FORT LAUDERDALE, Fla. — As the Florida Panthers chase the Stanley Cup, they are just two wins away from becoming the fifth team in the last six years to lift the trophy while being based in a U.S. state that does not have a state income tax.
This deep playoff run has brought the topic of taxes into sharp focus around the league. Many successful teams hail from warmer climates (the Sun Belt), and the lack of state income tax is often cited as a major draw for players. But how significant is this factor?
Florida General Manager Bill Zito downplayed the tax aspect, calling it “marginal at best.” He emphasized that the primary focus is building a winning team, highlighting the importance of ownership support and Head Coach Paul Maurice. Zito added that the appealing climate and environment (“The sun doesn`t kill us. It`s a nice environment to live in. It`s a good place for families. It`s a good place for singles. It`s got a little something for everybody”) are also positive factors.
NHL Commissioner Gary Bettman expressed strong disapproval of the tax discussion, stating he “hates the issue.” This became clear during a recent TNT broadcast when analyst and former player Paul Bissonnette suggested addressing tax disparities in the upcoming collective bargaining agreement. Bettman dismissed the idea as “ridiculous,” rhetorically asking if the league should then provide subsidies to teams located in high-tax areas such as New York or Los Angeles.
The NHL tax landscape
Six of the 32 NHL teams are located in U.S. states without an income tax: the Florida Panthers, Tampa Bay Lightning, Vegas Golden Knights, Dallas Stars, Nashville Predators, and Seattle Kraken. Deputy Commissioner Bill Daly acknowledged that some other franchises have voiced concerns about this, but stated that the league doesn`t share the view that it`s a significant problem.
Daly argued that such imbalances have always been present, noting that a player`s decision on where to play is influenced by numerous factors beyond taxes, including the specific team, coach, and location.
The NHL Players` Association (NHLPA) appears to concur that no changes are needed in the next collective bargaining agreement regarding tax differences. Ron Hainsey, the NHLPA`s assistant executive director and a former player himself, cited recent Stanley Cup victories by teams in high-tax states like Detroit, Chicago, Los Angeles, and Pittsburgh over a 10+ year period as counter-evidence to the idea that low taxes provide a significant advantage.
Hainsey expressed confusion that this topic receives so much attention, stating he`s “kind of baffled at times that this is the topic it is.” He believes the current success of Florida and Tampa, where players might accept slightly less money to play for winning teams, mirrors what happened in other markets over the previous decade. “So, when we talk about, is it really an issue, I`m not certain that it is,” he concluded.
Hainsey also noted that tax levels aren`t a major point of debate in the NFL and NBA, although he acknowledged that hockey salaries still lag behind those sports, even with the NHL salary cap increasing due to record revenues.
Alan Pogroszewski, who advises players on tax matters, suggested that a flexible salary cap could help account for varying state tax rates. His firm, AFP Consulting, found that since 2016, teams in states without income tax have reached the playoffs more frequently, suggesting what he termed “an innate-built-in tax advantage for several of these cities.”
Pogroszewski explained that success is influenced by a combination of factors, including how team funds are utilized. He noted that having money “worth more” in an equal playing field (referring to the salary cap) provides teams in low-tax states with “some leeway.”
What do players think?
Brad Marchand, a Canadian player recently traded to Florida from high-tax Boston after a long tenure, disagrees and does not believe the tax factor is negligible when players choose where to play.
Marchand pointed out that Canadian teams and California-based teams face “extremely high tax rates.” Comparing this to teams like Florida or Dallas, he noted a roughly 15% difference, which adds up to “a tremendous amount of money.”
However, Marchand acknowledged that money isn`t the sole determinant. The success of teams in Florida, Tampa Bay, Vegas, and Dallas is also directly linked to their skilled general managers (Zito, Julien BriseBois, Kelly McCrimmon, and Jim Nill) who excel at evaluating talent and managing the salary cap effectively.
Other attractive factors include being able to play golf during the winter, the lower pressure often found in smaller markets, or conversely, the intense fan passion in hockey-centric cities where the sport dominates.
The Edmonton Oilers, reaching the Final for the second year in a row, serve as a prime example of a market fueled by passionate fans.
Oilers forward Evander Kane, who has played in several different NHL cities, highlighted the “incredible” passion of the Edmonton fanbase. He also noted that upon getting to know the city, players discover “quite a bit to do” and find it a “good spot for families” with “great summers.”
Although NHL players are paid in U.S. dollars, which can partially offset high Canadian taxes for players based there due to the exchange rate, Marchand countered that living costs in Canada are also “extremely high,” with heavy taxes on everything. He argued that even with the exchange rate benefit at the time, players end up with “20, 30 per cent less money” when they eventually move back, concluding that taxes “absolutely plays a part” in player decisions.
