Eagles' home-field advantage in playoffs also tax advantage for Philly
The city will profit - as much as $200,000 if the Eagles host two playoff games - because both the Eagles and their opponents will pay the city wage tax.
The Eagles are putting in extra practice hours as their season extends into the playoffs.
They're also putting a little extra money into the city coffers.
Just like others who work or live in Philadelphia, Eagles players pay the city's wage tax. And, as has long been the case for professional athletes, the city and state also collect taxes from players on visiting teams for their time spent working here.
So, with the Eagles' home-field advantage in the playoffs, more than just the team's season is on the line. A boost in the city's tax revenue is, too.
Philadelphia could gain about $200,000 in wage taxes if the Eagles win next weekend and go on to host a second playoff game at Lincoln Financial Field, according to an Inquirer and Daily News analysis of the salaries of the Eagles roster and those of their potential opponents. With just one playoff game, the city would still gain; if the Eagles lose to the Atlanta Falcons on Saturday, their single playoff game will still raise more than $110,000 in wage taxes.
"I'm quite confident that whatever club they're playing will be on notice that Philadelphia will be taxing them," said Stephen Kidder, a tax lawyer who represents the NFL Players Association, as well as the MLB, NBA, NHL, and major-league soccer players associations. The state of Pennsylvania also stands to gain thousands of dollars from income levies on players for NFL post-season games in both Philadelphia and Pittsburgh, where the Steelers are scheduled to host one game. The state could earn nearly $120,000 this weekend alone from players traveling to the two cities.
Philadelphia became one of the first cities to aggressively pursue income taxes from athletes in the 1990s, said Kidder, who is also a former Massachusetts revenue commissioner. Now, charging so-called jock taxes to players based on the location of their games is a widely accepted practice.
But controversy and court challenges arise over implementation. In the last three years, Tennessee reached separate settlements with NHL and NBA players, and had to refund the $2,500-a-game tax it had charged. In 2015, the Ohio Supreme Court sided with NFL players and struck down Cleveland's 2 percent jock tax as unconstitutional.
Star athletes still make millions of dollars a year after paying taxes. But filing returns in multiple states can become a burden for players with smaller salaries, said Jared Walczak, a senior policy analyst for the Tax Foundation.
"It's very complex, especially for players in minor-league sports, because the compliance costs are very high compared to their income," he said. "If you are a minor-league baseball player and have to remit taxes back to 20 states, … that's really complex."
The Eagles' office declined to discuss income taxes last week. The team does not discuss "financial details of our employees or players," director of public relations Brett Strohsacker said.
Philadelphia works directly with sports teams to deduct taxes from paychecks, said Marisa Waxman, the city's first deputy revenue commissioner.
The wage tax charged to athletes is a drop in the bucket of Philadelphia's total tax revenue; wage taxes classified as coming from sports teams totaled $20 million, or just 1.1 percent of total wage tax revenue, in the fiscal year that ended June 30. But the taxes add up quickly for high-salaried athletes who spend just a few days in Philadelphia.
Waxman said the city calculates taxes owed by athletes by dividing their days spent working in Philadelphia by the total number of "duty days" — time spent in practice sessions, team meetings, and playing games.
The Inquirer and Daily News' conservative estimate of the money the city stands to gain from the Eagles' playoff run assumes that visiting teams will spend two days in Philadelphia and that none of the players lives in the city.
The taxes paid by opposing teams vary based on the players' total salaries. The Falcons players will owe the city about $67,000 in wage taxes. The city would have earned about $70,000 if the Carolina Panthers came to Philadelphia next weekend and $65,000 from the New Orleans Saints.
Eagles players who live in the city pay the resident rate, but those who do not will be paying more in wage taxes for additional games and practice days during the playoffs. If none of the Eagles players lived in the city, for example, Philadelphia would gain more than $42,000 in extra wage taxes for one playoff game and $67,000 for two games.
The city also works to collect taxes on income earned in Philadelphia from workers who are not athletes.
"There are a variety of ways we find this information, including data matching and sharing with other jurisdictions and the IRS," Waxman said.
The state of Pennsylvania charges income tax to visiting athletes unless they live in states that have reciprocal agreements with Pennsylvania: Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia.
The state revenue department does not analyze the total amount of income tax it receives from professional athletes, said communications director Jeffrey Johnson. He said the state does not count absences due to illness or injury as "working days" for athletes.
Eagles quarterback Carson Wentz, sidelined by a knee injury, lives in New Jersey and would not be paying Pennsylvania state income taxes. But is he still subject to the city wage tax?
Only when he's attending team meetings or activities, Kidder said.
"The factual question is: Is he rendering a service to the team?" he said. "If he's participating in team meetings then that becomes … an argument that the city might try to make."