225 Withholding of Tax by Nonresident

Professional Athletic Teams PURPOSE: This rule establishes guidelines for the employer withholding of income tax as specified in sections 143.191–143.265 and 285.230, RSMo. (1) All nonresident professional athletic teams shall be considered transient employers as defined in section 285.230, RSMo and shall be required to file a financial assurance instrument pursuant to section 285.230, RSMo. (2) Teams and Members Defined. (A) The term professional athletic team includes, but is 12 CSR 10-2—DEPARTMENT OF REVENUE DIVISION 10—DIRECTOR OF REVENUE not limited to, any professional baseball, basketball, football, soccer and hockey team. (B) Members of professional athletic teams shall include players, managers, coaches, trainers, travelling secretaries, players on the disabled list (if they are in uniform on the day of the game at the site of the game) and any others travelling with and performing services on behalf of a professional athletic team. (3) Personal Service Income of Members of Professional Athletic Teams Defined. (A) All nonresident members of professional athletic teams shall be taxed on that portion of their personal service income allocable to Missouri. (B) Personal service income shall include exhibition and regular playing season salaries and wages, guaranteed payments, strike benefits, deferred payments, severance pay, bonuses paid for playing in championship, playoff or bowl- type games and any other type of compensation paid to the nonresident member of a professional athletic team in that capacity. (4) Method of Allocation of Personal Service Income Earned by Members of Professional Athletic Teams. (A) The personal service income earned by members of professional athletic teams allocable to Missouri shall be determined by a fraction, the denominator of which shall be the total number of duty days in the tax year of the athlete (including the sum of days spent at training camps, all postseason games and travel days) and the numerator of which shall be the number of duty days in the tax year which the member of the professional athletic team spent in Missouri. (B) Duty days shall be defined to include the days a member of a professional athletic team serves in that capacity after the commencement of team activities and begins with the first day s/he reports to the professional athletic team. (C) The allocation fraction in subsection (4)(A) shall be multiplied by the amount of personal service income to arrive at the amount of personal service income allocable to Missouri. (5) Withholding and Reporting Obligations. (A) Any out-of-state professional athletic team which qualifies as a transient employer as specified in section 285.230, RSMo shall be required to withhold Missouri income taxes from wages and salaries paid to its team members as set forth in sections 143.191–143.265, RSMo. (B) Every out-of-state professional athletic team required to deduct and withhold tax shall file an employer’s withholding tax return and pay the taxes withheld to the director of revenue as set forth in sections 143.191–143.265, RSMo. AUTHORITY: sections 143.961 and 285.230, RSMo 1994.* Original rule filed Oct. 30, 1989, effective Jan. 26, 1990. Emergency amendment filed Aug. 18, 1994, effective Aug. 28, 1994, expired Dec. 25, 1994. Emergency amendment filed Dec. 9, 1994, effective Dec. 26, 1994, expired April 24, 1995. Amended: Filed Aug. 18, 1994, effective Feb. 26, 1995. *Original authority: 143.961, RSMo 1972 and 285.230, RSMo 1988, amended 1994.