Article: How Much Are the Wild Affected By the "Tundra Tax"?

[Bekki Antonelli]

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[Patrick]

Besides housing, cost of living for these guys is a complete non issue.  The cost of eggs and gas don't really matter at those incomes!

[MrCheatachu]

Yeah, but Minnesota doesnt have tax on clothes.  This fly outfit would have cost 6% more purchased in Florida than Minnesota...
 

[Burnt Toast]

The reason the NHL isn’t addressing the issue (which is significant) is money. If you level the cap to account for discrepancies Florida would be paying out less overall cap which the players association wouldn’t allow. If you give the tax states a higher cap those owners would be paying out more money to their players leading to less profit for the owners. That being said Florida won the cup for a lot of legitimate reasons, I don’t think the cap bump was the major factor. 

[Citizen Strife]

Win more often, then you become a destination.  Not a hard concept.

[RedLake]

I wouldn't want to come play in ultra commie lib run state.

[Fezig]

Anyone who says taxes aren't a consideration is a liar. Paying $100's of thousands more in taxes definitely outweigh the cost of living. 

[MNCountryLife]

If you are fighting to be on an NHL roster you likely don't care what the taxes are.  I think this issue becomes relevant when you start talking about the top players in the league.  Those are the players that can go to any team they want.   They can be picky.  I don't think it is a coincidence that the Lighting and Panthers are winning cups in a warm state that has loads of things to do and no taxes.

[MrCheatachu]

1 hour ago, Fezig said:

Anyone who says taxes aren't a consideration is a liar. Paying $100's of thousands more in taxes definitely outweigh the cost of living. 

It's one piece in the total compensation package.  Personally (professionally) I've lived/worked in 4 different states and have had written job offers from a number of other geographic locations.

For me, the decision has always come down to analyzing 1) how the opportunity would allow me to advance/grow my career 2) how it would impact my family, and 3) how the location would impact my quality of life outside of the job.

Marginal tax rates, and to some extent, salary compensation levels have not significantly impacted my decisions.  

You can call me a liar if you want, maybe call me stupid for 'leaving money on the table.'  Hell, I've got no clue how much I paid in state taxes last year and have not done a single analysis on how much my salary would be allowed to decrease if I were to move to a state with lower tax rates, because, frankly I do not care.

 

[MrCheatachu]

1 hour ago, MNCountryLife said:

I don't think it is a coincidence that the Lighting and Panthers are winning cups in a warm state that has loads of things to do and no taxes.

Neither team have a guy getting paid >$10M, and both have rolled out a brinks truck to their goalies (Bob $10M AAV, Vasey $9.5).

Both are hardcore in 'win-now' mode and 'mortgage the future' mode, (see: Tanner Jeanot trade).

Edmonton has been on the doorsteps of a cup for the past two seasons, which is *gasp* in Canada, however they're paying $14M for drai, $12.5 for mcjesus, and $9.25 for nurse while Stewart Skinner and Calvin Pickard make $3.6M, COMBINED.

 

[MNCountryLife]

1 hour ago, MrCheatachu said:

Neither team have a guy getting paid >$10M, and both have rolled out a brinks truck to their goalies (Bob $10M AAV, Vasey $9.5).

Doesn't it make you wonder how those teams were able to entice such great players to lower contracts.  Isn't that exactly the point.

[MrCheatachu]

1 hour ago, MNCountryLife said:

Doesn't it make you wonder how those teams were able to entice such great players to lower contracts.  Isn't that exactly the point.

What do you mean, they're 2 of the 3 top paid goalies in the league?

Are you suggesting Bob and Vasey took team friendly deals with those contracts?

[MNCountryLife]

1 hour ago, MrCheatachu said:

What do you mean, they're 2 of the 3 top paid goalies in the league?

Are you suggesting Bob and Vasey took team friendly deals with those contracts?

Sorry.  My bad.  I should have clarified the players I was talking about.  I would actually state that Barkov, Tkachuk and Ekblad were/are underpaid.  To narrow the focus let's specifically consider Barkov.  He has a 94 ranking.  That puts him right next to Matthews who has a 95.  Yet Matthews is getting a 13.5M salary.  Substantially higher.   Toronto also has loads of taxes.  Figure 15%.  Add that back in to his take home pay ($10M / .85) = 11.764M.  Since he is rated slightly lower than Matthews we could say his value in Toronto at 12M to 12.2M...roughly.  So Barkov only took a $240K to $500k cut to play for Florida and live in a warm climate and desirable location.

[SkolWild73]

40 minutes ago, MNCountryLife said:

Sorry.  My bad.  I should have clarified the players I was talking about.  I would actually state that Barkov, Tkachuk and Ekblad were/are underpaid.  To narrow the focus let's specifically consider Barkov.  He has a 94 ranking.  That puts him right next to Matthews who has a 95.  Yet Matthews is getting a 13.5M salary.  Substantially higher.   Toronto also has loads of taxes.  Figure 15%.  Add that back in to his take home pay ($10M / .85) = 11.764M.  Since he is rated slightly lower than Matthews we could say his value in Toronto at 12M to 12.2M...roughly.  So Barkov only took a $240K to $500k cut to play for Florida and live in a warm climate and desirable location.

The contracts might look underpaid today, but I don’t think they were when they were signed three to four years ago.  Even today both Barkov and Tkachuk’s contracts have them in the top 30 of all players.  

[MNCountryLife]

3 minutes ago, SkolWild73 said:

The contracts might look underpaid today, but I don’t think they were when they were signed three to four years ago.  Even today both Barkov and Tkachuk’s contracts have them in the top 30 of all players.

Austin Matthews prior contract was 5 years 11.64M/AAV. (2019 to 2023).  Still higher and not by a little considering the years gone by.  I will admit that it is quite difficult to pin things down to a pure 1 to 1 comparison.  But I think the point is made that Barkov signed a contract that was only slightly team friendly when considering the location and tax rates... yet makes a big difference for Florida in cap space for creating a deep team.

[MNCountryLife]

While I like the idea of building a team that is deep I think the Wild must recognize the tax base and location that they exist within.  We will need to pay at the higher end of contracts to entice players to play for the Wild.  That means we either have less talent at the top of our roster... or less talent at the bottom of the roster.  I would choose the latter and try to bring in top end talent for the 1st two lines and back fill with low contracts and ELC players.  Similar to what Edmonton did.

Edited Thursday at 09:40 PM by MNCountryLife

[mnfaninnc]

While I appreciate Mr. Cheatatu's comment on motivation of where to work, I'm guessing that his salary isn't an NHL star's salary. If it is, kudos.

Bekki did a real nice job with this, and without saying it, she showed us the tax difference in Florida vs. Minnesota. Kaprizov's contract is roughly 10% of the cap. Move that decimal one more space to the right and we have the answer: Take home pay for the Panthers is an extra $8-9m to work with. They probably won't get that with one player, but having a couple of other players in the $4-4.5m range gives a significant advantage to the non-state income tax teams. 

That is organizational depth. How much does 2 average $4-4.5m players add to points above replacement? That's the regular season. And Shooter has a bottom 6 group of guys getting paid like they're in FL. Yes, the Wild will need to use ELCs and bridge deals to make up the difference and then sign their guys long term. 

If you're a marketing guy, how do you market Minnesota? Florida's not hard to market to any of the players. TN isn't hard either. Vegas, not hard. Dallas, a little harder. And remember, nobody has to stay in FL for the summers, they can all have 2nd homes up north, or be visiting Sweden/Finland if they're from there. Cost of living for these salaries is negligible. How do you market MN for free agents?

 

[Fezig]

19 hours ago, MrCheatachu said:

It's one piece in the total compensation package.  Personally (professionally) I've lived/worked in 4 different states and have had written job offers from a number of other geographic locations.

For me, the decision has always come down to analyzing 1) how the opportunity would allow me to advance/grow my career 2) how it would impact my family, and 3) how the location would impact my quality of life outside of the job.

Marginal tax rates, and to some extent, salary compensation levels have not significantly impacted my decisions.  

You can call me a liar if you want, maybe call me stupid for 'leaving money on the table.'  Hell, I've got no clue how much I paid in state taxes last year and have not done a single analysis on how much my salary would be allowed to decrease if I were to move to a state with lower tax rates, because, frankly I do not care.

 

I won't call you a liar.  I will say there are exceptions to every rule. I will add that four or five figures in taxes is significantly different than six figures. Additionally, you didn't have to also pay your agent a percentage of your contract. 

[MNCountryLife]

10 hours ago, mnfaninnc said:

If you're a marketing guy, how do you market Minnesota?

I agree with your entire post!!  Numbers matter.

I'm not sure Minnesota can win on marketing.  Perhaps they could level the playing field a bit.  Minnesota is a professional 4 sport location.  We can advertise that there are things to do.  But our biggest marketing win... Minnesota is a hockey state that packs the arena.  I would definitely market our state hockey culture.  

We could also win by having the best feeder system in the NHL.  The IA Wild currently do not meet expectations here.

[MrCheatachu]

11 hours ago, mnfaninnc said:

While I appreciate Mr. Cheatatu's comment on motivation of where to work, I'm guessing that his salary isn't an NHL star's salary. If it is, kudos.

Bekki did a real nice job with this, and without saying it, she showed us the tax difference in Florida vs. Minnesota. Kaprizov's contract is roughly 10% of the cap. Move that decimal one more space to the right and we have the answer: Take home pay for the Panthers is an extra $8-9m to work with. They probably won't get that with one player, but having a couple of other players in the $4-4.5m range gives a significant advantage to the non-state income tax teams. 

That is organizational depth. How much does 2 average $4-4.5m players add to points above replacement? That's the regular season. And Shooter has a bottom 6 group of guys getting paid like they're in FL. Yes, the Wild will need to use ELCs and bridge deals to make up the difference and then sign their guys long term. 

If you're a marketing guy, how do you market Minnesota? Florida's not hard to market to any of the players. TN isn't hard either. Vegas, not hard. Dallas, a little harder. And remember, nobody has to stay in FL for the summers, they can all have 2nd homes up north, or be visiting Sweden/Finland if they're from there. Cost of living for these salaries is negligible. How do you market MN for free agents?

There's also the playoff bonus to consider.  Getting bounced in the first round of the playoffs your bonus is ~$18k, winning the cup ~$300k.  For the $3M guy you're talking about, that bonus could be roughly 10% of the salary.

Also, residency matters to get the tax benefits.  If you consider 41 road games + 30 travel days you're already at 71 of the 183 days you'd be allowed to be out of state to claim residency.  NHL regular season is roughly 150 calendar days long which means about 50% of your offseason must be spent in that state, so players cant 100% run off from TX/FL/TN.  Besides, maintaining two residencies seems like a huge hurdle to avoid a small amount of state taxes.

It's more complex than just looking at the marginal tax rates.  Puckpedia (which links to the same cardinalpointe calculator the article did) explains some of the assumptions and accuracy of that calculator, namely the calculator does not account for taxes owed for road games:

https://puckpedia.com/news/understanding-how-nhl-players-are-taxed

A few salient points:

Quote

• The calculator does not factor in the proportion of income taxed at different rates based on where games are played. For instance, a player on the Calgary Flames may earn part of their income in lower-tax Alberta but still owe U.S. taxes for road games.

• Playoff games are often overlooked in tax discussions. While players don’t receive salaries for postseason games, bonuses for winning a Stanley Cup or advancing in the playoffs are fully taxable based on where the games are played.

  Example: A player earning a playoff bonus for winning a series in New York will owe state taxes there, even if they reside in a no-income-tax state like Florida.

• Tax residency plays a crucial role in determining overall tax liability. Players with homes in multiple jurisdictions may strategically claim residency in lower-tax areas, but this must be backed up with substantial evidence (e.g., time spent, voting registration, or driver’s licenses).

• The Bottom Line

  NHL players face a maze of tax rules that go far beyond the gross paycheck numbers fans see. Between duty days, jock taxes, foreign tax credits, and differing provincial and state rates, the reality is that no two players’ tax situations are the same. While our NHL tax calculator provides a robust framework for estimating take-home pay, the nuances of endorsements, deductions, and personal residency decisions mean that individual circumstances can vary widely. Understanding these complexities not only sheds light on the financial realities of professional hockey but also gives fans a new appreciation for the business side of the game. As the saying goes, "It’s not what you make, it’s what you keep”, and for NHL players, keeping more of their hard-earned money requires careful planning and expert advice.

 

[mnfaninnc]

17 minutes ago, MrCheatachu said:

As the saying goes, "It’s not what you make, it’s what you keep”, and for NHL players, keeping more of their hard-earned money requires careful planning and expert advice.

This was why I thought it was a bigger deal. For Kaprizov, keeping an extra $800+k is probably a pretty big deal. Even if he just throws it into an investment making 5%, that will grow by the time he's done playing.

My assumption was that Bekki's numbers were accurate. I realize it doesn't take into consideration Property Taxes, Sales Taxes and other things like Insurance. But I did assume that her numbers were on target for state income tax, in that she took the salary, divided it in half and took the average state income tax in franchise states for the other half, pretty much like everyone has to pay regardless. NY teams and CA teams pretty much offset each other.

Playoffs are a completely different animal and not even notated in the equation, but you would figure that even at minimum, the hockey player's salary is likely in the top earner bracket of a progressive tax structure. There are other investments that probably also affect the taxes, and I'll agree with any endorsements affecting it. 

And, yes, for everyone else, I do believe that the "contending" situation plays a large role in the signing. Does that mean that you have to have a core of players that become good together that you drafted? I think it does, since there's likely a cycle for every franchise. We do know that part of the Parise/Suter contracts was to change this franchise into a destination place. To some extent it worked. Now we've got to re-establish that, and I think playing with Kaprizov is one marketing tool. Keeping him on the team has a residual affect with other players desire to come. I think that's one big reason that Edmonton can overcome it's deficiencies. 

Taxes aren't everything, money isn't everything, there are other factors. For the southern teams, though, that don't have blizzards in March, and don't have state income taxes, there is a compelling reason to choose them as a destination. 

I do think you can market the state to more mature guys who are starting a family and may want their sons in an excellent hockey program. My opinion is that MN is a good place to raise a family (though I haven't been there in awhile to verify that). I'd think having personal privacy, being able to live kind of rural, yet close to the rink is a perk, and having a full building in that atmosphere is compelling. But for it to really work, having a good, young, talented core is probably the best reason.