• New Jersey: Super Bowl-Sized Taxation—Win or Lose
  • February 5, 2014 | Authors: David M. Kall; Susan Millradt McGlone
  • Law Firm: McDonald Hopkins LLC - Cleveland Office
  • It is almost time for the time-honored American tradition of the Super Bowl. No matter your interest, whether it is the game itself, the office “Super Bowl square” pool, the commercials, or the legacies of various players, the Super Bowl is an American institution. What stimulating topic will you add to the many debates of the evening?

    Here is one we believe will spark debate—the fundamental fairness of state “jock taxes.”

    In many states, special laws are applicable to professional athletes and other entertainers to collect revenue from those athletes traveling to the state to perform either at a sporting event or concert.

    In anticipation of Sunday’s game, much attention has turned on the application of New Jersey’s so-called “jock taxes” as they apply to Peyton Manning. In Manning’s situation, winning the Super Bowl may be the only way he might earn net wages for his efforts (considering only state taxation).

    How this would work is as follows:

    • Peyton Manning’s 2014 salary: $15MM.
    • Manning is reported to be in New Jersey for eight days in preparation for the Super Bowl.
    • Manning is expected to be in New Jersey for an additional two days during the 2014 season, for a total of 10 days in 2014.
    • There are approximately 235 duty days in the NFL season.
    • Players on the winning Super Bowl team each receive $92,000, while players on the losing team each receive $46,000.
    • Manning earned $23,000 and $42,000 for winning the divisional playoffs and conference playoffs, respectively.


    Peyton Manning's 2014 Salary

    Super Bowl Win

    Super Bowl Loss

    2014 Salary



    2014 Playoff Earnings (w/o Super Bowl)



    2014 Super Bowl Earnings



    Total Estimated 2014 Compensation



    Ration: Days in NJ (10)/Total Duty Days (235)



    Earnings Allocable to NJ



    Application of Top NJ Tax Rate to Allocated NJ Earnings (@ 8.97%) Based on Days (8) in State for Super Bowl



    Percentage of NJ Taxation on Super Bowl Earnings




    Note that these percentages, where Manning actually pays more tax than he earns in his time in New Jersey, do not consider other applicable taxes, namely federal income tax.

    Regardless of the tax consequences, we at the Multistate Tax Update do not believe state taxation will give any of the athletes participating in the Super Bowl much pause after (or before) the coolers of Gatorade drop Sunday night. However, we need to ask if such stark levels of taxation are fundamentally unfair on a policy level, considering that the majority of Manning’s tax liability is due to his 2014 regular season earnings (not his Super Bowl earnings) which he has not yet earned. Manning is incurring most of his New Jersey tax liability as a result of his participation in the Super Bowl, not because he is a resident of New Jersey. We must remember that a fair argument can be made that the players participating in Sunday’s game, including Manning, are causing New Jersey and the City of East Rutherford significant costs to accommodate and ensure the safety of the players and fans. These are costs that those involved in the game should, at least in part, bear.

    For additional background on “jock taxes,” reference the Tax Foundation’s (dated) report.