Game Over for Tennessee's ‘Jock Tax' on NBA Players

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By Andrew M. Ballard

June 2 — National Basketball Association players will no longer have to pay a tax on the games their teams play in Tennessee.

A professional privilege tax of $2,500 per game—with a $7,500 annual cap—had been imposed on both resident and nonresident NBA players since 2009 (Tenn. Code Ann. Sections 67-4-1702 and 67-4-1703). The tax hasn't been levied on National Hockey League players since 2014, and was never imposed on athletes in the National Football League.

The tax expired for NBA players June 1, but hundreds of basketball players will receive refunds for a portion of the taxes they previously paid under a settlement reached last year, Gary Kohlman, general counsel for the National Basketball Players Association, told Bloomberg BNA. The tax was levied on athletes on NBA rosters even if they never played, and some lower-paid players actually lost money for games they played in Memphis, he said June 1.

Revenue from the tax was sent to team owners and was used to subsidize operations of the Memphis Grizzlies' FedEx Forum (NBA) and the Nashville Predators' Bridgestone Arena (NHL). In some cases, teams paid the tax on behalf of players, Kohlman said.

Big Win for Hockey

NHL players scored big in 2014 when the Tennessee Legislature removed them from being subject to the privilege tax (Public Act 2014-760). That law retained the tax on NBA athletes until June 1, 2016.

However, NBA players and the state reached a deal in 2015 under which the athletes would be refunded one-third of taxes they paid before 2015 and all of the taxes they paid during the most recent two years.

Brian Collins, chief financial officer for the city of Memphis, told Bloomberg BNA June 1 that his city wasn't party to the negotiations or agreement, but it owes about $2.4 million it received from the tax on players under the deal. Tennessee is going to deduct that amount from Hall income tax revenue the state is to pay Memphis this month, he said.

Kelly Cortesi, a spokeswoman for the Tennessee Department of Revenue, told Bloomberg BNA June 2 that the final tax return from NBA players—covering the June 1, 2015, to May 31, 2016, period—was due June 1.

Tennessee collected about $18.8 million from the professional privilege tax on NHL and NBA athletes from fiscal year 2010 through fiscal year 2015, she said.

Cortesi declined to discuss the settlement or reimbursement, citing pending litigation.

Other Jurisdictions

Other states and municipalities impose some form of special tax on nonresident athletes. Tax attorneys said NFL athletes that played in the 2016 Super Bowl may have paid more in California taxes than they earned from the championship event (2016 Weekly State Tax Report 13, 2/12/16).

A per-game tax levied by Cleveland was found improper by Ohio's highest court, and the U.S. Supreme Court recently refused to consider the matter, allowing the state court ruling to stand (2015 Weekly State Tax Report 21, 11/13/15).

To contact the reporter on this story: Andrew M. Ballard in Raleigh, N.C., at

To contact the editor responsible for this story: Ryan Tuck at

For More Information

Information about the tax is at

For additional discussion of Tennessee's professional privilege tax, see Corporate Income Tax Navigator, at Tennessee 4.7.9 .

Request Weekly State Tax Report