Court weighs Ohio's taxation of out-of-town athletes
Court weighs Ohio's taxation of out-of-town athletes
Associated Press By ANDREW WELSH-HUGGINS 4 hours ago
COLUMBUS, Ohio (AP) — An Ohio law that singles out
professional athletes and entertainers for taxation even when they're in the
state just a few days a year is unconstitutional, say several sport leagues
including the NBA, NFL and NHL who want the state Supreme Court to strike the
law down.
At issue is an Ohio law that excludes entertainers or
athletes from a ban on municipalities taxing people who perform services 12 or
fewer days per year. The leagues say the law singles out professional athletes
for less fair tax treatment and overlooks the fact that despite high salaries
the athletes' careers are relatively short.
An ex-NFL player, meanwhile, has sued over Cleveland's
interpretation of the law, saying the city unfairly imposes a 2 percent income
tax based on games played in the city as a percentage of total games played.
Former Chicago Bears linebacker Hunter Hillenmeyer says
the city should only have taxed him based on days spent in the city compared
with the length of his season, which comes out to a much lower rate.
Cleveland's system, known as the "games-played
method," treats professional athletes as if they were paid only to play in
games, Stephen Kidder, an attorney representing Hillenmeyer, said in a filing
with the Ohio Supreme Court, which heard arguments Wednesday.
This ignores everything else NFL players are paid to do,
including mini-camps, preseason training camp, team meetings, and practice
sessions, Kidder said.
Under the method most cities use, an NFL player who
traveled to a city for two days during a 160-day season would be taxed on
1/80th of his income. But in Cleveland, a visiting football player is taxed
just on the game, which amounts to five percent of his income based on a
20-game season (which includes exhibition games), Kidder argued.
A second former NFL player, retired Indianapolis Colts
center Jeff Saturday, argues in a separate lawsuit he shouldn't have been taxed
at all by Cleveland during the 2008 season because he was injured and not in
the city for the days he was taxed.
Cleveland says its interpretation of the law is based on
the thing that players are hired to do: play football games.
A case Hillenmeyer uses to bolster his argument involves
the late actor Paul Newman's successful challenge of taxes he paid filming the
1973 movie "The Sting."
California wanted to tax Newman only for the approximate
month he was in California filming, but Newman won an appeal that said he
should be taxed at a lower rate because his actual contract — similar to a
professional athlete's season — was 54 days, according to Kidder's court filing
on behalf of Hillenmeyer.
The Ohio Attorney General's office argues the
athlete-entertainer exception in the state tax code is constitutional.
A ruling is expected in a few months.
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Andrew Welsh-Huggins can be reached on Twitter at https://twitter.com/awhcolumbus.
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