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Comment by balls187 | Hacker News Reader

Unfortunately it doesn't work like that.

First, state income tax is exactly that, income tax imposed by the state, and governed by the state. There may be local jurisdictions that impose additional income tax but any savings there would be trivial.

While sports are important to the local economy, my understanding is that they are relatively minor at the state level.

Second, LeBron (and other athletes) earn playing income in every jurisdiction they play in, not based solely on the jurisdiction that the team is based in.

This means they are responsible for filing taxes in each of these jurisdiction.

In addition to playing income, they make money through endorsements and other investments. These are considered income in whatever state they claim is their residence.

It's in a players interest to establish a residence in an area with favorable tax laws.

Cities may try to woo elite players to join them, but tax savings isn't very compelling.

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>Second, LeBron (and other athletes) earn playing income in every jurisdiction they play in, not based solely on the jurisdiction that the team is based in. This means they are responsible for filing taxes in each of these jurisdiction.

That’s pretty funny how well settled that area of Law is, and yet again Amazon thinks it’s pretty special in that regard also...historically they haven’t paid those taxes either (state or local) and there was just a Supreme Court case confirming that in fact amazon isn’t special and that all this time they themselves should have been paying taxes where they had been selling/shipping goods.

Merchants don't pay sales taxes, they collect them on behalf of the taxing entity. The tax is owed by the consumer to the entity regardless of whether the merchant collects it or not. Amazon was trying to give itself an advantage over physical retailers, but thus had nothing to do with Amazon trying to get out of taxes.

Which is a total gangster move by the states. Force merchants to do the dirty work.

>Merchants don't pay sales taxes

That’s cute, but not the way the Law works generally. Maybe you can point to a single state where the law is different, until then I’ll just say the general rule is if the merchant makes of $x they are required by law to collect sales tax. Where or not the merchant does, they will be liable to the state for payment of the same, not the individual consumers.

If the law worked the way you represent why would any merchant collect and pay sales tax to the states?

LeBron (and other athletes) earn playing income in every jurisdiction they play in, not based solely on the jurisdiction that the team is based in. ... This means they are responsible for filing taxes in each of these jurisdiction.

Do you have a citation for this? I'm skeptical. I live and work in Texas. When I travel to my company's office in NJ, effectively earning income for a week in that state, I don't pay NJ income tax on that income.

Apparently you technically should, but you aren't expected to because it would be impractical.

https://en.wikipedia.org/wiki/Jock_tax

Unfortunately I am not an accountant and cannot give you tax advise, however, NJ has a non-resident income tax form, which you may be required to file: https://www.state.nj.us/treasury/taxation/taxtables.shtml

Edit to add: According to my interpretation of this: https://www.state.nj.us/treasury/taxation/pdf/current/1040nr...

Assuming your income is over $20,000, you ARE required to file a NJ state tax return.

Also, note that even if you don't file a tax return, doesn't mean you are exempted from doing so.

Example, as a citizen of Texas, you are also required to pay use tax on any items aquired out of state/country and used in the state. My assumption is that you don't also pay that either, even thought you are legally required to do so. It turns out that use Tax is particularly difficult to audit and collect for, especially without a mandatory return like state income tax.

Agreed. I see no exemption there for “I was just attending a conference and just stayed in a hotel for a few days.” Much less spending weeks at a remote company location or job site.

I also am not a tax lawyer. However, at least the NY non-resident form specifies that the tax is only owed on NY sources. Probably, when you are on a work trip, the "source" of your income is still the office you work at in your home state. Also worth noting that if you're only there for a week, you'd have to make a great deal of money annually before you got above the standard deduction cutoff for that state.

I had a paid remote internship for about 6 months for a Texas company while I lived in Missouri. I had to file a Texas state income tax form, or at least my reading of the law indicated that I had to, and Texas gladly took the money.

From where did you get a form that doesn't exist? Texas has no income tax.

Perhaps the Texas company sent him the form for MO, as they DO have state-income tax.

If you’re doing client work there — and you may not be! —- you’re responsible for the portion of the income earned in that state (you have “nexus,” in the parlance — I’m less sure about merely having presence in a state even if the work isn’t generating company income, but in some cases I think that’s treated as nexus as well). In those cases, your company should send you state W-2s for your income; most decent consulting firms offer tax prep services if you end up working in a lot of state and international jurisdictions with tax consequences.

> ... but any savings there would be trivial

Uh, state income taxes can approach 10%. This is not “trivial”.

http://www.tax-rates.org/taxtables/income-tax-by-state

You misread my comment.

The original proposal was that star athletes attempt to negotiate tax incentives with cities, in the same vein Amazon did with NYC (and many other large corporations do).

City income taxes add a trivial percent to the total income tax rate when compared to the state income tax level. Thus, if you got incentives from a city, they would amount to trivial amount of savings.

Athletes would need to negotiate at the state level in order to have a material effect on their taxes.

I hope that clarifies my point.

I imagine Athletes pay accountants who are well versed in how to fill out those forms, and, at least in the NFL's case, a lot of players compensation may be in bonuses, and not necessarily game-day checks (which would be subject to local jurisdictional income laws).

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