NFL vs. Cleveland Tax Authorities: 3rd Down

Mar 11th 2014
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By now, it’s pretty clear that it’s not about the money for former NFL players Hunter Hillenmeyer and Jeff Saturday.

After tax authorities in Cleveland, Ohio, applied what the athletes said was unfair taxation methods to their incomes, both men sued in separate but similar cases. Hillenmeyer and Saturday want to call attention to the fact that Cleveland taxes visiting athletes at a higher rate than it taxes other individuals who travel to Cleveland to earn money. They're throwing some light on a complex and controversial tax situation.

Recap of the Tax Applied
Most tax jurisdictions across the nation, including Ohio, use a tax allocation method known as “duty days.” Cleveland, on the other hand, taxes incomes based on the number of games played in that city, a method which results in a much higher tax bill. (More details are available in a previous AccountingWEB article and in a pair of articles published by the New York State Society of CPAs.)

The city, and then the court, said the tax was reasonable. After losing their original cases, Hillenmeyer and Saturday went to the Ohio Board of Appeals, asking for justice. In January, the appeals court also ruled against the athletes.

What’s Next?
Now, with what they perceive as tax fairness at stake, Hillenmeyer and Saturday are going to the next round – taking their cases to the Ohio State Supreme Court. (Cases that are lost in the Ohio Board of Appeals are automatically accepted by the state Supreme Court.)

Some critics have said the men were highly paid during their football careers and should drop it and pay “their fair share,” rather than wasting court time over a few thousand dollars. But Hillenmeyer and Saturday have their sites on a bigger goal.

Going forward, they want to see Cleveland tax visiting athletes the same way it taxes anyone else, regardless of profession. If that happens, Cleveland would stand to lose roughly a million dollars a year in tax revenue. With states and municipalities across the nation searching for ways to increase tax revenue, it’s unlikely Cleveland will give up without continuing the fight.

Related articles:

Ohio Board of Tax Appeals Says No Relief for Two Former NFL Players
NFL Players Call Personal Tax Foul on Cleveland


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