Professional athletes have an incentive to play in US states like Florida and Tennessee, and it’s not for the proximity to Disney World or Dollywood. They are among the states without income taxes—meaning those huge contracts are worth even more there than in other states.
For example: Mikko Rantanen spent the first 10 years of a very successful NHL career with the Colorado Avalanche and enjoyed the state’s flat 4.4% income tax rate. In January 2025, he was traded to the (North) Carolina Hurricanes, which had a similar flat tax rate of 4.25%. Three months later, he was traded again, this time to the Dallas Stars, where he immediately signed an eight-year, $96 million extension to play in the income tax-free land of Texas, after turning down similar offers from his previous two employers.
While Rantanen never publicly cited the extra ~$4 million he will make over the life of the deal by playing in Texas instead of Colorado or North Carolina as a motivator, other players have vocalized the draw of states without income taxes:
NBA player Grant Williams left Boston and signed a $54 million contract with Dallas in 2023. Not only does Massachusetts have a 5% state tax, but the state also passed a law in 2022 that adds a 4% surtax on income above $1 million. “In Boston, it’s really like $48 million with the millionaire’s tax, so $54 million in Dallas is really like $58 million in Boston,” Williams said.
NFL player Tyreek Hill chose to sign with the Dolphins in Miami, Florida, over the New York Jets (who play in New Jersey) in free agency. While no one would ever question why someone wouldn’t want to play for the Jets, when asked why he made that decision, Hill said, “Those state taxes, man.” By living in Florida instead of New Jersey, he saved $9 million in income taxes over the course of his three-year, $90 million contract.
Individual athletes consider taxes, too. Unlike in team sports, pro golfers and tennis players can call anywhere home. Many choose Florida, Texas, and Nevada due to the friendly tax laws (and the warm weather).
Colleges can do the same: Last year, Arkansas became the first state to make the name, image, and likeness (NIL) money that athletes receive tax exempt. Five other states—Georgia, Illinois, Louisiana, New Jersey, and South Carolina—are considering similar measures.
More to come? Several states, including Mississippi, Kentucky, and Missouri, are working to reduce or eliminate income taxes. They are each home to SEC schools, and likely feeling pressure to compete with Big Ten football programs.—DL
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