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Why can't they write the contract that he plays away games for free and double his "appearance" fees for florida games?
Link appears broken (resolves to http:///). I think this is the right link:
http://www.taxfoundation.org/news/show/26503.html
@Jody,
Thanks. Fixed.
@R. Pointer,
Because the tax authorities in NY and elsewhere would see through that in a New York minute. A more serious possibility, though, is to argue that he is being paid for "a body of work," including practices, and that, therefore, a day in NY should count for 1/150 of a year's income rather than 1/82. (The idea is that he works for Miami in a non-playoff year for about 150 days.)
does he get taxed for half of his 82 games or would he get taxed for 41 days of a 365 day year worked in another state? are the contracts written that he gets paid piecemeal? just curious.
R.Pointer beat me to the question. This has to have been tried and adjudicated.
Clever suggestion R. Pointer.
From a practical stand point athletes get hurt often. Suppose the manager(baseball) sits a guy out of a home series because of a small injury. Would he still get an appearance fee even if he didn't appear? Suppose he gets paid an extra 100,000 dollars for hitting 30 home runs in a season. Does New York get a percentage of that bonus? If not, this may be how to avoid much of those taxes.
How about a contract that pays LeBron the minimum wage for playing away games, but he gets a percentage of the gate for Miami home games.
"How about a contract that pays LeBron the minimum wage for playing away games, but he gets a percentage of the gate for Miami home games."
I'm pretty sure this wouldn't work either. Tax authorities would be probably jump all over it and write legislation (if it doesn't already exist) to fix it. Otherwise, everyone's company would be headquartered in florida, they would work for minimum wage in an income tax state and then agree to an exhorbitant amount for one day of work a year in Florida. This kind of tax arbitrage, if successful, would basically make income tax uneforcable at the state level...not the worst thing in the world.
"How about a contract that pays LeBron the minimum wage for playing away games, but he gets a percentage of the gate for Miami home games."
I'm pretty sure this wouldn't work either. Tax authorities would be probably jump all over it and write legislation (if it doesn't already exist) to fix it. Otherwise, everyone's company would be headquartered in florida, they would work for minimum wage in an income tax state and then agree to an exhorbitant amount for one day of work a year in Florida. This kind of tax arbitrage, if successful, would basically make income tax uneforcable at the state level...not the worst thing in the world.