Changing face of college athletics: States discover new edge in competition for players

OMAHA, Neb. (KMTV) — College sports recruiting has entered uncharted territory, with some states now using tax advantages as a marketing tool to attract student-athletes.

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The University of Central Florida, where former Nebraska football coach Scott Frost now coaches, recently highlighted this trend in a social media post, promoting the state's lack of income tax.

"We don't see this in any other industry," said David Weber, faculty director of the Sports Law Program at the University of Oregon and former Creighton University law professor. "States are absolutely using this as a marketing tool, saying, sure, right now we have this revenue sharing cap, all universities are limited on what they can spend, but if you come here, you're going to keep more of that money."

Athletes at schools in states with income tax, like Nebraska, still pay taxes on their revenue share and NIL earnings. They also pay income taxes in other states where they participate in NIL activities.

However, student-athletes currently avoid the "jock tax" that professional athletes pay when competing in different states, since they're not considered employees of their schools.

Weber said that could change if student-athletes gain employee status.

"So every time they're going to a game on the road, they're gonna have a taxable event there, and their tax returns are going to end up being hundreds of pages long because they're gonna have to do a tax return for every single state in which they're competing," Weber said.

"I think really the most interesting part is the level to which we see states competing with one another and trying to get these collegiate athletes and the lengths to which they're willing to go to attract them," he added. "It's really remarkable."

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