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During the final week of February, House Bill 4014 cleared the Mississippi House of Representatives. The bill exempts income earned by college athletes from their Name, Image, and Likeness ("NIL") activities from Mississippi income tax.
If the measure clears the Senate and is signed by the Governor, Mississippi would become only the second state (following Arkansas) to adopt a targeted income tax exemption specifically for NIL earnings. Notably, the exemption would be retroactive to January 1, 2026
Mississippi's proposal is part of a broader trend. Several states, especially those with Southeastern Conference ("SEC") programs, are turning to NIL-focused tax incentives as a new tool for recruiting and retaining top collegiate athletes.
Recent legislative activity includes:
- Alabama: Proposed exempting NIL income from the state income tax for tax years 2025 through 2027 (bill failed).
- Georgia: Introduced legislation excluding NIL compensation from athletes' state taxable income.
- Illinois: Proposed allowing a $100,000 state income tax deduction for NIL earnings.
- Louisiana: Proposed allowing athletes to deduct all NIL earnings from adjusted gross income (bill failed).
- New Jersey: Proposed a $100,000 income tax deduction for NIL earnings.
- South Carolina: Introduced legislation permitting athletes to fully deduct NIL earnings from taxable income.
Although some of these measures have stalled, several are still active. Collectively, they signal that targeted NIL tax incentives are quickly becoming a new frontier in interstate tax competition, particularly among states looking to strengthen the appeal of their collegiate athletic programs.
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