DC Set to Fail in Its Jock Tax Implementation Attempt

The council of the District of Columbia has placed a proposal to have the controversial jock tax apply in the state and thereby joining other states that levy this tax. The implementation of this tax is expected to raise $5 million annually according to the state’s office of the Chief Financial Officer. The proponents, including the chair of the state’s Finance and Revenue Committee, Councilman Jack Evans and Councilman Tommy Thomas, Jr. are keen at having the tax implemented to boost the revenues of this capital state.

What is the Jock Tax?

The jock tax is an informal description of tax levied on a city’s or state’s visitors who make some income while in the jurisdiction. However, since the determination and charging of such taxes can proof to be an uneconomical affair, the tax authorities normally just target the high profile, wealthy personalities whose income and work schedule is public. The obvious target for this jock tax is the professional athletes. The tax has been in place for about 40 years now. However, the tax took momentum after the California and Illinois Jock tax incidence in 1991. In this year, California levied a jock tax on Michael Jordan and Chicago Bulls players after they won Lakers in an NBA championship game. Following this successful tax decision, many of US states and cities decided to implement the jock tax. However, owing to various political and legal challenges, D.C. has never managed to implement this tax. However, the proposal to have this tax in the District of Columbia is now underway and tax advisers are watching to see how this plays out.

Challenge on the DC Jock Tax Implementation

Some of the huddles that the tax proponents Tax Advisors are expected to face include the Home Rule Act of 1973. According to this Act, D.C is not permitted to levy taxes on non residents. However, the proponents are seeking to have D.C. Delegate Eleanor Norton introduce an amendment bill that will seek to exempt professional athletes to this Home Rule Act. If this is pulled through, the council will stand a chance to have the tax implemented in D.C.. However, the big question is whether the Representatives and Senators will pass this amendment. Many of these lawmakers have home teams that play in D.C. and this may keep them from voting favorably. Besides this, tax advisors see a hindrance playing out from jock tax opponents, the usual politics and the invisible hand of the rich team owners and thereby shooting down this bill. This not to mention that Congress has a lot of sports fans!

Critique on Jock Tax

There has been a lot of criticism on the jock tax. According to the Tax Foundation, the tax is both arbitrary and poorly targeted. Furthermore, players pay taxes in jurisdictions that they do not have representation in and thus, violating the principle of “no taxation without representation.” Besides this, the tax is also imposed on home team players who live in neighboring states such as Maryland and Virginia in the case of D.C.