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The Myth of a Texas Tax Benefit

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Presswire

Yes, New Yorkers are taxed at 8.97 percent of taxable income and yes, there is no state income tax in Texas. Does that give Dallas any advantage in a case like that of Deron Williams who can make $109 million over five years playing for the Nets as opposed to $81 million over four playing for the Mavericks?

Bottom line, reports a Texas sports writer, is not much. Mac Engel spoke to a Texas accountant who said that while Williams would make more in Texas, the difference in take-home would be small, in part because Texas has super-high property taxes and other "dinky" levies. Is there a difference significant enough to affect quality of life? "Not really," said the accountant, who added that higher-end clients really don't care.

Larry Coon, in his CBA FAQ, says the benefit is "not quite as large as you might expect", explaining that the "jock tax", requires athletes to pay local taxes where they play their away games. "If there are 170 duty days in a season and a player plays five of those duty days in a state with a jock tax," he writes. "Then the player will pay state income taxes in that state based on 5/170 of his income."

And no one is saying, at least publicly, where the Nets players and coaches will get paid next year. Will it be in the state their team plays in or the state where basketball operations are still headquartered, New Jersey?