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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Corporate Tax

Date & Time
  • event Date

    Thursday, June 18, 2020

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

$247.00
CPE
ALL

This course will discuss how performers are taxed in varying states, mitigating the impact of state taxes, and the impact of tax reform on athletes and entertainers. Most individuals live and work in the same state and file a federal and a single state return. Professional athletes and entertainers are potentially subject to tax in every state they appear in a game or perform in a show. The panel will cover the "jock tax" and the two conventional methods of allocation, duty days, and game days. They will discuss strategic relocation, taxation of endorsements and signing bonuses, and the impact of tax reform on these celebrities.

Faculty

Alan Pogroszewski
Associate Professor
St. John Fisher College

Mr. Pogroszewski is an Assistant Professor of Sports Studies at St. John Fisher College and the President of his own tax consulting business whose clientele include professional athletes performing services on three separate continents. Prior to accepting his position at St. John Fisher College, he was the Vice President of Business Operations for Sports Consulting Group, a firm that specializes in the representation of professional hockey players. Mr. Pogroszewski received his M.B.A. from Rochester Institute of Technology in 1996 and his M.S. in Taxation from St. John Fisher in 2003

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Kari Smoker
Assistant Professor, Accounting and Business Law
Ithaca College

Ms. Smoker, JD, MS Taxation, is an Assistant Professor, Accounting and Business Law, at Ithaca College. She has received a number of awards, including the Rochester Business Journal’s Forty Under 40 Award and the SUNY Chancellor’s Award for Excellence In Teaching. Ms. Smoker is also a consultant for AFP Consulting LLC,  specializing in tax issues for professional athletes. She publishes regularly with co-author Alan Pogroszewski, has served with him as a consultant to the NBA and NHL Players’ Associations, and has been interviewed by various media outlets on contemporary tax issues affecting the sports industry.

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Description

For athletes, most states use "duty days" to apportion earnings. Duty days may include practice, a game, a team meeting, or a media appearance. Other states use a "game day" approach. Even when states use the same method, there are nuances in the calculations and definitions used. Also, there are injury, inactive, and suspension days to consider.

Where a team plays changes throughout the season, and the locations and days of events are unknown until the year ends, which makes planning difficult. Local and city taxes add another level of complexity to the "jock tax." Regardless of the location of services and the methodology used, the resulting calculations are cumbersome, and the return requirements are numerous. At the same time, these complexities cannot be overlooked since performers are easy targets for state and local taxing agencies.

Tax reform brought about the lowering of the top tax tier from 39.6% to 37%, which can only serve to benefit successful professional athletes and entertainers. The same top bracket performers who benefit from the federal drop are hit hardest by the cap on the state tax deduction at $10,000 unless they reside in one of only seven states without a state income tax.

The disparity in the impact of these changes on a given performer is primarily a product of the state where most events (performance, game, tournament, etc.) take place. Under tax reform, a client who is a hockey player, with an average annual salary of $3 million, could see a decrease in tax of $80,000 playing for the Dallas Stars but owe an additional $62,000 playing for the New York Islanders.

Pay for services is only one of many types of income earned and taxed to celebrities. Often more consequential are signing bonuses, endorsement income, and SWAG. Each performer's situation is unique; however, there are steps to lower state taxes as well as the impact of federal tax reform.

Listen as our panel of experts explains the nuances of state taxation of performers, including the taxation of earnings unique to the services they provide and how to reduce the overall burden of taxes paid by these individuals.

Outline

  1. The jock tax
    1. Duty days
    2. Game days
  2. Residency
    1. State tax nuances
    2. Relocation
  3. Tax considerations for other earnings
    1. Endorsements
    2. Signing bonuses
    3. Other
  4. Mitigating the impact of tax reform on performers

Benefits

The panel will review these and other important issues:

  • Impact of tax reform on athletes and entertainers
  • Calculation of the jock tax
  • Nuances of state taxation
  • Strategizing residency
  • Taxation of unique earnings

NASBA Details

 

Learning Objectives

 

 

  • Ascertain the factors when an athlete or entertainer is deemed to have nexus with a foreign state.

 

  • Distinguish traditional methods of tax allocation from methods such as duty days and game days for athletes.
  • Establish the impact that the Commerce Clause and Due Process has on the ability of foreign states to tax non-residents.
  • Recognize residency and issues pertaining to a taxpayer’s tax home that impact foreign state taxation.
  • Determine the impact of the Tax Cuts and Jobs Act of 2017 had on athletes and performers.

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or tax firm experience at mid-level within the organization, preparing complex tax forms and schedules. Specific knowledge of state income tax, nexus, tax apportionment, non-resident taxation, and the Commerce Clause; familiarity with taxation of athletes and entertainers, taxation of endorsements, signing bonuses, and the apportionment of earnings based upon game days and/or duty days.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.