Daily Tax Report ®

Super Bowl Players Face Hefty Taxes on Championship Bonuses

Feb. 1, 2019, 7:39 PM

There’s a Super Bowl LIII bonus waiting for every competing player, whether you’re New England Patriots quarterback Tom Brady or Los Angeles Rams backup quarterback Sean Mannion.

But every player competing for the Vince Lombardi Trophy in Atlanta Feb. 3 will face heavy tax burdens on those bonuses.

The franchise that wins the Super Bowl will see a $201,000 per player bonus, the losing team a $142,000 per player bonus. These totals also include bonuses for winning each postseason game leading up to the Super Bowl.

The bonuses are subject to a 37 percent federal income tax, and state income taxes (13.3 percent in California, and 5.1 percent in Massachusetts, assuming the players are residents of those states). Jock taxes—measured by the amount of duty days a player contributes to “income-related work” in any state that administers an income tax—also apply. However, because the entirety of the postseason was played in 2019, these duty days will carry over into next year’s tax bill.

Below is a breakdown of what players would net from their Super Bowl bonuses based on Massachusetts and California income taxes:

  • If the Patriots win, each player would receive $116,379 in net pay (57.9 percent of original bonus)
  • If the Rams win, each player would receive $99,897 in net pay (49.7 percent of original bonus)
  • If the Patriots lose, each player would receive $82,218 in net pay (57.9 percent of original bonus)
  • If the Rams lose, each player would receive $70,574 in net pay (49.7 percent of original bonus)

Lost Sales Tax Revenue?

Thanks to a Georgia law, all admission tickets to Super Bowl LIII are exempt from state and local sales and use taxes.

Not included in that exemption are souvenir purchases, hotel room rentals, and concessions, although parking is routinely tax-free in Georgia.

According to StubHub, the average Super Bowl LIII ticket price is $4,600. The combined sales tax rate in Atlanta is 8.9 percent, meaning the state could lose out on about $410 in sales tax revenue on average per ticket sold.

However, according to a Jan. 28 PwC report, Super Bowl LIII could generate $190 million in direct spending throughout the Atlanta metro area, as thousands of football fans are expected to pour into the city and boost lodging, transportation, and other tourism business.

On top of the 8.9 percent sales tax rate, Atlanta administers an 8 percent excise tax and $5 a night fee on hotel rooms. A $300 room would result in over $55 in tax revenue per night for Atlanta.

Inside the stadium, a $150 Rob Gronkowski jersey would mean over $13 in sales tax revenue for the city; a $12 order of chili-cheese fries would mean $1 for state coffers.

So is it ultimately worth it from a tax perspective to host one of the world’s most-watched sporting events? Jamie Yesnowitz, a principal and state and local tax practice and national tax office leader at Grant Thornton LLP, says yes.

“While the state misses out on the direct sales taxes, the state benefits greatly from the ancillary economic activity from the big game (hotels, restaurants, transportation, etc),” Yesnowitz told Bloomberg Tax in an email.

To contact the reporter on this story: Ryan Prete in Washington at rprete@bloombergtax.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; Megan Pannone at mpannone@bloombergtax.com

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