NBA free agency: Best player options for low taxes
A number of big NBA players could potentially become free agents this year – including Toronto Raptor and finals MVP Kawhi Leonard and Golden State Warriors powerhouse Kevin Durant – and for those looking to boost their earnings potential, some teams might be more attractive than others.
Tax liabilities can take a big bite out of players’ earnings. As previously reported by FOX Business, Golden State Warriors’ star Stephen Curry took home about $17.75 million of his $37.5 million gross wages during the 2018 to 2019 season.
League MVP Giannis Antetokounmpo, a Milwaukee Bucks player, took home about $12.82 million of his $24.2 million gross wages in the 2018 to 2019 season.
While players take many things into account when considering where to play, here’s a look at the teams located in states with the lowest tax obligations, as compiled for FOX Business by Robert Raiola, director of the sports and entertainment group at PKF O'Connor Davies.
Texas (0 percent)
Teams: Houston Rockets, San Antonio Spurs, Dallas Mavericks
Florida (0 percent)
Teams: Miami Heat, Orlando Magic
Tennessee (0 percent)
Team: Memphis Grizzlies
Pennsylvania (3.07 percent)
Team: Philadelphia 76ers
Indiana (3.23 percent)
Team: Indiana Pacers
Michigan (4.25 percent)
Team: Detroit Pistons
States with the highest taxes include:
California (13.3 percent)
Teams: Golden State Warrior, Los Angeles Clippers, Los Angeles Lakers, Sacramento Kings
Oregon (9.9 percent)
Team: Portland Trail Blazers
Minnesota (9.85 percent)
Team: Minnesota Timberwolves
However, even if a state does not charge income tax, athletes will still have to pay the IRS.
Players face taxes at the federal level, with the highest rate currently set at 37 percent.
Athletes are also subject to taxes in other states where they play and earn income. Those "jock taxes" are usually calculated by dividing the number of workdays spent (practices and games) in the city by the total number of work days.
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It's not a double tax, however. Players pay taxes equal to the highest rate in either their resident or non-resident state. They get credit for the taxes in the lower-tax state.
It should be noted that taxes for the Toronto Raptors work a bit differently.
The league’s free agency period begins on Sunday at 6 p.m. ET. The negotiation period ends on July 6, at which time players can sign their official contracts with teams.