Texas paid his salary for the first few years...it was a win win for the A-rod and the Yankees....and a stupid move by Texas from square 1..
On February 15, 2004, the Rangers traded Rodriguez to the New York Yankees for second baseman Alfonso Soriano and a player to be named later (Joaquín Árias was sent to the Rangers on March 24). The Rangers also agreed to pay $67 million of the $179 million left on Rodriguez's contract.
The Rangers paying A-Rod’s salary wouldn’t have affected the taxes ... he’d still have to pay NY taxes on the salary. If a company in Texas pays you to work in NY, you still owe NY the taxes for earning money in their state.
SnakeDoc