Pablo Sandoval’s return to the San Francisco Giants comes too late to turn around an awful 2017 season. But California’s budget likely will benefit.
A big-bucks deal with the Boston Red Sox after the 2014 season stood to save the 2012 World Series MVP as much as $7.6 million over re-signing with the Giants because of Massachusetts’ flat personal income tax rate of 5.2 percent and income tax policies in other states where Sandoval would play as a member of the Red Sox squad.
Now that Boston has cut ties with the underperforming Panda – yet will continue to pay him an estimated $87,500 a game – Sandoval is back with the organization where he got his start. He’ll also potentially be playing far more games in a state where the marginal income tax rate tops out at 12.3 percent, plus an additional 1 percent on taxable income above $1 million.
Under California income tax law, a professional athlete is taxed based on how many games he or she plays in the state. The number of California “duty days” is divided by the total number of duty days. That ratio is multiplied by the athlete’s total compensation.
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If Sandoval is called up to the big club by Aug. 1, 37 of the Giants’ remaining 55 games will be in California. Eighteen will be in other states, including three in Florida (where there is no income tax), three in Colorado (where income is taxed at a flat 4.63 percent) and six in Arizona (where the top rate is 4.54 percent.)
The Red Sox, meanwhile, play 30 of their 55 remaining games in Massachusetts. The other games are in New York, Ohio, Maryland, Florida and Canada. Income tax rates in New York, Ohio and Maryland are less than California’s. The Canadian tax hit is another ball of wax altogether (Sandoval’s accountants can deal with that.)