Washington Gov. Bob Ferguson is expected to sign legislation that, starting in 2028, will impose a 9.9% tax on households with an annual income greater than $1 million. That will mean new taxes for many players on Seattle’s pro sports teams as well as college athletes at Washington schools who are earning seven figures in NIL or revenue sharing
Washington is currently one of nine states in the U.S. without an income tax, with the others being Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. That will change, assuming Ferguson signs SB 6346 into law, and it withstands potential legal challenges before it goes into effect.
While rosters and payrolls in 2028 are not yet known, current rosters and payrolls indicate that more than 50 Seahawks players, along with about 30 Mariners and Kraken players, would pay the tax if it were applied in 2026. The NBA is also exploring expansion as early as 2028-29, with a return of a franchise to Seattle a distinct possibility. If that happens, most of the roster would pay the millionaires’ tax.
Even athletes who earn less than $1 million from their teams could face the tax if their endorsement and other sources of income bring their total earnings above the million-dollar mark. To that point, the current rosters of the Seattle Storm and Seattle Reign do not show a player earning more than $1 million, but many of the players likely have additional income channels. The WNBA’s new CBA is expected to bring higher salaries for players.
The tax could make it more challenging for Seattle teams to recruit and retain free agents. Seahawks general manager John Schneider recently told the media that agents have texted him he can no longer use Washington’s lack of income tax as a key sales pitch.
It also appears that, at least for some athletes, taxes matter in their choice of team. Last month, pitcher Merrill Kelly said a major reason why he signed with the Arizona Diamondbacks instead of the San Diego Padres was that he realized that he’d take home more money by signing with a team that plays in a state with a 2.5% flat income tax instead of one that, when including a state disability insurance rate, has a 14.6% tax rate.
Of course, it’s not as if teams in higher income tax states have been unable to field successful squads. The Los Angeles Dodgers have won three of the last six World Series (albeit, while paying among the luxury taxes in MLB), the Golden State Warriors and Los Angeles Lakers are two of the last six NBA champions, and the Los Angeles Rams won the Super Bowl in 2022 (and the San Francisco 49ers lost the Super Bowl in 2024).
Meanwhile, pro sports teams in Massachusetts have all had success since the state adopted a millionaires’ tax in 2023. Players are motivated to join teams for reasons that go well beyond income taxes (or relative cost of living, for that matter), including playing time opportunities, likelihood of team success, weather and proximity to family and friends.
State income taxes are only part of an athlete’s tax equation. They are also subject to the federal income tax, which is 37% for single taxpayers with incomes greater than $640,600, FICA (Social Security/Medicare), taxes owed to other states or municipalities (including via jock taxes), and any applicable property and sales taxes. There might also be taxes from sales of homes and investments. Further complicating the picture is the possibility of deductions that reduce the taxable amount, as well as potential income earned and expenses incurred outside of the U.S.
In short, there are many tax variables that make it impossible to know with precision how a state income tax will affect any given athlete.
But we can give a ballpark figure of how much the Washington income tax will cost some of Seattle’s highest-paid. We pick two players from the Mariners, pitcher Luis Castillo and outfielder Julio Rodriguez. Both have signed long-term, lucrative and guaranteed contracts that run through 2028. We thought about picking a Seahawks player, but NFL contracts are only partially guaranteed and are sometimes renegotiated.
Castillo is slated to earn $25 million from the Mariners in 2028, and the new tax projects to cost him $2.48 million that year. Obviously, this is an imprecise calculation, since Castillo may have other sources of income, which would raise his tax bill, and could rely on deductions, which would lower his tax bill. It’s also possible Castillo could be traded before 2028. But in a ballpark estimate, he stands to pay nearly $2.5 million in new taxes on his 2028 earnings due to the millionaires’ tax.
As for Rodriguez, he is slated to receive $20.1 million from the Mariners in 2028, and the millionaires’ tax projects to cost him $2 million.
Obviously, both Castillo and Rodriguez will still take home more money than virtually all the people who attend their games and who watch them on TV. No one is going to cry poor for anyone earning millions of dollars a year. That seems especially true at a time when many Americans have good reason to worry about how AI, inflation and other concerning trends will impact their livelihoods.
There are also important policy reasons behind the Washington tax, which is projected to generate about $3 billion in revenue for the state. In a recent statement, Ferguson hailed the tax legislation for expanding the reach of the Working Families Tax Credit, which provides qualifying families up to $1,300. The tax will also provide for free school lunch and breakfast for all Washington students.
“Hungry kids can’t learn, and this funding puts money back in the pockets of Washington families,” Ferguson said.
It remains to be seen how much Washington’s new millionaires’ tax will reshape the competitive landscape for Seattle’s teams—and how players, agents and front offices adapt in response.