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Bronx Bomber in tax dispute with NY

Most sports fans have been following the soap operas surrounding A-Rod's impending big bucks deal with the Yankees or Barry Bonds' grand jury indictment.

Derek_jeter_topps_baseball_card_2 New York tax collectors, however, have their eyes on another Bronx Bomber.

State tax officials say Derek Jeter should have been taxed as a New York resident from 2001 through 2003. Jeter contends he was a Florida resident those years.

The two jurisdictions are as different fiscally as they are climatologically. That means the eventual determination of Jeter's living arrangements could cost the Yankees captain millions of dollars.

Beyond the jock tax: The first tax thought that comes to mind in these cases is the jock tax, the law in many states that allows for collection of an athlete's (or other visiting performer's) earnings during the event in a particular jurisdiction. (More on this levy at this Tax Foundation Web page.) 

But New York tax collectors want to go beyond the relatively paltry per-game sums in Jeter's case.

If the state revenue officers can prove Jeter is a New York resident, even partially, then they can get a portion of income tax on his Yankees' salaries for the years in question. Florida, on the other hand, doesn't tax wage income. In fact, it no longer taxes investment earnings either, having recently done away with its intangibles tax.

That makes the Sunshine State a perfect place for a celebrity to shelter the big bucks earned in investments and for endorsement deals.

Salary history: The Associated Press says that Jeter's Yankees' contract called for him to receive $11 million in 2001, $13 million in 2002 and $14 million in 2003. In addition, he has a $16 million signing bonus payable between February 2001 and June 2008.

As for housing, the wire service says that New York City real estate records show Jeter purchased an apartment at Trump World Tower in October 2001. was the first to reveal the state tax collector's interest in Jeter. According to the Web site, Jeter was given formal notice in February about New York's intention to collect taxes based on his New York residence. The Yankees captain followed that by filing a petition for redetermination.

Last week (Nov. 8 to be exact), Administrative Law Judge Timothy J. Alston put the ball back in the state tax department's court (sorry for the mixed sport metaphor). Alston issued an order (here) saying the state has the burden of proof and must furnish Jeter with a more detailed bill specifying his ''community involvement in jurisdictions other than Florida'' and ''public statements regarding his desire to be in New York.''

New York state of mind: I wouldn't bet against Empire State tax officials. When they find any NY connection, they've been among the most persistent in going after their perceived due from those sometimes transient residents.

Martha_stewart_2 Just ask Martha Stewart. Thirteen years ago, the lifestyle diva lost a battle with the New York state revenue office, which taxed her because she had a property on Long Island and did some business in the Big Apple.

According to the New York Times: " ... New York tax authorities in 1994 determined that Ms. Stewart's account of her whereabouts and her property was less than accurate.

"The issue was whether Ms. Stewart was required to pay state income taxes, and among the points of disagreement was whether she maintained a home in New York and how much time she spent in the state each year.

"After a lengthy investigation, during which investigators disputed some of Ms. Stewart's claims by looking through the pages of her own magazine, the regulators determined that she owed more than $200,000 in taxes, penalties and interest, an amount she eventually paid."

You can read the Times' full account of Martha's pre-SEC NY tax travails here.

And more on Jeter's NY tax fight can be found at the aforementioned Fox News; New York Times; New York Daily News; Newsday, as well as the Long Island paper's Business Beat blog; NY1 News; ABC News; and internationally at BBC News and The Canadian Press


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R Jones

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