NBA Taxes

Uncle Sam

Amid the chaos that is NBA free agency, a lot of financial information gets lost in the shuffle.  While Kevin Durant’s relationship with Russell Westbrook or Carmelo Anthony may open the door for some hot takes on television, a lot of times the final decision may come down to cold hard cash.  Not all NBA contracts are created equally.  To use Durant as an example, the Thunder can offer more guaranteed money than other teams.  But another financial decision is far less talked about: state taxes.

The way that professional sports work is that a player gets paid for each game based in what state (or province!) they played in.  They then are assessed the applicable taxes based on location.  Thanks to twitter user @SportsTaxMan we have this data provided for each state:


Combining these tax rates with the NBA schedule you can figure out the effective tax rate for each team.  For example, the Lakers will play half of their games at home, thus 50% of their revenue will be taxed at 13.3%.  They also play four games against the Clippers, Warriors, and Kings as well.  That’s another 14.6% of revenue taxed at 13.3%  You can keep going through each of their opponents and add up the results to get each team’s effective tax rate.  Below are the results.

TeamConfDivisionTax RateHomeDivConfInter-ConfTotal
Miami HeatEastSoutheast0.00000.00000.01010.02760.02400.0617
Orlando MagicEastSoutheast0.00000.00000.01010.02760.02400.0617
San Antonio SpursWestSouthwest0.00000.00000.00290.04060.02040.0639
Dallas MavericksWestSouthwest0.00000.00000.00290.04060.02040.0639
Houston RocketsWestSouthwest0.00000.00000.00290.04060.02040.0639
Memphis GrizzliesWestSouthwest0.00000.00000.00290.04060.02040.0639
Philadelphia 76ersEastAtlantic0.03070.01540.01750.01960.02400.0765
Indiana PacersEastCentral0.03300.01650.01010.02620.02400.0768
Chicago BullsEastCentral0.03750.01880.00990.02620.02400.0788
Detroit PistonsEastCentral0.04250.02130.00960.02620.02400.0810
Cleveland CavaliersEastCentral0.05000.02500.00920.02620.02400.0844
Boston CelticsEastAtlantic0.05100.02550.01650.01960.02400.0856
Denver NuggetsWestNorthwestern0.04630.02320.01460.02800.02040.0862
Phoenix SunsWestPacific0.04540.02270.02600.01780.02040.0869
Charlotte HornetsEastSoutheast0.05750.02880.00730.02760.02400.0877
Utah JazzWestNorthwestern0.05000.02500.01450.02800.02040.0878
Atlanta HawksEastSoutheast0.06000.03000.00720.02760.02400.0888
Oklahoma City ThunderWestNorthwestern0.05250.02630.01430.02800.02040.0890
New Orleans PelicansWestSouthwest0.06000.03000.00000.04060.02040.0909
Milwaukee BucksEastCentral0.07650.03830.00790.02620.02400.0964
Washington WizardsEastSoutheast0.08950.04480.00570.02760.02400.1021
New York KnicksEastAtlantic0.08820.04410.01470.01960.02400.1024
Brooklyn NetsEastAtlantic0.08820.04410.01470.01960.02400.1024
Minnesota TimberwolvesWestNorthwestern0.09850.04930.01210.02800.02040.1097
Portland Trail BlazersWestNorthwestern0.09900.04950.01210.02800.02040.1099
Toronto RaptorsEastAtlantic0.13160.06580.01260.01960.02400.1220
Los Angeles LakersWestPacific0.13300.06650.02170.01780.02040.1264
Los Angeles ClippersWestPacific0.13300.06650.02170.01780.02040.1264
Sacramento KingsWestPacific0.13300.06650.02170.01780.02040.1264
Golden State WarriorsWestPacific0.13300.06650.02170.01780.02040.1264

The two Florida teams pay the least amount of state tax thanks to zero state tax and better overall rates and not playing a lot of the higher-taxed states in the West.  Up next is a 4-way tie in the Southwest division.  Most people know that there is no state tax in Texas, but that is also the case for the Memphis Grizzlies in Tennessee.  Thus a large majority of the games played by teams in the Southwest are played with zero state tax.

On the other end of the spectrum are the four teams from California, which has the highest state tax rate in the country.  Not only do you have to play 41 home games at a 13.3% rate, but another 12 games against your division opponents at that same league-high rate.  (Dwight Howard doesn’t look as bad now, huh?)

Going back to our Durant example, he would currently expect to pay an 8.9% tax rate should he decide  to stay in Oklahoma City.  If he did decide to join forces with Curry in Golden State, his state tax rate would go up 3.74% compared to what he’s paying now.  If he decided to suit up for Gregg Popovich in San Antonio, his tax rate would drop by 2.51%.  While that may seem like a negligible difference, remember that on a 100-million dollar contract that each percentage point is worth a million dollars.  Let’s just hope all of these guys have better accountants than Antoine Walker.

©2016 Sports Insights Inc.

Log in with your credentials

Forgot your details?