There are 9 states that do not have state income taxes: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. There are 6 NHL teams in these 9 states. Collectively, these teams have had tremendous success over the last 10 seasons (2014-15 through 2023-24):
- Tampa Bay Lightning (6 conference finals, 2 Stanley Cups)
- Vegas Golden Knights (4 conference finals, 1 Stanley Cup in just 8 seasons)
- Dallas Stars (3 conference finals)
- Florida Panthers (2 conference finals, 1 Stanley Cup)
- Nashville Predators (1 conference final)
- Seattle Kraken (1 playoff appearance in first 3 seasons)
In these 10 seasons, these teams represent:
- 18.75% of the league’s teams.
- 31.37% of the teams in the conference finals.
- 30% of the Stanley Cup winners.
I’m not saying that these 6 “no state tax” teams have a 12% advantage over their competitors. Obviously, dozens of factors lead to a team’s success. Plus, you can’t ignore that the New York Islanders (2x) and the New York Rangers (3x) have made it to the conference finals during this stretch in one of the most heavily taxed states. However, you can’t deny, that in a “hard cap” league, it plays a factor in roster building.
In the case of Mikko Rantanen, when the season started, the expectation was that Rantanen would either re-up with the Colorado Avalanche and his former co-stars Nathan McKinnon and Cale Makar or reach unrestricted free agency on July 1st. Instead, the following happened:
- Turned down a reported offer of $11.75m per season (8 years) from Colorado.
- Traded to the Carolina Hurricanes.
- Turned down a reported offer of “between $13-14m” per season (8 years).
- Traded to the “no state tax” Dallas Stars.
- Signed with Dallas for $12m per season (8 years).
Are “no state taxes” the only reason Rantanen went to the Stars? Probably not, as he said “Dallas was a better fit”. While many players love being coached by Rod Brind’Amour, his system does restrict players offensive creativity (like the New Jersey Devils in the 90’s, early 2000’s).
IF Rantanen did make it to free agency, how would the Stars offer compare if the New York Rangers offered the same exact deal?
- Rantanen would pay $0 in state/local taxes with Dallas.
- Rantanen would pay roughly $1.7m annually in state/local taxes with New York.
Please note that while I’m not an accountant, I was able to talk to my friends Mr. Google and ChatGPT and find that Rantanen would be taxed at a 10.3% rate by New York State and 3.86% rate by New York City. At those rates, the Rangers would have to offer $14m per season to match the Dallas offer. Again, in a “hard cap” league, that’s a disadvantage that Gary Bettman should address in the upcoming NHL/NHL Players Association Collective Bargaining negotiations.
In the meantime, it would make sense for New York Rangers owner James Dolan, New York Islanders owners Jon Ledecky and Scott D. Malkin, and Buffalo Sabres owner Terry Pegula to spend a few days in Albany lobbying New York State Governor Kathy Hochul to eliminate state income taxes to help bring the Stanley Cup back to the Empire State.
