NBA stars Steph Curry, Chris Paul among top players facing stiff tax liabilities

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Public Policy Institute of California's Mark Baldassare on California moving its Primary day to Super Tuesday, California Gov. Gavin Newsom's new budget calling for more taxes and the state of the California economy.

The NBA finals begins on Thursday, as the two-time defending champion Golden State Warriors face off against the Toronto Raptors – who will make their finals debut.

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While the league’s best players have worked hard to up their game – and their contracts – taxes are bound to eat up a big chunk of their annual salaries, particularly for those players that reside in higher-tax states.

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Players face taxes at the federal level – with the highest rate set at 37 percent – and their salaries are also subject to state taxes, which are much higher for some players than others.

Two players making $5 million dollars each playing for the Phoenix Suns and and the Golden State Warriors (Arizona vs. California) could see a $400,000 difference in their tax liabilities, Joel B. Kramer, Managing Director at CBIZ MHM’s Phoenix office, told FOX Business.

A handful of teams are located in states like Florida, Texas and Washington, which charge no income tax.

Even athletes who live in states without income taxes, however, are subject to taxes in other states where they play and earn income. Those "jock taxes" are usually calculated by dividing the number of work days spent (practices and games) in the city by the total number of work days, Kramer said, but some states just use games played.

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.

As previously reported by FOX Business, pro-athletes were among the biggest losers from the Tax Cuts and Jobs Act, after state and local tax deductions were capped at $10,000 and other itemized deductions were limited. One of the biggest changes, Kramer said, is that athletes can no longer deduct their agent fees.

"It's just complicated, these players are going to have to file tax returns in 20 states and a foreign country," Kramer, who is a former NBA player, added. "It’s a very complicated, time consuming tax return."

Here’s a look at what some of the hottest, top-paid players in the league will actually take home from their salaries, according to estimates provided to FOX Business by Robert Raiola, the director of the sports and entertainment group at PKF O'Connor Davies:

Steph Curry

The NBA’s highest-paid player, Warriors phenom Steph Curry, signed a $201 million five-year contract with the Golden State Warriors – and is credited with contributing greatly to the team’s success.

Here's a look at his tax liabilities:

  • Gross Wages: $37.5M
  • Federal taxes (including Social Security and Medicare): $14,761,350
  • State, local, jock taxes: $4,987,500
  • Net wages: $17,751,150

Curry’s salary made headlines in 2017, when ESPN reported that he would take home only about 44 percent of his more than $34.68 million salary – which included his contributions to his 401(k) account and agent fees.

Chris Paul

May 8, 2019; Oakland, CA, USA; Houston Rockets guard Chris Paul (3) shoots the basketball against Golden State Warriors forward Alfonzo McKinnie (28) during the first quarter in game five of the second round of the 2019 NBA Playoffs at Oracle Arena.

Houston Rockets point guard Chris Paul has been in the league since he was drafted to the New Orleans Pelicans in 2005.

He has been named the NBA All-Star game’s most valuable player and was given the NBA’s Rookie of the Year Award.

Paul has a four-year contract with the Rockets, valued at $160 million.

  • Gross Wages: $35.7M
  • Federal taxes (including Social Security and Medicare): $14,053,050
  • State, local, jock taxes: $874,650
  • Net wages: $20,772,300

The Rockets lost to the Warriors in the playoffs.

Joel Embiid

Mar 23, 2019; Atlanta, GA, USA; Philadelphia 76ers center Joel Embiid (21) drives to the basket against the Atlanta Hawks in the second quarter at State Farm Arena. Mandatory Credit: Brett Davis-USA TODAY Sports - 12405471

Currently a center for the Philadelphia 76ers, Joel Embiid was one of the top draft picks in 2014.

He has a contract with the team for a five year duration, which is valued at $147.7 million. His salary for the 2018-2019 season is valued at about $25.5 million.

He pays:

  • Gross Wages: $25.5M
  • Federal taxes (including Social Security and Medicare): $10,039,350
  • State, local, jock taxes: $1,722,480
  • Net wages: $13,688,170

The 76ers lost to the Toronto Raptors this year during the playoffs.

Giannis Antetokounmpo

TORONTO, ONTARIO - MAY 25: Giannis Antetokounmpo #34 of the Milwaukee Bucks handles the ball during the first half against the Toronto Raptors in game six of the NBA Eastern Conference Finals at Scotiabank Arena on May 25, 2019 in Toronto, Canada. NO

Antetokounmpo was drafted to the Milwaukee Bucks in 2013 in the first round. His playing skills have earned him the nickname “Greek Freak” in the league – as he has led his team across a number of statistical categories.

He has a four-year contract valued at $100 million. His base salary for the 2018-2019 year is about $24.2 million.

  • Gross Wages: $24.2M
  • Federal taxes (including Social Security and Medicare): $9,527,800
  • State, local, jock taxes: $1,851,300
  • Net wages: $12,820,900

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The first game of the NBA finals will begin on Thursday at 9 p.m. ET.

Assumptions made to make these calculations: Athletes are residents of the states that they play in. They will be refunded for 100 percent of the taxes withheld in escrow. Endorsements were not factored in.

This story was updated to correct a rounding error, a quote was removed.