Nov
15

Cap’n Jetes in tax trouble

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At a time when Alex Rodriguez is looking to bank some serious dough, Derek Jeter might be out some. The State of New York is seeking back taxes — possibly totaling over a million dollars — from the Yankees captain from the years 2001 through 2003. But it’s not that Jeter outright didn’t pay his taxes. It’s that he paid them to Florida, where he claimed residence, not New York, where he was a prominent figure for at least six and a half months of the year.

Lawyers for Jeter, who has an off-season home in Tampa, Fla., dispute the claims that Jeter “immersed himself in the New York community” and made “numerous statements professing his love for New York” during the disputed period, according to documents published this week on a state Web site monitored by FOXNews.com.

I’m not quite sure how his lawyers are disputing his immersion in the New York community. I’m also not sure how “numerous statements professing his love” for the city would denote his residence in it. He has claimed residence in Florida since 1994, when he spent the majority of his season with the Tampa Yankees.

That the State is seeking taxes from 2001 is significant for two reasons. First is his ten-year, $189 million contract which was signed that winter. Second is his $13 million purchase of an apartment in Trump Towers.

Honestly, I’m not sure how the law works in these instances of dual residency. If anyone can shed some light, please do so in the comments or shoot me an e-mail. All I know is that no one from the Jeter party is commenting on this case. It’s probably for the best, at least from a public relations standpoint.

Categories : News
  • Patrick

    Derek is a resident of Florida and a non-resident of NY. Accordingly NY can only tax him on wages he made while working in NY. Florida does not have any state income tax, so there is no income tax paid to the state of Florida, however there must be some income taxes paid to the state of NY for the income made while playing games at Yankee Stadium. I am not sure how the Yankees do their payroll but they should have NY withholding, hope that helps…

  • Chuck

    Florida has no income tax, which is why most pro athletes set up residency there.

  • http://riveraveblues.com Mike A.

    That deadbeat. Maybe if he wasn’t worrying about not paying for his 2 hookers’ parking, he wouldn’t be in this mess!

  • davi

    hold up there. I’ve lived in both NYC and florida. Baseball season is from March to Oct. Roughly 7 months.

    due to the magic of the internet, anyone can look up derek’s property records. For his Florida home, he has the homestead exemption which means that he considers his tampa home his “legal domicile”. So Jeter considers himself a resident of Florida, which is nice because there is no income tax. (But the state more than makes up for it w. sky high property tax rates, and the 600 it cost me to register my car when i moved to fl)

    In NY though, if you live in NYC, then you have to pay regular ny tax, and city tax. NYC defines a resident as one who

    “An individual is a New York resident if one (1) of two (2) conditions is met:

    1) If an individual is “domiciled” (see below for the definition of domicile) in New York, such individual is a New York resident.
    2) If an individual is not “domiciled” in New York, such individual is a New York resident if s/he both “maintains a permanent place of abode for substantially all of the taxable year” and spends in the aggregate more than 183 days of the taxable year in New York. New York Tax Law § 605(b)(1)(B), New York City Admin Code Section 11-705(b)(1).”

    I’m guessing NY thinks Jeter’s baseball season requires him to stay in the city for more than 183 days.

    More thoughts on this. Jeter is basically a ‘snowbird’ or w/e. A person who spends the year in NY then spends the winter in Florida. They are not suppose to receive a homestead exemption because they don’t “live” in florida. So well I’m not sure on this but I would consider Jeter a NY resident. Which means if I was Florida I’d go after him too.

  • davi

    ok here’s some more info. The most recent case contesting NY resident status involves senior citizens, but its applicable for Jeter.

    Demonstrating Intent

    Retirees (Yankee Captains) who elect to make Florida their permanent residence should demonstrate such intention in a clear and convincing way by taking as many of the following steps as appropriate:

    * File a declaration of domicile.
    * File for a Florida homestead exemption.
    * Obtain a Florida driver’s license and relinquish a New York license.
    * Acquire Florida license plates and relinquish New York license plates.
    * Register to vote in Florida and remove oneself from the New York voting rolls.
    * File a nonresident, rather than a resident, New York income tax return if there is New York–source income.
    * File a federal income tax return with the IRS Center in Atlanta.
    * Transfer safe deposit box contents to Florida and close out a New York box.
    * Open a Florida bank account.
    * Change credit cards to the Florida address.
    * Execute a new Florida will, Florida durable power of attorney, and Florida health care proxy.
    * Refer to Florida residence in all trusts and other legal documents.
    * Affiliate with Florida organizations and consider disaffiliation with New York ones.
    * Have family gatherings and social activities centered in Florida rather than New York.
    * Affiliate with a church or temple in Florida.
    * If investing in real estate or businesses, focus on areas in Florida rather than New York.
    * Transfer works of art, expensive furniture, heirlooms, and other valuable personal items to Florida.
    * Consider acquiring cemetery plots in Florida.
    * List the Florida residence as the primary residence on all homeowners insurance.
    * Turn in any New York resident fishing or hunting licenses.
    * License pets in Florida.
    * If a retiree is a New York notary public, resign and become a Florida notary public.
    * Cancel any New York real estate STAR exemption.
    * Stay in Florida as long as practically possible each year.
    * Consider acquiring a larger or more expensive home in Florida, or remodeling or redecorating it, and acquiring a smaller or less expensive home in New York, and document any steps taken in doing so.

    The sticking points to this is Jeter bought his house in Florida for 675K. His NYC pad cost him 13 million. Yes Manhattan real estate is pricey, but I’m sure that Steinbrenner’s house in Tampa cost more than 675K. And Jeter ‘invested’ (rented) real estate on LI.

    I hope Arod is paying close attention. When he lays down 40 million for that townhouse, NY will be licking its lips.

  • Sonny M.

    I’m not sure if New York can win here.

    In the month of March, until spring training ends, he is in florida.

    Over the course of his baseball season, from April to (hopefully) october, and over the course of 162 games, he is in NYC for only half that.

    I.E. He works in New York City, and lives in NYC for half of the baseball season.

    So for 6 months out of the year, he is in NYC for a little over 3 months (not talking about the off season). Keep in mind, that New York does play several games in Florida.

    New York can make a try at Jeter, but in the end, he is only in New York for roughly a little over a quater of the year.

  • Jon

    I was always under the impression that you owe taxes for the % of time you worked in NY. I don’t know how this works with baseball players, because I’d be very suprised if they filed 10,15,20 tax returns for each state they worked in.

    I know that one year, I filed CA, NJ, and NY state returns, for what it’s worth.

    I also remember that regardless of the time spent in NY, if one “maintains living quarters” there, then they must pay at least some tax.

    It’s been awhile, now I’m a full-time resident.

    But I’m fairly certain he owes at least something.

  • Travis

    I think Jon is right. If you’re employed in the Big Apple, but live elsewhere, I think the government sinks its teeth into you.

  • Sonny M.

    I think Jeter’s claim in going to be that he paid the proper amount of taxes in New York. If you do work in New York, but live somewhere else, you do have to pay a certain amount, if you both live and work in New York, you have to pay more.

    My guess is that the state is saying he lives in New York, while he is saying he doesn’t.

  • http://ibleedblueandwhite.blogspot.com Jamie

    Any lawyers read the blog?? Help us out!

  • Reese

    I suspect this is more than a domicile/residence issue. There is a concept, called a “jock” tax where states/cities try to collect taxes on income earned by athletes attributable to games played in those locales. FRom Googling:

    Jock tax: Some cities and states levy taxes on the income earned by athletes, entertainers (OK, not just jocks) and their various entourages, including non-athletic or non-performer employees. Generally, that means any money earned by a player or performer while playing in that particular city or state gets taxed. For instance, Cincinnati levies a 2.1 percent jock tax.

  • Judge Judy

    Regardless of where Jeter lives, he has to and has been paying NYC and NYS income tax on his Yankees salary. The issue is that he didn’t pay NYS tax on investment income (interest, divedends, etc) and endorsement income from 2001 – 2003. NYS needs to prove that NY was Jeter’s primary residence from 2001 – 2003. It doesn’t matter if Jeter paid $.01 for his Florida home and $1,000,000,000,000 for his NYC home. Jeter does not spend 183+ days in his NYC apartment and his Florida home is his legally declared domicile. Case dismissed.

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