Last week, North Carolina Senator Richard Burr proposed a bill, the "NIL Scholarship Tax Act," that would tax the scholarships of some college athletes who profit from name, image and likeness (NIL) deals.
Burr’s proposed bill would require college athletes who earn more than $20,000 from NIL deals to include their scholarship as taxable income. However, athletes are already required to pay taxes from any form of compensation from their NIL deals.
Effectively, between scholarships and NIL deals, athletes would be double taxed.
For those following Burr’s opinion on NIL deals, his proposal does not come as a surprise. This was a move Burr had been plotting for almost two years, far before NIL deals were allowed for college athletes.
“If college athletes are going to make money off their likenesses while in school, their scholarships should be treated like income," Burr said in an October 2019 tweet. "I’ll be introducing legislation that subjects scholarships given to athletes who choose to 'cash in' to income taxes.”
To further complicate the proposed system, it is currently unclear how scholarships would be taxed. College athletes never receive the physical money the scholarship is worth — instead, they receive the benefits covered by the scholarship, including tuition, food and room and board.
Would the system then vary by school? Paying a tax for a UNC athlete may look very different than taxing Duke athletes. With the large gap in the cost of attendance between UNC and Duke, it is unclear how Burr’s proposed tax would deal with these issues.
When the NCAA allowed athletes to profit off of their name, image and likeness in July, it was expected that eventually guidelines would be placed on a system that lacks a federal framework.
However, a system where athletes are subjected to a double tax would be a massive failure. The regular student on scholarship, who makes money on the side, does not get taxed on their scholarships. If we don’t tax other students’ scholarships, why should we create a system to tax athletes’ scholarships?
It is also quite ironic that Burr is introducing this bill considering his previous stances against raising taxes. In 2017, he voted to pass historic tax reform legislation, citing his desire to “get the government out of your pockets.”
This support for tax cuts came after Burr voted against increasing the tax rate for people earning over $1 million. Burr was also a signatory of the Taxpayer Protection Pledge, a pledge vowing to oppose tax increases for any reason.
Senator Burr continues to exhibit the double standard of continually voting against tax increases for the wealthy, yet has begun a crusade against taxing collegiate athletes.
To get the day's news and headlines in your inbox each morning, sign up for our email newsletters.