Residency

Residency refers to the legal determination of where an individual is considered to live for tax, legal, and financial purposes.

For athletes, residency is not based solely on where they own property or where they play, but on where they establish intent to permanently live, supported by objective actions and documentation.

States use residency rules to decide who owes state income tax and on what income.

Because athletes frequently travel and live in multiple states, residency is one of the most scrutinized issues in sports taxation.

How Residency Applies in Different Leagues

NCAA / NIL Athletes

For NCAA athletes, residency often begins as a family-based designation but quickly becomes a tax issue once NIL income grows.

Early residency decisions can impact state income taxes, tuition status, and long-term financial planning, making clarity essential before NIL earnings accelerate.

Use Cases

• Establishing home-state residency before NIL income spikes
• In-state tuition qualification
• NIL tax planning for high-income college athletes
• Avoiding unintended multi-state tax exposure

Example

A college athlete grows up in California but attends school in Texas.

If the athlete maintains California residency (driver’s license, voter registration, home address), California may still tax NIL income even though Texas has no state income tax.

NFL

In the NFL, residency is a core tax-planning decision rather than a lifestyle choice.

Because players earn income in many states, establishing a clear tax home in a favorable jurisdiction can significantly reduce long-term tax exposure while helping defend against state audits.

Use Cases

• Establishing residency in no-income-tax states
• Managing multi-state “jock tax” exposure
• Offseason domicile planning
• Property acquisition tied to tax strategy

Example

An NFL player plays for a New York team but establishes legal residency in Florida by purchasing a home, registering to vote, changing licenses, and spending the majority of the offseason there.

Florida becomes the player’s tax home, even though game checks are still taxed in other states.

NBA

NBA players face heightened residency scrutiny due to high income, frequent travel, and long-term contracts in high-tax states.

Residency planning often focuses on offseason domicile, documentation, and intent to avoid being classified as a full-year resident in unfavorable tax jurisdictions.

Use Cases

• Managing frequent travel
• Residency audits in high-tax states
• Offseason domicile strategies
• Real estate tied to tax residency

Example

An NBA player signs with a California team but maintains residency in Texas.

California may still claim partial residency if the player’s actions indicate intent to remain long-term, making documentation critical.

MLB

For MLB players, long seasons and extended time in team cities make residency determinations especially complex.

Without a clearly established domicile elsewhere, players risk being treated as residents in states where they spend a majority of the year due to the length of the season.

Use Cases

• Long seasons increasing residency scrutiny
• Spring training and offseason residency
• Dual-residency challenges
• Real estate ownership across states

Example

An MLB player spends over 183 days in a state due to the season schedule.

Without clear domicile intent elsewhere, that state may attempt to classify the player as a resident for tax purposes.

NHL

NHL players regularly deal with cross-border residency challenges involving U.S. states and Canadian provinces.

Establishing and maintaining residency affects not only state and provincial taxes but also treaty protections and worldwide income exposure.

Use Cases

• Cross-border residency issues
• Provincial vs state tax exposure
• Residency documentation and tax treaties
• Dual tax filings & joint filing (married athletes)

Example

An NHL player living in the U.S. but playing in Canada must clearly establish U.S. residency to avoid being taxed as a Canadian resident on worldwide income.

MLS / International Soccer

Soccer players often operate across multiple countries, making residency a blend of immigration status, tax treaties, and physical presence.

Proper residency classification determines whether income is taxed domestically, internationally, or subject to treaty-based relief.

Use Cases

• Immigration status vs tax residency
• Treaty-based residency rules
• Property ownership vs domicile
• International tax exposure

Example

A foreign-born MLS player may be physically present in the U.S. but remain a tax resident of another country under treaty rules, impacting how endorsement income is taxed.

Combat Sports

In combat sports, residency can be fluid due to training camps, fight locations, and frequent travel.

Because income is event-based, fighters must carefully document residency intent to avoid states asserting tax claims tied to temporary presence.

Use Cases

• Residency planning between fights
• Training camp location vs home
• State-specific income taxes
• Fight location taxation

Example

A fighter trains in California but maintains residency in Nevada.

California may still attempt to tax income earned during training periods if residency intent is unclear.

Golf / Individual Sports

Individual athletes with year-round travel schedules face constant risk of triggering unintended residency.

Clear documentation of domicile helps ensure a single tax home, even while earning income in dozens of states annually.

Use Cases

• Travel-heavy schedules
• Avoiding residency triggers
• Property ownership scrutiny
• Tournament-based state taxation

Example

A golfer owns homes in multiple states but establishes residency in Florida through voter registration, driver’s license, and time spent.

Florida becomes the tax home despite tournaments nationwide.

Racing / NASCAR / F1

Drivers earn income across many jurisdictions but benefit from establishing a single, well-documented tax residency.

With high endorsement income and frequent audits, residency clarity is critical to preventing overlapping state tax claims.

Use Cases

• Multi-state race schedules
• Team headquarters vs personal residency
• Endorsement taxation
• Residency audits

Example

A NASCAR driver living near Charlotte may still establish residency in a lower-tax state if domicile intent and documentation support it, even while racing nationwide.

How Residency Is Determined

Residency is determined by intent + actions, not just property ownership.

Common factors include:

• Days spent in the state
• Driver’s license and vehicle registration
• Voter registration
• Primary home location
• Family residence
• Business ties
• Where personal property is kept

No single factor is decisive states evaluate totality of circumstance.

Why Residency Matters

Residency determines where you pay state income tax on gross income.

A poor residency setup can result in:

• Double taxation
• State audits
• Penalties and back taxes
• Loss of tax advantages

For athletes, residency is often worth hundreds of thousands to millions of dollars per season, let alone over the length of a full career.

Related Terms

• Primary Residence
• Capital Gains
• Property Tax
• State Income Tax
• Federal Tax

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