Quick Tax Stats:
| Tax Type | Rate / Info |
|---|---|
| Income Tax | 0% (no state income tax) |
| Sales Tax | 6.25% statewide base; ~8.20–8.25% combined with local rates |
| Jock Tax | No state income tax; athletes still owe tax in other states where they play away games |
| Cost of Living (Range) | $65,000 – $140,000 annual for single-person moderate-to-high lifestyle (major metros) |
| Average Home Price | ~$350,000 – $450,000 (3-bed/2-bath typical home in Dallas–Fort Worth / Houston metro) |
Income Tax in Texas
Texas has no state income tax, making it a major tax advantage for high earners and athletes.
The Texas Constitution explicitly prohibits personal income tax, meaning wages, bonuses, sponsorships and endorsements, and any passive investment income are not reduced by state tax.
For professional athletes, this creates:
- Maximum take-home pay: All taxable income is only reduced by federal tax, not state.
- Strategic residency value: Player domicile in Texas can reduce annual state tax liability compared to high-tax states like California, Oregon, or Pennsylvania.
- NIL advantage: College athletes earning Name, Image, and Likeness income while living in Texas benefit from the same zero income tax, enhancing net earnings during eligibility.
Example
A NBA star earning $30 million in salary and endorsements in Texas avoids a state income tax bill that could exceed $5–$6+ million annually in states like Illinois or Massachusetts.
Sales Tax
Texas levies a base 6.25% sales tax on most retail goods and taxable services, and local jurisdictions can add up to 2%, resulting in average combined rates of ~8.20–8.25%.
Certain everyday essentials like groceries and prescriptions are exempt, but luxury purchases, apparel, and large spending categories remain taxable.
Athletes and high earners can mitigate the impact by:
- Timing large purchases during sales tax holidays.
- Purchasing in lower local tax municipalities.
- Considering the tax implications when structuring purchases.
Example
A $150,000 sports car in Houston could incur approximately $12,300–$12,375 in combined sales tax, depending on local add-ons.
Jock Tax
While Texas does not tax income itself, traveling professional athletes still pay “jock tax” in other states where they earn game-day income.
Visiting states with personal income taxes (e.g., California, New York, New Jersey) will apportion a share of their salary as taxable in those jurisdictions. (This is also known as prorated tax rates).
- Texas residency means home game income is free of state income tax.
- Away game income may be taxed by states with income tax.
Example
An MLB pitcher residing in Texas will be taxed by states like Colorado and Minnesota on away earnings, even though Texas itself imposes no state income tax. So, the pitcher only owes federal income tax. The additional money saved in net income can add millions more to an athletes net worth.
Cost of Living and Housing
Texas’ cost of living varies across urban and suburban areas:
- Dallas–Fort Worth / Houston / Austin: Higher cost of living for housing, services, and transport, ranging from $100k–$140k annually for a single professional athlete.
- Smaller cities: Lower ranges, approximately $65k–$95k for similar lifestyle standards.
Housing
- Average 3-bed/2-bath homes in major Texas metro areas often sit around $350,000–$450,000, though luxury and high-end property markets can run significantly higher.
- Texas property taxes are assessed locally (no state property tax), often resulting in moderate tax bills relative to very high property tax states.
Property taxes fund schools, infrastructure, and local services rather than state income or general revenue.
They do not represent a statewide income tax but can result in substantial annual obligations based on local rates and appraisal values.
Residency Rules
Establishing residency in Texas provides athletes with:
- Zero state income tax on wages or endorsements.
- A stable tax base for wealth accumulation and retirement planning.
- Ease of documentation: Texas residency can be maintained while traveling for games.
Proper residency typically includes a primary domicile, driver’s license, voter registration, and physical presence in the state.
Example
A college prospect with ties to Texas might cement residency there before entering a professional career to enhance lifetime net take-home, even if a team plays in multiple states.
Why Texas is Athlete-Friendly
- No state income tax = maximum net income retention
- Jock tax only applies in other states, not at home
- Moderate cost-of-living relative to income potential
- Strategic for long-term residency and wealth planning
- No state estate or inheritance tax in addition to zero income tax
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Related Terms
- Nevada State Athlete Taxes
- Wyoming State Athlete Taxes
- Tennessee State Athlete Taxes
- Florida State Athlete Taxes
- Washington State Athlete Taxes
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Credits
Sources: Texas Tax Rates & Rankings 2025–2026, Texas Department of Taxation, Zillow/Redfin Housing Data, APSM Proprietary Analysis
Disclaimer: This article contains general financial information for educational purposes and does not constitute professional advice.
Apostle Sports Media 