Monday, November 19, 2012
Wall Street Journal: These Marlins' Tax Bills Are Headed Way North:
The five Miami Marlins players headed to the Toronto Blue Jays [right: RHP Josh Johnson, LHP Mark Buehrle, SS Jose Reyes, Utility man Emilio Bonafacio, catcher John Buck] are going to one of the world's most cosmopolitan cities to play for a team that figures to be far better than their old one. But for them, the move also comes at a price: a steep tax hike.
Florida has no state income tax. Ontario, on the other hand, is about to impose a new, higher tax rate on the rich. As a result, the trade will cost the five players a combined $8.4 million in lost income, according to an analysis by Robert Raiola, the sports and entertainment group manager at Fazio, Mannuzza, Roche, Tankel and LaPilusa, a New Jersey-based tax, accounting and advisory firm. ...
For the purpose of these calculations, Raiola assumed 5% agent fees; that 43% of players' income would be subject to Canadian taxes (subtracting road games and spring training); a 49.53% combined tax rate for Canada and Ontario; a 40.5% U.S. tax rate; and assumed the players have established residency in Florida with the Marlins. Raiola also factored in a partial foreign tax credit that the players can use on their U.S. returns, along with so-called "jock taxes," in which some states require visiting athletes to pay state income tax for each game they play there.