What is Jock Tax? Know about the rule forcing Stephen Curry to pay $1 million extra in taxes
NBA superstars endure tax bills in the millions.
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Stephen Curry (USA Today)
Every NBA player signs a contract worth millions every year. From rookie contracts to max extensions, these contracts are subject to massive transactions. The minimum salary cap in the modern NBA starts at around 2.5 million dollars. With star players like Stephen Curry signing contracts worth a fortune, they do have to pay taxes. These taxes do include the state income tax where they reside, as well as a jock tax. This jock tax requires players to pay tax each time they visit a different state to play road games.
Players residing in California already have to pay a huge amount in taxes. Adding the jock tax to the same, California collects hundreds of millions of dollars in taxes each year. There’s no doubt that state tax is something that players do look into before signing for a team apart from the zeroes present in the contract.
Stephen Curry is a victim of the Jock Tax
The jock tax first came to light in 1991 when the state of California imposed a tax on Michael Jordan worth $10,000 following Chicago Bulls’ championship win against the Los Angeles Lakers. Illinois then imposed a tax that required athletes from California to pay tax for their visit. Soon, other states adopted the jock tax as well. In the modern NBA, with salaries skyrocketing each year, players pay a substantial amount of tax.
Golden State Warriors star Stephen Curry paid around one million dollars in jock tax in 2018 to 20 US states. Curry’s salary that year was 37.4 million dollars, of which he paid 945K dollars in jock tax. His contract of 4-year $215 million is in the top 10 of the league. And living in California, Curry already has a huge toll on him to pay around 13.3% of his salary in taxes at max. These taxes do require not only players but anyone who’s associated with a professional team or sports franchise.
Stephen Curry was and wasn’t the highest-paid player
In 2017, Curry signed a 5-year max extension worth $201 million. He was the highest-paid athlete by contract, though taxes took the most out of it. Curry’s gross income after taxes in the 2017-18 season went from $34.6 million down to $15.2 million. Other players residing outside California pay less in taxes. The Jock Tax is an added tax for players, so it would only put players living in Nevada and Texas in less jeopardy.
All in all, it will be interesting to see the final gross income of NBA players in the future, as the zeroes in the contract will only increase. What are your thoughts on the jock tax? Let us know in the comments.
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Ritvik Malhotra
(1085 Articles Published)