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.
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.
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?
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.
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.
Uh, state income taxes can approach 10%. This is not “trivial”.
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).
As is common with other, bigger ego, basketball players
Obviously NBA rules relate to tampering would come into play, but it would be a compelling story for the 24 hour sports new cycle.
I've read about athletes at least considering the income tax of a state in their decision, but I'm not sure it's ever been a deciding factor.
Getting reelected will be an issue.