Super Bowl Taxes Could Exceed Winnings for Some NFL Players

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Feb. 5 — Some of the players for the Denver Broncos and Carolina Panthers, who are scheduled to face each other in the upcoming Super Bowl 50 football championship, could actually lose money by playing in the event due to tax implications in California.

Jack Trachtenberg and Jason Feingertz, tax attorneys for Reed Smith LLP, say National Football League players aren't paid their regular season salary during the playoffs and instead only receive a “bonus” for their participation. Members of the winning team each receive a $102,000 bonus and those on the losing team get $51,000. However, California requires that taxes be paid on a player's full season salary, so some players may see a loss.

“For players earning a high salary, when you factor in California's high tax rate, those Duty Days spent practicing and playing in California can result in a tax bill larger than the $51,000 bonus the player receives for being on the losing team,” Trachtenberg, counsel for Reed Smith in New York, told Bloomberg BNA in a Feb. 5 e-mail. “Therefore, without even considering the federal tax implications of the Playoff bonus, a player can lose money by participating in the game.”

Trachtenberg and Feingertz agreed that any NFL player would trade the tax liability to play in the Super Bowl, but said the tax implications are interesting nonetheless.

With Super Bowl 50 set for Feb. 7 at Levi's Stadium in Santa Clara, Calif., players for the Broncos and Panthers will prepare to play and, potentially, to receive a tax bill. All will be subject to California taxes despite the fact that neither team is based in the state, according to lawyers familiar with the subject.

Duty Days

Trachtenberg and Feingertz say California imposes a tax on nonresident athletes for any “Duty Days” they spend working in the state during the year. As a result, according to the lawyers, every player competing in the Super Bowl will have a higher tax bill in 2016 due to extra days spent preparing for and playing in the event.

“Depending on their exact travel arrangements, the players on both teams will spend about 7-9 days in California for the Super Bowl for practices and the big game,” Feingertz, an associate in Reed Smith's state tax department, told Bloomberg BNA in a Feb. 5 e-mail. “All of these days will qualify as Duty Days for California purposes.”

Feingertz said that California's top personal income tax rate of 13.3 percent is “the highest individual income tax in the United States.” California imposes that rate on an athlete's income apportioned to the state under the “Duty Day” formula, he said.

Additional Tax Revenue

Feingertz said the state of California also will benefit, thanks to additional tax revenue generated by hosting the event.

“Hosting the Super Bowl can come at a high cost for a state, but the Jock Tax will help offset some of the expenses associated with the event,” he said. “The additional revenue typically will go into the state's General Fund, which allows the state to use it for many different purposes.”

However, Feingertz said, California won't see any additional tax revenue from the sales tax associated with tickets to the Super Bowl.

“The NFL requires that every state which hosts the Super Bowl specifically exempt Super Bowl tickets from the sales tax imposed by that state,” he said. “However, California can still benefit from local hotel taxes and sales taxes for other purchases made by tourists attending the game.”

California Taxes

In 1991, California became the first state to “aggressively impose a tax on non-resident athletes,” according to Trachtenberg. Since then, he said, most states with a personal income tax have instituted their own form of the “Jock Tax.”

“For example, New York currently uses the Duty Day formula to impose tax on non-resident athletes for all Duty Days spent in the state,” Trachtenberg said.

Feingertz said the California Franchise Tax Board is unique in that it has a specific “Sports Program,” which ensures nonresident professional athletes file California returns and that the correct state source income is reported by those who file returns voluntarily.

“Additionally, California is known to be one of the most aggressive states for Residency Audits of professional athletes who own a home in the state,” Feingertz said.

To contact the reporter on this story: David McAfee in Los Angeles at
To contact the editor responsible for this story: Brett Ferguson at

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