Report: State Taxes Could Prevent OKC Thunder from Attracting Free Agents

ABC’s Oklahoma City affiliate is concerned state taxes may prevent Russell Westbrook and Kevin Durant from adding a key free agent for a championship run. The station cited Americans for Tax Reform’s new grid of state taxes for NBA players that includes a couple of updates from a similar grid produced by Breitbart Sports on January 21, and it showed Oklahoma City players would have to pay their salary for more than two games to pay off their state taxes.

The affiliate KOCO, which broadcasts on Channel 5, posted on their website that “With NBA free agency in full swing, many players are looking for the next town to call home. According to a new study, Oklahoma City may not be as attractive as some other NBA cities.”

The report noted that ATR’s study showed athletes in Oklahoma City have to play 2.2 games just to pay their state taxes. ATR notes that California players must work 5.5 days to pay off their California state taxes, but even the ATR report does not detail the impact the four California teams have on the taxes of every other player in the league.

Each year and every NBA team plays an away game in every other NBA arena, plus an additional away game at the home of all four teams in their division and eight of 10 of the other teams in their conference.

When a player plays in a state with a higher tax rate than his own, his taxes are increased by the difference as he pays that tax rate and then deducts the rate of his home state's tax rate. The math is a little more complicated as states try to capture any day "worked" in the state, which may entail the day a team arrives the day before a game is played, etc., but basically a player would pay the tax rate of another state for 1/82nd of his check for every game played in a higher tax state than his own.

So Dwyane Wade and LeBron James only play four games a year in California, at the arenas of the four California teams.  Therefore those four games leave them with about an additional 0.645% to pay on their income to the state of California (4 games at 13.3% divided by 82 total games played). If the Kings had moved to Washington, that would have lowered the tax for Wade and James to 0.49 percent because it would entail only three trips.

The Phoenix Suns players pay twice as much in California state tax – 1.30% - because as the only non-California team in the Pacific Division they play the four state teams on their court twice a year each for eight extra games. Those players are able to back that tax out of the 4.5% rate in Arizona for those eight games so they are never paying Arizona AND California taxes the same game.

Team Breitbart Jan. 2013 ATR July 2013 Games State
Atlanta Hawks 6.0% 6% 2.5 games Georgia
Boston Celtics 5.3% 5.25% 2.2 games Massachusetts
Brooklyn Nets 9.0% 8.82% 3.6 games New York
Charlotte Bobcats 7.8% 5.75% 2.4 games North Carolina
Chicago Bulls 3.0% 5% 2.1 games Illinois
Cleveland Cavaliers 5.9% 7.93% 3.3 games Ohio
Dallas Mavericks 0.0% 0% 0 games Texas
Denver Nuggets 4.6% 4.63% + 1.9 games Colorado
Detroit Pistons 4.4% 5.50% 2.3 games Michigan
Golden State Warriors 10.6% 13.30% 5.5 games California
Houston Rockets 0.0% 0% 0 games Texas
Indiana Pacers 3.4% 3.40% 1.4 games Indiana
L.A. Clippers 10.6% 13.30% 5.5 games California
L.A. Lakers 10.6% 13.30% 5.5 games California
Memphis Grizzlies 6.0% 0% 0 games Tennessee
Miami Heat 0.0% 0% 0 games Florida
Milwaukee Bucks 7.8% 7.75% 3.2 games Wisconsin
Minnesota Timberwolves 7.9% 9.85% 4 games Minnesota
New Orleans Hornets 6.0% 6% 2.5 games Louisiana
New York Knicks 9.0% 8.82% 3.6 games New York
Oklahoma City Thunder 5.5% 5.25% 2.2 games Oklahoma
Orlando Magic 0.0% 0% 0 games Florida
Philadelphia 76ers 3.1% 7.05% 2.9 games Pennsylvania
Phoenix Suns 4.5% 4.54% 1.8  games Arizona
Portland Trail Blazers 11.0% 10.53% 4.3 games Oregon
Sacramento Kings 10.6% 13.30% 5.5 games California
San Antonio Spurs 0.0% 0% 0 games Texas
Toronto Raptors 13.2% NA 5.5 games Canada
Utah Jazz 5.0% 5% 2.1 games Utah
Washington Wizards 8.5% 8.95% 3.7 games District of Columbia

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