The Bias of the Traditional Market
When a team like Florida or Vegas makes a deep playoff run, there’s a reflex in the hockey world: “Well, it’s easy when you don’t pay income tax.”
It’s the kind of offhand remark that says more than it seems to. It implies these teams didn’t really earn it. That their success is an asterisk. A product of policy, not planning.
But that same logic rarely gets applied to the Pittsburgh Penguins, or the St. Louis Blues, or the Boston Bruins. All three have won in the cap era. All three operate in relatively low-tax environments. No one calls them “tax teams.”
Meanwhile, the so-called hockey heartlands — Toronto, Montreal, New York, California — face some of the toughest income tax rates in the league. Yet their reputations remain intact, their failures chalked up to bad luck, bad management, or just “the pressure.”
So we started asking questions:
- What exactly is a “tax-advantaged” team?
- How many of them are there?
- And does it really make a difference?
This report is our way of answering that — visually, transparently, and with every NHL team in the mix, Canada included. No fluff. Just data, patterns, and a few things we didn’t expect to find.
What We Mean by “Tax-Advantaged”
“Tax-advantaged” isn’t just about zero-tax states like Florida or Nevada.
Plenty of legacy teams operate in relatively low-tax environments:
- Pittsburgh
- St. Louis
- Detroit
- Boston
- Philadelphia
Meanwhile, teams in California, New York, and Canada face some of the league’s steepest tax burdens.
So we expanded the definition — and started to see some patterns emerge.
The Dataset Behind the Question
We gathered data for all 32 NHL teams, including Canadian franchises.
Each entry included:
- Location
- Tax rates (state, provincial, and city)
- A standardized $3.5M salary example
- Team performance since 2005 — Cups, playoff appearances, and playoff rounds won
2005 marks the start of the salary cap era, which makes financial efficiency more meaningful. We used this dataset to frame everything that followed.
Correlation? Not Quite.
We ran a Pearson correlation to see if higher taxes correlated with less success.
The result? Statistically flat. No significant linear relationship between tax rate and performance.
But correlation isn’t everything. Hockey’s messy. So we looked deeper.
Breaking It Into Brackets
We grouped teams into tax brackets:
- 0–5%
- 5–10%
- 10–15%
- 15–20%
- 20–25%
- 25%+
That’s when patterns started to emerge.
Teams in low-tax brackets — like Tampa Bay, Florida, Vegas, Dallas — were consistently successful.
But with so many teams in those brackets, were we just seeing volume?
The Uneven Spread
Over half the league falls below a 10% tax rate. That includes 18 teams — 11 of them in the 5–10% bracket alone.
Success may appear concentrated in those brackets simply because there are more teams there.
To get clarity, we needed to normalize the data.
Leveling the Playing Field
We recalculated everything per team:
- Cups per team
- Appearances per team
- Rounds won per team
Once we normalized the data, the advantage in low-tax brackets softened. Things looked more balanced.
Not perfectly equal, but enough to suggest that tax isn’t the only factor driving success.
A Simpler Lens: 0%, 1–9%, 10%+
We simplified the brackets: just three categories:
- 0% tax
- 1–9%
- 10%+
This model showed a clearer split.
0% teams still performed well. 1–9% was steady. 10%+ lagged.
But much of that advantage was driven by a few recent runs — especially by Florida and Tampa Bay.
So What Do We Make of It?
Taxes don’t win Cups. But they help.
A lower tax rate can make the same salary go further. That gives a team leverage. And in a cap system, leverage matters.
The surprising part? Some of the most tax-advantaged teams have been traditional powerhouses all along. We just didn’t frame them that way.
It’s time we started.
While taxes don’t win championships, they do shape the environment teams operate in. In a league built on parity, even a small financial edge can ripple into real results. And while markets like Florida or Nevada enjoy the benefits of a 0% income tax, they don’t carry the media pull, prestige, or lifestyle perks of places like New York, Los Angeles, or Toronto. The playing field isn’t just uneven — it’s tilted in different directions. If the NHL truly values fairness, it may be time to explore ways to account for these differences. Because right now, the salary cap might be flat — but the terrain underneath it clearly isn’t.
