It’s that amazing time of year again. Fire up the barbecue, make that famous seven-layer dip, and gather around the 70” flatscreen with all your friends and family because the highly anticipated NFL playoffs have officially begun. The goal of the teams who qualified – make the biggest stage in American sports. The Super Bowl.
This year, Super Bowl LVIII will be in Las Vegas, Nevada, one of the biggest tourist destinations and tax havens in the United States. For those lucky NFL players participating in the big game, their income generated from playing may not be subject to any state taxes. Nevada is one of the few states that does not impose a state income tax. This means that the many players might be able to save a few tax dollars.
Professional football players travel all around the U.S. throughout the NFL season and are subject to tax in the states where each individual game is played as well as their state of residency. The major tax benefit of playing in Nevada this year is that the players will only be paying the tax to their resident state as Nevada is one of the 9 states that does not have a state income tax. The other states on that list are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. As stated, even though playing games in those states would not subject the players to state income tax from those particular states, the players are still responsible for all taxable income reported to whatever state they legally reside in for tax purposes.
Most states determine residency based on a 183-day test. However, some other factors that may be considered when determining residency would be where the player’s family is located, where their car is registered, where their driver’s license is issued, or even where they keep their sentimental items and keepsakes (like Super Bowl rings). Owning a residential property in the team’s home state and staying there during the regular season (roughly 18-22 weeks with preseason) doesn’t automatically make them a resident of that particular state for tax purposes. They could still be a tax resident of another state if they own a residence there and spend most of their time during the offseason living in it.
An example that could prove detrimental for a player is with Jared Goff of the Detroit Lions and potential starting Quarterback in Super Bowl LVIII. He recently purchased a home in Manhattan Beach, CA and if he meets the domicile tests for being a resident of California, he will be paying tax on his Super Bowl earnings to California at a rate up to 14.4% for 2024. For players whose home residence is in one of those aforementioned states with no state income tax, they would only be paying the Federal tax on any earnings from the Super Bowl. Due to the location of this year’s big game, this trip to Sin City could be a win/win for some of the players.