MLB pitcher Merrill Kelly says California tax rate swayed decision to reject Padres’ free agency offer
Merrill Kelly will once again be wearing an Arizona Diamondbacks uniform when the 2026 regular season gets underway.
Kelly, who entered the free agent market after pitching in 10 games with the Texas Rangers in 2025, agreed to a deal to return to the Diamondbacks.
Kelly spent the first seven years of his professional career with the Diamondbacks but revealed that he received an offer from the San Diego Padres this offseason. Kelly said his decision to turn down the Padres during free agency centered on California’s higher income tax rate compared to Arizona’s.
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Kelly agreed to a two-year contract worth an estimated $40 million with the Diamondbacks, according to ESPN. Although the Padres offered a comparable deal at three years instead of two, California’s 13% tax rate on income above $1 million proved a key difference.
"I don’t think it’s any secret on how much money you get taken out of your pocket when you go to California," the right-hander told "Foul Territory."
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Kelly also has deep ties to Arizona, where he attended high school and played college baseball at Arizona State. He said finding a way back to Arizona "was always the priority."
While Kelly said he is fond of San Diego, he was unwilling to sacrifice a significant portion of his salary to taxes. "I love San Diego," Kelly said. "It’s just, like I said, they take too much money out of my pocket, man. The taxes over there are a different level.
"We had my numbers guy run the numbers, and it just made more sense to come home."
Arizona’s state income tax rate is roughly 2.5%. Kelly also joked that he prefers the desert landscape to San Diego’s coastal setting.
"It worked out best for us because that was honestly our second choice," Kelly said. "It was between here and San Diego going into the offseason. San Diego was really the only place that, if we did go somewhere, that was probably high on our list if we weren’t in Arizona. It’s like, ‘All right, let’s just hop over and take a short, six-hour drive to San Diego.’
"But, yeah, the desert is home. I guess we’re not ocean people."
In a statement to The California Post, the Padres said the team does "not comment on contract negotiations."
Acquired by the Rangers in July 2025, Kelly went 12-9 while splitting the season between Texas and Arizona.
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