A Taxing Profession: States Grab Millions from NBA Draft Picks

A Taxing Profession: States Grab Millions from NBA Draft Picks

Nik Stauskas was one of the hottest players in the NBA Draft Thursday, impressing scouts enough to move from a possible 2nd-round pick to the No. 8 selection. He could have been an even bigger winner if the Sacramento Kings had moved to Seattle, where he would have paid $0 in state taxes instead of the $576,128 California stands to take from him (see table below of the $114 million guaranteed to 1st-round picks Thursday).

In fact, California stands to net $1.4 million from guaranteed contracts from Thursday’s draft – more than twice that of any other state. The only other states who could get over half a million are the teams with the two picks. Despite the attempts by former classmate Governor Scott Walker to lower taxes, Wisconsin could still receive $635,573 from Jabari Parker (No. 2 pick) and Ohio could receive $501,232 from Andrew Wiggins.

Value Add player of the Year Shabazz Napier was one of five first round picks lucky enough to go to a state without state taxes (Florida and Texas). All 30 first round picks receive a set salary for their first two years even if someone is injured and never plays. The team and player are allowed to negotiate 20 percent higher or lower, but the figure is almost always about 20% higher than what is listed on the table below meaning this year’s first round picks will receive close to $137 million in the next two seasons. An explanation of how the taxes were estimated appears below the table.

Drafted Team Player Guaranteed State Tax
7 Lakers Julius Randle PF $5,108,000 $633,132
8 Kings Nik Stauskas SG $4,679,400 $576,128
28 Clippers CJ Wilcox SG $1,891,200 $205,298
  California total taxes     $1,414,558
2 Bucks Jabari Parker SF/PF $8,402,500 $635,573
  Wisconsin total taxes     $635,573
1 Cavaliers Andrew Wiggins SF $9,391,100 $501,232
  Ohio Total Taxes     $501,232
6 Celtics Marcus Smart PG $5,595,300 $290,956
17 Celtics James Young SG/SF $2,853,600 $148,387
  Massachusetts total taxes     $439,343
5 Jazz Dante Exum PG/SG $6,160,600 $308,030
23 Jazz Rodney Hood SF $2,199,000 $109,950
  Utah total taxes     $417,980
9 Hornets Noah Vonleh PF $4,301,600 $249,493
26 Hornets PJ Hairston SG $1,959,300 $113,639
  NC total taxes     $363,132
14 Suns TJ Warren SF/PF $3,328,500 $149,036
18 Suns Tyler Ennis PG $2,710,900 $120,997
27 Suns Bogdan Bogdanovic SG $1,902,800 $84,309
  Arizona total taxes     $354,342
3 76ers Joel Embiid C $7,545,500 $231,647
12 76ers Dario Saric PF $3,688,000 $113,222
  Pennsylvania total taxes     $344,868
13 Timberwolves Zach LaVine SG $3,503,500 $336,857
  Minnesota total taxes     $336,857
16 Nuggets Jusuf Nurkic C $3,003,900 $139,081
19 Nuggets Gary Harris SG $2,588,900 $119,866
  Colorado total taxes     $258,947
21 Thunder Mitch McGary C $2,385,900 $124,839
29 Thunder Josh Huestis SF $1,877,400 $98,143
  Oklahoma total taxes     $222,982
11 Bulls Doug McDermott SF/PF $3,882,000 $194,100
  Illinois total taxes     $194,100
15 Hawks Adreian Payne PF $3,161,800 $188,028
  Georgia total taxes     $188,028
20 Raptors Bruno Caboclo SF/PF $2,485,300 $152,900
  Ontario total taxes     $152,900
22 Grizzlies Jordan Adams SG $2,290,600 $114,530
  Tennessee total taxes     $114,530
4 Magic Aaron Gordon PF $6,803,100 $0
10 Magic Elfrid Payton PG $4,086,300 $0
24 Heat Shabazz Napier PG $2,110,900 $0
  Florida total taxes     $0
25 Rockets Clint Capela PF/C $2,026,600 $0
30 Spurs Kyle Anderson SF $1,863,800 $0
  Texas total taxes     $0

The taxes were calculated using the Tax Foundation table for each state, and the Canada Tax Revenue (link here). The actual figure for each player will go up from this figure due to most teams paying the maximum 120 percent of these figures, but will go down due to all deductions taken by each player. The figure for each player levels out some due to accountants having to allocate some of each player’s income to other states when he plays away games (so California will not actually get all $1.4 million from Julius Randle, CJ Wilcox and Stauskas because of their away games, but they will make up for some of that by getting a fraction of all the other players when they play games in California).