CELEBRITIES
Chris Tanev disclosed why he signed $27M Toronto Maple Leafs deal despite skyrocketing Canadian taxes
When veteran defenseman Chris Tanev hit free agency this summer, he had a big decision to make. After spending most of his 14-year NHL career playing for Canadian teams, Tanev played a brief stint with the Dallas Stars after being traded from Calgary at the deadline.
With Dallas, Tanev got a taste of playing in a U.S. market with no state income tax. However, when it came time to sign a new long-term deal, Tanev returned home, inking a six-year, $27 million contract with the Toronto Maple Leafs this summer.While Texas offered obvious financial incentives with no state tax, Tanev explained there were a few key factors that led him to choose Toronto.
“You do have the lower state tax there but I’ve played in Canada for 14 years. I’m from here and my wife’s family is from close to here. There’s also a tax when you leave Canada to become a US citizen there’s a departure tax to leave Canada,” Tanev said to the media last month.
Given Tanev’s age and NHL tenure, this departure tax could have been costly compared to a younger player just starting their career. Additionally, Tanev only played 19 games for Dallas, so he avoided establishing tax residency in the U.S. In the end, the financial considerations were attractive but not the sole determinant.
The Leafs helped their case by structuring Tanev’s deal with $21 million in signing bonuses, including $5 million this season (as per thehockeynews.com). This provides financial security and allows Tanev to start accruing returns immediately.
While some U.S. markets offer tax benefits, Tanev’s circumstances made Toronto the best overall choice considering hockey fit, family and taxes. In the end, taxes were one variable but not the only factor in Tanev’s free-agent decision
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