Two NFL megastars are on the move, with Defensive End Myles Garrett heading from the Cleveland Browns to the Los Angeles Rams. Meanwhile, Wide Receiver A.J. Brown will be going from the Philadelphia Eagles to the New England Patriots. While both players will now play for teams that are expected to compete to become Super Bowl champions, each player will now be facing millions less in after-tax earnings due to significantly higher state income tax liabilities while playing for their new teams.
The NFL Salary Cap And June 1st NFL Trades
The NFL operates under a salary cap, meaning that teams must carefully orchestrate how much money they spend on players each season. For the upcoming 2026-27 NFL Season, the salary cap will be $301.2 million per team, according to NFL.com. While determining the total players’ salaries during a football season can be straightforward, nuances like players’ signing bonuses can create complexities when figuring out when and how that one-time payment should be allocated to the salary cap.
The NFL created June 1st as the arbitrary day when the league will shift from one football season to the next from a financial standpoint. The team the player is on at the beginning of the day on June 1st will direct how that prorated signing bonus will be applied when determining the salary cap costs. Because of this date, many teams wait until June 1st to trade players, as it is beneficial for one team to hold the player on the roster as of June 1st versus another team.
To illustrate, consider Garrett’s $41.09 million signing bonus. If Garrett were traded before June 1st, then the Browns would have had to absorb this entire amount as a reduction in their 2026 salary cap, according to CBSSports. Since Garrett was traded after the June 1st cutoff, the Browns can now spread out the $41.09 million reduction in their spending over two years. Not only does this allow teams to cushion the blow of reduced spending, but as the salary cap increases each season, it might simply be offset by this contract nuance.
This year’s set of June 1st trades involved two of the league’s most recognizable star players: Myles Garrett and A.J. Brown. Garrett played his entire career for the Cleveland Browns and was sent to the Los Angeles Rams for Defensive End Jared Verse and three future draft picks (including next year’s first-round pick). Meanwhile, A.J. Brown was shipped from the Philadelphia Eagles to the New England Patriots for two draft picks (including next year’s first-round pick).
NFL Salaries And Taxes
While the player’s contracts typically remain intact following trades like this, one thing that does change is the player’s after-tax income. While federal income taxes typically remain constant for each player, their state income tax liabilities will fluctuate based on the jock tax.
The jock tax is the state income tax players owe. The final taxes they must pay to each state are based on a formula of the location of each duty day – a day in which they were performing their job duties, such as a game or a practice.
Some teams are located in low or no-income tax rate state jurisdictions, and their players have many duty days where they are subject to very little state income taxes. These teams include the Jacksonville Jaguars, Houston Texans, Tennessee Titans, Tampa Bay Buccaneers, and Dallas Cowboys.
Meanwhile, some times are located in high-income tax rate state jurisdictions, and their players have many duty days that are subject to substantial state income taxes. These teams include the San Francisco 49ers, Los Angeles Chargers, Buffalo Bills, and New York Jets. These teams also include Garrett’s Los Angeles Rams and Brown’s New England Patriots.
The Myles Garrett Trade And His Change In After-Tax Compensation
Garrett averages $40 million per year under his current contract. Using the simplifying assumption that his $40 million annual salary equates to $40 million in taxable income, Garrett will be paying federal income taxes to the tune of $14.7 million annually.
When playing for the Browns, Garrett faced a very low 2.75% flat tax rate in Ohio. This means that Garrett’s $40 million in taxable income would lead to a $1.1 million state income tax liability. This amount will balloon to over $5.3 million with Garrett practicing and playing the majority of his games in California, which imposes the highest state income tax rate of 13.3%.
While Garrett will face different tax liabilities by practicing and playing in California but having some games and practices outside of California (thereby lowering his state income tax liabilities), a key difference in after-tax compensation emerges – Myles Garrett will pay an average of up to $4.2 million more annually in state income taxes following this trade (ignoring differences in schedules each year to give way to differential jock taxes).
The A.J. Brown Trade And His Change In After-Tax Compensation
Brown averages $32 million per year under his current contract. Following the same simplifying assumptions, Brown will pay approximately $11.8 million annually in federal income taxes.
At the state level, when playing for the Philadelphia Eagles, Brown faced a 3.07% flat income tax rate. At his level of income, Brown’s state income tax liability was below $1 million per year. However, with Brown now playing for the New England Patriots, he will be subject to Massachusetts’s top income tax rate of 9%. This increase in tax rate will lead to Brown facing an average of a little under $3 million in state income taxes annually – $2 million more than when we played for the Eagles (ignoring differences in schedules each year to give way to differential jock taxes).
Is A Lower After-Tax Income Worth A Super Bowl Championship?
Garrett and Brown head to their new teams with higher state income tax rate liabilities. However, many times these types of mega-deals are voluntary. In fact, Garrett has a “no-trade” clause, which meant that he had to explicitly agree to this trade – and a significant reduction in after-tax income – before it could be finalized.
However, what emerges from this trade for Garrett is a renewed sense of optimism as he goes from the Browns, which have among the worst odds of winning next year’s Super Bowl, to the Rams, which, according to DraftKings, have the best odds of winning next year’s Super Bowl. Like Micah Parsons last season, who was traded from the Dallas Cowboys (0% state income tax rate) to the Green Bay Packers (7.65% state income tax rate), players do not always think about state income taxes when making their playing location decisions. Thus, as NFL players continue to relocate after and during each season, it begs the question of whether more income taxes are worth the ultimate prize of a change of winning the Super Bowl?
