Cleveland’s “Jock Tax” Under Scrutiny

Several professional athletes have questioned the method that the city of Cleveland is using to tax their income earned when working for short periods of time in the city.  On Thursday, April 30th, the Ohio Supreme Court ruled that the method is unconstitutional because it violates athletes’ due process rights.

Hunter Hillenmeyer, formerly of the Chicago Bears, is due a partial refund because the city unfairly imposed a 2 percent tax on his income based on games played in the city as a percent of total games played.  Cleveland uses a games-played method which treats professional athletes salaries as earned only when playing games even through they are also being paid to attend training camps, practices and team meetings.  The method used by most cities takes into consideration the days spent in a city compared to the total days in the season.  For example, a visiting football player who spent 2 days in a city for a 160 day season would be taxed on 1.25% of his salary.  Per Cleveland’s method, 5% of the total salary would be taxed by the city because a player played 1 game out of a 20 game season in Cleveland (16 regular season and 4 preseason games).

Sport leagues including the NBA, NFL and NHL disagree with the law because they feel that athletes are being taxed unfairly.  Cleveland’s defense of their method was that they believe they are taxing athletes on what they are primarily paid to do, which is to play games, but their argument didn’t stop the method from being ruled as unconstitutional.    Cleveland spokesman Daniel Bell said that the city will look further into how the decision will affect the city’s economy.