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Supreme Court Won't Save Cleveland's 'Jock Tax'

By Christopher Coble, Esq. on November 13, 2015 | Last updated on March 21, 2019

Cleveland is one of eight cities to tax visiting professional athletes who play games in the city. But their taxation scheme was unique, and, according to the Supreme Court, illegal.

The United States Supreme Court declined to hear Cleveland's appeal of an Ohio State Supreme Court ruling on the city's so-called jock tax, effectively saying that the city could tax athletes, but it was taxing them on the wrong basis. Considering most of us didn't even know there was a jock tax before now, let's take a minute to unpack the Court's ruling.

I'm the Taxman

Cleveland had been taxing athletes based on how many games they played in the city, whereas other cities with jock taxes (Cincinnati, Cleveland, Columbus, Detroit, Kansas City, Philadelphia, Pittsburgh, and St. Louis) based payment on the number of days they work in the jurisdiction each year. In 2013, former National Football League players Hunter Hillenmeyer and Jeff Saturday sued the city, claiming the taxation scheme was a violation of due process.

The Ohio Supreme Court agreed, noting, "The games-played method reaches income that was performed outside of Cleveland, and thus Cleveland's income tax as applied is extraterritorial." This was especially true for Saturday, who was taxed for a game between the hometown Browns and the Indianapolis Colts in which he never played, having stayed in Indiana with an injury. By declining to hear Cleveland's appeal, the Supreme Court left that ruling in place. Cleveland will now have to alter its jock tax and refund some of the money it collected.

Yeah, the Tax, Man

Just about every state has its own jock tax as well. As soon as California started taxing Chicago Bulls players for in-state games against the LA Lakers, other states returned fire, putting their own taxes in place. The only states that don't have a jock tax -- Florida, Texas, and Washington -- don't charge any income tax at all.

And Washington, D.C., is barred by Congress from imposing any income tax on non-residents who work there. That's not at all surprising when you consider the overlap of those who work in D.C. but live elsewhere and members of Congress.

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