D.C. Councilmen Jack Evans and Harry Thomas Jr. have proposed a bill that would tax the income of the District's nonresident professional athletes, estimating it could be a $5 million annual boon to the city.
Known as a "jock tax," the practice was first used by California in 1991 when it decided to tax Michael Jordon and the Chicago Bulls after the Los Angeles Lakers lost to Chi-town in that year's NBA finals.
The tax targets athletes because it's generally too cumbersome for a state to track all the intermittent business done within its borders. But athletes' salaries — at least the high-profile ones — are well-known and their business (season schedules) is public record. However, states have been known to extend the tax to visiting musicians, lawyers and touring skateboarders.
The District is currently prohibited from taxing nonresidents thanks to the 1973 Home Rule Act, which requires approval from Congress to tax nonresidents. But The Washington Times quotes Evans as saying the D.C. Council could adopt a nonbinding “sense of the council” resolution and city lawmakers could ask D.C. Delegate Eleanor Holmes Norton to introduce a bill in Congress that amends the nonresident section of the tax code to say “except for professional athletes."
But critics of the jock tax, most notably the Tax Foundation, say the practice is poorly targeted, arbitrary in enforcement and imposes "an unrealistic administrative burden by forcing traveling professionals to file potentially dozens of state and local income tax returns annually."
But Thomas says the current scenario has the District losing out twice.
"The District loses income tax revenue from nonresident athletes who visit, but also from the District's own athletes whose incomes are taxed by other states, and thus have their District liabilities reduced due to prohibitions on double taxation," he said in a news release.