UPDATE: Since this article was originally published, the Mississippi legislation proposing an exemption for Name, Image and Likeness (NIL) income from state income tax has stalled. Although the bill passed the Mississippi House of Representatives, it did not advance out of the Senate Finance Committee before the legislative deadline, effectively ending the proposal for 2026. As a result, NIL income earned by college athletes in Mississippi remains subject to the state’s standard income tax rules.
The NIL landscape continues to evolve, and now state tax policy is entering the recruiting conversation.
Early in the NIL era, the conversation centered on gross deal value. However, as the market matures, athletes and advisors are increasingly focused on the net outcome, or what the athlete actually takes home.
Within the SEC footprint, that answer can vary depending on state income tax policy.
Mississippi Looks to Join Arkansas
The Mississippi House recently passed legislation exempting NIL compensation from state income tax. The bill will now head to the Senate and if passed there, can be signed by the governor to become a new state law.
While NIL income remains subject to federal taxation, athletes earning NIL income in Mississippi would no longer owe the state’s income tax, which in 2026 is 4% on taxable income above $10,000. In a landscape where athletes increasingly focus on net earnings, eliminating that state tax could be a meaningful advantage.
In 2025, Arkansas became the first state to exempt NIL income from state income tax, excluding student-athlete NIL compensation from Arkansas taxable income.
Taken together, these developments signal something bigger: states are starting to view tax policy as part of the recruiting environment.
The Built-In Advantage States
Some SEC programs already operate with a natural advantage.
The states Florida, Texas, and Tennessee do not impose a personal income tax on any individual taxpayer. For athletes earning NIL income while in those states, there is no state income tax.
When athletes evaluate NIL opportunities across schools, that difference between taxable and non-taxable can become meaningful.
Other States Are Watching
Mississippi and Arkansas may not be the last.
Georgia lawmakers introduced legislation that would exempt NIL compensation from state taxable income, though the bill has not yet been enacted.
Other states have explored similar proposals as well. For example, Alabama previously considered legislation that would exempt NIL income from state taxation, though it ultimately did not pass.
Here is a chart of SEC schools and whether their income is taxable or non-taxable.
| School | State | State Income Tax |
|---|---|---|
| Alabama | Alabama | Yes |
| Auburn | Alabama | Yes |
| Arkansas | Arkansas | Yes, NIL Income Exempt |
| Florida | Florida | No |
| Georgia | Georgia | Yes |
| Kentucky | Kentucky | Yes |
| LSU | Louisiana | Yes |
| Mississippi State | Mississippi | Yes, NIL Income Exempt |
| Ole Miss | Mississippi | Yes, NIL Income Exempt |
| Missouri | Missouri | Yes |
| Oklahoma | Oklahoma | Yes |
| South Carolina | South Carolina | Yes |
| Tennessee | Tennessee | No |
| Texas | Texas | No |
| Texas A&M | Texas | No |
| Vanderbilt | Tennessee | No |
Navigate the Complex World of NIL
Whether you’re in a state with no income tax or one considering NIL-specific breaks, staying compliant with federal and state tax laws is essential. Our team specializes in helping athletes navigate the complex world of NIL income, tax planning, and financial strategy.
The Bigger Picture
This isn’t about creating tax havens.
It’s about net value.
As NIL compensation continues to grow, athletes and their advisors are becoming more sophisticated when evaluating opportunities. Two identical NIL deals can produce very different outcomes depending on where the athlete plays and how that income is taxed.
Within a conference as competitive as the SEC, that difference may start to matter.
It also reinforces the importance of working with experienced tax advisors who understand the complexities of NIL income, multi-state taxation, and the evolving regulatory landscape. At Withum, our Professional Sports team regularly works with athletes and their advisors to help navigate these issues so they can better understand the tax implications of their opportunities and make informed financial decisions.
Author: Evan Graulau | [email protected]
Contact Us
For more information on this topic, please contact a member of Withum’s Professional Sports Services Team.
