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NFL training camps and tax implications

The most exciting time of year is back! That’s right, football season has kicked off with NFL training camps in full swing.  Did you think I would mention Christmas? That is still about 130 days away, which leaves plenty of time to shop. I do a lot of my shopping at the NFL Team Store by the way.

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In addition to fantasy football preparation and watching parts of the preseason games, I watch HBO’s Hard Knocks, which each year tracks the training camps of various NFL teams. This year, HBO is focusing on the Oakland Raider training camp, which is taking place in Napa, California. Napa is about 43 miles north of Oakland. Most NFL training camps take place close to the team’s headquarters. However, there are a couple that do take place out of state. One is the Carolina Panthers, which takes place in Spartanburg, South Carolina. The distance between Charlotte and Spartanburg is only 74 miles, so it is not too far away. The Dallas Cowboys, on the other hand, holds its training camp in Oxnard, California. Dallas ownership probably has plenty of reasons to hold their training camp several states away. However, I am not sure if they considered the tax implications.

Athletes and state taxation can cause a lot of headaches for tax professionals. Athletes are playing in so many locations during a calendar year and the more time spent in a state, the more tax that is paid to that jurisdiction. NFL players are typically paid during the 17-game regular season. While the Dallas players are not paid for their training camp participation, the fact that they are spending a few weeks in California could translate to higher taxes. California is one of the highest taxing states with a top individual tax rate of about 13.3%. Since training camp last about 20 days (off days are not factored in for state allocation), California creates quite a large tax bill for the NFL players making millions each year. If Dallas held training camp close to home, the individual tax bill would be nothing as Texas does not impose an individual income tax. Either way, NFL football is back and that is the important takeaway.

 

Kelly Lynch, CPA

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