When the Tampa Bay Lightning 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 鈥渇avorable taxation situation.鈥�
It has become difficult to deny the impact of favorable tax situations around the league in recent years. Four of the past five are based in places with no state income tax, and that benefit who know they will take home more money there than elsewhere around North America.
鈥淭here is a distinct advantage for those teams that are in states with no tax 鈥� always,鈥� said Alan Pogroszewski, who has studied and worked with players on tax matters for more than a decade. 鈥淭here will always be an advantage.鈥�
It is not necessarily the deciding factor for a player, but it certainly doesn't hurt. The Sam Reinhart got to re-sign with the 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 by Cardinal Point Athlete Advisors.
Over the length of the contract that could save him up to $12 million.
鈥淭hat鈥檚 part of the reality,鈥� San Jose Sharks general manager Mike Grier said. 鈥淚 think it is an advantage for those teams: They can obviously pay guys a little bit less, and guys are happy to go there. So not to their fault or anything, those teams take advantage of the situation as they should.鈥�
And they do. Nashville, Florida, Tampa Bay, Dallas, Vegas and Seattle 鈥� the six teams in the 32-team NHL in states with no income tax 鈥� combined to spend nearly a quarter of the $1 billion-plus in salaries committed Monday when free agency opened.
Winger Jake Guentzel, who played his first seven-plus seasons with Pittsburgh before 小蓝视频 traded to Carolina in March, just signed a seven-year deal worth $63 million with the Lightning. Their winning culture was part of the draw, along with the lack of winter weather, but tax experts will point out that he's coming out ahead financially, too.
鈥淚 guess that鈥檚 always a good thing if you can make more money,鈥� Guentzel said. 鈥淭here鈥檚 just the positives about Tampa, and there just seems to be so many of them: living the lifestyle, the atmosphere in the rink is unbelievable and if that鈥檚 part of it, too, that鈥檚 great. There鈥檚 just a lot of things behind the scenes that you鈥檙e really excited for.鈥�
Pogroszewski, the founder, president and CEO of AFP Consulting LLC, which specializes in the tax preparation and consulting for pro athletes, said he and his colleagues have debated for years how much of a factor financial matters such as these should play in free agent decisions.
Pogroszewski said the New York Rangers or Islanders would need to offer a contract exceeding $88 million to net the same amount as Reinhart鈥檚 $69 million contract with the Panthers.
He points out there are things players can do to even the playing field 鈥� retirement compensation arrangements in Canada 小蓝视频 one of them and establishing residency in a no- or low-tax state is another. Grier said players and agents are all aware of tax differences by state, acknowledging 鈥渢hat definitely figures into everything.鈥�
Veteran defenseman Chris Tanev's situation featured a different variable. After finishing last season with the Dallas Stars, moving there and becoming a U.S. resident would have triggered Canada's departure tax on capital gains, while remaining a resident of Ontario would have mitigated the tax advantage of working in Texas.
"That plays a role into it," said Tanev, who played his first 14 years in Canada with Vancouver and Calgary and is now heading to Toronto after half a season with Dallas. 鈥淎nd family reasons. Just coming to a good team is obviously a big part of that. I didn鈥檛 want to leave Dallas and go to a team that wasn鈥檛 trying to win, and that was a huge reason why this happened.鈥�
Some good teams do not have big-time tax benefits, such as the and pushed the Panthers to a Game 7. The Canadian dollar also plays a major role in league finances, with player salaries paid in U.S currency.
The vast majority of the league simply has to deal with paying players while considering state or provincial tax implications.
"If you can get New York state to go tax-free, I鈥檓 in," Buffalo's Kevyn Adams joked, before explaining his philosophy. 鈥淵ou try to focus your attention on building an organization the right way, where people recognize that and say, 鈥楾hat鈥檚 the culture, that鈥檚 the place that I want to play.鈥� ... If there鈥檚 players that flat out just don鈥檛 want to be in cold weather or don鈥檛 want to be in a state that has higher taxes, then they are probably not for us anyway.鈥�
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AP Hockey Writer John Wawrow contributed to this report.
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AP NHL:
Stephen Whyno, The Associated Press
