The following is a guest post by Jason Hershman, founder and part-time CFO of Point Company. The views expressed are solely those of the author.

In February 2026, Seattle Seahawks quarterback Sam Darnold lifted the Lombardi Trophy after defeating the New England Patriots in the Super Bowl at Levi's Stadium in Santa Clara. However, California's "thank-you note" arrived in the form of a $249,000 tax bill.

You may have seen the buzz: "Darnold loses $71,000 for winning the Super Bowl," "California's tax policy is a disaster!" and comments from commentators like Boomer Esiason calling on the NFLPA to boycott California Super Bowls, along with coverage from outlets like Forbes. The problem is that these claims are only partially true.

The reality is that the NFL paid each winning player $178,000. Under California's "jock tax" rules, the state allocated Darnold's average annual salary of $33.5 million across 8 duty days (the time the Seahawks spent in California preparing for the Super Bowl), applied a 13.3% rate, and the resulting state tax bill exceeded that bonus by about $71,000.

Two numbers, stripped of context, went viral. What wasn't shared: the $2.5 million Super Bowl victory bonus in his contract and the $4 million in performance and playoff bonuses he earned during the postseason. Comparing one bonus against one tax liability and calling it a loss is absurd in our view.

So, I dug into the "jock tax" and the truth behind it. Sports is just the hook; this is really a cross-state payroll taxation issue with roots going back decades, and every CFO should understand it.

The history of the "jock tax": It didn't start with Darnold

The "jock tax" didn't start with Sam Darnold, or even in 1991, although that's when most people began learning about it. California has been taxing non-resident athletes since the late 1960s. In 1976, San Diego Chargers kicker Dennis Partee challenged the practice in an appeal. New York and Wisconsin followed suit before the end of the 1980s.

But the catalyst for the national chain reaction was Michael Jordan. After the Bulls defeated the Lakers in the 1991 NBA Finals, the California Franchise Tax Board sent tax bills to Jordan and his teammates for income earned while in California. Illinois retaliated with the "Michael Jordan Revenge" law, targeting visiting athletes from any state that taxed Illinois players.

Eventually, every state with a personal income tax and a professional sports team followed suit. Today, NFL players file 8 to 12 state tax returns per season, NBA players 16 to 20, and MLB players up to 25.

How the "jock tax" works

The concept of the "jock tax" is simple, but compliance is not. Every state with a personal income tax wants a piece of athletes' compensation, and the key metric is "duty days." Most states use the same basic formula: (duty days in the state ÷ total duty days) × total compensation = taxable income in that state.

For example, a player with a $10 million annual salary and 200 total duty days, 10 of which are in California, would owe California tax on $500,000. At California's top rate of 13.3%, that's $66,500 in taxes for about a week and a half of work. "Total compensation" includes salary, game bonuses, and performance bonuses. Endorsement income is typically excluded because it isn't tied to on-field services in a specific state.

The formula seems clear, but states define "duty days" differently. California counts every duty day from preseason through the playoffs; New York includes coaches and trainers under 20 NYCRR §132.22; Illinois explicitly lists game days, practice days, and team travel days in its statutes; Ohio had to overhaul its approach in 2015 after the state supreme court ruled its games-only method unconstitutional.

Some states also define duty days differently for playoffs versus the regular season. A few states have reciprocity agreements to reduce double taxation, but most do not.

The rate map: Wide disparities

State tax rates vary dramatically. California tops the list at 13.3% (plus a 1.3% state disability insurance tax), New York is at 10.9%, New Jersey at 10.75%, Massachusetts imposes a 9% rate on income over $1 million, Illinois has a flat 4.95%, and Pennsylvania a flat 3.07% on all wages. Florida and Texas, meanwhile, have no state income tax, and Washington, D.C., cannot tax non-residents at all.

However, state taxes are only part of the story. Many cities also want a cut: Philadelphia imposes a 3.44% local wage tax on non-residents; Detroit adds a 2.4% city tax on top of Michigan's 4.25% state rate; Pittsburgh tried to impose a 3% facility fee on visiting players, but it was struck down by a court in 2025. No wonder many athletes choose to live in zero-tax states.

Three real-world scenarios: The numbers speak

The duty-day formula is simple, but the resulting tax bills can reach six or even seven figures. I calculated three scenarios to show the scale of the "jock tax."

Scenario 1: Dak Prescott— Dallas Cowboys quarterback with an average annual contract value of $60 million. The Cowboys play home games in Texas, which has no state income tax. But once they hit high-tax states, things change. Take an away game against the New York Giants (at MetLife Stadium in New Jersey): Prescott flies in, practices, plays on Sunday, and returns—about 3 duty days (out of roughly 200 total). New Jersey determines that 1.5% of his annual income (about $900,000) is taxable in the state, and at the top rate of 10.75%, he owes about $96,750—for just one road trip.

Scenario 2: A minimum-salary rookie— An undrafted rookie for the Miami Dolphins at the 2025 league minimum of $840,000. Florida has no state income tax, but on an away game against the Los Angeles Rams, the team flies in on Friday, plays on Sunday, and returns—about 3 duty days. California determines that 1.5% of his annual income (about $12,600) is taxable, and after California's rate and SDI, the total bill is around $1,500 to $1,700. It's not a huge amount, but given his pre-tax income, agent fees, and union dues, every dollar counts. Over a full season with 8-9 road games in high-tax states, a minimum-salary player could lose $10,000 to $15,000.

Scenario 3: The Darnold case— Darnold signed a three-year, $105 million deal with Seattle, averaging about $35 million annually (including base salary and prorated signing bonus). The Seahawks arrived in California a week early, and with travel, media activities, practices, and the game, Darnold had 8 duty days (out of roughly 160 total). California determined that 5% of his annual income (about $1.875 million) was taxable, and at the top rate of 13.3%, the bill came to about $249,000. The NFL paid him $178,000 for the win, but adding the $2.5 million Super Bowl victory bonus in his contract, he received $2.678 million total. After subtracting the $249,000 tax bill, he still netted about $2.4 million. The "$71,000 loss" claim only compared the league bonus to the tax bill, ignoring all other income.

Compliance advice for CFOs

I can teach you the duty-day formula in 30 seconds, but implementing it across 53 players, 17 games (excluding playoffs), and more than twenty tax jurisdictions is a completely different matter. Here are practical steps finance teams should take:

  • Establish a duty-day log before training camp, not after tax season:Starting in July, record travel days, practices, and team meetings for every employee on the roster. Don't wait until a week before the filing deadline to reconstruct everything from old itineraries and hotel bills.
  • Automate withholding, or pay for tax experts:With more than twenty jurisdictions, different rates, rules, and definitions of "duty days," any spreadsheet will break down. Choose a payroll provider that specializes in athlete or entertainment withholding; the cost is far less than the price of a mistake.
  • File composite returns where possible:New York and Pennsylvania allow group filings, consolidating individual non-resident returns into one, reducing the number of filings and errors.
  • Treat city taxes as a separate issue:Philadelphia's 3.44% non-resident wage tax and Detroit's 2.4% city tax don't disappear just because you've filed state taxes. Ignore local taxes, and the city will come knocking eventually.
  • Run exposure scenario analyses before the season starts:Look at the schedule, map each away game to its tax jurisdiction, and model the withholding impact across the entire roster. A CFO who discovers a seven-figure compliance gap in March could have avoided it all season.

Conclusion: Winning isn't tax-free

The "jock tax" isn't going away. Every state with a personal income tax and a professional sports team sees visiting athletes as a revenue source, and that reality won't change because of Boomer Esiason's radio rants. The problem was never the tax itself; it was lazy math and lazier headlines. Sam Darnold didn't lose money by winning the Super Bowl; he made millions. Someone just picked two numbers from his ledger and called it a loss.

In my view, the "jock tax" is a fixed cost of running a travel business. You need to budget for it, track it, and build systems before the season starts. The teams and players who get burned are the ones who treat it as a surprise every offseason. Track your duty days, automate withholding, simulate exposure before the season, and then go win your games.