Kansas
Why Chiefs’ Move To Kansas Could Mean Less Income For Their Players
Kansas governor Laura Kelly and Kansas City Chiefs owner Clark Hunt stand outside the Kansas state capitol after an agreement was reached for a new state-of-the-art domed stadium in Wyandotte County.
Kansas City Chiefs
The Kansas City Chiefs are moving from Missouri to Kansas and into a glistening, $3 billion dome, which will be surrounded by an entertainment district.
“It will be a world-class facility,” Kansas governor Laura Kelly said, “the envy of professional sports.”
But going across state lines could have a potentially significant downside: Reduced income for both Chiefs players and staff as a result of the state’s different tax provisions.
The Chiefs are slated to play — and therefore work — in Missouri’s Arrowhead Stadium complex until moving into their Kansas digs in 2031.
Currently, Kansas Citians who work in Missouri instead of Kansas pay less income tax, but the difference is marginal.
The top income tax rate in Kansas is 5.58%, and one reaches that rate with a taxable income of $46,000, which NFL players obviously would exceed. In Missouri it is 4.7% once taxable income reaches $9,436, and those who work in Kansas City, Mo. — like the Chiefs — pay another 1% as an earnings tax.
Another difference between the states is the corporate tax rate, which impacts the Chiefs as a privately held C corporation.
Both states have a base rate of 4%, but only Kansas assesses a surtax of 3% on taxable income of more than $50,000.
That discrepancy, though it wouldn’t impact the players’ individual income, is likely why Jason Sudeikis said tax issues forced him to film scenes from his Ted Lasso show in Missouri instead of Kansas.
And legislation in August could more drastically shift things between the border states.
As part of a special election on Aug. 4, Missourians will vote on Amendment 5.
If the amendment passes, it would eliminate individual state income tax in Missouri. So staying put at Arrowhead Stadium’s GEHA Field would have had financial benefits.
“If you have that situation,” Kenneth Woodward, a Kansas City-area certified public accountant, exclusively shared, “it would have been a totally different ballgame.” To put the numbers in perspective: If the amendment passes and the Chiefs had stayed in Missouri, a Chiefs player making $20 million a year would save about $1 million in taxes. (Guard Trey Smith, for example, will make $19.75 million in base salary this season, though that does not include his bonuses.)
The Chiefs could still save money while playing in Missouri through the end of the decade but not once they leave the Arrowhead complex in 2030 — unless Kansas changes its tax provisions before then, and Congress approves them.
Amendment 5 would not only impact players currently on the roster, but also the entire Chiefs staff, including owner Clark Hunt.
Moreover, it could have helped lure free agents.
After his then-Raiders team moved from Oakland, Calif., to Las Vegas, Nev., tight end Darren Waller lauded the financial windfall because Nevada is one of eight states — along with Alaska, Florida, New Hampshire, South Dakota, Tennessee, Texas and Wyoming — to have no state income tax. To offset the loss of income tax revenue, states typically increase sales tax, but Texas and Alaska compensate with taxes on oil drilling.
“Each state kind of deals with it on their own,” Woodward said. “They’re all going to get their money from somewhere. It’s not like the states are operating without revenue streams.”
Since moving to Kansas City from Dallas in the 1960s, the Chiefs have played in the state of Missouri.
But moving to Kansas became attractive to the Chiefs because the state will pay for about 60% of the new stadium through its sales tax and revenue (STAR) bonds.
The Wyandotte County in Kansas, City, Kan., location also offers ample space for the stadium to be surrounded by an entertainment district, featuring hotels, bars, restaurants and shops. That will provide further revenue streams and capitalize on the NFL trend.
The New England Patriots have Patriot Place, an outdoor complex adjacent to Gillette Stadium, which has restaurants, hotels, a movie theater and shops. The Dallas Cowboys’ The Star District has a 12,000-seat practice facility also used by high school teams and 19 restaurants, a hotel, a cigar bar, a spa and multiple shops.
Having that kind of complex is the upside of moving to Kansas for the Chiefs.
The downside is they may have cost themselves some future income by staying in Missouri.
“That would have been a big motivator for the Chiefs to stay just to be able to avoid that state income tax,” Woodward said. “If they complete the move to Kansas, then there’s nothing they’re going to be able to do other than just complain to Kansas.”Amendment 5’s Potential Consequences
The Lure Of Kansas