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Photo Credit: RDS.ca

Jason Demers and Tax Rates

Late last month, the Canucks were rumoured to have a deal in place that would’ve sent Erik Gudbranson to the Florida Panthers for Jason Demers. That transaction never occurred, because Demers invoked his limited no-trade clause which allows him to block a move to eight teams of his choosing.

Demers earned that no-trade-clause by virtue of being a free agent, and he was well within his right to do exercise that option.

We’ve yet to hear why he declined a move to the Canucks, so we are left to speculate the reasons why. Could be the direction of the team, his affinity for Florida or Demers just didn’t want to move again after just the one year in Florida. As usual, though, the wheels started turning.

I was left trying to figure out a possible reason — or uncover some part of the picture — to explain why Demers vetoed a trade to Vancouver. Barring a follow-up report from the NHL’s insiders, I’ll never know what the final reason was for his decision. That’s never stopped me from diving down the rabbit hole, though.

My attention turned to tax rates on the player’s salaries, and I quickly noticed that the financial impact to Demers would’ve been noteworthy. Thankfully, www.CapFriendly.com has all this information readily available.

*These are all just estimates, I am not a tax lawyer nor do I have all the information. All data is from Capfriendly.com*

Jason Demers carries a cap hit of $4.5-million next season but is actually scheduled to receive $5.4-million for the 2017-18 season. That includes a $1-million signing bonus that was paid out on July 1st and may have been part of the reason why the Panthers wanted were motivated to move him before the pay-out. They were unable to move him in time, and then quickly bought out Jussi Jokinen.

With the $5.4-million salary in consideration here, I pulled the information from CapFriendly about the tax rates for each team and came out with this.

Team Federal Rate State Rate City Rate Estimated Tax Rate
Anaheim Ducks 38.79% 12.87% 51.66%
Arizona Coyotes 38.79% 4.52% 43.31%
Boston Bruins 38.79% 5.10% 43.89%
Buffalo Sabres 38.79% 8.42% 47.21%
Calgary Flames 47.47%
Carolina Hurricanes 38.79% 5.75% 44.54%
Chicago Blackhawks 38.79% 3.75% 42.54%
Colorado Avalanche 38.79% 4.63% 43.42%
Columbus Blue Jackets 38.79% 4.95% 2.50% 46.24%
Dallas Stars 38.79% 38.79%
Detroit Red Wings 38.79% 4.25% 2.40% 45.44%
Edmonton Oilers 47.47%
Florida Panthers 38.79% 38.79%
Los Angeles Kings 38.79% 12.87% 51.66%
Minnesota Wild 38.79% 9.77% 48.56%
Montreal Canadiens 52.88%
Nashville Predators 38.79% 38.79%
New Jersey Devils 38.79% 8.69% 47.48%
New York Islanders 38.79% 8.42% 47.21%
New York Rangers 38.79% 8.42% 4.25% 51.46%
Ottawa Senators 52.90%
Philadelphia Flyers 38.79% 3.07% 3.91% 45.77%
Pittsburgh Penguins 38.79% 3.07% 3.00% 44.86%
San Jose Sharks 38.79% 12.87% 51.66%
St. Louis Blues 38.79% 6.00% 1.00% 45.78%
Tampa Bay Lightning 38.79% 38.79%
Toronto Maple Leafs 52.90%
Vancouver Canucks 47.20%
Washington Capitals (D.C.) 38.79% 8.56% 47.35%
Washington Capitals (Virginia) 38.79% 5.75% 44.53%
Winnipeg Jets 49.97%

The final tax percentages are in the far right column. Since the state of Florida does not have any State income tax, and there isn’t any city income tax in Sunrise, the tax rate is considerably lower than the majority of other teams, including the Canucks. We can compare the two closer together:

Florida Panthers 38.79% 38.79%
Vancouver Canucks 47.20%

That is a difference of 8.41% off the $5.4-million that Demers was scheduled to earn this upcoming season. Once again, CapFriendly provides the actual financial impact that would have on Demers wallet:

Team Federal Rate State Rate City Rate Estimated Tax Rate Tax Paid Net Salary Difference
Florida Panthers 38.79% 38.79% $2,094,570 $3,305,430
Vancouver Canucks 47.20% $2,548,828 $2,851,172 (-$454,258)

If Demers had accepted the trade to the Canucks, it would’ve cost him $454,258 USD this upcoming year. This obviously doesn’t include other deductions such as agent percentages, but that isn’t chump change.

Tax rates change based on your income, and as we saw above, Demers compensation does change from year to year. Thus here is a quick breakdown of the other years remaining on his deal:

2018-19 season

Team Estimated Tax Rate Tax Paid Net Salary Difference
Florida 38.60% $1,698,570 $2,701,430
Vancouver 47.09% $2,071,828 $2,328,172 (-$373,258)

2019-20 season

Team Estimated Tax Rate Tax Paid Net Salary Difference
Florida 38.38% $1,381,770 $2,218,230
Vancouver 46.95% $1,690,228 $1,909,772 (-$308,458)

2020-21 season

Team Estimated Tax Rate Tax Paid Net Salary Difference
Florida 38.38% $1,381,770 $2,218,230
Vancouver 46.95% $1,690,228 $1,909,772 (-$308,458)

Now, when we combine those totals.

2017-18 -$454,258
2018-19 -$373,258
2019-20 -$308,458
2020-21 -$308,458
Total -$1,444,432

The financial impact for Demers to agree to a trade to the Vancouver Canucks before July 1st, 2017 would’ve been $1,444,432. It likely wasn’t the only reason why he didn’t agree to adjust his limited no-trade protection to accept a trade to the Canucks, but you have to believe that it was at the very least brought up by someone.

If the fit was perfect, or the Canucks were on the verge of being a cup contender, someone like Demers might overlook that salary difference. But at this point, the current position of the organization and a variety of factors including the financial impact were all possibly combined to turn down the deal.

It is worth noting that Demers went from Dallas, Texas, which has no State income tax to Florida, which also doesn’t have State income tax.

From a big picture viewpoint, it brings more light to the fact that sometimes it isn’t simply a yes or no. These are people, and all of these factors go into their decisions on where they ply their trade.

It takes two teams to make a trade, but sometimes it takes a player who is also willing to make a sacrifice.

  • Gotta wonder how much this factored into Stamkos’s team-friendly deal with the Lightning. $8.5 million in Tampa ends up being just as much take-home salary as $10 million in Toronto, Montreal, or New York.

    Being in a big hockey market offers other opportunities for players to earn supplemental income which would likely convince a player like Demers to come to Vancouver… if the team was decent. But why take less money to play for a worse team?

    • Forward Thinker

      It is unlikely Demers would have a lucrative off ice offer regardless where he plays. He might get some small endorsements but any big ones would be available no matter where he played.

  • Just a Fan

    I think you are being a little simplistic when you are calculating your tax rates. Although Florida does not have a state tax, you pay your state tax in the state where the income is earned. For most of us that does not make much difference but for high paid, public figures like hockey players, there is no question that other states are going to want a share of the tax. This means that when a player plays a game in New York they are likely to be paying New York state tax. I will even go so far as to say that when they play a game in Vancouver, they will be paying both Canadian federal tax and BC provincial tax.

    NOTE: I am not a tax lawyer. I have never been a tax lawyer. I have worked in the US and found this to be true.

    • The_Blueline

      I think that might be the case when you make revenue from an event on your own name, like a Florida based singer givin a concert in NY. At least internationally, you might be race where you perform in such case.

      I’m also not a tax lawyer, so what do I know…

    • peterl

      This is a true statement. A quick google search will confirm this. My sister is a tax accountant and once told me the complications of calculating Ryan Kesler’s taxes at the height of his career here in Vancouver based on the US state he was playing in. Her firm only did his Canadian taxes and they had to find a US tax accountant to calculate state-by-state and US federal taxes.

      The above calculation is a good first approximation. On average Jason Demers should be paying less income tax in Florida where he works half of his games compared to Vancouver and other US states.

  • Riley Miner

    Interesting article, I honestly think this was more hockey-related as the Panthers are in a far better position to rebound into a good season than the Canucks are, but that amount is pretty substantial.

  • Pat Quinn Way

    Your tax theory only holds up if 7 of the 8 teams on Demers ‘no thanks’ list were Canadian. Personally, I believe he looked at the standings and the trainwreck under LinBenning and just said nah i’m not waiving, I’ll stay in sunny Fla thanks.

    However guys, this piece makes me appreciate even more the incredible job GMMG and Laurence Gilman did in keeping our core players together during their prime years by negotiating outstanding ‘home discount’ contracts despite the lure of other teams and the outrageously high Canadian taxes. Great work!

    I feel the fickle fans need to be reminded of this before nonchalantly dismissing the most successful period in Canucks history. Guys, I sure miss those glory days of trophies and titles, playoffs every year, Stanley Cup final runs and elite hockey, the like of which we will never see under LinBenning. Don’t you?

    • Bud Poile

      No prospects.
      10 NTC’s.
      Empty cupboards.
      Worst draft record since Nonis.
      NHL unemployed line for five years.
      31 NHL teams pass on the bum while you kiss his daily.

      • ENFORCER

        Who is this dick? No prospects and empty cupboards he says. Last i saw Tanev, Markstrom, Hutton and Horvat were all playing on the Canucks and McEneny, Subban, LaBate, Gaunce, Rodin, Cassels, Archibald are all in Utica from the Gillis days. Last i heard Gillis was living it up in tax haven Switzerland enjoying the free millions owed from Aqua man. Shame about this muppet bud, heard he was livin off welfare wednesdays lol.

        • Pat Quinn Way

          Wow nice post enforcer!! i didn’t realise we had so many players from GMMG’s tenure still on the books…and there is not one player on the current Canucks roster closeto the talent level of Bo and Tanny. Very pleased to see the legacy of our most successful GM ever lives on. Fanastic 🙂

        • Silverback

          Enforcer…
          Be interesting to see what kind of team all those Gillis picks/trades would ice.

          Tanev, Markstrom, Hutton, Horvat McEneny, Subban, LaBate, Gaunce, Rodin, Cassels, Archibald . Wow!

    • TD

      Did you look at the chart? There were 14 teams that had a higher tax rate than the Canuck players face. Some were very close to the Canucks, but the Canucks were also close to a bunch of teams that have a lower tax rate. There were 7 teams whose player have to pay over 50%, the 3 California teams, the Rangers, the Ontario teams and the Canadians. So your first line stating the theory only holds true if his wish list included all 7 Canadian teams means you didn’t bother reading the article. Florida does not have a state tax which gives the Lightning and Panthers a big advantage, but the Western Canadian teams are in the middle of the pack for tax purposes. Although who knows what the NDP will do in BC.

  • Chungus

    This was a good article. Not gonna pretend I was too interested in why Demers would turn down a trade here (figured it was because we’re bad), but you bring up some good points that are probably overlooked during surface-level thinking.

  • Sandpaper

    According to this list, the Canucks have 15 teams above them with higher taxes, so if Demex was using that as a reason for using his limited NTC, he could end up moving to one of the other teams that are even higher in taxes.
    I am just glad this trade didn’t happen.

    • Waffles

      Exchange rates and cost of living also make a huge difference. Also, tax benefits for high income earners are different based on country and state/province. So looking below the surface, the tax rates straight up aren’t indicative of what the financial impact actually would be. But it was an interesting perspective nonetheless.

  • Puck Viking

    Does anyone know what the rumor of the Demers for Gud deal was exactly? It better not have been one for one.. Id rather hold on Gud and flip him at the deadline for a 1st or prospect and just sign an aging vet(Demers type) next season as a UFA on a short term deal like MDZ

    • Braindead Benning

      Who knows… even though I can’t stand that trade for the Slug to begin with as a fan I am glad that didn’t transpire given the anchor contact that comes along with Demers.

      But I agree it would be better to trade Gud when the team is in its usual position come trade deadline

  • HockeyMinion

    We gotta put this to bed people. Mike Gillis decimated this team and left it hamstrung with crappy contracts with NTC’s. Anyone that tries to point out the 2011 cup run must remember that the core players were already in place and all he did was deplete the cupboards for the supporting cast. I seriously doubt he will ever work in the NHL again. The point I’m trying to make is, SHUT UP about MG. if you can’t recognize that he is responsible for the drivel we have put up with for the last 6 years you are probably too young to remember and shouldn’t be commenting on it. I have watched this team for 40+ years and Mike Gillis is by far the WORST thing that has happened in that time to this team.

    • Fortitude00

      Mike Gillis the winningest GM in history is the worst thing to happen to this club interesting? I was there in the 80’s, 90’s until now and I have to say Gillis did what no other GM EVER could do. Bring in free agents to surround the core that was here. Sure he traded off draft picks and prospects to achieve that but he also came close to winning a championship. Very close. Nonis and Burke couldn’t get past the middle of the pack with their teams so you can’t say they were better then Gillis.

      • Bud Poile

        Elite franchises don’t blow their wad and go supernova.
        They simultaneously compete and build.
        Gillis gave out gazilliions to the likes of Sundin and Booth,had zero clue or accountabiility regarding drafting nor development and rode shotgun on the superstars gifted him.
        If Benning traded a second round pick for 12 games of Derek Roy the Benning hater nutjobs here would write about it every day until Betttman resigns.
        How about two first rounders and a power forward for a $5m contract and d-man that will never meaningfully contribute anything?
        The silence is a reflection of ignorance and apathy.

      • Pat Quinn Way

        Nice post Forti. Good to see that you smelt the coffee after I called you out on another thread mate.

        I’m sure like all us true Canucks fans Forti you will always be grateful for those wonderful winning years under NHL GM of the year Mike Gillis, Laurence Gilman and coach AV – incredible to think they were finally able to push us over the hump adter years of failure to game 7 of a Stanley Cup final, 5 division titles, 2 Presidents trophies a Western Conf Championship, exciting playoff hockey every season and of course Art Ross/Hart/Selke trophies for the twins and Kesler under their astute leadership . No wonder Ryan bolted when this clown Benning washed up on our shore like a beached whale. He saw the abject failure that was coming under this disastrous LinBenning tenure and he was bang on eh.

        Mike, thanks for all the wonderful memories mate, enjoy your millionaire lifestyle in beautiful Switzerland, you earned it!

  • “It was kind of a no-brainer for me. I wanted to go somewhere I have a chance to win because winning makes everything a lot more fun. Florida was one of my top picks when I was looking around. I did my due diligence before free agency once I found out Dallas wasn’t going to bring me back. I always liked their team, their young core, just playing against them the last few years I like where they’re headed.” — Jason Demers, Summer 2016

    http://www.sun-sentinel.com/sports/florida-panthers/fl-florida-panthers-0703-20160702-story.html

    • Elliot McKenzie

      Wow there it is. case solved. I think when someone earns the type of money these guys are on, tax isn’t the biggest issue. Let’s be real, one year of an ELC contract is more money than most working class joes make in a lifetime.

      Hockey players are groomed and focused on one thing from a very young age, to win the Stanley Cup and this Demers piece proves it. Thanks for the link and info man.

        • Pat Quinn Way

          Nor are the Canucks brainache and the taxes and weather are better in FLA so run along dimwit, tail between legs like yesterday when me, Freud and many other astute posters ran you off the boards whining lke the insignificant litte b*tch you are.

          • Bud Poile

            I can’t count how many times per blog you swear or denigrate me but it’s obviously not enough.
            You and your three aliases are going to have to do a much better job with your act.
            Astute /relevant poll question,eh,ENFORCER?
            Everybody (but one) acknowledges the job Benning is tasked with accomplishing.
            Please don’t confuse “running off whining like an insignificant b*tch” with my trying my best to ignore you.

          • Pat Quinn Way

            That’s it whiner, keep dancing while i call the tune and i will keep putting you on that six hour ferry ride to reality, hup hup

            How does it go again –
            “Bud has generally served to make the comment section an unwelcoming place not just for the authors but also for a lot of the commenters as well. ” – Jackson McDonald

            ”the least I could do is occasionally remind Bud that CA’s readership is constantly growing and if all he is going to do is be rude to other readers he doesn’t need to come back especially because this isn’t Tim Hortons and I don’t get brownie points for smiling and being polite while someone makes the work area a nuisance to be in for staff + customers. ” – Jackson McDonald

            You are the ONLY commenter here asked to leave and still you slither back in. Take the hint, GET LOST!

            #banbudthetroll
            #whinerbudoutnow
            #firefailurebenning
            #loserbenningout

  • Ncmas

    A few points:
    This doesn’t really apply for any game he plays outside of florida he will be subject to having to source that income to that state.(AKA the Jock Tax)
    Additionally he is Canadian to the extent he wants to return to Canada to live in the future he is considered a Canadian resident and needs to pay income tax on all of his income.
    He should also be able to deduct anything he pays for meals while traveling and the like.
    He most likely receives a Foreign Tax Credit (FTC) for the Federal and State amounts of tax he pays in the USA.

    Taxes are probably not a motivator to nix a trade to Vancouver since he is already paying Canadian taxes.

    Also NYI need the NYC tax they play in Brooklyn.

    Also ther are a lot of articles out there from forbes and USA Today about this.
    (I am not providing tax, accounting or legal advice. The above is for informational and discussion purposes only, if you do find yourself in a situation where you need tax, accounting or legal advice, it is generally recommended that you engage a professional.)

    • PWCC

      Why would he be paying Canadian income taxes? If he is resident in the U.S., he doesn’t have to pay them, even if he may want to become resident in Canada in the future. The U.S. has a system of worldwide taxation but, like most countries, Canada’s system is territorial.

  • Rodeobill

    This is a good article with things to consider that I had not before. If it was me, I would definitely consider this in some part to my decision. I will no longer feel inclined to take this news personally as a slight against my home and team.

  • wojohowitz

    I see no mention anywhere here of performance bonuses – like picking up 40 assists, winning the division or making the playoffs – none of which is expected from a Canuck blueliner but could be possible with Florida.

  • Cageyvet

    I have to admit I skimmed both the article and the comments. I think it’s because we suck, and even with a good team your odds of making it to the cup final are very low. This was a not a free agent signing, so you can’t buy your way out of your team’s crappy short-term future. I’m a die-hard Canucks fan who likes the direction we are headed, but I’m realistic enough to not be upset with any player who puts us in his bottom 8. Losing is not fun.

  • Fred-65

    If the taxes are part of the decision, then I don’t like it. How many residents of Quebec/Canada have paid for the services that Jason depended on during his early life. Rec Centres, roads, hospitals schooling etc. Every one is supported by the Province, municipality and country and then it ‘s your turn to pony up. You put back, this is a two way street. I don’t doubt it did have a part in his decision and I’m dispointed.

      • Fred-65

        The same as every parent who’s kids play sports. They buy his skates and his gloves but the community/municipality/Government buys the Ice Arena, the roads leading to it, and hospital you take them too if he suffers and injury. These things are not free they cost millions rather than hundreds for gloves

  • BC SPORTS FAN

    Too bad the Canucks who desperately need a good D-man passed on Liligren. He will become a stud on the Maple Leafs and lead them to the Stanley Cup. He had mono for 3 months, tried to play and fell in the draft. Why did I know that as a casual hockey fan but Benning didn’t ?