Buried in HB 2724 is Section 404, which would impose Washington income tax on nonresident professional athletes based on games played in the state.
Who it applies to
- Nonresident members of professional athletic teams earning over $1 million annually.
- This includes not only players but also coaches, trainers, and other team personnel above that threshold.
How the apportionment works
The taxable income formula is:
Washington taxable income = Total compensation × (duty days in WA ÷ total duty days)
“Duty days” covers every day from the start of official preseason training through the last game of the season.
Example
A visiting NBA player earns $5 million annually. Their team plays 3 games in Seattle during a 200-day season (including training camp and playoffs).
Using the formula:
$5 M × (3 ÷ 200) = $75,000
So $75,000 of the player’s income would be taxable at Washington’s new rates.
Compliance requirements
Teams must file annual reports with the Department of Revenue listing every covered individual’s:
- Taxpayer ID number
- Total compensation
- Duty days in Washington vs. total duty days
- Any additional information the department requires
Key observations
- This applies to nonresidents with minimal physical presence in the state—potentially just a few days per year.
- The “duty day” denominator includes the entire season, not just game days, which affects the apportionment formula.
- Teams effectively become tax collectors and reporters for Washington, tracking visiting personnel across all opponent rosters.
- The $1 million threshold creates a cliff: $999 K = no tax; $1,000,001 = apportioned tax on all compensation.
Several states already have similar “jock taxes,” but Washington’s version is notable for its reporting requirements and broad definition of covered individuals. It’s worth watching if you work in professional sports, athlete representation, or multistate tax compliance.
