Budget & Tax
Curtis Shelton | July 11, 2024
Free agents reap tax savings
Curtis Shelton
NBA free agency largely wrapped up over the last week, with several high-profile players moving to different teams and fans dreaming of what next year might look like on the court with the new roster. For some players, the off-the-court changes may be just as impactful.
Here are a few notable free-agent signings and how their new tax rate will affect how much of their earnings they’ll actually get to keep.
Klay Thompson
Golden State Warriors to Dallas Mavericks (Tax Rate: 13.3% to 0%)
Four-time NBA champion Klay Thompson is leaving Golden State after 13 seasons with the team for the Dallas Mavericks on a three-year, $50 million deal. Thompson reportedly offered the Warriors a two-year deal that would have paid $20 million annually. Had the Warriors taken that deal, Thompson would be paying $2.66 million in state taxes rather than the $0 he will be paying thanks to Texas not having an income tax.
Paul George
Los Angeles Clippers to Philadelphia 76ers (Tax Rate: 13.3% to 3.07%)
Paul George signed a four-year, $212 million contract with the 76ers after the Clippers only offered a three-year deal rather than four. With an average annual salary of around $50 million, George will save $4 million annually on state taxes by paying $1.47 million in Pennsylvania rather than $6.5 million in California.
Chris Paul
Golden State Warriors to San Antonio Spurs (Tax Rate: 13.3% to 0%)
Former Thunder guard Chris Paul is the third player on this list to leave California and the second to relocate to Texas. Paul will pay $0 in state taxes on his $10 million contract after paying $4 million in state income taxes last season while playing in California.
Kentavious Caldwell-Pope
Denver Nuggets to Orlando Magic (Tax Rate: 4.4% to 0%)
Caldwell-Pope is trading the mountains for the beach—and trading a state tax payment of $750,000 last year for a $0 state income tax bill next season playing for the Magic.
Isaiah Hartenstein
New York Knicks to Oklahoma City Thunder (Tax Rate: 10.9% to 4.75%)
Isaiah Hartenstein is the talk of the town here in Oklahoma City. Thunder fans can be grateful that not only did the team have cap space to offer an average annual salary of $29 million—far outpacing the Knicks' offer of $18 million—but that the state has a tax structure that saves Hartenstein an extra $500,000 in state income taxes.
Photo Credit: OKC Thunder on X (formerly Twitter)
Curtis Shelton
Policy Research Fellow
Curtis Shelton currently serves as a policy research fellow for OCPA with a focus on fiscal policy. Curtis graduated Oklahoma State University in 2016 with a Bachelors of Arts in Finance. Previously, he served as a summer intern at OCPA and spent time as a staff accountant for Sutherland Global Services.