Getting in on the Game: If and How a Non-Income Tax State Could Impose a Jock Tax

A "jock tax" is the colloquial name given to state and local income taxes levied against non-resident athletes for money earned within the taxing jurisdiction's borders. Virtually every state that hosts a professional sports team and imposes a general income tax enforces a jock tax, and as a result many athletes pay taxes in upwards of twenty jurisdictions. While there are tax policy arguments for and against jock taxes, there is no dispute it can be lucrative for states and cities looking to offset the rising amount of taxpayer dollars funneled to new arenas. States that do not have a broad income tax scheme have remained largely on the sidelines as this revenue-producing strategy has become commonplace over the last twenty-plus years.This Note explores the viability of a non-income tax state enacting and enforcing a jock tax, and uses Seattle, Washington — a locale currently in a battle regarding a potential new arena — as a vehicle to illustrate the unique constitutional issues such a tax would face. Part II sets forth states' authority to tax non-resident income, generally. Part III outlines the jock-tax system, which includes a look at the history of jock taxes, how the system operates today, and whether the practice is wise from a policy perspective. Part IV analyzes the constitutional hurdles such a jock tax would have to overcome, namely under the Due Process and Dormant Commerce Clauses. Ultimately this Note concludes that there is a strong argument that a non-income tax jurisdiction could impose a jock tax provided it tailored the tax in three ways: (1) the tax would have to apply to both resident and non-resident athletes, (2) athletes' income should be apportioned under the "duty-days" formula, and (3) offer a tax credit to resident athletes for income taxed by other jurisdictions.