The 'Jock Tax' and the NBA Finals? What You Need to Know

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The NBA finals 2025 are over and many who watched the Oklahoma City Thunder best the Indiana Pacers are probably not wondering what a jock tax is.

But the NBA Finals — and other sporting events — are connected to taxes in a big way. That’s partly due to a lucrative income tax, imposed by most states, known as the “jock tax.”

And professional athletes aren’t the only ones affected by the tax. Individuals who travel to work with sports teams and earn income in different states also pay taxes.

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What is the jock tax?

The jock tax is an income tax levied on athletes and other people associated with sports teams earning money outside their home states. The tax has an interesting history.

Following the NBA Finals in 1991, California assessed state income taxes against the Chicago Bulls (including Michael Jordan), who played the Los Angeles Lakers in the finals that year.
What is Michael Jordan's Revenge?: Illinois then enacted its law, "Michael Jordan's Revenge,” to tax players who came to Chicago. Other states followed.
The concept was that athletes and staff who earn income while visiting a state should be subject to income tax in that state. The jock tax continues to be a notable source of revenue for states that impose it.

Who pays the jock tax?

Stephen Curry of the Golden State Warriors is set to earn a base NBA salary of $59.6 million for the 2025-26 season. According to Forbes, Curry’s total earnings for 2025, including endorsements, are estimated at $156 million, with $59.6 million from his on-court salary and about $100 million from off-court ventures.

However, Curry’s net take-home pay is reduced by federal income tax, California’s high state income tax, and the “jock tax.”

While the jock tax can be substantial — for example, a player earning $10 million and spending half the season in California could owe over $665,000 in state taxes to California alone — that represents only a portion of total tax liabilities.

The combined effect of federal, state, and local taxes, plus fees and agent commissions, can, in some cases, reduce a top athlete’s take-home pay to around 40–50% of gross earnings.

But the jock tax itself is just one component of the overall reduction.

And it's important to note that athletes aren’t the only ones who pay jock taxes.

Anyone connected to a professional or semiprofessional team who earns money while visiting another state can be subject to the tax.
For example, that would include trainers, coaches, physicians, etc., associated with teams who travel to multiple states to work at games.

The jock tax can sometimes be hard to determine because base and bonus income can both be subject to the tax. The calculation formula can also vary by sport.

But overall, the amount of jock tax paid considers factors like the number of games played in the states or cities involved, the total annual compensation the athlete receives, and the applicable income tax rate from the nonresident state or city.

Note: The idea behind the jock tax doesn’t only apply in sports contexts. Earning income in a state outside of your home state can have tax implications when your job has nothing to do with sports. (The jock tax tends to get attention because of the money involved with multimillion-dollar athletic contracts. Highly paid entertainers and celebrities also deal with hefty income taxes for income earned outside their home states.)

Which states impose the jock tax?

Most states and some U.S. cities have a jock tax. For example, some cities that impose the tax include Kansas City and Detroit.

But some states don’t have a jock tax, including Florida, Nevada, Texas, Washington, and Tennessee. (Those are five of nine states with no personal income tax.)

Are jock taxes legal? Jock taxes have faced legal challenges over the years.

For example, in Ohio in 2016, the state’s Supreme Court struck down a “games played” formula used to calculate the tax in Cleveland. Last year, a Pennsylvania appeals court struck down Pittsburgh’s city jock tax, calling it a discriminatory tax that violated Pennsylvania's constitution.

However, as of now, the jock tax is in effect in most states. So, athletes and others impacted by the tax should engage in ongoing tax planning with trusted financial and tax professionals.

And, in case you’re wondering, the jock tax isn’t the only tax levied on athlete and team staff income. Federal income taxes and home-state income taxes must be paid as well.

Kelley R. Taylor is the senior tax editor at Kiplinger.com, where she breaks down federal and state tax rules and news to help readers navigate their finances with confidence. A corporate attorney and business journalist with more than 20 years of experience, Kelley has helped taxpayers make sense of shifting U.S. tax law and policy from the Affordable Care Act (ACA) and the Tax Cuts and Jobs Act (TCJA), to SECURE 2.0, the Inflation Reduction Act, and most recently, the 2025 “Big, Beautiful Bill.” She has covered issues ranging from partnerships, carried interest, compensation and benefits, and tax‑exempt organizations to RMDs, capital gains taxes, and energy tax credits. Her award‑winning work has been featured in numerous national and specialty publications.