NHL free agency shows teams in states with no income tax have an advantage
Four of the past five Stanley Cup champions are based in a place with no state income tax, and the flood of talent to those locales continued in NHL free agency
When the Tampa Bay Lightning made moves at the NHL draft to clear salary cap space, general manager Julien BriseBois hoped a variety of factors would entice players to sign as free agents.
One, of course, was the organization's penchant for winning and the talent already on the roster. Another, he pointed out, was the “favorable taxation situation.”
It has become difficult to deny the impact of favorable tax situations around the league in recent years. Four of the past five Stanley Cup champions are based in places with no state income tax, and that benefit continues to draw free agents who know they will take home more money there than elsewhere around North America.
“There is a distinct advantage for those teams that are in states with no tax — always,” said Alan Pogroszewski, who has studied and worked with players on tax matters for more than a decade. “There will always be an advantage.”
It is not necessarily the deciding factor for a player, but it certainly doesn't hurt. The $69 million contract Sam Reinhart got to re-sign with the reigning champion Florida Panthers is worth more there than it would have been had he signed for the same terms in many other markets.
Averaging out Reinhart's salary to $8.625 million annually, he owes $3.15 million in taxes in Florida. He would pay $1.1 million more in California, $1.5 million more in New York and $1.4 million more in Toronto, according to a calculator provided publicly by Cardinal Point Athlete Advisors.
Over the length of the contract that could save him up to $12 million.
“That’s part of the reality,” San
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