If you have been watching the endless coverage of this Sunday’s Super Bowl match-up, you have probably realized that most of the conversation has been centered around the quarterbacks (as is usually the case). While Trent Dilfer and Steve Young talk about what they like and dislike about Packer’s QB Aaron Rodgers and Steelers’ QB Ben Roethlisberger respective styles, not much is being made of the star’s tax liabilities. Well, the Wall Street Journal has taken the liberty to shed light on this topic. According to the article:
Take the Packers’ fleet-footed quarterback Aaron Rodgers. He made $8.6 million in 2009, according to USA Today’s database of player salaries. Of that, we calculate he paid roughly $680,000 in state and $3.1 million in federal income and payroll taxes. Steeler quarterback Ben Roethlisberger didn’t earn as much, but he got to keep a relatively larger chunk of his haul—$4.6 million of his $7.7 million salary. (This excludes taxes paid to states that tax players visiting on away games.) Unlike Wisconsin, which has a graduated income tax that charges top earners 7.75% on earnings over $220,000, Pennsylvania has a 3% flat rate. Even football players can behold the merit of a flat tax.
If you happen to be attending the AFC or NFC Championship game in Pittsburgh or Chicago (respectively) and planning on having a beer, smoking a cigarette, buying a new sweater or driving to the game (or any combination of these) you may be interested in this chart. It lists the sales, gas, beer, spirits, and table wine taxes in Pennsylvania and Illinois as of February 1, 2010. The data was compiled by Tax Foundation and I modified the chart to cater to today’s games.
Lamar Odom, the 6- foot-10 Los Angeles Lakers forward, is challenging his IRS bill, arguing that certain expenses he deducted are related to his work as a professional athlete and therefore are “ordinary and necessary expenses” paid in carrying on a trade or business which are deducible. Specifically, Odom sought to deduct expenses associated with fines handed down from the National Basketball Association (NBA). Odom also claimed expenses incurred in training and conditioning arguing that his contract with the Lakers requires him to be in sufficient physical condition. The IRS views these expenses as personal, rather than business expenses, and therefore not deductible.
The fines for which Odom is arguing should be deducible are not excluded from the regulations pertaining to the deductibility of fines and penalties. See Reg. 1.162-21. Therefore, this case likely turn on whether these expenses are truly personal in nature, or incurred in connection with Odom’s “trade” as a professional athlete.
Forbes, Lamar Odom Seeks Tax Deduction For NBA Fines and Fitness Fees
European golf tour officials are in talks with the British government about changing certain tax laws that may deter top golfers from competing in this year’s Ryder Cup. The recent rules issued by the HMRC (HM Revenue and Customs) allow the agency to tax endorsement and sponsorship earnings as well as player winnings. The agency’s rules have deterred Jamaican sprinter Usain Bolt from competition’s in Britain.
Andre Agassi lost a landmark case against the agency four years ago regarding these rules and regulations. In light of the court’s ruling in this case, for example, if an athlete competes 40 percent of the time in Britain, that athlete’s global endorsement earnings can be taxed 40 percent.
AP: Tour Officials Hampered by UK Tax Rules
From Forbes, Did Tax Ploy Help Saints Win Super Bowl?
In a just-filed U.S. Tax Court lawsuit, the partnership owning the Saints acknowledges that it didn’t treat an $8.5 million annual payment from the state of Louisiana as income and therefore didn’t pay taxes on the sum. Rather, the team said the money was an addition to “working capital” and a nontaxable transaction.
According to the lawsuit, the $8.5 million was one of a series of “inducement payments” starting in 2001 for 10 years to keep the National Football League team in New Orleans. The lawsuit says, the money was to be used, among other things, to “acquire additional and higher-priced player contacts” to make the team “more competitive in the NFL.”
The Internal Revenue Service is auditing the University of Georgia regarding income from activities unrelated to teaching students. These activities include revenue made from catering, parking services or other activities outside the college’s core teaching activities.
In a quote from the In Atlanta Journal Constitution, a University official stated:
“They are auditing us in these areas,” UGA spokesman Tom Jackson said Wednesday. “We’re answering all their questions, and the main issue we’re dealing with is the unrelated income.”
The Associated Press is reporting that Ryder Cup player Soren Hansen has been fined nearly $1.1 Million for tax evasion:
The Copenhagen City Court says Hansen was found guilty of tax evasion from 2002 to 2006. He had claimed residency in tax-haven Monaco during the period.
The court on Wednesday ruled Hansen actually lived in Denmark and avoided Danish taxes.
It was unclear whether the ruling would be appealed.
The 36-year-old Hansen has represented Denmark in the World Cup five times.
In 2007, he reached the top 50 in the world rankings and became the top-ranked Danish golfer. A year later, he represented Europe in the Ryder Cup.
Minnesota lawmakers have unveiled a $791 Million plan to build a new stadium for the hometown Vikings. According to the Minneapolis Star Tribune, the sources of revenue for the stadium are “a 1.5 percent hotel surtax, a nearly 7 percent fee on jersey sales, a sport-themed lottery ticket and a rental car tax” which would bring in $31.9 million a year.
Pro Football Talk
Minnesota Public Radio
A new tax law in Tennessee is not finding favor with one Detroit Red Wings player. Brian Rafalski, a defensman for the Red Wings, says that Tennessee is unfairly taxing professional athletes that play in the state. Rafalski has estimated that 17 of his teammates will be paying more in taxes to face off against the Nashville Predators than they will earn for actually playing the game.
The Tennessee law is what is commonly referred to as a “jock tax” and is charged to make money off of highly paid athletes that play for the visiting team. Approximately 18 states now charge this type of tax. Specifically the law attempts to tax NBA or NHL players that play for the visiting team for more than 10 days in a tax period and within Tennessee’s boundaries.
If you are a sports fan, you may have spent countless hours looking at stats, crunching numbers, and watching games from this season in order to fill out your 2010 NCAA Men’s Basketball Tournament Bracket. Regardless of the method to your madness, PayScale.com took a unique approach to determining this year’s champion. The online line leader in global compensation data filled out a bracket and advanced teams based on the school’s average alumni salary. This year’s champion: Duke. Check out the site’s Sweet Sixteen below. The full bracket is available at this link PayScale’s NCCA Bracket Predictions