NHL free agency shows teams in states with no income tax have an advantage

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NHL free agency shows teams in states with no income tax have an advantage

2024-07-03 02:22 Last Updated At：02:31

When the Tampa Bay Lightning made moves at the NHL draft to clear salary cap space, general manager Julien BriseBois hoped a variety of factors would entice players to sign as free agents.

One, of course, was the organization's penchant for winning and the talent already on the roster. Another, he pointed out, was the “favorable taxation situation.”

It has become difficult to deny the impact of favorable tax situations around the league in recent years. Four of the past five Stanley Cup champions are based in places with no state income tax, and that benefit continues to draw free agents who know they will take home more money there than elsewhere around North America.

“There is a distinct advantage for those teams that are in states with no tax — always,” said Alan Pogroszewski, who has studied and worked with players on tax matters for more than a decade. “There will always be an advantage.”

It is not necessarily the deciding factor for a player, but it certainly doesn't hurt. The $69 million contract Sam Reinhart got to re-sign with the reigning champion Florida Panthers is worth more there than it would have been had he signed for the same terms in many other markets.

Averaging out Reinhart's salary to $8.625 million annually, he owes $3.15 million in taxes in Florida. He would pay $1.1 million more in California, $1.5 million more in New York and $1.4 million more in Toronto, according to a calculator provided publicly by Cardinal Point Athlete Advisors.

Over the length of the contract that could save him up to $12 million.

“That’s part of the reality,” San Jose Sharks general manager Mike Grier said. “I think it is an advantage for those teams: They can obviously pay guys a little bit less, and guys are happy to go there. So not to their fault or anything, those teams take advantage of the situation as they should.”

And they do. Nashville, Florida, Tampa Bay, Dallas, Vegas and Seattle — the six teams in the 32-team NHL in states with no income tax — combined to spend nearly a quarter of the $1 billion-plus in salaries committed Monday when free agency opened.

Winger Jake Guentzel, who played his first seven-plus seasons with Pittsburgh before being traded to Carolina in March, just signed a seven-year deal worth $63 million with the Lightning. Their winning culture was part of the draw, along with the lack of winter weather, but tax experts will point out that he's coming out ahead financially, too.

“I guess that’s always a good thing if you can make more money,” Guentzel said. “There’s just the positives about Tampa, and there just seems to be so many of them: living the lifestyle, the atmosphere in the rink is unbelievable and if that’s part of it, too, that’s great. There’s just a lot of things behind the scenes that you’re really excited for.”

Pogroszewski, the founder, president and CEO of AFP Consulting LLC, which specializes in the tax preparation and consulting for pro athletes, said he and his colleagues have debated for years how much of a factor financial matters such as these should play in free agent decisions.

He points out there are things players can do to even the playing field — retirement compensation arrangements in Canada being one of them and establishing residency in a no- or low-tax state is another. Grier said players and agents are all aware of tax differences by state, acknowledging “that definitely figures into everything.”

Veteran defenseman Chris Tanev's situation featured a different variable. After finishing last season with the Dallas Stars, moving there and becoming a U.S. resident would have triggered Canada's departure tax on capital gains, while remaining a resident of Ontario would have mitigated the tax advantage of working in Texas.

"That plays a role into it," said Tanev, who played his first 14 years in Canada with Vancouver and Calgary and is now heading to Toronto after half a season with Dallas. “And family reasons. Just coming to a good team is obviously a big part of that. I didn’t want to leave Dallas and go to a team that wasn’t trying to win, and that was a huge reason why this happened.”

Some good teams do not have big-time tax benefits, such as the Oilers who went to the Cup final and pushed the Panthers to a Game 7. The Canadian dollar also plays a major role in league finances, with player salaries paid in U.S currency. Teams north of the border have said they can some $400,000 each time the Canadian dollar drops a penny in value, putting a strain on their ability to compete for or retain high-priced talent.

The vast majority of the league simply has to deal with paying players while considering state or provincial tax implications.

"If you can get New York state to go tax-free, I’m in," Buffalo's Kevyn Adams joked, before explaining his philosophy. “You try to focus your attention on building an organization the right way, where people recognize that and say, ‘That’s the culture, that’s the place that I want to play.’ ... If there’s players that flat out just don’t want to be in cold weather or don’t want to be in a state that has higher taxes, then they are probably not for us anyway.”

AP Hockey Writer John Wawrow contributed.

AP NHL: https://apnews.com/hub/NHL

Britain's Labour on track for huge majority, exit poll suggests, amid frustration with Conservatives

2024-07-05 05:09 Last Updated At：05:12

LONDON (AP) — Britain’s Labour Party was headed for a huge majority in Britain’s election on Thursday, an exit poll suggested, against a gloomy backdrop of economic malaise, mounting distrust in institutions and a fraying social fabric.

The poll released moments after voting closed in the parliamentary election indicated that Labour leader Keir Starmer will be the country’s next prime minister.

A jaded electorate looks to have delivered a crushing verdict on Prime Minister Rishi Sunak’s Conservative Party, which has been in power since 2010.

“Nothing has gone well in the last 14 years,” said London voter James Erskine, who was optimistic for change in the hours before polls closed. “I just see this as the potential for a seismic shift, and that’s what I’m hoping for.”

While the suggested result appears to buck recent rightward electoral shifts in Europe, including in France and Italy, many of those same populist undercurrents flow in Britain. Reform UK leader Nigel Farage has roiled the race with his party’s anti-migrant “take our country back” sentiment and undercut support for the Conservatives, who already faced dismal prospects.

Full results will come in over the next hours. The exit poll is conducted by pollster Ipsos and asks people at scores of polling stations to fill out a replica ballot showing how they have voted. It usually provides a reliable though not exact projection of the final result.

Hundreds of communities were locked in tight contests in which traditional party loyalties come second to more immediate concerns about the economy, crumbling infrastructure and the National Health Service.

In Henley-on-Thames, about 40 miles (65 kilometers) west of London, voters like Patricia Mulcahy, who is retired, sensed the nation was looking for something different. The community, which normally votes Conservative, may change its stripes this time.

“The younger generation are far more interested in change,’’ Mulcahy said. “So, I think whatever happens in Henley, in the country, there will be a big shift. But whoever gets in, they’ve got a heck of a job ahead of them. It’s not going to be easy.”

Britain has experienced a run of turbulent years — some of it of the Conservatives' own making and some of it not — that has left many voters pessimistic about their country's future. The U.K.'s exit from the European Union followed by the COVID-19 pandemic and Russia's invasion of Ukraine battered the economy, while lockdown-breaching parties held by then-Prime Minister Boris Johnson and his staff caused widespread anger.

Johnson’s successor, Liz Truss, rocked the economy further with a package of drastic tax cuts and lasted just 49 days in office. Rising poverty and cuts to state services have led to gripes about "Broken Britain."

The first part of the day was sunny in much of the country — favorable weather to get people to the polls.

In the first hour polls were open, Sunak made the short journey from his home to vote at Kirby Sigston Village Hall in his Richmond constituency in northern England. He arrived with his wife, Akshata Murty, and walked hand-in-hand into the village hall, which is surrounded by rolling fields.

The center-left Labour Party led by Keir Starmer has had a steady and significant lead in opinion polls for months, but its leaders have warned against taking the election result for granted, worried their supporters will stay home.

"Change. Today, you can vote for it,” he wrote Thursday on the X social media platform.

A couple of hours after posting that message, Starmer walked hand-in-hand with his wife, Victoria, into a polling place in the Kentish Town section of London to cast his vote. He left through a back door out of sight of a crowd of residents and journalists who had gathered.

Labour has not set pulses racing with its pledges to get the sluggish economy growing, invest in infrastructure and make Britain a “clean energy superpower.”

But nothing has really gone wrong in its campaign, either. The party has won the support of large chunks of the business community and endorsements from traditionally conservative newspapers, including the Rupert Murdoch-owned Sun tabloid, which praised Starmer for “dragging his party back to the center ground of British politics.”

The Conservatives have acknowledged that Labour appears headed for victory.

In a message to voters on Wednesday, Sunak said that “if the polls are to be believed, the country could wake up tomorrow to a Labour supermajority ready to wield their unchecked power.” He urged voters to back the Conservatives to limit Labour's power.

Former Labour candidate Douglas Beattie, author of the book “How Labour Wins (and Why it Loses),” said Starmer's “quiet stability probably chimes with the mood of the country right now.”

The Conservatives, meanwhile, have been plagued by gaffes. The campaign got off to an inauspicious start when rain drenched Sunak as he made the announcement outside 10 Downing St. Then, Sunak went home early from commemorations in France marking the 80th anniversary of the D-Day invasion.

Several Conservatives close to Sunak are being investigated over suspicions they used inside information to place bets on the date of the election before it was announced.

Sunak has struggled to shake off the taint of political chaos and mismanagement that’s gathered around the Conservatives.

But for many voters, the lack of trust applies not just to the governing party, but to politicians in general. Farage has leaped into that breach.

The centrist Liberal Democrats and environmentalist Green Party also want to sweep up disaffected voters.

“I don’t know who’s for me as a working person,” said Michelle Bird, a port worker in Southampton on England’s south coast who was undecided about whether to vote Labour or Conservative. “I don’t know whether it’s the devil you know or the devil you don’t.”

Follow AP's coverage of elections around the world: https://apnews.com/hub/global-elections/