Potential Baseball Trade has Tax Implications
By: Administrative Account | Source: ESPN.com
December 17, 2003 3:29PM EST

The state of Massachusetts stands to make thousands if Alex Rodriguez is traded to the Red Sox.

Last year, Rodriguez (A-Rod) and the Texas Rangers played three games in Boston. Based on Rodriguez' $22 million annual salary and the fact that baseball players serve 210 duty days for tax purposes, Rodriguez had to pay Massachusetts state taxes on three days' salary ($314,286). Given the Massachusetts state income tax is 5.3 percent, A-Rod owed the state $16,657, not to mention the taxes he paid to others that levy a special "jock tax" on every athlete who plays in their state. If A-Rod were to play his home games in Boston in 2004, approximately half of his duty days (105) would be taxed -- meaning Massachusetts would bill the shortstop $583,000 in income taxes, according to the Tax Foundation, a Washington-based research group that has studied jock taxes. That's 2.65 percent of A-Rod's total salary.

Boston's Manny Ramirez -- the A-Rod trade is predicated on the Red Sox sending Ramirez to Texas -- would owe Massachusetts $543,250 for 105 days' salary in Massachusetts for the 2004 season based on his $20.5 million salary. The state's total net take in the trade? A cool $39,750.

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