The Supreme Court’s decision in NCAA vs Alston on June 21, 2021, had far-reaching effects. College football hasn’t been the same ever since. On the one hand, it is positive to see college athletes making the money they always deserved. On the other hand, NIL has opened a whole plethora of avenues that colleges now have to wade into. Take, for example, the recent House v. NCAA settlement.

The settlement has the potential to create an equal parity between the power of 4 colleges. It has introduced a salary cap and added benefits for athletes even after they stop playing. It has retroactively applied the NIL payments given to athletes. That only means one thing: More money for athletes and more attempts from colleges to circumvent all these regulations. Kalen DeBoer’s Alabama has got an opportunity to do just that after a recent announcement.

The State of Alabama State Senator Joe Lovvorn has recently introduced legislation that would exempt all income tax levied on NIL earnings of collegiate athletes in the state of Alabama. Right now, there are 5 SEC colleges that are enjoying such benefits in Tennessee, Florida, Texas, Vanderbilt, and Texas A&M. If the bill successfully becomes law, the Crismon Tide will be the 6th SEC team that would enjoy tax benefits from their state. So, what does it mean for Alabama going forward?

Well, it will mean a hell lot. Since, now athletes will have more incentive to join the program as they will not be levied the 5% tax that they are levied now. Joe Lovvorn explained his reasoning behind the bill. “As NIL continues to change the landscape of college sports, the state must work to foster an environment that helps our schools land America’s top recruits. Exempting NIL earnings from state income tax gives Alabama a competitive edge, leading to more students receiving a quality education here and more championships coming home to Alabama”. However Alabama isn’t the only state that’s going to do this, here’s why.

Recently, the State of Georgia also introduced a similar bill that would see athletes earning their NIL income without paying any tax. That would essentially see colleges like the University of Georgia and  Georgia Tech also reaping the benefits of the proposed tax reform. Kirby Smarts’ Georgia recently suffered a tough blow when Carson Beck decided to join Miami, which is a tax-free state in NIL income. Many reports link his decision with tax relief, too. The Alabama Bill, if passed, will come into effect on 1st October 2025 and will be applied retroactively from January 1st of the same year. So, while there has been quite a positive reception to the news, not everyone has taken the news with the same enthusiasm. For context, hear this.

Unconstitutionality concerns loom on the legislation?

There have been calls within the state of Alabama about discrimination between common citizens and athletes regarding the application of the 14th Amendment. People are reacting to the news and terming it as ‘utterly unconstitutional’ and arbitrary. One user reacted to the news and wrote, “If I gotta pay taxes from my job they should have to pay taxes on NIL“. Another one wrote, “Hell naw I don’t think that’s right !! If they don’t have to pay taxes why should I have !! This is b——!“. A third one wrote, “What has football come to? Talking about taxes“. Well, there are some genuine concerns about constitutionality and discrimination, but there’s a catch.

The States are within their rights to make laws that can exempt a category of individuals based on two factors. First is if the law advances a legitimate interest of the state and second is if the law is rationally related to the said interest. Mind you, there are many states like Florida and Texas that offer these incentives to their athletes, and courts have found legitimate interest in those legislations. Furthermore, states can also make such laws if they advance tourism, economic development, and job creation. Which it seems the introduced legislation is actively doing. The verdict?

Well, NIL and State laws have become intertwined now in more ways than you can imagine. Programs are finding ways to attract top athletes and actively pushing for such reforms. Still, it will benefit athletes at large who, on average, make about $63,592 average in NIL compensation (if you exclude some of the top-paid athletes). The decision not only will be a key factor in their income but also will boost their morale.