Professional Privilege Tax for Athletes

Public Chapter 760 eliminated the professional privilege tax on National Hockey League ("NHL") players, beginning for regular season games played in Tennessee after April 24, 2014.  For National Basketball Association ("NBA") players, the professional privilege tax is eliminated for regular season games played in Tennessee after June 1, 2016.  

Until June 1, 2016, professional basketball players in the NBA are subject to the professional privilege tax.  This applies to any player who is employed by an NBA team for more than 15 days during the tax year (June 1 through May 31) and is on that team’s active roster for any regular season game played in Tennessee.  It does not matter if the athlete actually participates in the game.  

The tax is $2,500 per game, up to a maximum of three games per annual tax period.  In other words, the maximum amount an individual player can be taxed per year is $7,500 ($2,500 x three games).  Teams should determine the method of collecting the tax from their players who owe the tax.  The team must then submit a tax return with payment to the Department.  All tax returns and payments are due by June 1 of each year.  However, a team may file and pay more frequently during the tax year if it chooses to do so (e.g., following each game or at the end of each month).  Adequate records must be maintained by each team to verify proper payment has been made for all players subject to the tax.  See important notice:  Oct. 2009 - Professional Privilege Tax for Professional Athletes (09-13)