‘Jock Tax’ Boosts Revenue in Pa., N.J.

By: - December 1, 2009 12:00 am

Philadelphia football fans may jeer when the New York Giants come to town, but city and state budget officials are likely to cheer. That’s because Philadelphia and Pennsylvania – as well as neighboring New Jersey – tax the income of visiting athletes.

City and state revenue departments didn’t disclose to The Philadelphia Inquirer how much they take in from visiting athletes, but the paper reports that revenue from the so-called “jock tax” is higher than ever. That’s particularly true in Philadelphia, the paper notes, “which has four major sports franchises and one of the nation’s highest wage-tax rates.”

The state of Pennsylvania collected .6 million last year from the state’s seven major-league football, baseball, hockey and basketball teams – a figure that includes taxes levied on visitors’ salaries, according to The Inquirer .

While the concept of the jock tax is simple, calculating the right amount can be tricky. Visiting athletes are taxed for each “duty day” spent in the state, defined by the city of Philadelphia as any day “on which (an athlete) participated in a game, practice or workout in Philadelphia.”

The New York Yankees “likely were charged for five duty days for the three World Series games at Citizens Bank Park” earlier this year, The Inquirer says.

While New Jersey has fewer professional sports teams than Pennsylvania, it has “the good fortune to be the home of the Giants and Jets” – which means that the two NFL teams’ generous payrolls, as well as those of visiting teams, are open to taxation from the state.

According to The Inquirer , California was the first jurisdiction to tax visiting athletes. The practice has not come without criticism, however; one tax expert told The Inquirer it was “an excusable money grab.”

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