Alongside Nikola Jokic, Jamal Murray was the standout player in game 3 of the NBA Finals. Murray missed the NBA Playoffs due to injury for the last two years but has been the second-best player for the Denver Nuggets this season. He came up clutch in game 3 and produced some crucial shots. Despite proving his All-Star credentials this year, Murray’s earnings have taken a hit this year due to the “Michael Jordan tax,” which was first enacted in 1991.
Advertisement
The now 26-year-old star is on a 5-year contract that “guarantees” him more than $31.6 million in salary. However, according to content creator Andrew Petcash, his overall earnings will take a hit of more than $18.2 million this year. Apart from a $943k jock tax first enacted due to Michael Jordan, Murray also has to pay almost $17.3 million in other fees and taxes. The jock tax is in addition to a number of other taxes and fees levied on professional athletes, such as Jamal Murray.
Jamal Murray’s earnings take a huge hit thanks to the “Jock tax” enacted due to Michael Jordan
After the Chicago Bulls won the 1991 NBA Finals over the LA Lakers, California released the income tax assessments of all Bulls players. This led to the formulation of the “Michael Jordan” revenge tax, first enacted by Chicago.
Only 5 states in the form of Florida, Nevada, Texas, Washington, and Tennessee currently do not impose the Jock Tax. Along with the Jock tax, the Colorado state tax, and other fees imposed on the overall earnings, Murray will end up owing more than $18.2 million!
It is also worth noting that the $3.2 million held by NBA in the Escrow account will be returned to Murray if the league revenue does not fall short of projections at the end of the year. Generally, this amount is received by players at the end of the season, and Murray should be able to save up.
However, as things stand, the worse situation financially for Murray is that he will end up forfeiting $18.2 million in taxes. Of course, Murray, with his net worth of over $40 million and multiple sponsorships with brands such as Adidas and Western Union, will not be sweating over his financial situation anytime soon!
Jamal Murray’s tax situation is made worse due to Colorado’s state income tax
The situation is made worse also because Colorado charges a 4.4% state income tax, unlike the 9 US states that do not levy any income tax. Florida, being one of the states that do not levy state tax, is a much-better place to be, at least tax-wise.
Miami Heat’s Jimmy Butler, for example, owes only slightly more than Jamal Murray in taxes despite being on a $45.1 million per year contract. This leads to an increase of $695k in overall tax liability for Jamal Murray.
According to Sportrac, Murray signed a 5-year, $170 million deal back with the Denver Nuggets back in 2019. Considering his performances this season, the Nuggets will be delighted with their overall investment.
