Shohei Ohtani's life could get much more expensive off the diamond

Shohei Ohtani has found three unique ways to make finance-related news in the past four months. First, he signed a record-shattering contract that sent shockwaves throughout the sports world. Then, he found himself embroiled in a gambling scandal that grows more complicated by the day. And now he's in the crosshairs of California lawmakers.

Shohei Ohtani signed a 10-year, $700 million free-agent contract with the Los Angeles Dodgers in December, the largest contract in sports history. Ohtani will not receive $70 million a year, however. Ohtani and the Dodgers agreed to defer all but $68 million of his $70 million annual salary — a staggering total of $680 million — until the completion of the contract.

The unprecedented deferrals dropped the annual average value of Ohtani's contract to $46 million, helping the club's payroll by lowering his competitive balance tax hit.

California lawmakers target tax loophole exposed by Shohei Ohtani's contract

The global superstar was praised for his team-first mentality, but the deferrals weren't entirely selfless. Ohtani will avoid paying an estimated $90 million in California state income taxes by deferring nearly all of the $700 million contract.

There's nothing lawmakers hate more than tax loopholes they can't take advantage of. Following Ohtani's deferred contract, California lawmakers are pushing to change the federal tax code to prevent Ohtani's contract structure from becoming common practice for professional sports players. State Senator Josh Becker introduced legislation on Wednesday that urges the U.S. Congress "to establish a reasonable cap on deferred compensation," according to The Athletic.

Senate Joint Resolution No. 14 passed a Revenue and Tax Committee vote 6-1. There will be a discussion and vote on the State Senate floor to pass the resolution in the upcoming weeks.

"Ultimately, this is about fairness," Becker told The Athletic in a phone interview. "This is earned income. This is not retirement income. This is income that is earned here and should be taxed here. It wasn't what the federal tax code was meant to contemplate. It's a massive hidden-ball trick."

The federal tax code was altered in 1996 to prevent states from taxing deferred compensation for out-of-state residents if payments are made in equal periodic amounts for 10 or more years. The purpose of these laws was to protect pension income, Becker said.

Coincidentally, Ohtani happens to be an out-of-state resident on a 10-year contract with equal periodic payments. If Ohtani returns to Japan and no longer resides in California when the deferred payments are made, he would avoid paying state taxes.

Ohtani's life has been anything but simple ever since he signed his contract, but the three-time All-Star and two-time AL MVP has continued to shine under pressure.

Ohtani is batting .333./369/.650 (174 OPS+) with three home runs, eight RBIs, and a stolen base. The Dodgers are currently 10-5 after a 3-2 loss against the Minnesota Twins ended their four-game winning streak.