In Edmonton, officials from the NHL and NHLPA, who are currently negotiating a new collective bargaining agreement, consider the state income tax issue to be minor. This topic has been “raised by some franchises as a concern,” according to NHL Deputy Commissioner Bill Daly.
Speaking on Wednesday evening before the opening of the sixth consecutive Stanley Cup Final featuring a team from a state with no income tax, Daly acknowledged the concern but stated the league doesn`t “share the level of concern that they have.”
Daly explained that these differences have always been present and are nothing new. He highlighted that players choose where to play based on many factors, such as the team, coach, or location, which are unrelated to local taxes. Therefore, he doesn`t anticipate this topic being proactively addressed as part of the collective bargaining negotiation.
The recent success of teams from tax-free states has fueled the debate. The Florida Panthers (following the Tampa Bay Lightning), both from tax-free Florida, have reached the final three consecutive times. The Vegas Golden Knights, from tax-free Nevada, have also been to three finals since their inception in 2017-18. This has led to complaints of unfairness from general managers and fans in areas with higher taxes.
Ron Hainsey, the NHLPA assistant executive director, expressed his bewilderment that state tax rates have become such a significant point of discussion.
Hainsey recalled the period from 2008 to 2020, noting the dominance of teams like Pittsburgh, Chicago, Los Angeles, Detroit, and Boston. He pointed out that players like Brad Marchand, Patrice Bergeron, and Zdeno Chara in Boston or Sidney Crosby, Evgeni Malkin, and Kris Letang in Pittsburgh could have earned more money elsewhere but chose to stay with their successful teams.
He attributed these decisions to having a strong team, liking the city, and not wanting to relocate. He contrasted this with the current focus on Florida`s tax situation. Hainsey suggested that after 12 years of dominance by teams in different tax situations, followed by six years of Tampa Bay and Florida reaching the final, perhaps more time is needed to see if there`s a real issue.
Panthers GM Bill Zito emphasized that winning championships isn`t merely about free agents accepting lower salaries for tax benefits. He stressed the importance of dedicated ownership, building a winning and inclusive team culture, and addressing team needs through trades.
Zito stated that the tax factor is “marginal at best.”
Incorporating a clause for state and provincial taxes into the salary cap system would be complex. Additionally, the cost of living varies significantly across NHL cities. The situation of Canadian players earning U.S. dollars but spending in Canadian currency also presents a unique factor.
The question is raised whether the issue of states without income tax providing an unfair advantage is being exaggerated.
Panthers defenseman Seth Jones acknowledged that players appreciate larger paychecks, which might be partly influenced by taxes. However, he suggested this is just the current trend and could change, viewing it as simply a “wave.”
Jones also pointed out that successful teams have drafted effectively, and many players have spent their entire careers with those teams. He wondered if the tax issue was being overanalyzed.
Hainsey confirmed the players` association discusses the topic occasionally but strongly believes it is being given undue importance.
He argued that complaining about the current success of Florida and Tampa Bay, where skilled players chose to stay with competitive teams, is an overreaction.
Hainsey reiterated that the situation is similar to what happened with other successful teams over the preceding 12 years. He questioned whether it`s a genuine issue now and suggested that Florida and Tampa Bay`s period of dominance is part of a natural cycle and won`t last forever.
