Extra Innings · The Front Office
Paying Old Wages Late
United States v. Cleveland Indians Baseball Co. (2001)
Charge: Employment tax refund - which year's tax rates apply to back pay settled years later (suit against the United States)Court: Supreme Court of the United StatesDocket: The Front Office
When a club pays players back wages years late, are payroll taxes owed based on the year the wages are paid or the years they should have been paid?
The facts
Under a settlement of player grievances, a big-league club owed players back pay for two earlier seasons. It paid the money eight years later. Many of those players had already earned more than the payroll tax wage cap in the earlier years, so taxing the money back then would have produced little extra tax. Taxed in the later year, the bill was much bigger. The club paid the tax and sued for a refund.
You have the facts the court had. Guilty or not guilty? Call it in the game with your friends, then see what the court actually decided. Wrong call, you drink.
Citation: United States v. Cleveland Indians Baseball Co., 532 U.S. 200 (2001)
Read more at supreme.justia.com. The source reveals the outcome.