In Fort Lauderdale, Florida, the Florida Panthers find themselves just two wins shy of claiming the Stanley Cup, poised to become the latest champion from a U.S. state with no income tax, a feat achieved by four other teams in the past six years. The tax situation has ignited discussions across the National Hockey League, particularly as many leading teams in the playoffs hail from the Sun Belt region. The appeal of these locales extends beyond financial perks, offering alluring living conditions that entrench their status as favorable destinations for players.
Florida Panthers’ General Manager, Bill Zito, emphasizes that the tax aspect is merely one of many factors, citing the organization’s ownership and their head coach, Paul Maurice, as significant attractions. “The sun doesn’t kill us,” Zito said, pointing towards the agreeable environment as a drawing card for singles and families alike. NHL Commissioner Gary Bettman has expressed disdain for tax-related discussion, reflected by his reaction to former player-turned-commentator Paul Bissonnette’s call for tax consideration in the upcoming collective bargaining agreement. Bettman considers the suggestion unfounded, questioning whether subsidies should support tax-heavy areas like New York and Los Angeles.
Six NHL teams operate in states without a state income tax: the Panthers, Tampa Bay Lightning, Vegas Golden Knights, Dallas Stars, Nashville Predators, and Seattle Kraken. Despite concerns from some franchises, Deputy Commissioner Bill Daly maintains that diverse reasons influence a player’s choice of team, aside from tax implications. Echoing this sentiment, NHLPA’s assistant executive director Ron Hainsey notes that teams from regions with higher taxes have succeeded in the past, challenging the notion of tax disparities significantly affecting competitiveness.
The NHL Players’ Association seems to agree that the tax issue won’t be a prominent topic in the next collective bargaining agreement discussions, with Hainsey citing past Stanley Cup victories from cities like Chicago, Detroit, Los Angeles, and Pittsburgh. He questions the assertion that taxation inequities have become a critical issue, considering that lower-salary leagues like the NFL and NBA haven’t voiced similar concerns.
Tax consultant Alan Pogroszewski suggests the implementation of a flexible salary cap to address differing tax burdens effectively, arguing that teams in tax-free states enjoy higher playoff participation rates since 2016, allowing them a strategic advantage. “It’s not just about the money spent; it’s how it’s utilized,” Pogroszewski commented, proving that a dollar stretches further with contributory factors.
Brad Marchand, who recently transitioned from Boston to Florida, acknowledges that taxes do shape decisions regarding team selection. He highlights significant discrepancies between various teams, including Canadian and Californian squads with higher taxes than their counterparts in places like Dallas. “That’s a 15% difference,” Marchand noted, stressing the substantial financial implications of where players choose to play.
While taxation remains a consideration, it does not overshadow the merit of excellent management demonstrated by executives from teams like Florida, Tampa Bay, Vegas, and Dallas. Successful hockey programs effectively navigate player talent and salary cap complexities, providing another layer of appeal. Additionally, players appreciate the lifestyle benefits of these regions, characterized by warm climates and lower stress levels compared to busier markets.
A prime example of a team fueled by fan passion is the Edmonton Oilers, one of the finalists for a second consecutive year. Evander Kane, who plays for the Oilers, reflects on the fervent support they receive from their hometown, as well as identifying Edmonton as a family-friendly city with vibrant summers.
NHL players, even those situated in Canadian cities with elevated tax rates, receive payment in U.S. dollars, partly offsetting the tax impact through exchange rates. However, Brad Marchand cautions that Canadian living costs, including high taxes on purchases and transactions, could affect players’ net earnings significantly, even when accounting for currency advantages.
Overall, while tax considerations do factor into discussions, they represent only a piece of a larger puzzle that includes team culture, management prowess, community support, and lifestyle advantages. The interplay of these elements ensures a complex and dynamic decision-making process for players selecting their professional environments.