In 2018, pitcher Merrill Kelly began his Major League Baseball journey with the Arizona Diamondbacks, where he has spent most of his career. Although the team traded him to the Texas Rangers midway through the 2025 season, Kelly made his way back to Arizona this offseason, signing a two-year contract worth $40 million in December.

At the time, Kelly expressed his interest in returning as a fondness for the city and belief in the team’s roster. But Kelly more recently shared another reason why he chose the Diamondbacks. While chatting with Foul Territory, Kelly revealed he was weighing another offer.

“There was a California team in the mix, and it’s pretty obvious who that was,” Kelly noted. “They offered a guaranteed three-year deal. However, the financial impact of California’s taxes was a significant factor. The offer was certainly tempting and made my choice more complex. But once Arizona reached a satisfactory number, it became clear that returning here was the better option.”

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The enticing proposal came from the San Diego Padres, who were offering Kelly $40 million spread over three years. Although this meant the same financial figure pre-tax, the taxation realities in California played a pivotal role in his decision.

Arizona’s state income tax is a flat 2.5%, while California’s is progressive, with a 12.3% rate on earnings over $742,954. Additionally, those earning over $1 million face an extra 1% payroll tax. Had Kelly joined the Padres, his state tax obligation would have totaled $5,300,116 over the contract period. In contrast, his deal with the Diamondbacks results in just $1 million in state taxes, translating to a substantial $4,300,116 more in Kelly’s pocket.

Kelly is not the first player to navigate away from California’s hefty taxes. Shohei Ohtani’s groundbreaking $700 million contract includes significant deferred payments, potentially allowing him to earn his salary while residing outside the state post-retirement.

This isn’t the only time we’ve seen a player try to avoid paying California taxes. Shohei Ohtani’s record-setting $700 million deal includes tons of deferred money; he could very well be retired and living outside of the state by the time he earns it.

Per Spotrac, Kelly has made about $36.6 million throughout his career so far. He’s 37 years old, so this is likely one of the last contracts he’ll sign as a major leaguer. He’s trying to maximize the amount he gets to keep.