As the clock runs out this week on Tennessee’s infamous “jock tax,” the city of Memphis is about to turn over $2.38 million to more than 900 professional basketball players as part of a 2015 settlement, according to the Commercial Appeal.
The city will return its portion of the money — a third of the $7.27 million it’s collected since Tennessee’s professional privilege tax was approved in 2009 — within the next three or four weeks, said Brian Collins, the city’s chief financial officer.
“(The money) was reserved a long time ago, and it won’t have an impact on the city’s budget this year or any year,” Collins said. The city set the funds aside in fiscal year 2015.
The flat tax of $2,500 per game up to $7,500 for NBA and NHL players was widely criticized for eating up most — and in some cases all — of the income lower-paid athletes received from basketball games in Memphis and hockey games in Nashville.
Gary Kohlman, general counsel for the National Basketball Players Association (NBPA), which sued the state over the tax, said “dozens” of players earning the legal minimum paid more in the tax than they earned from the games.
“That was not an isolated event,” he said.
A spokesman for the National Hockey League Players’ Association (NHLPA), which also sued the state, said its players lost money playing against the Nashville Predators too.
Kohlman said some NBA players were also charged the tax just because they were on the team’s roster — even if they didn’t play.
The Tennessee General Assembly voted in 2014 to repeal the tax, effective immediately for hockey players and June 1, 2016, for basketball players.