TOPEKA, Kan. Kansas lawmakers trying attract the Kansas City Chiefs to their state argue that helping the Super Bowl champions build a new stadium could earn Kansas millions of dollars in income taxes from players and coaches, which are currently going to Missouri.
Some economists doubt that the new revenue from “sports taxes” will be significant for Kansas, and a debate over the issue has emerged ahead of a special session of the Kansas Legislature scheduled for Tuesday. Lawmakers hope to consider a plan to authorize state bonds to help professional baseball’s Chiefs and Kansas City Royals finance new stadiums on the Kansas side of its metropolitan area, which is divided by the Missouri border.
Professional athletes and touring artists pay income tax not only in their home states, but also in other states where they perform, if those states charge income tax. For athletes, Kansas taxes a percentage of their income based on how many games they play in the state — so if a visiting minor league player plays 12 of his team’s 120 games each season in Wichita, 10 percent of your income will be taxed.
Economists who have studied professional sports teams for decades have concluded that subsidizing their stadiums not worth the cost for their communities. But advocates of bringing the Chiefs and Royals to Kansas believe that skepticism does not adequately consider the taxes that come from the big incomes of top professional players.
“The 53 players are making approximately $250 million, and that amount continues to rise, and that does not include any of the executives, the coaching staff or the rest of the team,” Chiefs attorney Korb Maxell told lawmakers during an informational hearing on Monday at the Statehouse. “You have all the other visiting teams that come and always pay those taxes too.”
Kansas already collects some income taxes from professional athletes, although the state Department of Revenue does not have numbers. The state is home to NASCAR’s Kansas Speedway, professional football’s Sporting KC, and several minor league baseball and hockey teams.
Missouri is home to the Chiefs, the Royals, the St. Louis Blues of Major League Baseball and the St. Louis Blues of the National Hockey League, as well as two minor league baseball teams.
Missouri collected nearly $34 million in income taxes from professional athletes during the current budget year that began July 1, a 9% increase over the $31 million collected the previous year, according to the state. However, during the current budget year, when the Chiefs won their third Super Bowl in five years, football players’ taxes increased 39%, from about $14 million to $19 million.
It’s unclear how much of Missouri’s revenue would go to Kansas if its lawmakers manage to attract the Chiefs, the Royals or both.
Geoffrey Propheter, an associate professor of public affairs at the University of Colorado Denver who regularly publishes articles on sports economics, predicted the value to the Chiefs would be “trivial,” just a few million dollars, even if they also moved their practice facilities to Kansas.
He also said lawmakers should consider additional issues that come with a new stadium, such as traffic congestion, light pollution and how rising property values make housing less affordable for local residents.
“On the Kansas side of the river, they have access to the team without paying the cost,” he said. “That’s a fantastic situation to be in.”
Others’ numbers for potential new income tax revenue are millions of dollars higher.
One potential question is whether the Kansas government could withstand a court challenge. Edward Zelinsky, a professor at Yeshiva University’s Cardozo School of Law in New York City, said these rules unfairly burden athletes.
An expert in tax law, he is familiar with how states tax visiting athletes. In the 1990s, Zelinsky challenged a New York rule like Kansas’s because New York taxed all of his income even though he worked primarily from home in Connecticut. He lost, but in 2015, the Ohio Supreme Court ruled that visiting athletes should be taxed based on the total number of workdays they spend in the state — in this case, two out of 157 — rather than the games played there, a percentage bigger. .
Zelinsky said stadium supporters might argue that being able to tax athletes’ income is a benefit, but it doesn’t boost the economy surrounding the venue.
“It will be a good change, but I wouldn’t use it to control the debate,” Zelinsky said.
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Associated Press writer Summer Ballentine in Columbia, Missouri, contributed to this story.
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