By |November 30th, 2015|Categories: Athletes & High Net Worth Individuals, Tax|

Overturning Cleveland’s ‘jock tax’: What NFL players should do

ClevelandEarlier this month, the U.S. Supreme Court dismissed the City of Cleveland’s appeal on two tax cases that challenged the city’s non-resident taxation of NFL players during the 2012-2015 tax years.

While Cleveland is not the only U.S. city to impose a so-called “jock tax” on out-of-town professional athletes who compete at its venues, the Ohio Supreme Court declared its particular method of taxation unconstitutional. Unlike other municipalities, Cleveland had taxed athletes from visiting clubs based on a percentage of games played instead of the number of working days spent in its jurisdiction. In doing so, the city had been able to collect a significantly larger percentage of each athlete’s income.

With the ruling upheld, Cleveland now owes refunds to NFL players that could total close to $1 million for each year in question.

What should NFL players do?

For NFL players, it’s a waiting game. The NFL Players Association is currently working with the NFL to layout a process for helping players collect refunds from the City of Cleveland. At the moment, we at Froehling Anderson are advising players to remain vigilant — additional information should come from the NFLPA in the coming weeks.

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About the Author: Wade Christensen

Wade Christensen, CPA is a tax partner at Froehling Anderson specializing in working with businesses, professional athletes, and high net worth individuals.