Fort Lauderdale, Fla. (AP) – The Florida Panthers are two victories away from becoming the fifth Stanley Cup champion in the last six years, representing a US state with no income tax.
Taxation has become a hot topic across the league, with many playoff contenders hailing from the Sunbelt region. However, some argue that economic advantages are pivotal in attracting and retaining players. Or are they?
“I believe taxes are minimal at best, and the real focus is on winning,” stated Bill Jeet, the general manager of Florida. Guided by Paul Maurice, this is a significant asset. “The sun doesn’t wear us down. It’s a wonderful place to live, ideal for families and singles alike. There’s something for everyone.”
Commissioner Gary Bettman remarked prior to the finals that he “hates the issue” surrounding taxation. This sentiment was echoed on Monday night during a TNT segment where retired player Paul Bissonnett suggested tax concerns should be addressed in the next collective bargaining agreement. Bettman dismissed the idea as absurd, questioning whether the league should subsidize teams in cities like New York or Los Angeles.
NHL Tax Status
The Panthers, Tampa Bay Lightning, Vegas Golden Knights, Dallas Stars, Nashville Predators, and Seattle Kraken are among the six NHL teams based in states without income tax. Deputy Commissioner Bill Daly noted that while several other franchises expressed concern, the league does not support that notion.
“These disparities have existed for a long time,” Daly remarked. “There are various reasons players choose to overlook the tax situation in a particular market for a specific coach, location, or team.”
The union seems to agree there is no need to negotiate tax disparities in the upcoming CBA. NHLPA Assistant Executive Director Ron Hainsey, who played for seven teams over 17 seasons from 2003 to 2020, noted this topic has resurfaced during discussions, especially considering the Cup winners’ streak over a decade in places like Detroit, Chicago, Los Angeles, and Pittsburgh.
“It’s puzzling that this issue persists,” Hainsey commented. “To react this way simply because Florida and Tampa have a standout player on a good team seems unfounded.”
He further emphasized that this isn’t the primary concern in the NFL or NBA, acknowledging that hockey still has work to do in keeping pace with the earnings of football and basketball players. NHL salary caps are anticipated to rise in the coming years, with revenue projections hitting record highs.
Alan Poloszewski, who has advised players on tax matters for over a decade, suggested a flexible salary cap could alleviate the tax-related issues. His AFP consultancy has found that since 2016, teams in tax-free states have been providing what they term “the tax advantage inherent in several of these locations” for playoff-qualified teams.
“It’s a mix of numerous factors,” Poloszewski explained on Tuesday. “More influences are at play than simply what is spent. The way money is allocated is key, but when you enter a level playing field, your worth in dollars allows for some leeway.”
What Do Players Think?
Brad Merchand, who spent over a decade with Boston before being traded to Florida in March, acknowledges taxes as a consideration when choosing where to play.
“Canadian teams have substantially high tax rates, and California teams are similar. These teams incur higher costs compared to others,” stated Merchand. “For instance, Montreal has rates around 52-54%. Meanwhile, places like Florida and Dallas present a 15% difference.”
However, money isn’t the only motivator. The success of teams in Florida, Tampa Bay, Las Vegas, and Dallas can be attributed to executives like Zito, Julien Brisebois, Kelly McCrimmon, and Jim Nill, who excel in talent evaluation and cap management.
Additionally, the appeal of year-round golf in warmer climates and the preference for smaller markets with less pressure influence player choices. Some players are also attracted to cities with fervent hockey fans, where the sport is of paramount importance.
The Edmonton Oilers exemplify this dedication with their fans’ passion during back-to-back years.
“The devotion of this fanbase to the team is astounding,” said Oilers forward Evander Kane, who has played in Atlanta, Winnipeg, Buffalo, and San Jose. “Once we got here and navigated the local area, we discovered there’s more to do, making it a fantastic place for our families and a great summer haven.”
NHL players receive salaries in US dollars, even when playing in Canada, and face significant tax deductions at high rates in cities like Montreal and Toronto. However, taxation can vary depending on residency choices.
“Living in those locations is advantageous, but the overall cost of living in Canada is quite high due to extensive taxation on purchases, sales, and income,” explained Merchand. “While there are some differences in cost, they aren’t monumental. Ultimately, I might see a 20-30% reduction in my earnings, which certainly impacts decisions.”
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AP NHL Playoffs: https://apnews.com/hub/stanley-cup and https://apnews.com/hub/nhl
Source: apnews.com