Definitions. For purposes of this
section:
(3)
(i) Except as provided in subparagraphs (iv)
and (v) of this paragraph, the term duty days shall mean all days during the
taxable year from the beginning of the professional athletic team's official
pre-season training period through the last game in which the team competes or
is scheduled to compete. Duty days shall be included in the allocation
described in paragraph (a)(1) of this section for the tax year in which they
occur, including where a team's official pre-season training period through the
last game in which the team competes, or is scheduled to compete, occurs during
more than one tax year.
(ii) Duty
days shall also include days on which a member of a professional athletic team
renders a service for a team on a date which does not fall within the
aforementioned period (e.g., participation in instructional leagues, the "Pro
Bowl" or promotional "caravans"). Rendering a service includes conducting
training and rehabilitation activities, but only if conducted at the facilities
of the team.
(iii) Included within
duty days shall be game days, practice days, days spent at team meetings,
promotional caravans and preseason training camps, and days served with the
team through all post-season games in which the team competes or is scheduled
to compete.
(iv) Duty days for any
person who joins a team during the period from the beginning of the
professional athletic team's official pre-season training period through the
last game in which the team competes, or is scheduled to compete, shall begin
on the day such person joins the team. Conversely, duty days for any person who
leaves a team during such period shall end on the day such person leaves the
team. Where a person switches teams during a taxable year, a separate duty day
calculation shall be made for the period such person was with each
team.
(v) Days for which a member
of a professional athletic team is not compensated and is not rendering
services for the team in any manner, including days when such member of a
professional athletic team has been suspended without pay and prohibited from
performing any services for the team, shall not be treated as duty
days.
(vi) Days for which a member
of a professional athletic team is on the disabled list and does not conduct
rehabilitation activities at facilities of the team and is not otherwise
rendering services for the team in New York State, shall not be considered duty
days spent in New York State. However, all days on the disability list are
considered to be included in total duty days spent both within and without New
York State.
(vii) The provisions of
this paragraph can be illustrated by the following examples:
Example 1:Player A, a member of a professional athletic
team, is a nonresident of New York State. Player A's contract for such team
requires A to report to such team's training camp and to participate in all
exhibition, regular season, and playoff games. Player A has a contract which
covers seasons that occur during yr.1/yr.2 and yr.2/yr.3. Player A's contract
provides that A receive $500,000 for the yr.1/yr.2 season and $600,000 for the
yr.2/yr.3 season. Assuming player A receives $550,000 from such contract during
taxable year 2 ($250,000 for one-half the yr.1/yr.2 season and $300,000 for
one-half the yr.2/yr.3 season), the portion of such compensation received by
player A for taxable year 2, attributable to New York State, is determined by
multiplying the compensation player A receives during the taxable year
($550,000) by a fraction, the numerator of which is the total number of duty
days player A spends rendering services for the team in New York State during
taxable year 2 (attributable to both the yr.1/yr.2 season and the yr.2/yr.3
season) and the denominator of which is the total number of player A's duty
days spent both within and without New York State for the entire taxable
year.
Example 2:Player B, a member of a professional athletic
team, is a nonresident of New York State. During the season, B is injured and
is unable to render services for B's team. While B is undergoing medical
treatment at a clinic, which is not a facility of the team, but is located in
New York State, B's team travels to New York State for a game. The number of
days B's team spends in New York State for practice, games, meetings, etc.,
while B is present at such clinic, shall not be considered duty days spent in
New York State for player B for that taxable year for purposes of this section,
but such days are considered to be included within total duty days spent both
within and without New York State.
Example 3:Player C, a member of a professional athletic
team, is a nonresident of New York State. During the season, C is injured and
is unable to render services for C's team. C performs rehabilitation exercises
at the facilities of C's team in New York State as well as at personal
facilities in New York State. The days C performs rehabilitation exercises in
the facilities of C's team are considered duty days spent in New York State for
player C for that taxable year for purposes of this section. However, days
player C spends at personal facilities in New York State shall not be
considered duty days spent in New York State for player C for that taxable year
for purposes of this section, but such days are considered to be included
within total duty days spent both within and without New York State.
Example 4:Player D, a member of a professional athletic
team, is a nonresident of New York State. During the season, D travels to New
York State to participate in the annual all-star game as a representative of
D's team. The number of days D spends in New York State for practice, the game,
meetings, etc., shall be considered to be duty days spent in New York State for
player D for that taxable year for purposes of this section, as well as
included within total duty days spent both within and without New York
State.
Example 5:Assume the same facts as given in example 4,
except that player D is not participating in the all-star game and is not
rendering services for D's team in any manner. Player D is instead travelling
to and attending such game solely as a spectator. The number of days player D
spends in New York State for such game shall not be considered to be duty days
spent in New York State for purposes of this section. However, such days are
considered to be included within total duty days spent both within and without
New York State.
(4)
(i) The
term total compensation for services rendered as a member of a professional
athletic team means the total compensation received during the taxable year for
services rendered:
(a) from the beginning of
the official pre-season training period through the last game in which the team
competes or is scheduled to compete during that taxable year; and
(b) during the taxable year on a date which
does not fall within the aforementioned period (e.g., participation in
instructional leagues, the "Pro Bowl" or promotional "caravans").
Such compensation shall include, but is not limited to,
salaries, wages, bonuses as described in subparagraph (ii) of this paragraph,
and any other type of compensation paid during the taxable year to a member of
a professional athletic team for services performed in that year. Such
compensation shall not include strike benefits, severance pay, termination pay,
contract or option year buy-out payments, expansion or relocation payments, or
any other payments not related to services rendered for the team.
(ii) For purposes of
this paragraph, "bonuses" included in "total compensation for services rendered
as a member of a professional athletic team" subject to the allocation
described in subdivision (a) of this section are:
(a) bonuses earned as a result of play (i.e.,
performance bonuses) during the season, including bonuses paid for
championship, playoff or "bowl" games played by a team, or for selection to
all-star league or other honorary positions; and
(b) bonuses paid for signing a contract,
unless all of the following conditions are met:
(1) the payment of the signing bonus is not
conditional upon the signee playing any games for the team, or performing any
subsequent services for the team, or even making the team;
(2) the signing bonus is payable separately
from the salary and any other compensation; and
(3) the signing bonus is
nonrefundable.
(c) This
section is designed to apportion and allocate to New York State, in a fair and
equitable manner, a nonresident's total compensation for services rendered as a
member of a professional athletic team. It is presumed that application of the
foregoing provisions of this section will result in a fair and equitable
apportionment of such compensation. Where it is demonstrated that the method
provided under this section does not fairly and equitably apportion such
compensation, the department may require such member of a professional athletic
team to apportion and allocate such compensation under such method as the
department prescribes as long as the prescribed method results in a fair and
equitable apportionment. A nonresident member of a professional athletic team
may submit a proposal for an alternative method to apportion such compensation
where such nonresident member demonstrates that the method provided under this
section does not fairly and equitably apportion such compensation. The proposed
method must be fully explained in such nonresident member's New York State
nonresident personal income tax return.