Monday, March 03, 2003

Such a deal!
The Washington Post Service reports Many states use 'jock tax' so those who play will pay:
When Texas Rangers shortstop Alex Rodriguez stepped onto the field at the All-Star Game last July in Milwaukee, there was a huge cheer from the crowd.

There may have been cheering at the Wisconsin Department of Revenue as well: By appearing in the event, Rodriguez obligated himself to pay more than $8,000 in Wisconsin income taxes.

Rodriguez and hundreds of other athletes and entertainers are finding that some of their biggest fans are state tax collectors. A growing number of states -- and some cities as well -- are aggressively pursuing high-income nonresidents who earn income from within the states' borders.

This ultimate commuter tax -- often dubbed the "jock tax" -- is creating a major headache for its targets and has spawned a cottage industry of accountants and bookkeepers who advise high-profile figures on how to minimize their state taxes, prepare returns and make payments for taxes they cannot escape.

Players sometimes move to different states, which accountants say can help when it comes to items like signing bonuses, but they have little choice about where they play their games.

"It's a nightmare," said Ronald Rubin, a certified public accountant in Bethesda, Md., who does tax returns for several professional athletes. "You have some players filing 12 or 14 state income tax returns."
Everyone needs a hobby. But it isn't just the big bucks guys:
Agents and others, though, say many marginal players, who may have careers lasting only a few years and paychecks far smaller than A-Rod's, can see a significant portion of their earnings drained away by the jock tax. The tax also applies to coaches, trainers, equipment managers and others who travel with the team, though many of them make fairly modest salaries.
Somehow, I don't think H&R Block can handle 12 or 14 State tax returns. And how long before the revenuers figure out that they could do the same to ordinary business people who travel?