SACRAMENTO, Calif. (AP) - Legislation that would exempt California athletes who win Olympic medals from paying state taxes on their cash prizes passed the state Assembly on Friday and prompted a spirited debate among lawmakers about who deserves freedom from tax collectors.
The bill, AB2323, by Assemblyman Jeff Gorell, R-Camarillo, heads to the Senate after passing on a 53-4 vote. Many Olympians have meager salaries and deserve the break for representing their country and training with little financial support from the government, Gorell said.
“The least we can do as a state and as Americans is to give these athletes a small break on this achievement they earn for their enormous sacrifice, these achievements made on our behalf,” Gorell said.
Medalists receive honorary payments from the U.S. Olympic Committee, generally $25,000 for gold, $15,000 for silver and $10,000 for bronze, and are taxed on that as part of their income.
In Congress, Sens. Marco Rubio, R-Florida, and John Thune, R-South Dakota, have introduced legislation to exempt athletes from paying federal taxes on their prizes.
Democratic Assemblyman Das Williams of Santa Barbara said Gorell’s bill sets a poor precedent by picking favorite occupations to exempt from taxes. He took a shot at Gorell’s argument that athletes give back to the community by visiting schools.
“Those school kids need their tax revenue more than they need the volunteerism,” Williams said. “Those athletes did not make it on their own. They made it with roads paid by taxes, schools paid by taxes and services paid by taxes.”
Supporters of the bill countered that the bill barely puts a dent in state coffers. The Franchise Tax Board estimates the state would lose less than $100,000 over the next three years.
Before voting against the bill, Assemblyman Phil Ting, D-San Francisco, asked why Nobel Prize winners shouldn’t receive tax exemptions for their cash prizes.
Olympic athletes who testified in support of the bill included 2008 gold medalists Gabe Gardner, a volleyball player, and Stephanie Brown Trafton, honored in discus throwing.
If signed into law by the governor, AB2323 would apply to prizes won after Jan. 1, 2014, a period that includes the Winter Olympics in Sochi, Russia.
Follow Fenit Nirappil on Twitter at http:/www.twitter.com/FenitN