Monday, December 09, 2013

Cano will make millions more just becoming a resident of Washington which has no state income tax-Bloomberg

12/9/13, "Cano Pockets Extra $42 Million in Tax-Friendly Mariners Deal," Bloomberg Scott Soshnick

"The Seattle Mariners’ contract with Robinson Cano is worth about $42 million more in after-tax pay than the New York Yankees’ best offer to the All-Star second baseman, according to Robert Raiola, a certified public accountant who specializes in sports and entertainment.

The Mariners’ agreement with Cano, which hasn’t been signed, is for $240 million over 10 years, a person familiar with the negotiations said on Dec. 6. New York’s best offer was about $175 million over seven years, according to the New York Post.

The calculation, Raiola said in a telephone interview, is based on the assumption that Cano will become a resident of Washington, which has no state income tax. Cano lives in New Jersey, where the top tax is 8.97 percent, and he intends to relocate to Seattle, said Ron Berkowitz, a Roc Nation Sports spokesman with Berk Communications.

Had Cano re-signed with the 27-time World Series champions, he would have paid New York State taxes on 45 percent of his Yankees income, Raiola said, adding that he would have received a credit in New Jersey on those taxes.

With the Mariners, Cano will benefit from playing more than 70 percent of his games in jurisdictions that don’t have a state tax, including Texas. Seattle plays in the American League’s Western Division, which includes two Texas teams -- the Texas Rangers and Houston Astros.

Washington voters rejected an income tax in 2010. States tax athletes based on days or games played within their borders. For the Mariners, Raiola said he assumed a state tax rate of 7 percent in the locales where athletes are subject to tax.

State Taxes

As a member of the Mariners, Cano, 31, will pay about $504,000 annually in state taxes, Raiola said. As a member of the Yankees, he would pay about $2.2 million a year over the life of the contract, said Raiola, the sports and entertainment senior group manager at Cranford, New Jersey-based Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC.

The five-time All-Star’s net pay would be about $12.8 million annually for 10 years with the Mariners, Raiola said. It would be about $12.3 million annually for seven years with the Yankees.

That, combined with the extra three years of salary in Seattle, is a difference of about $42 million over the span of the Mariners contract

The Yankees would have had to pay Cano about $265 million for him to keep the same amount that he will with Seattle, Raiola said.

Cano’s net pay over the life of his Seattle contract is about $128 million, Raiola said. His net pay over the life of the Yankees offer, he said, would have been about $86 million." via Newsday twitter

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