How the tax situation helped keep Chris Tanev in Canada

I had never heard of this before.

Turns out taxes worked against the Dallas Stars this time.

Chris Tanev signed with the Toronto Maple Leafs on Monday, a six-year deal with a $4.5 million AAV.

At his introductory Zoom with Toronto media, Tanev mentioned a “departure tax” to leave Canada, and that limited his options in free agency.

I’d never heard of this, many people haven’t. So I reached out to my good friend Kyle Stich, a sport tax expert to explain it to me like I’m a 5-year-old.

Let’s start with Tanev’s unique situation. He’s 35 and before getting traded to Dallas before the deadline had only played for Canadian employers. He spent one year in college at RIT, but that was on a student visa, which is why the Stars had visa issues getting him into the lineup in the middle of the season.

While he finished the season with Dallas, he also didn’t spend enough time in Texas to hurt his residency status.

Now, this is where things get really interesting.

Tanev has been filing taxes as a Canadian resident throughout his NHL career, having spent at least 183 days out of the calendar year in Canada. That would have changed if he signed with an American team.

To sign with an American team, Tanev would have had to do one of two things.