KU, Mizzou and others will pay more for coaches this year because of new tax law
College athletic departments will now have to foot an additional bill when it comes to paying for top-dollar coaches.
Because of a change in the tax code effective this year, nonprofits will be required to pay a 21-percent excise tax on any compensation given to employees who make more than $1 million; the tax will be limited to an organization's five highest-paid individuals.
University of Kansas chief financial officer Pat Kaufman spoke about the change when discussing the athletic department's proposed budget during a board of directors meeting on Wednesday morning. Kaufman later told The Star that the department is budgeting an additional tax expense around $1 million, which could change depending on how tax advisers interpret KU men's basketball coach Bill Self's salary for next year.
Self's compensation for 2018-19 is just under $5 million, though his contract is complicated by a retention payment that will be paid at a future date. Football coach David Beaty, meanwhile, will make $1.7 million.
Other schools will be affected as well. Kansas State, for instance, will pay roughly $777,000, based on the salaries of football coach Bill Snyder ($3.2 million) and men's basketball coach Bruce Weber ($2.5 million). Schools are only required to pay excise tax on every dollar over $1 million that their high-salaried employees make.
The Missouri athletic department, meanwhile, will have to pay about $661,500 in taxes on its two men’s salaries, department spokesman Nick Joos confirmed. Missouri men's basketball coach Cuonzo Martin’s guaranteed salary from May 2018 through April 2019 is $2.8 million. The Tigers’ football coach, Barry Odom, makes $2.35 million in guaranteed salary.
Joos said there is currently “conflicting info” whether the tax applies to the fiscal year or calendar year.
Wichita State, which does not have a football program, is expected to pay $547,500 in tax for men's basketball coach Gregg Marshall.
This story was originally published June 28, 2018 at 10:34 AM.