While this is not the last of this series' articles, it is the “least” of these articles. The American Conference may have happened upon becoming a power conference if college athletes are to be paid for their services.
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If this is your first time stopping by, here are some other articles to get you caught up to speed in the series on the impact state income taxes could have on NCAA recruiting.
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First, the American Conference will become the highest net income earners among college athletes as the athletes from the AAC’s average football and basketball program will earn, respectively, 32% and 38% more than the next closest NCAA conference will be able to pay their athletes. Second, half of the American Conference’s teams will fill a roster with football players who will not owe over $111 and basketball players not owing over $401 in state income taxes. In fact, 4 AAC football programs and 5 AAC basketball programs rank within the Top 10 lowest state income tax bills among all NCAA programs! This could entice other schools to join the AAC as the majority of their schedule would then be in tax friendly areas, thus helping the new school lower their own tax bill.
Taking a look at the teams inside the new “wonder conference”, the conference is split down the middle for “haves” and “have nots”. The football programs for the “haves” – teams residing in states without income taxes – would owe an average of $62 in annual state income tax while the “have nots” would owe an average of $8,403.
Taking a look at the teams inside the new “wonder conference”, the conference is split down the middle for “haves” and “have nots”. The football programs for the “haves” – teams residing in states without income taxes – would owe an average of $62 in annual state income tax while the “have nots” would owe an average of $8,403.
Dividing the basketball program into the same dividing line, the “haves” would make $19,451 more annually than their “have nots” would.
Interestingly from a tax perspective, the AAC Conference Tournament will move in 2015 from the FedEx Forum in Memphis to the XL Center in Hartford, Connecticut. This change will subject basketball players to a week of the highest tax rates possible for AAC teams instead of a state without an income tax.
Interestingly from a tax perspective, the AAC Conference Tournament will move in 2015 from the FedEx Forum in Memphis to the XL Center in Hartford, Connecticut. This change will subject basketball players to a week of the highest tax rates possible for AAC teams instead of a state without an income tax.
This large gap in earnings may be well needed relief for the AAC’s smaller basketball programs such as Larry Brown’s Mustangs, as they currently have to recruit against both the 2013 and 2014 NCAA Tournament Champions – the Louisville Cardinals and Connecticut Huskies. While UConn and Louisville currently dominate the AAC on the court, the “haves” could now offer potential AAC athletes $23,525 more than either of those programs could offer their basketball prospects.
NOTE:
This article only discusses state income taxes. College athletes would also be subject to federal and local income taxes. Provisions in the federal tax code allow for the deduction of state and local income taxes for certain income thresholds. Given this potential deduction on federal taxes, the variance in total income taxes owed may not be as drastic between conferences and schools. However, for simplicity sake - this article solely focuses on state income taxes.
Estimated football and basketball salaries provided by CNBC's Mark Koba (@MarkKobaCNBC).
This article only discusses state income taxes. College athletes would also be subject to federal and local income taxes. Provisions in the federal tax code allow for the deduction of state and local income taxes for certain income thresholds. Given this potential deduction on federal taxes, the variance in total income taxes owed may not be as drastic between conferences and schools. However, for simplicity sake - this article solely focuses on state income taxes.
Estimated football and basketball salaries provided by CNBC's Mark Koba (@MarkKobaCNBC).
- Estimated football salary: $178,000
- Estimated basketball salary: $375,000
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