How hidden tax tricks could cost Stamkos if he signs with Toronto
When it comes to signing players to blockbuster contracts, usually any discussion about the monetary value of the contract revolves around how much the player is worth, how long the contract lasts and which bonuses the player could accrue. But a recent story by the Tampa Bay Times proved that for Steven Stamkos, taxes could play a large role in determining where he might be best off signing from a financial standpoint.
On Saturday, SportsNet reported that the Lightning offered an eight-year, $68 million deal to Stamkos, a term which looked cheap compared to Los Angeles Kings center Anze Kopitar's new eight-year, $80 million deal. But as the Tampa Bay Times reported in a compelling story Monday, federal and state taxes would make the net total of those deals fairly comparable, as California has a 13.3 percent state tax rate whereas Florida has no state income tax. Taxes also mean Stamkos could lose out on money should he sign a deal for the exact same terms in Toronto as the one offered to him in Tampa.
Via the Tampa Bay Times:
In Toronto, Stamkos' hometown, there's a proposed 53.53 percent federal/provincial tax if he's a Canadian resident. So even if the Maple Leafs offer $10 million annually, Stamkos would net $7 million less total over the length of the deal compared one at $8.5 million annually in Tampa Bay, partly thanks to an eighth year. Stamkos would even make just $1.4 million less total than Kopitar over his eight-year deal with the Kings, assuming Kopitar is a California resident.
Of course for a player like Stamkos, there are other factors in play aside from just the money. Perhaps he does want to return to his hometown or try to lead the Maple Leafs to their first Stanley Cup championship since 1967. Or perhaps Stamkos truly wants to stay in Tampa, where he has played his entire NHL career thus far.
There was no confirmation from the Lightning or Stamkos's camp that the contract terms reported by SportsNet are accurate, so this is all still speculation, but the story from the Times adds another element into the discussion about what a fair offer from Tampa for Stamkos would be. Maybe $68 million for one of the game's biggest stars in a state with no state income tax isn't such a bad deal after all.
Arielle Aronson writes about the NHL for FOX Sports. You can follow her on Twitter @aharonson28.
