NHL teams in states with no income tax have economic advantage, professor says

The hot-button topic of whether NHL teams based in states without income tax have an advantage is well and alive again.

The Panthers’ third straight trip to the Stanley Cup final means a team from the state of Florida has competed for hockey’s biggest prize six straight years, and has won three of the last five. In addition, the Vegas Golden Knights have made two appearances since their inception in 2017-18, with one Cup win.

Former NHLer and TNT commentator Paul Bissonnette sparked the debate last week, saying those teams have an advantage due to their state’s tax rules.

Jim Weese, a sport management professor at Western University, feels as though those teams have a leg up financially to build a contender.

“You could be paid less in a state like Florida or Nevada and as a result, your salary cap money will go a little bit further,” he said.

“Now I don’t think that’s the only thing. I mean, those places are pretty desired places to play as well. Beautiful warm weather, you could play in a little more of an obscurity than you can in a place like Toronto or Montreal or some of the hot hotbed hockey markets.”

Weese suggests there may be a point the league addresses the issue for the sake of levelling the playing field, saying it’s “not fair to the other teams.”

“Maybe they could factor in income tax implications and that might balance the field a little bit,” Weese said. “So the cap could go up in maybe some states that have a higher level of tax because competitive balance is so important. And those states that have no income tax, perhaps their salary cap would be a little bit lower.

“The way I understand it though, is that these players do pay income tax in the places where they play their road games. But there has to be a way to look at that, to develop a formula and create the competitive balance that the salary cap was designed to promote.”

Aside from the Tampa Bay Lightning, Vegas and Florida, the Dallas Stars and Nashville Predators also play in states with no income tax. The five teams have a combined six Cup wins since the 1998-99 season, with three going to Tampa Bay.

When asked about it leading up to Game 1 of the Stanley Cup final on Wednesday, commissioner Gary Bettman turned it over to deputy commissioner Bill Daly saying, “Why don’t you answer it because you know I hate the issue.”

With the NHL and NHLPA in negotiations for a new collective bargaining agreement, Daly doesn’t expect it to be something that will be “proactively” addressed.

“Certainly it’s an issue that some of our franchises have raised as a concern,” he said. “I guess what I’d say is at this point, we don’t share the level of concern that they have. And what I’d say on top of that is, these imbalances have existed forever. There’s nothing new here.

“There are so many reasons why a player may choose to play in a particular location, for a particular team, for a particular coach that have nothing to do with the tax situation in that market.”

David Silber, a partner at Crowe Soberman LLP, said players consider lots of factors including their chances of winning a Stanley Cup, where best to raise their families and taxes. However, Silber says players increasingly have an eye on what their net pay will be.

“I think players at the end of the day are like everybody else and they’re trying to see how can I make the most money for me and my family and how can ensure I can take care of myself and my family financially, even during my retirement,” he said.

“So I do find that as the years go by and yes, the cap space is going up, which makes it helpful for teams to compete and to try to sign those star players that they are taking more and more into consideration the tax implications of playing for a particular state or province and what that means and what the take-home pay will ultimately be for them. I do feel that that’s becoming a bigger issue for the players.”

This report by The Canadian Press was first published June 5, 2025.

Abdulhamid Ibrahim, The Canadian Press