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CALIFORNIA’S JOCK TAX

February, 2016

Enjoy the Super Bowl? Cheer for your favorite team? California’s Tax Man was also clapping for an entirely different reason: the state made a cool $1.0 million in income taxes off the players, because the Super Bowl was played in Santa Clara, California. How is this possible? Welcome to California’s Jock Tax.

California earns about $239 million from taxing athletes on professional teams when they are present in California during their sports season. Take Peyton Manning for example: because the Super Bowl was played in California, his tax bill roughly doubled, from $60,000 to $130,000, whether or not he won the Super Bowl!

California does not just tax him on his Super Bowl earnings, he is taxed on a proportionate share of his entire $20 million salary!

Apportionment Formula

California taxes the number of “duty days” and athlete spends in California during the entire season, defined as the first official preseason activity to the last game played. Here is the California’s Jock Tax regulation (Section 18662-6 (f)(1):

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