FOUL PLAY: TENNESSEE'S UNEQUAL
APPLICATION OF ITS JOCK TAX AGAINST
PROFESSIONAL ATHLETES
Grk Beger*
ABSTRACT
The Framers of the Constitution knew, and we should not forget
today, that there is no more effective practical guaranty against arbitrary
and unreasonable government than to require that the principles of law
which officials would impose upon a minority must be imposed
generally. Conversely, nothing opens the door to arbitrary action so
effectively as to allow those officials to pick and choose only a few to
whom they will apply legislation and thus escape political retribution
that might be visited upon them if larger numbers were affected. Courts
can take no better measure to assure that laws will be just than to
require that laws be equal in operation.'
INTRODUCTION.................................................
I. BACKGROUND
...........................................
II. CONSTITUTIONAL STANDARD UNDER EQUAL PROTECTION
CLAUSE OF FOURTEENTH AMENDMENT ....................
A. BriefHistoU of the FourteenthAmendment and Various
Applications.
...................................
B. Application of the FourteenthAmendment Under RationalBasis
Review .................................................
i. The Progeny of Allegheny..............................
ii. Standard Under Rational Basis Review...........................
iii. Scope of Review
............................
334
337
341
341
344
345
346
347
III. APPLICATION OF RATIONAL BASIS REVIEW TO THE ISSUE AT
* J.D. Candidate, 2015, Benjamin N. Cardozo School of Law; B.A., magna cum laude, 2012,
University of Pennsylvania. I would like to thank the journal editors and staff for their
diligence and contributions to this Note. Thanks also to Professor Anthony Sebok for his
guidance. To Mom, Dad, Ben, Doug and the rest of my family and friends, thank you for
your love, support, and patience throughout law school and the Note-writing process.
I Ry. Express Agency, Inc. v. New York, 336 U.S. 106, 112-113 (1949) Jackson's
Concurrence).
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[Vol. 13:333
BAR ...........................................................
351
A. Tennessee's-Arguments Under RationalBasis Review....................351
B. Making a Casefor the NBA and NHL...........
..... 353
CONCLUSION
...........................................................
359
INTRODUCTION
Geno Smith of the New York Jets and Peyton Siva of the Detroit
Pistons have a lot in common. Both professional athletes are rookies
trying to make an impact on their teams in their respective sports,
Smith in the National Football League (hereinafter "NFL") and Siva in
the National Basketball Association (hereinafter "NBA"), while being
paid the applicable minimum salary dictated by each league's Collective
Bargaining Agreement;2 Smith will be paid a base salary of $405,000,3
while Siva will be paid a partially-guaranteed $490,180.4 However,
when both Smith and Siva play their sole regular season games in the
state of Tennessee, against the Titans and Grizzlies respectively,' only
Siva will have to pay $2,500 for the privilege of working in the state of
Tennessee.
While the fact that one professional athlete will be taxed at a rate
of 41%' while another professional athlete will not be taxed at all for
the same exact service (one game) is completely disproportional, it is
See
CBA
Minimum
Annual
Salary
Scale,
REAL
GM
BASKETBALL,
http://basketball.realgm.com/nba/info; see also David Bryan, 2011-2014 NFL Minimum Base
Salaries,STEELERS DEPOT (July 23, 2011), http://www.steelersdepot.com/2011/07/2011-2014nfl-minimum-base-salaries.
3 Brian McIntyre, jets Rookie QB Geno Smith Hires Jay-Z's 'Roc Nation' Agency, YAHOO!
SPORTS (May 22, 2013), http://sports.yahoo.com/blogs/nfl-shutdown-comer/jets-qb-genosmith-hires-jay-z-roc-175711097.html.
4 Detroit Pistons Team Salary, HOOPS WORLD, http://www.hoopsworld.com/detroit-pistonsteam-salary.
5 See Schedule, OFFICIAL SITE OF THE TENNESSEE TITANS,
http://www.titansonline.com/schedule/season-schedule.html; see also 2013-2014 Pistons Schedule,
NBA, http://www.nba.com/pistons/schedule.
6 See TENN. CODE ANN. § 67-4-1702(a)(7); § 67-4-1703(d).
7 The rate is calculated by dividing Siva's total salary by the number of regular season
games (82) and then dividing the Jock Tax (2,500) by the previous number. See infra note 8. But
see Jeffrey L. Krasney, State Income Taxation of Nonresident ProfessionalAthletes, 2 SPORTS LAW. J.
127, 136 (1995), showing that some professional athletes -most notably NHL players - calculate
their income tax by duty days (the number of days the athlete spent within a taxing jurisdiction,
not including days off, divided by the total number of duty days per year covered under said
year of the contract).
2
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FOUL PLAY
335
exactly what Tennessee's Professional Privilege Tax for Professional
Athletes' (hereinafter "Jock Tax") has done since its enactment in 2009.
To add insult to injury, Siva will be assessed this tax even in games
where Pistons head coach Maurice Cheeks chooses not to play the
rookie.9 The Jock Tax, actually defined by the state of Tennessee as a
fee, forces NBA and National Hockey League (hereinafter "NHL")
players to pay $2,500 per game played in Tennessee, for up to three
games, regardless of each player's respective salary.
The Jock Tax further injures NBA and NHL players by being
classified by the Tennessee legislature as a fee'0 thus disqualifying it
from being credited against players' home state income tax. This leads
to a form of double taxation because the player is first assessed the Jock
Tax by the state of Tennessee and then taxed on the same earnings by
his home state because he cannot claim a tax credit, due to the original
tax as a fee." In fact, there are even situations, in both the NHL and
8 See
TENN. CODE ANN. 5
67
-4-1702(a)(7) (year) and § 67-4-1703(d) (year).
§ 67-4-
2
170 (a)(7):
There is levied a tax on the privilege of engaging in the following vocations,
professions, businesses or occupations . . . Persons employed as players on any
franchise of the National Basketball Association (NBA) or National Hockey League
(NHL) for more than ten (10) days in the tax period who are on the roster for any
NBA or NHL regular season game within the boundaries of the state. For purposes
of this subdivision (a)(7), "roster" means the list of players present in this state and
eligible to participate in games, regardless of whether the player actually participates
in the game.
5 67-4-1703(d):
Mhe
annual privilege tax established by this part payable by any player defined in 5
67-4-1702(a)(7) in any tax year shall be two thousand five hundred dollars ($2,500)
per game with a three (3) game annual cap. For purposes of this subsection (d), "tax
year" means June 1 through May 30, and the privilege tax is due and payable on June
1 following the end of the tax year.
See also , PrvfessionalPriilege Tax for ProfessionalAthletesNotice #09-13, TENN. DEP'T. OF REVENUE
(2009), http://www.tn.gov/revenue/notices/professional/09-13.pdf.
9 C.f Shannon Nash, The Jock Tax: A Taxing Problem for more than just Celebrities, TAX
CAREER DIGEST, http://taxcareerdigest.com/articles/articlel5.pdf.
10 Geoff Calkins, NBA Millionaires can Afford Tennessee's lock Tax' COMMERCIAL APPEAL
(July 27, 2013), http://www.commercialappeal.com/news/2013/jul/27/geoff-calkins-nbamillionaires-can-afford-tenn/?partner=RSS.
i But see Chris Stephens, Pressure Mounts against 'lock Tax" in Tennessee, TAX FOUNDATION,
http://taxfoundation.org/blog/pressure-mounts-against-jock-tax-tennessee. ("While the
player's home state will give a credit for the Tennessee tax paid, this doesn't even things out. If
336
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POLICY &ETHICS J.
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NBA, when players can be taxed at over one hundred percent of the
income earned in the state of Tennessee.12 Such as when "a player at
the NBA league minimum of $500,000 who is paid per game [and]
would make about $6,097 per game [plays in Tennessee]. If the player
plays only one game in Tennessee he would pay a tax of $2,500 for that
game, which is a tax rate of 41 percent . . . [and] would also pay
approximately 40 percent in federal income taxes, potentially leaving
almost nothing in take home pay."13 In summation, when the NFL's
Geno Smith plays in Tennessee he walks away with a paycheck befitting
that of a professional. However, when Peyton Silva of the NBA leaves
Tennessee his pockets may actually be lighter than when he entered the
state.14
When the laws of a state treat those that are similarly situated
differently, it raises proverbial red flags regarding the constitutionality
of such legislation. This Note analyzes whether the Jock Tax is in
violation of the Fourteenth Amendment, specifically the "Equal
Protection Clause", and is therefore unconstitutional." This subject is
of paramount importance to the scholarly community because it
demonstrates that the United States Constitution protects even the
the player lives in a state with no income tax, he will not receive a credit in his home state and
will bear the full burden of the Tennessee tax. If his home state allows him a credit, they will
only credit him for taxes paid out of state up to the amount he would have paid in state. This
means that if he lives in a low tax state he will receive a credit of approximately 3 or 4 percent
when he effectively paid 41 percent.').
12 See, e.g., Alan Pogroszewski & Kari A. Smoker, Is Tennessee's Version of the 'lock Tax"
Unconstitutional?,23 MARQ. SPORTS L. REv. 415 (2013) available at http://scholarship.law.marque
2
tte.edu/sportslaw/vol23/iss . for NHL: ("Mr. DiSalvatore's daily earnings, which translated
into $2,972.97 each day. His income earned for this one game in the NHL was then subject to
both federal and state taxes in addition to Tennessee's Professional Privilege Tax, a flat $2,500
fee assessed on NHL and National Basketball Association (NBA) players for the privilege of
playing a game in Tennessee... [T]he one game Jon DiSalvatore played in Nashville cost him a
hefty price, resulting in a $156.21 net loss.").
See also Zach Lowe, Paying to Play in Memphis? The Strange Case of Tennessee's Jock Tax,
GRANTLAND (uly 19, 2013), http://www.grantland.com/blog/thetriangle/post/_/id/69059/paying-to-play-in-memphis-the-strange-case-of-tennessees-jock-tax.
for NBA ("In certain instances.. .it can actually cost a player money to play in Memphis. It's
completely disproportionate.").
13 Stephens, supra note 11.
14 See, e.g., Mary Pilon, For Some Players, Tax Ensures a Loss Even After a Win,
N.Y.
TIMES(December 12, 2012), http://www.nytimes.com/2013/12/13/sports/athletes-questionfairness-of-tennessees-jock-tax.html?_r=1&.
is But see Pogroszewski & Smoker, supra note 12 (discussing whether the tax is in violation
of the Fourteenth Amendment under the Due Process Clause).
FOUL PLAY
2014]
337
wealthiest Americans from the abuse of over-taxation, despite the
inherent feelings from the public that "they can afford it."' 6
Section I of this Note will begin with a narrative of similar jock
taxes in the United States and then compare them to the current
Tennessee Jock Tax. Then Section II of this Note will first briefly
discuss the historical development and expansion of the Fourteenth
Amendment. Then Section II will examine the constitutional standard
under the Fourteenth Amendment's Equal Protection Clause using
specific case law from the Supreme Court of the United States, Circuit
Courts and relevant law review articles. The aforementioned Section
will then define the applicable standard to be applied in the issue at bar
under the Equal Protection Clause determining whether to apply strict
scrutiny, intermediate scrutiny or Rational Basis Review. Once a
standard of judicial review is determined, this Section will evaluate the
appropriate measurements using such a standard. In Section III, this
Note will employ the applicable standard to the Jock Tax weighing
both potential arguments and counterarguments of the taxes' validity
under the Equal Protection Clause. Finally, this Note will conclude
with a determination that Tennessee's Jock Tax may be in violation of
the Equal Protection Clause of the Fourteenth Amendment and
therefore wholly unconstitutional.
I.
BACKGROUND
A jock tax is defined as a "colloquial expression referring to the
trend among tax authorities toward levying state and local income taxes
on traveling business professionals, particularly visiting professional
athletes."" While taxes against nonresident athletes have gained traction
in the media in only the last decade, the first instances of taxing
16 See Calkins, supra note 10 ("Former Memphis Grizzlies guard Gilbert Arenas spent
$5,000 a month on the care and feeding of his sharks. So I'm supposed to feel bad that he was
taxed $2,500 for the privilege of playing at publicly funded FedEx Forum?'). See also Kavitha
A. Davidson, The Unympathetic Casualties of the fock Tax', BLOOMBERG VIEW (Dec. 16,
2013),
http://www.bloomberg.com/news/2013-12-16/the-unsympathetic-casualties-of-thejock-tax-.html ("On its face, the idea of charging athletes a seemingly nominal fee to fund the
arenas where they make all their money seems like a fine idea, especially if the alternative is
taxing local residents. I doubt a family making less than $44,000 a year - Tennessee's median
household income, according to the latest census - would look kindly upon being charged a fee
to essentially subsidize Zach Randolph's workplace. After all, what's $7,500 to a guy who's
making $17.8 million this year?").
17 Jock Taxes, TAX FOUNDATION, http://taxfoundation.org/tax-topics/jock-taxes.
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CARDOZO PUB. LAW, POLICY &ETHICSJ.
[Vol. 13:333
nonresident athletes actually occurred in 1968 and 1971, in California
and New York respectively." The first true jock tax to garnish media
attention occurred over twenty years after California's initial tax and
was in fact used in response to the original California tax." After the
1991 NBA Finals,20 California informed Michael Jordan, the NBA
Final's Most Valuable Player recipient, that he owed the state taxes for
each day spent in Los Angeles because of the 1968 tax.2' In retaliation
"to this new egregious policy, Illinois passed a bill famously known as
'Michael Jordan's Revenge' - imposing income taxes on athletes from
California and any other state that imposed a tax on their residents."2 2
Soon other state and local governments followed Illinois' lead, enacting
jock taxes and allowing said governments to reap increased tax
revenues via nonresident athletes23 who lacked political representation
in the taxing state.
The Tennessee Jock Tax differs from the aforementioned taxes in
two key methods of taxation. "[T]he tax is a flat tax as opposed to a
tax based on a percentage of income or some other relevant tax base...
[and second] is assessed only on athletes performing services in the
NBA and NHL, but not in the National Football League." 24 Since its
enactment on July 1st 2009, the Jock Tax assesses a flat fee of twentyfive hundred dollars ($2,500) per game, up to a maximum of three
games per tax year for members of the NBA's Memphis Grizzlies, the
18 See Alan Pogroszewski, When is a CPA as Important as Your ERA? A Comprehensive
Evaluation and Examinationof State Tax Issues on ProfessionalAthletes, 19 MARQ. SPORTS L. REV.
395 (2009).
19 See Noah Sheer, MichaelJordan'sRevenge: The Jock Tax, INSIDE HOOPS (Apr. 12, 2012),
http://www.insidehoops.com/jordans-revenge-jock-tax-041212.shtml.
20 Michael Jordan's Chicago Bulls defeated the Magic Johnson-led Los Angeles Lakers in
five games (4-1) in a best-of-seven game series. Jordan was subsequently named the NBA
Finals Most Valuable Player. Bulls Finally Get That Championship Feeling, NBA
ENCYCLOPEDIA, http://www.nba.com/history/finals/19901991.html (last visited Nov.12,
2014).
21 Noah Sheer, Michael Jordan's Revenge: The Jock Tax, INSIDE
HOOPS (Apr. 12, 2012),
http://www.insidehoops.com/jordans-revenge-jock-tax-041212.shtml.
22 Id. See also, Timothy B. Lee, lock Tax' Is Poor Sportsmanshep, SHOW-ME INSTITUTE
(Nov. 28, 2005), http://showmeinstitute.org/publications/commentary/taxes/287-jock-tax-ispoor-sportsmanship.html.
23 Noah Sheer, Michael Jordan's Revenge: The Jock Tax, INSIDE HOOPS (Apr. 12, 2012),
http://www.insidehoops.com/jordans-revenge-jock-tax-041212.shtml. ("Even city local taxing
authorities such as Cleveland, Kansas City, Detroit and Philadelphia established similar rules
independent of the state.").
24 Alan Pogroszewski & Kari A. Smoker, Is Tennessee's Version of the 'lock Tax"
Unconstitutional?,23 MARQ. Sports L. REv. 415 (2013).
2014]
FOUL PLAY
339
NHL's Nashville Predators, and both teams' out-of-state opponents. 25
Thus, the maximum amount an NBA or NHL player can be taxed in
the state of Tennessee in any individual tax year is a total of seventyfive hundred dollars ($7,500).26 The "[p]roceeds from the privilege tax
go to the Nashville Predators to subsidize operations at Bridgestone
Arena and the Grizzlies to subsidize the FedEx Forum in Memphis." 2 7
The revenue from the Tennessee tax is valued at $3.5 million dollars
per year and reportedly is used to attract event talent (Elton John, Paul
McCartney etc.) to the FedEx Forum, the home of the Memphis
GrizzieS28 and reduce the debt on the arena. 29 Another reason
Tennessee gives the revenue from the Jock Tax to the Predators and
Grizzlies is to offset both teams' operating losses. According to
Forbes, during the 2011-2012 season, the Predators and Grizzlies
suffered losses of $800,000 and $12,500,000 respectively.30 The Jock
Tax is even more egregious when it is put into context in terms of who
owns and operates the respective arenas of the Nashville Predators and
Memphis Grizzlies.
The FedEx Forum, which opened before the 2004-2005 NBA
season, was built using 100% public funding-at a cost of $250 millionthrough public bonds issued by the Memphis Public Building
Authority.3 1 The City of Memphis retains full ownership rights of the
FedEx Forum; however, it is operated by Hoops LP, the parent
company of the Memphis Grizzlies32 who "keep all of the revenue
generated by the new arena."3 3 It should come to no surprise that
Memphis Grizzlies CEO Jason Levien, a supporter of the Jock Tax,
See supra note 8.
Id.
27 Chas Sisk, Lawmakers Weigh Tennessee's Jock Tax, THE TENNESSEAN
(July 25, 2013),
http://archive.wbir.com/rss/article/281947/2/Lawmakers-weigh-Tennessees-jock-tax.
28 See Chris Butler, Slap Shot: TN Yock tax' applies to hockey, basketballplayers, but not NFL,
TENNESSEE WATCHDOG (Apr. 12, 2013), http://tennessee.watchdog.org/2013/04/12/sl
ap-shot-tn-jock-tax-applies-to-hockey-basketball-players-but-not-nfl.
29 Id.
30 Kavitha A. Davidson, The Unsympathetic Casualties of the lock Tax', BLOOMBERG VIEW
(Dec. 16, 2013), http://www.bloomberg.com/news/2013-12-16/the-unsympathetic-casualtiesof-the-jock-tax-.html.
31 See FedExForum,INSIDE ARENAS,
http://www.insidearenas.com/western/FedExForum.htm.
32 Id.
33 John Lombardo, New GriZjlies dizision to run FedEx Forum, SPORTS BUSINESS DAILY
(Aug. 18, 2003), http://m.sportsbusinessdaily.com/Journal/Issues/2003/08/2003081 8/ThisWeeks-Issue/New-Grizzlies-Division-To-Run-Fedex-Forum.aspx.
25
26
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CARDOZO PUB. LAW, POLICY &ETHICS J.
[Vol. 13:333
defended the fee by stating that: "the sales tax rate here for promoters
is more than double what it is in Mississippi. We're competing for acts
against Mississippi and Arkansas. Tennessee would lose those acts but
for the fund" created by the Jock Tax. 34 The Nashville Predators are in
a similar situation to the Grizzlies. The Bridgestone Arena, home of
the Nashville Predators, opened in 1996 and was built for $114 million
dollars - using 100% public funding - with bonds issued by City of
Nashville. It is owned by the Sports Authority of Nashville and
Davidson County, but operated by Powers Management Company, a
subsidiary of the Nashville Predators.3 s
Recognizing the unfair treatment of NBA and NHL players in
relation to the Jock Tax, Tennessee State Senator Jack Johnson placed a
bill on the floor of the State Senate to repeal the Jock Tax in February
of 2013.
Johnson's main problem with the Jock Tax is that the
proceeds go to the owners of the Memphis Grizzlies and Nashville
Predators rather than the cities where the arenas and games are located
and the city governments. 37 Additionally, the Jock Tax acts as a way for
owners to pay players less than the agreed upon salary, albeit only up to
$7,500, with no direct monetary benefit for Tennessee. However,
Johnson's bill "has stalled in the House and has been repeatedly
deferred for a Senate comrruttee.' 38 Therefore, the players themselves
have been forced to take actions into their own hands.
The most recent developments regarding the tax have taken place
in the Tennessee Legislature.
During the summer of 2013,
representatives from Memphis Grizzlies, National Hockey League
Players' Association [hereinafter NHLPA] and National Basketball
Players' Association [hereinafter NBPA] met with the Tennessee state
legislature to discuss the fairness and constitutionality of the Jock Tax
and to support Senator Johnson's bill. 9 David Keifer, former legal
counsel for the NBPA, stated that the union "firmly believe[s] that the
34 Supra note 28.
3s See BridgestoneArena, BALLPARKS.COM,
http://hockey.ballparks.com/NHL/NashvillePredators.
36 See S.B. 1247, 108th Gen. Assemb., (Tenn. 2013).
37 Supra note 28.
38 J amie McGee, Ination on jock tax' couldspur lawsuits, NHL union says, NASHVILLE BUSINESS
JOURNAL (Apr. 12, 2013, 6:55 AM), http://www.bizjournals.com/nashville/news/2013/04/12
/failure-to-repeal-athlete-tax-could.html.
39 See Butler, supra note 28.
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FOUL PLAY
341
tax is unfair, discriminatory and unconstitutional."" While both the
NBPA and NHLPA would like to work out a deal with the State of
Tennessee regarding the tax,' in order to avoid more drastic litigation,
the "players could be motivated to seek refunds or file suit before a
statute of limitations on the tax expires."42 While the NBA, as a league
and its individual owners, have been silent regarding support of its
players and union in relation to the Jock Tax, the NHL has privately
stated in its proposed term during the 2012 collective bargaining
session that it supports the players in their "choice to challenge the
legality and/or constitutionality of such taxes."43 Additionally, the
NHL has reportedly even agreed to pay the Jock Tax on behalf of their
players as part of the league's recent Collective Bargaining Agreement."
The issue of the Jock Tax and its constitutionality has strong
potential to be on the forefront of federal litigation in the future. In
fact, "[t]wo cases winding their way through Ohio's courts are raising
questions of whether a city or state can tax an athlete who does not
travel there, and what formula it should use to determine how many
days a player has worked."4 Therefore, this Note is both relevant and
important to the legal community as it will demonstrate that the Jock
Tax may be in violation of the Equal Protection Clause of the
Fourteenth Amendment and therefore unconstitutional.
II.
A.
CONSTITUTIONAL STANDARD UNDER EQUAL PROTECTION
CLAUSE OF FOURTEENTH AMENDMENT
BriefHistoU of the Fourteenth Amendment and Various Applications
The Fourteenth Amendment (and the Thirteenth Amendment)
Id.
41 Id.; see also, The Tennessee Plan: How to Het the NHL & NHLPA's Partnership,SB NATION
(July 26, 2010), http://www.wingingitinmotown.com/2010/7/26/1588417/the-tennesseeplan-how-to-help-the.
42 Janie McGee, Inaction on jock tax' could spur lawsuits,NHL union says, NASHVILLE BUSINESS
40
JOURNAL (Apr. 12, 2013, 6:55 AM), http://www.bizjournals.com/nashville/news/2013/04/12
/failure-to-repeal-athlete-tax-could.html.
43 NHL/NHLP PROPOSED CBA--SUMMARY OF TERMS, NHL.COM (Jan. 12, 2013)
http://www.nhl.com/nhl/en/v3/ext/CBA2012/NHLNHLPAjProposedCBA_Summary of_TermsFINAL-4Jan. 12 2013%20(1).pdf.
44 See Mary Pilon, For Some Players, Tax Ensures a Loss Even After a Win, N.Y. TIMES (Dec.
12,
2013),
http://www.nytimes.com/2013/12/13/sports/athletes-question-fairness-oftennessees-jock-tax.html?_r= 1&.
45 Id.
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CARDOZO PUB. LAW, POLICY& ETHICSJ.
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was enacted in 1868, at the end of the Civil War, in order to end slavery
in the United States of America and grant equal rights and protection to
former African American slaves.46 One of the key elements to assist
the integration of former slaves into society was the "Equal Protection
Clause" located in Section One of the Fourteenth Amendment. It
provides that "[n]o State shall make or enforce any law which shall
abridge the privileges or immunities of citizens of the United States;
nor shall any State deprive any person of life, liberty, or property,
without due process of law; nor deny to any person within its
jurisdiction the equal protection of the laws." 47
In terms of securing equal treatment for African Americans, the
Fourteenth Amendment was originally extremely unhelpful. 48 In fact,
in Plesy v. Ferguson, the court used the Fourteenth Amendment to
enforce segregation.49 However, after Brown v. Board of Educaion of
Topeka," "the separate but equal" standard purported by the Supreme
Court in Plessy v. Feruson was expressly overruled, paving the way for
equal treatment among all races." The Supreme Court has since
guaranteed equal protection to other immutable suspect classes,52 such
as national origin," religion,54 aenage, 5 and possibly sexual
orientations employing a similar strict scrutiny test as used in Brown.
46 U.S. CONST. amend. XIV.
47 U.S. CONST. amend. XIV, § 1.
48 See, e.g.,Plessy v. Ferguson, 163 U.S. 537 (1896) (leading to Jim Crow laws
via separate,
but equal ruling).
49
Id.
Brown v. Bd. of Educ., 347 U.S. 483 (1954) (finding separate but equal unconstitutional
as applied to public schools).
5 See Adarand Constructors v. Pefia, 515 U.S. 200 (1995) (holding that all racial
classifications, imposed by whatever federal, state, or local governmental actor, must be
analyzed by reviewing court under strict scrutiny and expressly overruling Metro Broad. Inc. v.
Fed. Commc'n Comm'n, et al., 497 U.S. 547 (1990)).
52 See, e.g., Yick Wo v. Hopkins, 18 U.S. 356 (1886) (stating that the Equal Protection Clause
would not be limited to discrimination against African Americans, but would extend to other
races, colors, and nationalities such as, in this case, legal aliens in the United States who are
Chinese citizens).
s3 See, e.g., Clark v. Jeter, 486 U.S. 456, 461 (1988) (explaining that national origin
classifications are suspect and therefore subject to the strict scrutiny of Brown).
5 See Susan Gelman & Susan Looper-Friedman, Thou Shalt Use The Equal Protection Clause
ForRekgion Cases (Not just The Establishment Clause), 10 U. PA.J. CONsT. L. 665 (2014).
ss See Hopkins, 18 U.S. at 356.
56 See, e.g., Perry v. Schwarzenegger, 591 F.3d 1147, (9th Cir. 2009) (stating that sexual
orientation may be the subject of strict scrutiny). But see United States v. Windsor, 133 U.S.
2675 (2013) (holding that sexual orientation is a quasi-suspect class and subject to intermediate
5
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FOUL PLAY
343
The standard proffered by the Supreme Court "[u]nder strict scrutiny,
[is that] the government has the burden of proving that . . .
classifications 'are narrowly tailored measures that further compelling
governmental interests."'
However, alleged gender-based violations
of the Equal Protection Clause, which have a similar immutable nature,
are considered a quasi-suspect class and analyzed under intermediate
scrutiny."
The standard offered by the Supreme Court under
intermediate scrutiny is that a governmental body must show
"exceedingly persuasive justification . . . that the challenged
classification serves important governmental objectives and that the
discriminatory means employed are substantially related to the
achievement of those objectives."" Using intermediate scrutiny the
Supreme Court has invalidated laws that disproportionately favor men
over women in areas such as dependent-spouse qualifications for
military personnel,60 age for alcohol consumption" and accessibility to
military academies.6 2 All other laws that purport to discriminate against
similarly situated classes, including those relating to age, political
affiliation,6 4 and wealth," are subject to a basic standard of Rational
Basis Review for alleged violations of the Fourteenth Amendment.
Therefore, in relation to tax law and such tax classifications, as long as
said classification does not involve a suspect classification (race,
national origin, alienage, or religion) or a quasi-suspect classification
scrutiny); Lawrence v. Texas, 539 U.S. 558 (2003) (invalidating a law based on sexual
orientation under the Due Process clause of the Fourteenth Amendment).
57 Johnson v. California, 543 U.S. 499 (2005) (quoting Adarand Constructors, Inc. v. Pefia,
515 U.S. 200, 227 (1995)).
s8 See Craig v. Boren, 429 U.S. 190 (1976) (applying intermediate scrutiny to gender
classifications used to enforce different alcohol restrictions). But see Geduldig v. Aiello, 417
U.S. 484 (1974) (distinction based on gender held under rationality review because it was related
to wealth).
59 Miss. Univ. for Women v. Hogan, 458 U.S. 718, 724 (1982) (quoting Wengler v.
Druggists Mut. Ins. Co., 446 U.S. 142, 150 (1980)).
60 See, e.g., Frontiero v. Richardson, 411 U.S. 677 (1973) (holding that access to dependency
status is in violation of the Equal Protection Clause if distinctions are made based on gender).
61 See, e.g., Boren, 429 U.S. at 190.
62 See, e.g., United States v. Virginia, 518 U.S. 515 (1996) (holding that military colleges must
provide equal access to both genders).
63 See, e.g., Mass. Bd. of Ret. v. Murgia, 427 U.S. 307 (1976) (holding that classifications
based on age are subject to Rational Basis Review).
64 See, e.g., Pagin v. Calder6n, 448 F.3d 16 (1st Cir. 2006) (holding that classifications based
on political affiliation are subject to Rational Basis Review).
65 See, e.g., Geduldig v. Aiello, 417 U.S. 484 (1974) (distinction based on gender held under
rationality review because it was related to wealth).
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(gender) it is subject to a rational basis test." Therefore, because the
Jock Tax makes classifications based on which sport an athlete plays,
the next section of this note will examine the Rational Basis Review
standard with a particular focus into classifications based on tax and
wealth.
B.
Application of the FourteenthAmendment Under RationalBasis Review
The Equal Protection Clause of the Fourteenth Amendment
prevents states and governmental bodies from discriminating against
individual taxpaying groups that impose irrational" tax classifications."
Under Rational Basis Review the Court will determine "whether the
classifications drawn in a statute are reasonable in light of its
purpose."69 The paradigm case to the issue at bar is Allegheny Pittsburgh
CoalCo. v. County Commission of Webster County, which established that tax
classification will be upheld under the standard of Rational Basis
Review only if they are "neither capricious nor arbitrary, and rests upon
some reasonable consideration of difference or policy."7 0 Part i of this
section will discuss Allegheny and its potential applicability to the Jock
Tax. Then Part ii will comprehensively explain the standard of Rational
Basis Review. Finally, Part iii of this section will discuss the newly
changing scope of Rational Basis Review used by the Supreme Court.
66 See Romer v. Evans, 517 U.S. 620, 631 (1996) ("[I]f a law neither burdens a fundamental
right nor targets a suspect class, we will uphold the legislative classification so long as it bears a
rational relation to some legitimate end."); See, e.g., Mass. Bd. of Ret. v. Murgia, 427 U.S. 307,
315; Harrah Indep. School Dist. v. Martin, 440 U.S. 194, 199 (1979). But seeLochner v. New
York, 198 U.S. 45 (1907) (demonstrating the early view that economic regulations were subject
to strict scrutiny by virtue of freedom to contract).
67 See, e.g.,Romer, 517 U.S. at 643.
68 See Yick Wo v. Hopkins 118 U.S. 356, 369 (1886) (a promise by the government to have
"equal laws"); But see Reed v. Reed, 404 U.S. 71, 75 (1971) (The Fourteenth Amendment "does
not deny to States the power to treat different classes of persons in different ways.").
69 McLaughlin v. Florida, 379 U.S. 184, 191 (1964); Cf, Reed v. Reed, 404 U.S 71, 76
(1971), (quoting F.S. Royster Guano Co. v. Virginia, 253 U.S. 412, 415 (1920) ("[a] classification
must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair
and substantial relation to the object of the legislation, so that all persons similarly
circumstanced shall be treated alike.")).
70 Allegheny Pittsburgh Coal Co. v. County Com'n of Webster County, W.Va., 488 U.S.
336, 344 (1989); Cf., Helvering v. Davis, 301 U.S. 619, 640 (1937) (stating that the government
will uphold laws under rational basis review unless the statute is "clearly wrong, a display of
arbitrary power, not an exercise of judgment.").
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345
The Progeny of Allegheny
In Allegheny, the Webster County tax assessor valued certain
property in the county on the basis of its recent purchase price, while
property that was not recently sold was assessed a value under its
previous assessment. The tax system of West Virginia, particularly
Webster County, "resulted in gross disparities in the assessed value of
generally comparable property."" The Supreme Court of the United
States held that the "Equal Protection Clause permits a State to divide
different kinds of property into classes and to assign to each a different
tax burden so long as those divisions and burdens are neither arbitrary
nor capricious."7 2 However, it "requires that such general adjustments
be accurate enough to obtain, over a short period of time, rough
equality in tax treatment of [those] similarly situated."" The Supreme
Court held that Webster County's tax assessments were found to be in
violation of the Fourteenth Amendment's Equal Protection Clause
because they intentionally and systematically undervalued property
unfairly, depriving some citizens of their right to Equal Protection.74
The issue in Allegheny is similar to the issues at bar because in both
instances, similarly situated persons are being intentionally taxed at
vastly different rates, wholly depriving some persons of the Equal
Protection afforded by the Fourteenth Amendment.
However, Allegheny may be viewed as an outlier, in light of many
other cases where the court has been asked to invalidate laws under the
Equal Protection Clause using Rational Basis Review. After the
Lochner era concluded in 1937," courts were much more reluctant to
invalidate state laws-under the Fourteenth Amendment-pertaining
to economic regulation, consistently applying an insurmountable
standard of Rational Basis Review.7 ' The final nail in the coffin for
71Allegheny
PittsburhCoal Co., 488 U.S. at 336.
72 Id. at 337.
73 Id. at 336.
74 Id. at 337.
's See, e.g., Adkins v. Children's Hosp. 261 U.S. 525 (1923) (declaring a minimum wage law
for women unconstitutional via the Fourteenth Amendment); Morehead v. New York ex rel.
Tipaldo, 298 U.S. 587 (1936) (holding a minimum wage law invalid because it did not serve a
valid state police purpose); Weaver v. Palmer Bros. Co. 270 U.S. 402 (1926).
76 See, e.g., West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937) (upholding a state law
requiring a nunimum wage, expressly overruling Adkins and Morehead); United States v.
Carolene Products Co., 304 U.S. 144 (1938) (declaring a need for greater judicial deference to
government economic regulations).
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suggesting a stricter level of scrutiny was hammered in by Justice
Douglas in Williamson v. Lee Optical; "The day is gone when this Court
uses. .. the Fourteenth Amendment to strike down state laws, regulatory
of business and industrial conditions, because they may be unwise,
improvident, or out of harmony with a particular school of thought."n
The Supreme Court now prefers to give extreme deference to the
legislature's decision making when deciding laws under the Rational
Basis Review standard. The Court has gone so far as to state that: "We
do not sit as a super-legislature to determine the wisdom, need, and
propriety of laws that touch economic problems, business affairs, or
social conditions."" The Court has a preference for issues involving
non-suspect classes, such as taxation, to be resolved through the
legislative process and the election of state officials who can be directly
held accountable for their legislative decisions via the political process."
Yet, courts will still invalidate tax laws under Rational Basis Review if
they are "palpably arbitrary." 0 Furthermore, the Supreme Court has
displayed a growing trend of granting certiorari to Equal Protection
cases that require Rational Basis Review.
ii.
Standard Under Rational Basis Review
Under Rational Basis Review a law or statute will be
unconstitutional if it is found to be arbitrary or capricious. Black's Law
Dictionary defines arbitrary as "founded on prejudice or preference
rather than on reason or fact."8 2 Additionally, Black's defines capricious
as "contrary to the evidence or established rules of law."" While these
Williamson v. Lee Optical of Okla. Inc., 348 U.S. 483, 488 (1955).
78 Griswold v. Conn., 381 U.S. 479, 482 (1965).
79 See also Munn v. State of Ill., 94 U.S. 113, 134 (1876) ("For protection against abuses by
legislatures the people must resort to the polls, not to the courts."). But see Edward L. Barrett,
Rational Basis Standardfor Equal Protection Reiew of Ordinary Legislative Classifications, 68 KY. L.J.
845, 850 (1979-1980) ("The Constitution itself mandates that final decisions as to the validity of
legislation burden such interests are not to rest with the legislatures.").
so Northwest Financial, Inc. v. State Bd. of Equalization, 229 Cal.App.3d 198 (1991). See
also City of Cleburne, Tex. v. Cleburne Living Ctr., 473 U.S. 432, 440 (1985) ("When social or
economic legislation is at issue, the Equal Protection Clause allows the States wide latitude.").
81 During the ten most recent terms of the Supreme Court, there have been sixty opinions
written on cases relating to rational basis review, including twelve during the 1978 term.
Edward L. Barrett, Rational Basis Standard for Equal Protection Review of Ordinary Legisladve
Classifications,68 KY. L.J. 845, 857 (1979-1980).
77
82 BLACK'S LAW DICTIONARY 125 (10th ed. 2014).
83 BLACK'S LAW DICTIONARY 254 (10th ed. 2014).
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two definitions may be helpful in other scholarly endeavors, neither
lends much help to understanding how the Supreme Court can
invalidate a law under Rational Basis Review. According to the Court
in Cleburne," legislation will be given a presumption of rationality, and
therefore found not to be arbitrary, if "the classification drawn by the
statute is rationally related to a legitimate state interest."85 However,
"mere negative attitudes, or fear, unsubstantiated by factors which are
properly cognizable"" will not be considered a legitimate state interest
and can be invalidated under the Equal Protection Clause of the
Fourteenth Amendment.
Furthermore, a regulation does not comply with the Equal
Protection Clause when it applies unequally upon classes whose
differentiation is in no way relevant to the objects of regulation." If
there is only a "bare congressional desire to harm a politically
unpopular group [this] cannot constitute a legitimate government
interest[,]"" and the law violates the Equal Protection Clause. Justice
Jackson added another factor to be considered in his concurrence in
Railway Express Ageny, Inc. v. New York, stating that the Court is "much
more likely to find arbitrariness in the regulation of the few than of the
many."89 Therefore in order for a law to be considered neither arbitrary
nor capricious there must be a rational relationship between the
disparity of treatment and some legitimate governmental purpose.o A
line must be able to be drawn from the distinction of similarly situated
persons to the legitimate government interest in the classification.
iii.
Scope of Review
When analyzing the constitutionality of a law under Rational Basis
Review the breadth of the scope used by the Court is just as important
84 Cleburne, 473 U.S. at 432.
as Id. at 440.
86 Id. at 448.
87 See Id.
88
89
U.S. Dep't of Agric. v. Moreno, 413 U.S. 528, 534 (1973).
Ry. Express Agency, Inc. v. New York, 336 U.S. 106, 113 (1949).
90 See Cleburne, 473 U.S. at 441; f, Carmichael v. S. Coal & Coke Co., 301 U.S. 495, 509
(1937) (stating that a state legislature may "make distinctions of degree having a rational basis").
See also Ry. Express Agency, Inc., 336 U.S. at 115 (ackson, J., concurring) ("It is urged with
considerable force that this local regulation does not comply with the Equal Protection Clause
because it applies unequally upon classes whose differentiation is in no way relevant to the
objects of the regulation.").
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as the standard itself. Therefore, before one can attempt to apply
Rational Basis Review to invalidate an arbitrary and capricious law, one
must first understand the scope of review under such a standard. If the
Court uses a limited scope, it will find the law to be reasonable, so long
as the state gives any reason for imposition of the law. It leaves the
plaintiffs with the virtually insurmountable task of proving that "no
state of facts 'reasonably may be conceived to justify' the
classification."" This burden becomes even more difficult when a
statute's legislative history is absent, and the difficulty is compounded
by the fact that the legislature is not required to give a reason for a
statute upon its creation and implementation. However, if the Court
utilizes a broader scope, it will not just accept the state's reason without
further inquiry. Rather the Court will analyze whether the proffered
reason is actually reasonable and not arbitrary or capricious.
Recent Supreme Court opinions demonstrate "that a broader
scope of review is being exercised, [and] that the Court upholds
legislation only when it makes an affirmative finding of rationality." 2
Cases such as Holt Civic Club v. City of Tuscaloosa93 and Cakfano v. Boles"
examined the justifications given for certain classifications and then
determine whether the statute "bears a rational relation to the
government's desire."95 Lower Federal and State courts have also taken
to the new broader scope of review. In Dorrough v. Estelle," the Fifth
Circuit stated, "[W]hatever it may have been in the past, the rational
relationship standard is relatively strict. Recent Supreme Court cases
teach that the [Rational Basis Review] test calls for a serious and
genuine judicial inquiry into the correspondence between the
classification and the legislative goals."" Although there may seem to
91 Edward L. Barrett, Rational Basis Standardfor Equal Pmtetion Review of Ordinay Legisladve
Classificaions, 68 KY L.J. 845, 858 (1979-80) (quoting Holt Civic Club v. Tuscaloosa, 439 U.S.
60, 74 (1978)). See also Vance v. Bradley, 440 U.S. 93, 111 (1979) ('Those challenging the
legislative judgment must convince the court that the legislative facts on which the classification
is apparently based could not reasonably be conceived to be true by the governmental
decisionmaker.").
92 Barrett, supra note 91, at 858 ("The form of these opinions suggests that the Court is
reexamining legislative judgments and making its own determination of reasonableness.").
93 Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60 (1978).
94 Caifano v. Boles, 443 U.S. 282 (1979).
95
Id. at 293.
96 Dorrough v. Estelle, 497 F.2d 1007 (5th Cir. 1974).
97 Donugh, 497 F.2d at 1011. But see Bd. of Trs. of Univ. of Ala. v. Garrett, 531 U.S. 356,
366-67 (2001) ("The State need not articulate its reasoning at the moment a particular decision
2014]
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be a shift of the Supreme Courts' scope of review in the past fifty years,
the effects of such a change have not been realized; from 1955 to 1980,
ninety cases have been decided under a Rational Basis Review by the
Supreme Court and in only eight of those cases has the challenged
statute been held to be invalid pursuant to the Equal Protection Clause
of the Fourteenth Amendment."
The difficulty of persuading any court to find a law invalid under
Rational Basis Review is further complicated by the Supreme Court's
majority opinions in Railway Express Ageng" and Williamson v. Lee
Optical.'00 Both cases stand for the proposition that there "is no
requirement of equal protection that all evils of the same genus be
eradicated or none at all."'O' Therefore, under Rational Basis Review, it
is constitutional for a state to subject only some citizens to a law
because the court will allow the state to apply the law gradually to its
citizens. In other words, the state is not required to choose between
applying a law to all of its citizens or none of its citizens.
In Railway Express Ageng, the Supreme Court upheld a law that
prohibited advertising on vehicles, unless the advertisements were
products sold by the owner of the vehicle. The reason proffered by the
State of New York, in defense of the rationality of the statute, was that
putting advertisements on vehicles would distract drivers. However,
the statute is completely arbitrary and capricious; there is no true
difference in the level of distraction between advertisements of
products on vehicles that are sold by the owner of the vehicle, and
advertisements of products that are not sold by the owner of the
vehicle. Even the Court opined that there is no difference between the
distinction -of those who are regulated and those who are notmade by the State, 10 2 the Court gave great deference to the legislature;
the State "may well have concluded that those who advertised their
is made. Rather, the burden is upon the challenging party to 'negative any reasonably
conceivable state of facts that could provide a rational basis for the classification."' (quoting
Heller v. Doe by Doe 509 U.S. 312, 320 (1993)).
98 Bamett, supra note 91, at 856
99 Ry. Express Agency, 336 U.S. at 113.
100 Williamson v. Lee Optical of Okla., Inc., 348 U.S. 483 (1955).
101 Ry. Express Agency, 336 U.S. at 110.
102 Id. at 109-110 ("It is said, for example, that one of appellant's trucks carrying the
advertisement of a commercial house would not cause any greater distraction of pedestrians
and vehicle drivers than if the commercial house carried the same advertisement on its own
truck.").
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own wares on their trucks do not present the same traffic problem in
view of the nature or extent of the advertising which they use."1 03
Therefore, Railway Express Ageng stands for the proposition that
classifications that are under-inclusive in relation to the rationale of a
statute are not invalid under the Equal Protection Clause. Railway
Express Ageng could also be interpreted further that classifications that
are illogical, and even irrational, will be upheld under Rational Basis
Review as not violating the Equal Protection Clause of the Fourteenth
Amendment.
Williamson v. Lee Optical expands upon the protection afforded to
legislative decision making under Rational Basis Review by holding that
"the law need not be in every respect logically consistent with its aims
to be constitutional."' 04 Williamson also protects under-inclusive laws by
giving great deference to the legislature via two different approaches to
Rational Basis Review: 1) Evils to be addressed in the "the same field
may be of different dimensions and proportions, requiring different
remedies,"'s and 2) "[I]he reform may take one step at a time,
addressing itself to the phase of the problem which seems most acute
to the legislative mind."'0 6 In Williamson, the State of Oklahoma
enacted an illogical lawo' that made "it unlawful for any person not a
licensed optometrist or ophthalmologist to fit lenses to a face or to
duplicate or replace into frames lenses or other optical appliances,
except upon written prescriptive authority of an Oklahoma licensed
ophthalmologist or optometrist."'
Implicitly forbidding opticians
"from fitting or duplicating lenses without a prescription from an
ophthalmologist or optometrist."' 0 ' Common sense would dictate that
this law is also arbitrary and capricious because there is no difference in
the qualifications and abilities of opticians when compared with
ophthalmologists or optometrists in regard to fitting and duplicating
Id.
Williamson, 348 U.S. at 488-89.
105 Id. at 488.
Cf., Mathews v. Diaz, 426 U.S. 67 (1976) ("It is of no constitutional
significance that the degree of rationality is not as great with respect to certain ill-defined
subparts of the classification as it is with respect to the classification as a whole.").
106 Williamson, 348 U.S. at 489.
107 Id. at 487. ("The Oklahoma law may exact a needless, wasteful requirement
in many
cases. But it is for the legislature, not the courts, to balance the advantages and disadvantages of
the new requirement.")
103
104
los
Id. at 486.
109 Id.
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351
lenses. However, the Court found otherwise and not only held the law
to be rational, but constitutional as well. While one could argue that
these cases fall under a narrow scope of review given when the
decisions were made-Railway Express Ageng in 1949 and Williamson in
1955-both cases have yet to be overruled by the Supreme Court, and
therefore represent another hurdle for those seeking to invalidate laws
under Rational Basis Review.
III.
APPLICATION OF RATIONAL BASIS REVIEW TO THE ISSUE AT BAR
The subsequent sections will first address the State of Tennessee's
reasoning for instituting the tax classification distinction between NBA
and NHL players and NFL players. Then the Jock Tax will be
scrutinized under the aforementioned Rational Basis Review standard,
while implementing arguments that could be made by the NBA and
NHL that the Jock Tax is in violation of the Equal Protection Clause of
the Fourteenth Amendment. Finally, this section will conclude with a
hypothesis on the constitutional validity of the Jock Tax in regards to
the Equal Protection Clause of the Fourteenth Amendment.
A.
Tennessee's Arguments Under RationalBasis Review
As stated above,1 o a state law that classifies an equally situated
person will be found to be in compliance with the Fourteenth
Amendment only if they are not members of a protected class... and
that the "distinctions of degree [have] a rational basis."" 2 Since
professional athletes do not constitute a protected class, in order for the
Jock Tax to be valid under the Equal Protection Clause, the State need
only supply a rational reason for the distinction directed at a legislative
3
goal.''
In the issue at bar the only reasoning proffered by Tennessee
Revenue Commissioner, Reagan Farr, is that the "NFL rules would
have penalized the state had it included their guys [NFL players]."ll 4
110See supra Part II.B.
"I Id.
Carmichael v. S. Coal & Coke Co., 301 U.S. 495, 510 (1937).
See generally Allegheny Pittsburgh Coal Co. v. Cnty. Comm'n of Webster Cnty., W.Va.,
488 U.S. 336, 344 (1989) (A law does not violate Equal Protection if it is "neither capricious
nor arbitrary and rests upon some reasonable consideration of difference or policy.").
114 Comment to Chas Sisk, In Session, GriZies, Preds May Have to Pay to Play, Gune 3, 2009
17:50 EST), http://blogs.tennessean.com/politics/2009/grizzlies-preds-may-have-to-pay-to112
113
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Therefore, the State could argue that there is a reasonable distinction
between the tax classifications, namely, the fear of penalty levied by the
NFL. However, State Senator Jack Johnson, who tried to get the Jock
Tax repealed in 2013, openly stated that he has no idea why NFL
players were not included in the Jock Tax."' If the Court views the
case at bar under a narrow scope, then merely stating that the State
fears a penalty by the NFL would be sufficient under Rational Basis
Review. Yet, if the Court uses the broader scope that has been
employed recently, but sporadically by the Supreme Court, Tennessee
may need to further elaborate on their rational reason for the class
distinction.
However, under a narrow scope of Rational Basis Review,"'
Tennessee will argue that the Jock Tax should be deemed
constitutional, "as long as the classificatory scheme chosen by [the
legislature] rationally advances a reasonable and identifiable
governmental objective.""'7 Under this scope, it will be extremely
difficult for the NBPA to argue that the Jock Tax is unconstitutional.
As long as the Court accepts Tennessee's argument that there is a
"reasonable and indefinable government objective" in collecting taxes
and raising state revenues by taxing only NBA and NHL players, the
Jock Tax will be held to be constitutional. - Even if the NBPA
demonstrates that it would be more beneficial to the State's
"governmental objective" to tax all athletes rather than some athletes,
the Court "must disregard the existence of other methods of
allocation""' that may make more logical sense."' Tennessee will argue
that while the Jock Tax "may exact a needless, wasteful requirement in
many cases . . it is for the legislature, not the courts, to balance the
advantages and disadvantages of the new requirement."120
play. (last visited Nov. 12, 2014).
1s Chris Butler, Taxing Sports: TN's fock tax posiby unconstitutional, orn ns a mystey,
TENNESSEE WATCHDOG (July 30, 2013), http://tennessee.watchdog.org/2013/07/30/taxingsports-tns-jock-tax-possibly-unconstitutional-its-origins-a-mystery.
116 See infra III.B.
Sanchez v. State, 692 N.W.2d 812, 818 (2005) (quoting Schweiker v. Wilson, 450 U.S.
221, 235 (1981)).
117
118 Id.
119 See Williamson, 348 U.S. at 483.
120
Id. at 487.
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B.
353
Making a Casefor the NBA and NHL
The NBA and NHL have two routes in order to attempt to
invalidate the Jock Tax under the Fourteenth Amendment: 1)
distinguishing the case at bar from previous case law; or 2)
demonstrating that the Jock Tax's distinction is arbitrary and capricious.
Yet, even if the Court is not swayed by either of the following
arguments, the two leagues may be able to invalidate the Tennessee
Jock Tax under other sections of the Constitution:12' either under the
Due Process Clause or the Commerce Clause.122
If the Court uses a broader scope to determine the rationality of
25 the
1burne,
the Jock Tax, as it has done in Holt,123 Calfano, 124 and C
NHL and NBA players may be able to argue that the Tennessee
Legislature's fear of a penalty by the NFL is wholly irrational and
unsubstantiated. The Supreme Court has held under Rational Basis
Review that "mere negative attitudes, or fear, unsubstantiated by factors
which are properly cognizable, . . . are not permissible bases for
treating" 126 those of a similarly situated nature, in a non-suspect class,
differently. The NHL and NBA players can show that Tennessee
Revenue Commissioner Farr's fear of a penalty is unsubstantiated
because nowhere in the language of the National Football Collective
Bargaining Agreement is there any mention of a team, or the league as a
whole, having the ability to "penalize" a state for levying income taxes
or fees on NFL players. Furthermore, the NFL Players Association has
yet to respond to inquiries about what, if any, type of penalty a team or
the league could assess against a state that chooses to unfavorably tax
their players.127
On a macro-level, there are only two fears that are even arguably
121See Zablocki v. Redhail, 434 U.S. 374 (1978) ("If an interest is accorded special protection
by some other clause of the Constitution, it seems to matter little whether judicial review of
burdens on that interest is conducted under the rubric of the underlying constitutional clause or
under the rubric of equal protection.").
122 Alan Pogroszewski and Kari A. Smoker, Is Tennessee's Version of the 'Jock Tax"
Unconstitutional?, 23 MARQ. SPORTs L. REV. 415, 419-22 (2013) available at
http://scholarship.law.marquette.edu/sportslaw/vol23/iss2/.
123 Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60 (1978).
124 Califano v. Goldfarb, 443 U.S. 282 (1979).
125City of Clebrune v. Cleburne Living Center, 473 U.S. 432 (1985).
126 Id. at 448.
127 The author of this Note has attempted multiple personal calls and emails to the NFLPA,
and have yielded no response.
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cognizable as penalties that the NFL or Tennessee Titans could levy
against the State of Tennessee: (1) moving the team out of the State or
(2) denying any bids the State of Tennessee and the Tennessee Titans
make to host the Super Bowl. Moving the Titans out of Tennessee
requires an agreement between the NFL and the Titans and then
requires a majority vote by the other thirty-one NFL franchises. The
NFL has been extremely interested in moving a team to Los Angeles,
California or London, England. However, the NFL has exclusive rights
to professional football in both venues and the decision to move a team
to either destination would require a unilateral push by the NFL league
office.128 Furthermore, there are a few teams in less successful markets
that are more interested in moving and may have priority over the
Titans, including the Jacksonville Jaguars, San Diego Chargers, Oakland
Raiders, St. Louis Rams and Minnesota Vikings. 29
Yet, what truly makes the threat of moving the Titans from the
State of Tennessee non-cognizable is the current state of their
ownership. In 2013, the man who brought the NFL to Tennessee,
It is rumored, but
Kenneth S. "Bud" Adams, passed away.' 30
unconfirmed, that Adams has left the Titans to his three children, Susie,
Amy and Kenneth III. While "[p]assing a family business to a younger
generation can create rifts if all the heirs are not committed to the same
goal or if other business interests force compromise"13' and could lead
to the team leaving Tennessee, this will almost certainly not be the case
with the Titans. In Adams' will, "he made it clear that he wanted the
team to remain in Nashville because of the commitment he and the
city's leadership made in 1996".132 In fact, in his will "Adams
established a plan to 'pass ownership of the Titans to members of his
family while contractual commitments keep the team at LP Field
through the duration of the original lease,' which runs through the 28th
128 Luke Hughes, Report: NFL Keeping Teams From Moving to Los Angeles, Will Dedde Which
Team Can Move and When, NESN (Nov. 11, 2013, 3:09 PM), http://nesn.com/2013/11/reportnfl-keeping-teams-from-moving-to-los-angeles-will-decide-which-team-can-move-and-when/.
129 Id.
130 David Climer, With Bud Adams' Death, What Lies Aheadfor Titans?, USA TODAY (Oct. 22,
2013, 9:10 AM), http://www.usatoday.com/story/sports/nfl/titans/2013/10/21 /tennesseenashville-franchise-future-bud-kenneth-adams/3144525.
131 Id. "When Art Rooney left the Pittsburgh Steelers to his sons ... Dan Rooney's brothers
had to sell because of their involvement in gambling operations at horse racing tracks. NFL
rules do not permit those involved in garming operations to own teams. Dan Rooney bought
out the shares of his brothers and enlisted outside investors to the new ownership group."
132 Climer, supra note 130.
2014]
season.
FOUL PLAY
355
Adams had the 'foresight - and wealth - to establish a
succession plan that keeps the NFL team in the family.""" Typically,
teams in the polar opposite situation of the Titans desire a change of
scenery. It would make little sense to move the team from Tennessee
because they have "sold out every game ever played at LP Field, the
stadium is still in great shape (including some very expensive updates
just last year), the team is wildly popular locally, [and] consistently
profitable."' 3 4 Therefore, the fear of moving the Titans out of the State
of Tennessee, in retaliation to including NFL players in the Jock Tax, is
not cognizable.
The second proposed penalty-denial of a Super Bowl bidwould be equally difficult to prove as a cognizable fear, which would
constitutionally allow for differentiations in the application of the Jock
Tax. The NFL's top priority when choosing a city to host the Super
Bowl is on new and state of the art venues to showcase the game.
Additionally, other requirements include: a 70,000-seat stadium or one
that can be expanded to at least that size; at least 19,000 hotel rooms
that require three or four night minimum stays, including rooms for
both teams and NFL personnel; a range of nearby facilities or spaces to
house the media and accreditation center for more than 4,000 media
representatives, the NFL Experience, the NFL Tailgate Party, and the
like; an average daily temperature of 50 'F (10 oC) or above the week of
the game, or a climate-controlled indoor facility; and a provision of
police, fire, ambulance, and other infrastructure services at no cost to
the NFL. 13 5
First and foremost, LP Field, the home of the Titans, is one of the
oldest stadiums in the NFL. Built in 1999, and recently damaged in
area wide flooding, LP Field is extremely outdated when compared to
MetLife Stadium, the host of the 2013 Super Bowl.'3 ' This fact alone is
extremely detrimental to Tennessee's future Super Bowl hopes because
133 Titans' Future In Nashville Appears Stable, With Bud Adams' Grandson Likey To Take Reins,
SPORTS BUSINESS DAILY (Oct. 22, 2013), http://m.sportsbusinessdaily.com/Daily/Issues/2013
/10/22/Franchises/Titans.aspx (quoting David Climer).
134 Jimmy Morris, What's next for Titansfranchise Now ThatBud Adams Has Passed?, SB NATION
(Oct. 21, 2013, 1:00 PM), http://www.musiccitymiracles.com/2013/10/21/4862646/whatsnext-for-titans-franchise-now-that-bud-adams-has-passed.
135 Rick Horrow & Karla Swatek, BEYOND THE SCOREBOARD: AN INSIDER'S GUIDE TO THE
BUSINESS
OF
SPORT
4-5
(Human
Kinetics,
Rev.
ed.
2011),
available at
http://www.humankinetics.com/excerpts/excerpts/how-do-cities-reel-in-a-mega-event.
136 See generally Metlifestadium.com.
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the stadium lacks the state of the art technology required by the NFL.13 1
Furthermore, LP Field can hold a maximum of only 69,143 attendees13 1
and the average weather in the month of February is only forty-two
degrees;13' violating two other NFL requirements for Super Bowl
eligibility. Therefore, given the factors listed, it would not be possible
for Tennessee to host the Super Bowl regardless of any decision the
State legislature makes to include NFL athletes under the Jock Tax.
Therefore, the scope of review used by the Court under Rational
Basis Review is of paramount importance to the NBA and NHL's
players Equal Protection Argument. If the Court uses a narrow scope,
as they have in Williamson and New York Railway Ageng, then
Tennessee's statement that they fear a penalty will be enough to find
the Jock Tax constitutional. The Court will not delve into matters that
are better solved by the legislative process. However, if the Court uses
a broader and more exacting scope then they will look into the actual
rationality of the State's fear. Given that there is absent any penalty
provision in the NFL Collective Bargaining Agreement, and that fears
of the team moving out of the State or the NFL refusing to allow the
State to host the Super Bowl are both irrational, the Court could find
the reasoning behind the NFL's exclusion from the Jock Tax (the
penalty) both arbitrary and capricious. Consequently, if the Court uses
the broader scope of review, under Rational Basis Review, then they
should find that Tennessee's Professional Privilege Tax for Professional
Athletes is unconstitutional under the Equal Protection Clause of the
Fourteenth Amendment.
Additionally, to strengthen the NBA and NHL's overall argument,
there are at least nine other professional and semi-professional leagues
in the State of Tennessee that are not subject to the Jock Tax. Those
nine leagues have distributed a total of over $10,000,000 in salaries and
137 But see Jimmy Morris, What's next for Titans franchise now that Bud Adams has passed?, SB
NATION (Oct. 21, 2013, 1:00 PM), http://www.musiccitymiracles.com/2013/10/21/4862646
/whats-next-for-titans-franchise-now-that-bud-adams-has-passed.
138 LP
Filed Ovemiew, THE OFFICIAL SITE OF THE TENNESSEE TITANS,
http://www.titansonline.com/stadium/stadium-facts-figures.html (last visited Nov. 12, 2014).
139 Average WeatherforNashville IN, THE WEATHER CHANNEL,
http://www.weather.com/weather/wxclimatology/monthly/graph/USTNO357
(last visited
Nov. 12, 2014). However, it is worth noting that the New York Giants recently hosted the
Super Bowl in 2014 and New York has an average temperature of forty degrees in February.
Average WeatherforNew York, NY, THE WEATHER CHANNEL, http://www.weather.com/weathe
r/wxcimatology/monthly/graph/USNYO996 (last visited Nov. 12, 2014).
2014]
FOUL PLAY
357
purses from 2009, the enactment of the Jock Tax, to 2010. The
following information was supplied and compiled by David Keifer
formally of the NBPA:
1) Men's Professional Golf: TPC Southwind in Memphis, Tennessee
hosted the 2010 St. Jude Classic (July 7-13, 2010), an official event
on the Professional Golfers' Association ("PGA") Tour. The
PGA distributed a total purse of $5.6 million, and tournament
champion Lee Westwood took home $1.01 million.
2) Women's Professional Softball: The Tennessee Diamonds of
National Professional Fastpitch ("NPF") began play in 2010
season (June 4-August 22, 2010) and hosted 24 home games at
Draper Diamond on the campus of Lipscomb University. Player
salaries ranged from $2500-$5000 for the season.
3) Men's Professional Baseball: Nine minor league baseball
franchises reside in Tennessee and have played roughly two
seasons worth of games since the Jock Tax passed. Player wages
range from $850-$2,150 per month.
4) Men's Professional Tennis: The Racquet Club of Memphis hosted
the 2010 Regions Morgan Keegan Championships (February 1321, 2010), an official event on the Association of Tennis
Professionals ("ATP") World Tour. The ATP distributed prize
money totaling $1.1 million dollars, and tournament winner Sam
Querrey took home $261,000.
5) Women's Professional Tennis: The Racquet Club of Memphis
hosted the 2010 Cellular South Cup (February 12-20, 2010), an
official event on the Women's Tennis Association ("WTA")
Tour. The WTA event distributed prize money totaling $220,000,
and tournament winner Maria Sharapova took home $37,000.
6) Professional Racing (NASCAR Sprint Cup): Bristol Motor
Speedway in Bristol, Tennessee hosted the 2009 Sharpie 500
(August 22, 2009), an event in the NASCAR Sprint Cup series.
Race winner Kyle Busch took home $341,073, and the total purse
for the event was $6.31 million. Bristol Motor Speedway also
hosted the 2010 Food City 500 (March 21, 2010), another Sprint
Cup event. Race winner Jimmie Johnson took home $199,978,
and NASCAR distributed a total purse of $5.5 million.
7) Professional Racing (NASCAR Nationwide Series): Bristol Motor
Speedway hosted the 2009 Food City 250 (August 21, 2009), an
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CARDOZO PUB. LAW, POLTCY & ETHICSJ.
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event on NASCAR's Nationwide Series. Race winner David
Ragan took home $50,545, and NASCAR distributed a total purse
of $1.42 million. Bristol Motor Speedway also hosted the 2010
Scotts Turf Builder 300 (March 20, 2010) another Nationwide
Series Event. Race winner Justin Allgaier took home $49,938,
and NASCAR distributed a total purse of $1.48 million.
8) Mixed Martial Arts: The Ultimate Fighting Championships hosted
UFC 107 (December 12, 2009) at Memphis' FedEx Forum. The
event produced a live gate of $1.5 million, paid out $260,000 in
bonuses for the fight, and generated 620,000 pay-per-view buys.
9) Professional Bull Riders: The Professional Bull Riders hosted two
events at Nashville's Bridgestone Arena: the 2009 Jack Daniels
Invitation (August 15-16, 2009) and the 2010 Jack Daniels
Invitational (August 14-15, 2010). At the 2009 event, winner
Cody Ford took home $38,932, while the other top-five finishers
combined to take home $43,808. Memphis's FedEx Forum also
hosted the Memphis Invitational Presented by Cooper Tires
(August 20-21). Event winner Silvano Alves took home $27,710,
while the other top-five finishers combined to take home
$43,158.
The NBA and NHL players can point to these professional and
semi-professional sport earnings to demonstrate that even if courts
agree with the Tennessee legislature's fear of a penalty as a Rational
Basis for their exclusion from the tax, the tax is still irrational because it
is not applied to these additional athletes in their respective sports.
Furthermore, these monetary statistics coupled with the amount
Tennessee would gain from taxing NFL players 140 shows a strong
incentive that Tennessee should apply the tax equally across all
sports.14 ' Therefore, it would seem even more irrational and capricious
that the State refuses to tax these other sports when it has so much to
gain from their inclusion under the Jock Tax. From a pure monetary
standpoint, it is completely irrational for the State of Tennessee to
choose to tax some players while not taxing others.
The alternative argument the NHL and NBA players can make is
140 An NFL team can carry up to 53 players on its roster and each team plays 16 home
games. Therefore, Tennessee would be able to tax 1,007 players under the Jock Tax (including
three games taxed against Titans) and profit a total of around $2,517,500 per season.
141But see Wilamson, 348 U.S. at 489.
FOUL PLAY
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359
that their issue with the Jock Tax is distinguishable from the previous
cases at bar because the NFL players enjoy a total tax exemption rather
than being placed in a lesser tax rate. They could argue that the
Fourteenth Amendment "protects the individual from state action
which selects him out for discriminatory treatment by subjecting him to
taxes not imposed on others of the same class."' 42
However,
Tennessee and the NFL could respond by citing cases such as
Williamson, which allows states latitude in not addressing the entire
"evil" in their legislation. Since laws that are under-inclusive towards a
class are not in violation of Equal Protection under Rational Basis
Review, this argument would likely not be enough to invalidate the Jock
Tax. Furthermore, the NFL can cite Mathews v. Dial 4 3 for the
proposition that "it is of no constitutional significance that the degree
of rationality is not as great with respect to certain ill-defined subparts
of the classification as it is with respect to the classification as a
whole." 144
CONCLUSION
On September 29th, 2013, Geno Smith, in a losing effort, threw
for two hundred and nine yards, including one touchdown, against the
Tennessee Titans.145 Conversely, on November 1st, 2013, Peyton Siva
recorded only one statistic, a "Did Not Play-Coaches Decision" in a
three- point loss to the Memphis Grizzlies at FedEx Forum. 4 6 Yet,
when their respective tax accountants file tax returns in early April, only
Siva will be taxed an extra $2,500 for the privilege of "playing" in the
State of Tennessee. While this note has harped on the irrationalities
behind Tennessee's reasoning for applying the tax to the NHL and
NBA players and not NFL players, it is entirely possible that the
Supreme Court would still find the tax constitutional under Rational
Basis Review. The outcome of the Court's ruling will depend entirely
on the scope used to evaluate rationality. As this Note contends, if the
Court uses a narrow scope, the NHL and NBA players will fail to
142Hillsborough v. Cromwell, 326 U.S. 620, 623 (1946).
143See Mathews v. Diaz, 426 U.S. 67 (1976).
144N.Y.C. Transit Auth. v. Beazer, 440 U.S. 568, 593, (1979) (citing Mathews, 426 U.S. at 83).
145 Game
Day
Week
4,
OFFICIAL
SITE
OF
THE
http://www.titansonline.com/schedule/game/2013/regular4.
146 Pistons at Gri.Z!ies-November 1, 2013, NBA,
http://www.nba.com/games/20131101/DETMEM/gameinfo.html.
TENNESSEE
TITANS,
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CARDOZO PUB. LAW, POLJCY&ETHICSJ.
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demonstrate that the Jock Tax is arbitrary and capricious. However, as
noted in Section III, if the Court chooses to employ a broader scope,
then the NBA and NHL players have a much better chance of having
the Jock Tax found unconstitutional under the Equal Protection Clause
of the Fourteenth Amendment.
Yet, even if the courts use the limited scope of Rational Basis
Review and find that the Jock Tax is constitutional under the
Fourteenth Amendment, the Jock Tax may still be in violation of the
commerce clause and therefore be unconstitutional.'47 The Supreme
Court stated in Zablocki v. Redhail that "[i]f an interest is accorded
special protection by some other clause of the constitution, it seems to
matter little whether judicial review of burdens on that interest is
conducted under the rubric of the underlying constitutional clause or
under the rubric of equal protection."' 48 Therefore, voiding the Jock
Tax via the Fourteenth Amendment is not the only route that can be
taken and the NHL and NBA players can be hopeful that the desired
outcome can be achieved via other constitutional amendments or even
through an external agreement with the State of Tennessee.
See Alan Pogroszewski & Kari A. Smoker, Is Tennessee's Vernion of the 'Jock Tax"
Unconstitutional?,23 MARQ. SPORTS L. REV. 415 (2013), available at http://scholarship.law.marqu
ette.edu/sportslaw/vol23/iss2/ (stating that the Jock Tax may be unconstitutional under the
commerce clause of the constitution).
148 Zablocki, 434 U.S. 374 (1978).
147