Sport tax

Maybe this has been answered before, but when sport teams come into Detroit to play, do they have to pay income tax to the City of Detroit?

They are employees, under contract to perform X task. For doing X, or as close as possible, they are compensated. I call that income.

Is it taxed? Is that why the Lions HQ is in Allen Park? and the Red Wings pre-season is in T.C.?

Yes. Visiting and home players have to pay income tax for games played in Detroit. Don't know about exhibition games, since I don't think the actual salaries/contracts kick-in until the regular season.

Visiting players are taxed? I work in other cities and other states [[for a corporation based in another state), and I never pay income tax to those places.

What about celebrity actors? Did Shea Labeouf pay income taxes to the city when he was filmed acting in part of Transformers in Detroit? Part of his income was for being filmed in Detroit. Same thing, isn't it? I suspect they pay in their declared main city of residence, not visiting cities. Last I heard, the Blue Jays cannot be forced to pay under the current Canada/US tax treaty when playing in Detroit. But I'd be curious to hear what some of the tax guys on here have to say about that.

I think we need correct this thread. It is not called a sport tax, it is called a non-resident entertainer tax and only the state could collect those taxes not a municipality like Detroit.

Take Shaquille O'Neal for example. His one-day visit last season to Auburn Hills as a member of the Phoenix Suns netted him a pay day of $243,902. Since Shaq is a entertainer, his pay that he made in Michigan is taxable because the Pistons and the Suns charged fans to see him play. Actors, artists, public speakers all pay the tax if they charge people to see them perform or speak.

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Originally Posted by davewindsor

What about celebrity actors? Did Shea Labeouf pay income taxes to the city when he was filmed acting in part of Transformers in Detroit? Part of his income was for being filmed in Detroit. Same thing, isn't it? I suspect they pay in their declared main city of residence, not visiting cities. Last I heard, the Blue Jays cannot be forced to pay under the current Canada/US tax treaty when playing in Detroit. But I'd be curious to hear what some of the tax guys on here have to say about that.

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I thought that tax treaty was for federal income tax only.

Sports pros, as well as entertainers, are supposed to pay the non-resident city income tax [[and probably state income tax) for the time worked in the city, as r8rbob has indicated. Other cities have sued pro athletes and collected, so now it's usually paid as a matter of course.

MikeM, in theory, you owe taxes to the other states and cities [[would would likely be a credit toward your local state taxes). It's generally not an issue for day to day work, but there have been lawsuits filed by New York, and won, for taxes due from workers who spent months each year in the state.

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Originally Posted by jiminnm

Sports pros, as well as entertainers, are supposed to pay the non-resident city income tax [[and probably state income tax) for the time worked in the city, as r8rbob has indicated. Other cities have sued pro athletes and collected, so now it's usually paid as a matter of course.

MikeM, in theory, you owe taxes to the other states and cities [[would would likely be a credit toward your local state taxes). It's generally not an issue for day to day work, but there have been lawsuits filed by New York, and won, for taxes due from workers who spent months each year in the state.

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Athletes who professional team is based in Detroit would pay non-resident city income tax because their residence is located in Michigan. [[either part-time or full-time) Athletes who professional team is located outside of Michigan would be responsible only for state taxes.

So if I work for a local accounting firm, a law firm, an advertising agency, etc, and I travel to another state for the day, week, month to work on a project for a client based there, I have to pay income taxes to that state for the income earned during that period?

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Originally Posted by MikeM

So if I work for a local accounting firm, a law firm, an advertising agency, etc, and I travel to another state for the day, week, month to work on a project for a client based there, I have to pay income taxes to that state for the income earned during that period?

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Here are questions that can answer your own questions.

1) Does the local accounting firm, the law firm, the advertising agency, etc charge a fee to others to view your work?

2) Who is paying you while you are on travel? The local accounting firm, a law firm, an advertising agency, etc or the client you are serving while on travel.

If you are able to answer those two questions, you will know if you required to pay a tax.

MikeM, You might find this helpful:

"Airline employees
Federal law, 49 USC 40116[[f)[[2), provides that the compensation paid by an air carrier to employees who perform their regularly assigned duties in more than one state can be subject only to taxation by their home state and the state in which they earn more than 50 percent of their compensation."
http://www.taxes.state.mn.us/individ...shtml#P67_6446

49 USC 40116[[f)[[2):
http://vlex.com/vid/sec-state-taxation-19259425

Oh, I understand the law as it apples to me; I'm thinking of family members who work out of state yet never pay income tax to those states, or neighbors who would be paying taxes to a dozen or two other states. Sounds like a real headache at tax time.