Those excise taxes on huge coaches’ salaries aren’t going to pay themselves, peeps.
Another byproduct of the new legislation is a provision (Section 4960) that forces tax-exempt organizations like many of the colleges and universities across the country to pay an excise tax of 21 percent on the top five highest paid employees who make a salary of $1 million or more.
In most cases, that would include athletics directors and coaches who are sometimes the highest paid employees in the state.
Nick Saban is the highest paid coach in the FBS last season with a salary of $11.3 million. Under the new tax provision, Alabama would be on the hook for an estimated $2.3 million a year in excise taxes.
The issue stretches beyond Alabama. Last season, 78 coaches made at least $1 million. There were also 15 assistant coaches who made more than $1 million last season, led by LSU defensive coordinator Dave Aranda ($1.8 million), and a handful of athletics directors who wer paid more than $1 million as well.
How schools will offset the excise tax is another piece of the overall puzzle that no one seems to have an answer for at the moment. Some of it, unfortunately, could come in the form of cuts to programs. Then there are some more extreme measures, some of which involve third-party sponsorship.
“I think that schools are going to look at, ‘Can I get a shoe company to pay part of this?’” McMillen said. “I mean there is probably some workaround, but whatever they are, there’s probably a price to pay. You don’t want your football coach being paid by shoe companies.”
Well, except when you do. But I digress.
Kirby’s gonna be in a pretty high tax bracket when the dust settles. Mel Tucker just pole vaulted over the $1 million a year mark. Presuming success continues for the football program, he’ll soon be joined by other assistants. Sounds like another rainy day storm heading our way. No doubt McGarity is on the mother as I type this.
Of course, instead of giving us another mealy-mouthed explanation for the coming bump in 2019, Butts-Mehre could always get a little creative, like this. Probably not very Georgia Way-ish, though. Too fan friendly.