NHL teams in no-income-tax states enjoy a powerful edge in signing top players—reshaping the Stanley Cup race and raising calls to fix the league’s hidden imbalance.
At a Glance
- NHL enforces a flat salary cap, but state taxes create major disparities in take-home pay
- Teams in Florida, Texas, Nevada, and other no-tax states have won 4 of the last 5 Stanley Cups
- Players in low-tax states keep millions more than those in New York, California, or Canada
- Free agents increasingly choose tax-favored markets, limiting options for high-tax teams
- League has yet to address the issue in collective bargaining
Tax Breaks and Stanley Cups
The NHL’s salary cap system is designed to level the financial playing field among teams. But in practice, it’s anything but equal. Players pay income tax based on both their home team’s state and where they play on the road, and teams in tax-free states like Florida and Texas are reaping the benefits.
Consider Sam Reinhart’s recent $69 million deal with the Florida Panthers: without state income tax, he could save up to $12 million compared to a similar contract in California. For top free agents, that’s a difference they can’t ignore.
Watch for more: NHL Salary Cap Inequality.
A System Tilted Toward No-Tax States
The effects of these disparities go beyond player paychecks:
Free Agent Magnet: Teams in no-tax states like Tampa, Vegas, and Dallas can offer the same gross salary but with a much higher net payout.
Trade Limitations: Players often block trades to high-tax teams, shrinking trade options for general managers.
Unfair Advantage: According to tax expert Alan Pogroszewski, “There is a distinct advantage for those teams that are in states with no tax—always.”
These advantages have played out on the ice. Since 2020, teams from no-tax states have dominated the playoff semifinals, winning 4 of 5 championships. GM Julien BriseBois of the Tampa Bay Lightning acknowledged his team’s “favorable taxation situation” as a recruiting tool.
Canadian Teams Hit Hardest
The issue is even more acute north of the border. Canadian franchises face provincial taxes and unfavorable currency exchange rates, paying salaries in U.S. dollars while earning revenue in Canadian currency. It’s no coincidence that no Canadian team has lifted the Stanley Cup since 1993.
Buffalo Sabres GM Kevyn Adams summed up the challenge: “We’re not a destination city… we have taxes in New York. Those are real.”
Can the League Fix It?
So far, the NHL has not adjusted for tax disparities in collective bargaining. Proposals such as luxury tax offsets, cap adjustments for high-tax markets, or tax-equalized incentives have not advanced. High-tax teams are left to get creative—leaning on team culture, tax planning, and bonus-heavy contracts.
As the league looks ahead, pressure is mounting for the NHL to address a system that rewards geography more than strategy. Until then, winning in the NHL may depend less on coaching—and more on a state’s tax code.
