FORT LAUDERDALE, Fla. — The Florida Panthers` deep playoff run, culminating in their appearance in the Stanley Cup Final, has once again brought the debate over state income taxes into focus. If they win, the Panthers would be the fifth team in the last six years to claim the championship from a U.S. state that does not impose an income tax.
While many successful playoff contenders hail from warmer “Sun Belt” regions, the financial implication of no state income tax is often cited as a significant advantage in attracting and keeping players. However, opinions within the league differ on how impactful this benefit truly is.
Florida General Manager Bill Zito downplays the tax factor, calling it “marginal at best.” He argues that the primary reasons for the team`s success are efforts to build a winning culture, strong ownership support, and the guidance of head coach Paul Maurice. Zito acknowledges that the desirable environment of South Florida—offering pleasant weather and being a good place for families and individuals alike—is certainly a positive draw, but not necessarily the main driver.
NHL Commissioner Gary Bettman expressed his dislike for the tax discussion before the final, stating he “hates the issue.” This sentiment was clear during a recent TNT broadcast where former player Paul Bissonnette suggested addressing tax disparities in the next Collective Bargaining Agreement. Bettman quickly dismissed the idea as “ridiculous,” questioning if the league should then subsidize teams in high-tax markets like New York and Los Angeles.
The NHL tax landscape
Currently, six of the 32 NHL teams are located in states with no state income tax: the Florida Panthers, Tampa Bay Lightning, Vegas Golden Knights, Dallas Stars, Nashville Predators, and Seattle Kraken. Deputy Commissioner Bill Daly confirms that while some franchises have raised concerns about this imbalance, the league doesn`t view it as a major problem.
Daly points out that “These imbalances have existed forever,” and a player`s decision on where to play is influenced by numerous factors beyond taxes, including team fit, coaching, and location.
The NHL Players` Association also appears to agree that no specific negotiation is needed in the upcoming CBA to address varying tax rates. Ron Hainsey, NHLPA assistant executive director and a veteran of 17 seasons with seven different teams, finds the intensity of the debate surprising. He notes that the argument loses some weight when considering past Cup champions like Detroit, Chicago, Los Angeles, and Pittsburgh over the preceding decade, which were not in no-tax states.
“To react this way out there because Florida and Tampa are having their moment here where they have the players, good teams, took less to stay — it’s the same thing that’s happened the previous 12 years with all these other things. So, when we talk about, is it really an issue, I’m not certain that it is,” Hainsey commented. He also highlighted that this issue doesn`t seem to dominate discussions in the NFL and NBA, although hockey salaries still lag behind those sports, despite the NHL salary cap increasing due to rising revenues.
However, Alan Pogroszewski, a consultant who has advised players on tax matters for over ten years, believes a tax advantage does exist. His research indicates that since 2016, teams in no-state-income-tax locations have qualified for the playoffs at a higher rate, suggesting an “innate-built-in tax advantage.”
“It’s a combination of many things,” Pogroszewski stated, acknowledging other factors are involved. “There’s more factors than just the amount of money that’s spent. It’s how it’s spent. But when you come into an equal playing field and your dollar’s worth more, then that allows you some leeway.”
What do players think?
Brad Marchand, a Canadian player who spent many years in Boston before being traded to Florida, does see taxes as a relevant consideration for players deciding where to sign.
“The Canadian teams, most of them have an extremely high tax rate, and then the California teams, same thing: Those teams are going to have to pay more money to get certain players than others,” Marchand explained. “When you look at a team like Montreal, what are they 52, 54 per cent? Versus a team like here or Dallas or whatever. That’s a 15 per cent difference. When you add that up, it’s a tremendous amount of money.”
Naturally, financial gain is not the sole motivator. The recent successes of Florida, Tampa Bay, Vegas, and Dallas are also directly tied to the skills of their respective general managers — Bill Zito, Julien BriseBois, Kelly McCrimmon, and Jim Nill — in evaluating talent and managing the salary cap effectively.
Other factors include lifestyle benefits like the ability to golf in the winter. Some players prefer the lower profile of smaller markets, while others are drawn to cities with passionate fanbases where hockey is a dominant sport.
The Edmonton Oilers, who are in the final for a second consecutive year, exemplify a high-tax market that achieves success due to immense fan passion and other appealing aspects.
Oilers forward Evander Kane, who has played in various markets, praised Edmonton: “The passion obviously that this fanbase has for their team is incredible. Once you actually get here and get to know your way around the city a little bit more, you realize there’s actually quite a bit to do and it is a good spot for families and they have great summers.”
Although NHL players in Canada are paid in U.S. dollars, which offers some tax relief via exchange rates compared to being paid in Canadian dollars, high living costs and taxes on consumption and assets in Canada can still significantly impact a player`s net worth over time.
“It helps while you’re there, but also the living costs in Canada are extremely high, too, because you’re taxed through the roof on everything: what you buy, what you sell, what you make,” Marchand noted. “So, yes, at the time, the costs are a little bit different but not much, and then when you move back, you have 20, 30 per cent less money, so it absolutely plays a part.”
Tristan Blackwood