In texts to ESPN over the weekend, Rivers said he and his family were “permanently” moving to Florida in order to be closer to his family.
While it is far from clear that Rivers’ move has anything to do with taxes, he will owe far less as a permanent resident of the Sunshine State.
California has some of the highest state income tax rates in the United States, with a top rate that can reach more than 13 percent. The cities of San Diego and Los Angeles also levy taxes on residents.
On the other hand, Florida has no statewide income taxes, meaning residents owe the income taxes levied by the federal government. Florida levies other statewide taxes like a sales tax.
Moving across America
Rivers move coincides with a trend of other wealthy Americans who have opted to leave high-tax states for states with lower, or no, income taxes.
New Jersey, Illinois, New York and Connecticut, for example, had the highest percentage of people moving from the state to other places last year, and many of those people who left high-tax states had incomes of at least $150,000.
California ranked seventh among the top states losing population. As previously reported by FOX Business, a recent study showed a correlation between the state government’s decision to raise income tax rates to their current levels and a “substantial one-time out-migration response,” particularly among millionaires.
Popular destinations in the west include Washington and Arizona. Washington has no state income tax and Arizona has relatively low rates.
Rivers leaving the Chargers?
Rivers, 38, will become a free agent in March, and there is speculation his move could have to do with where he may play next season. He is one of the top quarterbacks on the market in addition to New England Patriots star Tom Brady, who will also be a free agent next season and whose career has been the subject of speculation.
“What this means football-wise is to be determined, but it was time for us to move back closer to home,” Rivers told ESPN.
The move has sparked rumors Rivers may join the Tampa Bay Buccaneers, which needs a quarterback. Within the state, Rivers could also play for the Miami Dolphins or the Jacksonville Jaguars.
Rivers played with the Chargers for 16 years. He lived in San Diego, even after the team made the move to Los Angeles.
Even though Rivers will owe no income taxes to the state of Florida, if he continues on in his football career, he will owe taxes in other states where he plays. Those "jock taxes" are usually calculated by dividing the number of workdays spent practicing and playing games in the city by the total number of workdays, but some states just use games played. It's not a double tax, however. Players pay taxes equal to the highest rate in either their resident or non-resident state. They get credit for the taxes in the lower-tax state.
When it comes to federal taxes, Rivers, whose four-year contract extension was worth $83 million, will likely be subject to the highest rate, which is 37 percent.