• Yanks Line For CC Is Not A Hard One?

    Posted by on November 24th, 2008 · Comments (6)

    Via Jon Heyman

    The Yankees have not yet set a deadline for their $140-million, six-year offer to free-agent starting pitcher CC Sabathia, and according to someone familiar with their thinking, they have no intention to pull the offer anytime soon.

    New Yankees boss Hal Steinbrenner was responding to a reporter’s question when he said, “We made an offer. It’s not going to be there forever.” And all he meant was exactly that. Not forever.

    It appears now that the Yankees aren’t about to set a deadline — at least not yet.

    The Dodgers, Giants, Angels, Red Sox and incumbent Brewers all have interest in Sabathia. But to this point, no one has emerged to play in the Yankees’ dollar stratosphere, and they remain the favorite to win the Sabathia Derby.

    One element that I haven’t seen anyone look at here is the tax issues that face CC if he takes the New York offer.

    If he lives and “works” in California (meaning that he plays for the Giants, Dodgers or Angels) I would assume that he pays California taxes.

    However, if he lives in California (which I believe that he does) and he “works” in New York (playing for the Yankees) would he then not have to pay some combination of California and New York taxes? (I ask it as a question because I’m not sure.)

    Assuming the answer to the latter is yes, at some point then, does the value of a dollar earned in New York become less than the value of a dollar earned in California, for CC, because of the tax impact…and…then some team on the West Coast really doesn’t have to match the Yankees offer (dollar for dollar) in order to be equal?

    Again, I’m not sure – are they any accountants in the house that would know the answer to this one?

    Comments on Yanks Line For CC Is Not A Hard One?

    1. antone
      November 24th, 2008 | 5:46 pm

      Wouldn’t this be like Jeter’s issue, because CC would have to live in the NY area during the season, so wouldn’t he have to prove his main residence is in California?

      If he was lives in a hotel room or something then he would have to file both a NY and CAL tax return, but he would get credit on the CAL for taxes paid in NY. It would deduct from the tax he owes in California and in his case it would probably mean he was getting money back if NY has a higher tax rate.

      I think he’d have to prove his main residence is in California though.

    2. Evan3457
      November 24th, 2008 | 6:46 pm

      Of course Hal’s statement is a bluff, and a bad one.

      The brutal facts are that the Yanks need CC, he doesn’t need them.

      Therefore, if he’s not rushing to claim the extra $20-30 million, that means he doesn’t value it highly, and any ultimatum the Yanks utter and then carry out hurts them, not CC.

      And other teams know all this, and so does CC’s agent, and so does CC.

    3. Evan3457
      November 24th, 2008 | 6:47 pm

      Oh, and since the bluff is easily seen through, it’s a sign of weakness, not strength, and it will be no surprise when it gets “played over”.

    4. Rich M
      November 24th, 2008 | 7:10 pm

      Its called a “jock Tax” Players have to pay taxes in every state and almost every city that they play in.

      here is an article on the subject.

      here is another


    5. November 24th, 2008 | 7:58 pm

      ~~~Wouldn’t this be like Jeter’s issue, because CC would have to live in the NY area during the season, so wouldn’t he have to prove his main residence is in California?~~~

      I’ve heard reports that CC is building a huge house for his family in SoCal. So, if that news is out there, you know the state of CA is going to be looking to hit his $23,000,000 annual salary.

    6. thenewguy
      November 24th, 2008 | 9:51 pm

      Any extra taxes he would pay NY would no doubt be offset (and then some) by an increase in advertising deals.

      Also, doesn’t an issue like this arise for people playing in Canada, for all sports? Doesn’t converting the money to US dollars, or simply bringing it over the border if the salary is paid in US$, make the player incur some form of tax or conversion fee?

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