nonresident athlete tax laws, Hasselbeck would have to file forms in eight different states where he played this season (two exhibition, five more in the regular season and one playoff location). Hasselbeck's agent was unavailable Monday to confirm the anticipated filings.
To calculate athlete taxes, accountants must consider the number of active duty days in each state, the sliding tax scale and the daily salary with incentives.
"It's like you're publishing a book every year for these guys with all these miscellaneous filings," said Mike Rivello, a California-based accountant who works with a number of professional athletes.
Hasselbeck's lucky. With longer seasons in more cities, baseball, basketball and hockey players will face tax-form nightmares at the end of the season. Of the 24 states with major professional teams, 20 take aim at the salaries of athletes. For low-income competitors, like some professional soccer players or even skateboarders, the paperwork can make for quite the chore.
To make matters worse, cities are hopping on the bandwagon.
"Not everyone is a Shaquille O'Neal, making millions, that can travel with a coterie of accountants," said Bill Ahern of the Washington D.C.-based Tax Foundation. "We consider it to be an outrageous administrative burden on anyone who travels and works for a few days out of state."
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