The deadline on the Leo Carlsson offer sheet is approaching quickly. The Anaheim Ducks need to make a decision by July 10th to either match the five-year $90 mil contract offered by Philadelphia, or let Carlsson go.
The Flyers presented this financially aggressive offer sheet for many reasons, and one that should not be overlooked is state taxes.
Bonuses Offered
The offer sheet presented by Philadelphia includes $85.3 million in signing bonuses, with $19.95 million paid out in Year 1 alone. Bonuses in the NHL are usually paid by the owners of the organization, with only a % being counted against the cap. The Flyers are owned by Comcast Spectacor, which makes the $85.3 million in bonuses easier to digest.
PuckPedia has the full breakdown of the Leo Carlsson offer sheet here.
CA vs. PA State Income Taxes
It’s no secret that NHL players will opt to play in states like Florida or Texas because they have no state income tax. While Pennsylvania and California both have state income tax, the discrepancy between them is impactful. Enough so that Carlsson would miss out on almost $2mil per year if the offer sheet is matched by the Ducks.
Pennsylvania taxes all of their income at a flat rate of 3.07%, regardless of how much you make. California uses a progressive income tax bracket system. With $18mil AAV, Carlsson would be taxed between 12.9%-13.3%. This tax difference between the two teams is substantial. If the Ducks match, Carlsson would be signing the same contract with them, but making less money.
This is a life changing contract for the 21-year-old Carlsson, regardless of which team he signs with. Taking into account the taxes of each market could be a heavy contributor as to why he signed the offer sheet with the Flyers to begin with.
Anaheim Cap Space
Another short-term consideration for Anaheim is being left with just under $12,798 of total space, according to Cap Wages, if they match the offer sheet. The Ducks have a few intra-system signings left to make. The big one, of course, is restricted free agent forward Cutter Gauthier.
The Collective Bargaining Agreement allows teams to exceed the salary cap ceiling by up to 10 percent during the off-season. The likeliest course of action if the offer sheet is matched would be to unload the contracts of Chris Kreider, Alex Killorn, and/or Frank Vatrano.
However, that will take some doing. All three players have modified no-trade clauses. Kreider and Killorn are both UFAs next summer.
The offer sheet matching deadline is at 3:00 p.m. ET on Friday, July 10.
Home › Forums › Could State Taxes Benefit the Flyers in Leo Carlsson Offer Sheet?