This story reports that Australian javelin thrower Joanna Stone is going to have to pay more income tax than she wanted to:
In the 1999 tax year, Stone received prizemoney of $93,429, grants from the [Australian Olympic Committee] and the Queensland Academy of Sport worth $27,900, sponsorships worth about $12,500 and $2700 in appearance fees. The tax office claimed the entire $136,448 was taxable, while Stone thought only the sponsorship was assessable income.
My first thought when I read this was: holy crap, a javelin thrower earned $130,000!? And her international record, while very good, was nothing to compare to the best of Australia's best. She was second-ranked in the world in 1997, and fourth in 1998. She won a silver medal at the World Championships in 1997.
According to the story, the Australian court ruled that Stone's athletic career was a business because she accepted sponsorships on top of her prize money; whereas Stone claimed that the money should not be taxable because she was only motivated by "her desire to excel, to represent her country and win medals, not to make money."
It's an intriguing argument, but I am not surprised it didn't fly. It is difficult to see any difference between prize money earned in a javelin competition and the salary paid to a professional football player. (I never won enough prize money to break through the poverty line, myself!) The article doesn't break down where the prize money came from. I know that for many athletics competitions the organizers and sponsors offer significant cash prizes to draw top competitors; but I also know that Australia is one of the many countries that pays its own athletes "bonuses" for winning medals. I would be curious to know how much of the $93,000 came from each source.
It is also interesting that the Australian Olympic Committee bankrolled Stone's legal case. Clearly the AOC recognizes that income tax will diminish the real value of their incentive program considerably.
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