California’s “jock tax” was the issue in the Appeal of N. Carroll, a case before the Office of Tax Appeals involving former National Football League cornerback Nolan Carroll.
Carroll played in the NFL from 2010 to 2017, starting with the Miami Dolphins before moving to the Philadelphia Eagles and then to the Dallas Cowboys.
Carroll’s 2017 time with the Cowboys was at the heart of his tax appeal. On August 12, 2017, he played a pre-season game in Los Angeles. He was injured early in the regular season and was released by the Cowboys before the team played a regular-season game in California.
Carroll’s California tax return reported California-source income of $4,886. The Franchise Tax Board determined that he spent two duty days in California, of out 150 total duty days, and that he owed $4,742 in additional tax, plus interest.
The OTA sided with the FTB, opining that Carroll failed to overcome the FTB’s presumption of correctness.
“Appellant argues on appeal that since he only played one preseason game in California there is ‘no way’ he owes California $5,836.09,” the OTA wrote. “Appellant does not explain how he calculated the California source income of $4,886 that he reported on his tax return. FTB’s method of allocating and apportioning income to California using a taxpayer’s working days in California is well established. … OTA’s record reflects that FTB reasonably apportioned just two of appellant’s working days to California, one for a travel day and one for the preseason game day. Additionally, as the denominator in the duty days formula, FTB used all football team duty days of 150, when it appears that due to an injury, appellant was released from the football team after appellant completed 84 duty days. Had FTB used 84 duty days as the denominator, its proposed assessment would have been substantially greater.”
The OTA also denied the taxpayer’s petition for a review of the call.