AILSA CHANG, HOST:
All hail the Denver Nuggets, who as of last night, are the new champions of the National Basketball Association.
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MIKE BREEN: At last, the long wait is over. After 47 years, the Denver Nuggets can finally call themselves NBA champions.
CHANG: But do spare a thought for their opponents in the NBA Finals, the Miami Heat, who not only travel back to Florida disappointed but also have to pay taxes to the state of Colorado.
ARI SHAPIRO, HOST:
It's colloquially known as the jock tax. It's an income tax that many places charge nonresidents on money earned while visiting. It's enforced mostly on visiting entertainers and pro athletes who can make high incomes. And while it's been around for decades, it came to prominence in the summer of 1991.
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MARV ALBERT: Paxson open again. John Paxson continues to provide the crushing shots.
CHANG: That's when the sharp shooting of point guard John Paxson helped Scottie Pippen and Michael Jordan and the rest of the Chicago Bulls start an NBA dynasty.
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ALBERT: And the Chicago Bulls have won their first-ever NBA championship.
CHANG: They clinched that first title against the Los Angeles Lakers in LA. And afterwards, it came to light that the state of California was taxing the income that each Bulls player and staff member earned while in state, meaning while beating the Lakers.
SHAPIRO: So in response, Illinois drafted up jock tax legislation of its own, which earned its own nickname, Michael Jordan's revenge. Today, every state with an income tax assesses a jock tax on visiting pro athletes. And some cities do, too.
ED ZELINSKY: A lot of athletes have to file lots of returns.
SHAPIRO: That's Ed Zelinsky, professor at Yeshiva University's Cardozo School of Law.
ZELINSKY: These kinds of taxes on nonresidents' income have been on the books for years. The reason we're talking about this is that it's been in the last couple of decades that cash-starved states and cities have gotten more serious about enforcing these taxes.
CHANG: For instance, the state of California brings in hundreds of millions of dollars in these taxes yearly, not much within the hundreds of billions the state makes in taxes every year but, you know, not nothing.
SHAPIRO: While most multimillionaire athletes can afford it, filing in more than a dozen places does eat away at the salaries of athletes who aren't stars or who play at a lower level.
ZELINSKY: In some ways, I'm more concerned about the minor league players because they are individuals who have much lower incomes, and yet they're subjected often to the same degree of complexity.
SHAPIRO: Same is true of touring musicians, as I know firsthand.
CHANG: (Laughter) Sorry, Ari.
SHAPIRO: Enforcement often shows up in the form of deficiency bills.
ZELINSKY: This is the ultimate tax that a tax collector likes to impose because it's on a nonvoter.
CHANG: Law professor Ed Zelinsky forecasts that even more state and city tax commissioners will follow suit now that federal relief funding from COVID-19 has dried up. Transcript provided by NPR, Copyright NPR.
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