Lets say a player is signed to a 1 year $10M deal and plays for a team in Florida (who has low income tax), and is then traded to a team in California (who has high income tax)

If his Florida team retains $5M in the trade, will the player pay tax to California on the whole $10M or would he pay taxes separately to each state?

Income taxes fall on the employee, not the employer. So my guess is the player pays whatever the tax is in the state their current team is in.

The team retaining salary would probably still cover their share of the payroll tax under their states laws.