A team I support is headquartered in one city, but its stadium is in the suburbs, in another state. If I bought a ticket to a game, would Stadium State get the sales tax revenue from my purchase of a ticket, or would Team State get the sales tax revenue?
I ask because I don’t want one thin dime of my money going into the tax coffers of Stadium State.
I would assume the sales tax revenue would go to the state where the business is incorporated, not where the stadium is, but someone will be by soon to prove me wrong. Maybe it depends on where you purchase the ticket?
I believe sales tax would go to the stadium state. Think about it like a store. Where is the sales tax collected - at the point of sales or where the company is headquartered?
Well, if you’re a Giants or Jets fan, you’re out of luck, NJ will collect sales tax on the ticket:
Every state will. The headquarters has nothing to do with it. It’s the place of use. That’s why Amazon doesn’t give Washington state a bajillion dollars in sales tax revenue. The products are being used in other states, so the sales tax is owed to them. Same thing with stadiums. You’re using the ticket in we’ll say New Jersey, so New Jersey gets the money.
All true, although the determination of the site to build the stadium often depends on competing tax breaks that are offered by the contending jurisdictions. Not necessarily on sales tax, but taxes in general.
The Redskins play in Maryland, while their HQ is in Virginia. Here (pdf) is a discussion from a few years ago, where the Maryland taxation authority how that state taxes the team.
Somewhat OT but I know for years the Redskins successfully argued that the primary place of employment activities for their players was in VA, in order to deny them workers’ compensation. So I find that Maryland Comptroller link interesting. it also includes the known by me but perhaps not widely known fact that pro athletes (and all travelling team employees) pay state income tax in every state where they play a game.
That is both interesting and an almighty pain in the ass. I wonder why that is. I travelled a lot on business and I didn’t have to deal with 25% time in VA, 25% in CA, 25% in London for taxation.
And every country (Canada, the UK). Similarly, a friend of mine made partner at a large multinational law firm here in Washington DC, and suddenly he had to pay taxes in France.
When I’ve tried to figure this out, I see many references to a “jock tax” - but it’s unclear to me if there is truly a separate tax for athletes and other performers or if it is simply a case where it’s easier to enforce it on them. I suspect it’s the latter- because I know if I work in NJ, I may owe NJ taxes even if I am a NY resident. And if I get a job at Best Buy in NJ, they will probably withhold NJ taxes, even though I am a NY resident. But if I am a salesperson and my company is in NY and I live in NY , NJ has no way of knowing that I spend three days a week in NJ visiting customers - but they will absolutely know that a player for the NY Giants has spent some time working in NJ even if he lives in NY.
Well the Giant are headquartered in East Rutherford, NJ, and the Jets are headquartered in Florham Park, NJ. They are not New York teams at all.
I think the Buffalo Bills like to point out that they’re the only true New York team.
I don’t know if there is a special “jock tax” in any state, but most states have a section in their tax law or a tax regulation that explains how the salaries of non-resident athletes are to be apportioned. This is usually what is called the “jock tax.”
For example, NJ has an income tax regulation that explicitly explains how non-resident athletes’ salaries are to be apportioned: NJAC § 18:35-5.1 Compensation received by nonresident professional athletes
(If that link does not work, google for “N.J.A.C. 18:35-5.1”,)
The regulation starts as follows:
And then it goes on for pages and pages describing what “duty days within and without New Jersey” are. In order to properly figure their NJ taxes, athletes essentially need to keep a diary showing what days they worked, what they did on those days, and where they did it.
And every state has its own rules as to how to calculate the ratio, whether “duty days” or some other metric is used, and what activities constitute “duty days” (or similar).
Here is an illuminating paragraph from an article in Forbes Magazine, written by Kurt Badenhausen: