Recently, Jalen Hurts broke records, becoming the highest-paid athlete in the NFL. As such, Hurts is set to sign a 5-year contract extension with The Philadelphia Eagles. However, with all the good news, there is also some bad news for the youngster.
According to Forbes, Hurts’ new contract will keep him with the Eagles through 2028 and includes close to $180 million in guarantees. Further, the contract also includes a no-trade clause as well. Thus, Hurts will rake in a reported $51 million per year on average from his new deal.
BREAKING: Eagles, QB Jalen Hurts agree to terms on 5-year, $255M contract extension ($179.3M in guarantees). (via @rapsheet, @tompelissero) pic.twitter.com/1hAW4OTFMW
— NFL (@NFL) April 17, 2023
Previously, for the 2022-23 season, Hurts was the Eagles’ hero as he led them to Super Bowl 57. Unfortunately, they lost the game to the Kansas City Chiefs 35-38. However, Jalen still managed 3,701 yards, 22 touchdowns, and 6 interceptions throughout the season. Additionally, he also had an average quarterback rating of 66.4, which was the 4th best in the league.
Notably, Hurts was picked up by the Eagles in the 2020 NFL drafts and offered an initial contract worth $6 million. Thanks to the efforts of his agent Nicole Lynn, Jalen was able to achieve his lifelong dream of playing in the NFL. Since Hurts’ aforementioned contract was for four years, he would have been a free agent in 2024. Thus, the Eagles have done well to secure their prodigy for the future.
Jalen Hurts will have to pay the ‘Michael Jordan Tax’?
Whilst the 24-year-old star will likely be celebrating his new contract, there is also some bad news waiting for him. As it turns out, Hurts could well be losing a lot of the money he is set to make, due to non-footballing reasons. Additionally, basketball legend Michael Jordan is inadvertently at the center of this reason.
Previously, Michael Jordan and the Chicago Bulls trounced the Los Angeles Lakers in the 1991 NBA finals. Surprisingly, Jordan’s accountant reportedly received a tax notice, demanding $10,000 in taxes for the matches he played in LA. Whilst the rule was not necessarily a new one, it was a rather strange one, likely born out of spite for MJ. Thus, the state of Illinois passed a new law known as the ‘Jock Tax’ or ‘Michael Jordan’s Revenge’.
1) The “Jock Tax” became famous in 1991.
Michael Jordan and the Chicago Bulls had just beaten the LA Lakers in the NBA Finals.
But after the championship parade, MJ’s accountant received a notice from California saying MJ owed $10,000 in taxes for the games he played in LA.
— Joe Pompliano (@JoePompliano) April 17, 2023
2) This wasn’t necessarily a new rule, but no one knew about it before.
So Illinois got mad that LA was being petty and passed a new law known as “Michael Jordan’s Revenge.”
This required athletes from California to pay income tax in Illinois.
And the rest is history. pic.twitter.com/g9qqMzO8O6
— Joe Pompliano (@JoePompliano) April 17, 2023
3) Every US state now has a jock tax, except five:
• Florida
• Nevada
• Texas
• Washington
• TennesseeSome cities (Cleveland, Kansas City, Philadelphia, and Detroit) have also implemented the tax.
And the money can really add up.
— Joe Pompliano (@JoePompliano) April 17, 2023
4) Take Stephen Curry, for example.
He paid nearly $1 million in taxes to nearly 20 US states during the 2018 NBA season.
And California alone collects hundreds of millions of dollars each year in Jock Taxes, including $233 million in 2013. pic.twitter.com/uSfyVUNVvq
— Joe Pompliano (@JoePompliano) April 17, 2023
5) This has also complicated the year-end process.
Patrick Mahomes will have to file 7 tax returns this year. Shohei Ohtani will file 11, and Kevin Durant will have to file nearly 20 different tax returns.
But athletes have also gotten smarter about taxes.
— Joe Pompliano (@JoePompliano) April 17, 2023
As per this new law, athletes from the state of California were required to pay income tax in Illinois. Thus, this soon became a trend in every US state with the exception of a few. As such, this law is not yet applicable in Florida, Nevada, Washington, and Tennessee. Notably, Cleveland, Kansas City, Philadelphia, and Detroit have also implemented the tax. Moreover, some athletes found a workaround for this with the likes of Floyd Mayweather fighting in Las Vegas from 2007 to 2017, saving $20 million in the process.
Thus, due to Michael Jordan‘s excellence athletes like Jalen Hurts will have to pay huge amounts in taxes every time they travel to another state to play. Although he probably will not mind the taxes, it certainly takes a lot away from the deal that saw him become the highest-paid player in NFL history.