An Updated Consideration of a Taxing Problem: The Harmonization of State and Local Tax Laws Affecting Nonresident Professional Athletes

Professional athletes today can no longer merely concern themselves with their on-the-field performances. More and more states and cities, driven by growing deficits and the need to create more tax dollars, have made diligent efforts to focus their tax collection resources on visible individuals who earn sizable salaries in their jurisdictions. With their big salaries, nonresident professional athletes are easily identifiable targets who justify the effort. The author examines how the collection of taxes from nonresident professional athletes has created numerous problems, including inconsistent formulas employed by different jurisdictions, which has lead in some cases to double taxation. This Note focuses on the four largest professional team sports: baseball, basketball, football, and hockey. Following an examination of federal tax issues, the author reviews state and local tax law issues from a historical viewpoint, and the issues that specifically affect nonresident professional athletes today. The author next explores solutions recommended by the Federation of Tax Administrators as most fair to the parties involved, and finally, the most viable plan deserving of implementation in the coming years. Some states are leading the way, hoping others will follow their quest for fairness and efficiency. Ultimately, true uniformity will only be achieved once each relevant state adopts substantially similar taxing schemes