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Jock Tax Comes to Campus

With student athletes now able to profit from their likeness in the form of name, image and likeness, Universities like their professional counterparts, find themselves with a competitive tax advantage or disadvantage depending on their tax jurisdiction.


In our recently completed law article Name, Image, and Likeness (Three words that ended amateurism under the NCAA and the unforeseen tax consequences that they bring with them) which will be submitted for publication later this year, Kari Smoker and I address the tax consequences that face student athletes who receive endorsement income. The article provides an overview of how these NIL funds are earned, how they are categorized, where the compensation should be sourced, and how this all impacts the way this income is taxed. The article concludes with a case study using two Pacific-12 Conference (Pac-12) schools to highlight how NIL payments are taxed based on four different income levels, for similar athletes, at schools that are in different tax jurisdictions.

The conclusion of the article is it becomes apparent Universities in different states receive either a competitive tax advantage or disadvantage depending on their location (and to a lesser extent away schedule).

To further the discussion, in this article, I take a closer look at nationally recognized football programs that are in eight different states to determine how their location impacts the net income of a star recruit who receives NIL in the form of endorsement income.

Case Study & Parameters

Last December, University of Pittsburgh head football coach Pat Narduzzi stated on 93.7 FM the Fan radio that North Carolina quarterback Drake Maye was offered $5 million by two schools to transfer. Maye, who will be entering his sophomore season this fall, did not transfer, and in fact never even entered the portal to transfer. However, for this article, Narduzzi’s musing provides useful insight into the value of a starting quarterback for a Division I football program.

The $5 million value provides a starting point in the following analysis to determine which schools hold a competitive tax advantage. To provide a fair comparison, NIL payments in this case study are considered tied to performance. NIL income therefore is subject to federal, state, and self-employment income tax and is allocated to all states and cities in which services are provided. In addition, all students are considered residents of the state and or city in which the University resides.


As with professional sports, the taxes that student athletes pay impact the net income they receive, the amount that is ultimately put in their bank account. All student athletes are subject to federal tax, and because they are considered contracted workers as opposed to employees, they are also subjected to self-employment tax and additional Medicare tax due to their income level. Where the differences occur between the universities is at the state level where the athletes will be subjected to resident state, local (in some circumstances), and non-resident tax for games played in other states (jock tax).

Below, I summarize each team’s tax consequences. Two immediate observations can be taken from our findings. First, the University of Texas has a clear tax advantage with their student athletes keeping over 60% of their endorsement income. Second, at the other end of the spectrum, the University of Southern California is at a clear disadvantage with their athletes retaining only 48% of their endorsement income.

Table 1


  1. University of Texas – with no state tax and only road games in Kansas and Oklahoma a $5 million endorsement deal would next $3,023,738.50 or 60.47%

  2. Clemson University – Although South Carolina’s marginal tax rate is 6.5% the state offers a 3% active trade and business tax limit which allows endorsement income to be taxed at a much lower rate than the other states in our table.

  3. University of Alabama – The state of Alabama offers two tax advantages. First, the state allows a deduction for federal tax and second that income is taxed at only 5%.

  4. University of Michigan – The state of Michigan’s 4.25% flat tax rate is the lowest of all states in our table apart from Texas which has no state tax.

  5. Notre Dame – Notre Dame student athletes are subject to tax in Indiana (3.5%), St. Joseph’s (local) (1.75%), and the highest jock tax in our comparable group with road games in California, Maryland, New York, and North Carolina.

  6. University of Georgia – the defending national champion Bull Dogs are subject to Georgia’s 6% tax rate and jock tax in California, Kentucky, Mississippi, Missouri, and South Carolina.

  7. Ohio State – Although Ohio’s tax rate is only 3.99%, student athletes at Ohio State are also subject to Columbus tax which is 2.5% along with jock tax in Georgia, Illinois, Maryland, Michigan, and Pennsylvania.

  8. University of Southern California – USC players are subjected to California’s marginal tax rate of 12.3% plus an additional 1% tax on income earned over $1,000,000.


There is a clear competitive advantage and disadvantage when it comes to where NIL income is earned. Tax rates are not linear, meaning athletes who receive smaller deals will not see the same level of income discrepancy. However, those earning less need to understand the impact of the tax imposed to maximize their net income. The best way for all athletes to maximize their earnings is to work proactively with an expert tax professional to position themselves in the best manner possible.


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