Dallas Cowboys Fumble with Training Camp Taxes
NFL teams across the country have commenced their annual training camps in preparation for the upcoming football season. While most organizations keep things local holding their camps near their regular headquarters, the Dallas Cowboys take a thousand-mile trip west to breezy Oxnard, California. Although the cooler weather and isolated location bring advantages, one thing players may not enjoy are the additional state taxes.
California has the highest state tax rate, which has become a significant consideration for many sports-related decisions from trades to travel. Since training camp is an unpaid part of the job, individuals will essentially end up paying to practice in California in the form of the state’s 13.3% income tax. For players that get cut from camp early, the situation seems even worse as they will still be liable for state taxes based on the days they did complete.
The total amount players will owe to California is calculated by using a duty day ratio based on days spent in the state compared to total working days in a season. When considering summer training, potential games, and a minicamp back in June, the Cowboys will spend 20 days of their 172 duty days (160 for new players) working in California this year. Training camp represents 16 of those days making about 10% of player’s income taxed in California just for those two weeks of practice.
Looking at what the Cowboy’s multimillion-dollar players will pay for camp, Amari Cooper and Tyron Smith will pay roughly $158,000 and $177,000 respectively. Their total California tax bill for the year will include an additional estimated $40,000 considering pre-season and playoff games.
All this considered, Jerry Jones may want to think about looking into a different location for their training camp. Using their home state of Texas or an alternate lower tax state could save the organization a lot in travel bills and taxes. Ultimately, the end game is that the choice of location was probably made after looking at the cost/benefit scenario from multiple angles. In any case, having an expert tax advisor on your team can help you and your organization avoid unnecessary fumbles.
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