As college athletes begin to earn income through Name, Image, and Likeness (“NIL”) deals, they are becoming exposed to tax regimes that college sports are not ready to deal with. One of the most notable tax policies is the “Jock Tax,” which targets income earned by athletes in various states. The jock tax has traditionally applied to professional athletes. The tax allows states to impose income tax on nonresidents for a game or an appearance performed within state lines. With student-athletes now traveling for games and earning NIL compensation across multiple jurisdictions, the question arises: Are student-athletes subject to a state’s jock tax, similar to that of professional athletes?

The jock tax has a longstanding history. It was first introduced during the 1960s.[i] However, the rise of its application is directly attributed to the 1991 NBA Championship. Notably, Michael Jordan’s first championship. Following the defeat of the Los Angeles Lakers, Jordan was informed by California that he owed state taxes for his time in Los Angeles.[ii] To counter California’s state tax request, Illinois enacted their own version of a jock tax known as “Michael Jordan’s Revenge.”[iii] Michael Jordan’s Revenge tax was levied against players from any state that imposed a jock tax upon Illinois athletes.[iv]

As time went on, state legislatures across the country saw jock tax as an opportunity to bring in extra revenue. Currently, the only states that do not levy jock taxes are those with no state income tax.[v] Jock taxes were initially intended for professional athletes and entertainers. However, with the legalization of NIL and its newly adopted revenue sharing model, student-athletes will likely now be subject the tax.

Jock tax is calculated using the “duty day” method, which taxes the days an athlete or entertainer is on duty – including practice days, game days, and other days that demand various official duties.[vi] Income subject to the jock tax is calculated by dividing the number of duty days in the taxing state by the total number of duty days in the year.[vii]  Such allocated income is then multiplied by the state’s income tax rate.

When determining state tax liability, nexus is a key issue. Merriam-Webster defines nexus as a “connection” or “link.”[viii] Each state has their own definition of what nexus is. For example, California’s economic nexus law requires out-of-state businesses to collect and remit sales tax if they have more than $500,000 in sales of tangible personal property in the current or prior calendar year.[ix]

With the increase of branding and social media, players are becoming businesses. They make appearances all over the country and are paid to do so. Let’s say that Jeremiah Smith, who plays football at Ohio State University, is paid to attend an event in Illinois. Under the applicable jock tax, he could–and likely will–start being taxed on his income earned in Illinois.

Historically, tax officials generally did not target athletes because the income involved was considered minimal and enforcing such taxes presented more trouble than it was worth. However, as athletes’ salaries began to rise significantly in the 1980s, states recognized that the potential revenue outweighed the administrative burden, leading to the implementation of these taxes.[x]  Gabe DiCerbo, New York State Department of Taxation and Finance Director of Taxpayer Services, credits this shift in attitude towards taxing nonresident athletes to the trending salary increases for professional athletes.[xi]

College athletes have presumably never been taxed on income generated by playing their sport because they have never had an income until now. College athletes are definitely not professionals, but some of them are making more than professional counterparts who are subject to the jock tax. Could we see jock tax applied to college players who generate income in other states? It seems likely.

Prior to the legalization of NIL, student-athletes were not permitted to earn income, so state tax departments never considered imposing a jock tax on them. However, given the ridiculously high NIL valuation that some of these athletes have, it might be worth it to start taxing them. Even though student-athletes are not paid to play or paid on a per game basis like traditional professional athletes, if a student-athlete establishes a taxable nexus in a given state, income derived from NIL deals may be subject to that state’s income tax.

Constitutional and policy concerns arise when determining a state’s ability to levy the jock tax. Under the Due Process Clause, there must be “some definitive link, some minimal connection, between the state and the person, property, or transaction it seeks to tax.”[xii] Establishing whether this connection is met is the focal point in determining if the state can levy the tax. The argument then becomes this: If professional athletes are deemed to establish nexus by merely playing a game in a particular state, then the same standard should apply to student-athletes. When student-athletes accept an NIL deal and compete in a particular state, they create a comparable connection to that of a paid professional player. As such, there is no valid reason why nexus should not be established in their case as well.

Moreover, another concern relates to the Commerce Clause. Under the Commerce Clause, state taxes may not discriminate against or unduly burden interstate commerce.[xiii] The Supreme Court in Complete Auto Transit, Inc. v. Brady presented four prongs for determining if a state tax can withstand Commerce Clause scrutiny. The prongs are: 1) substantial nexus with the taxing state; 2) fairly apportioned; 3) does not discriminate against interstate commerce and; 4) is fairly related to the services provided by the state.[xiv]

While many students earn too little through NIL deals to generate significant tax revenue, low income alone does not preclude a state from asserting its taxing authority. If a state can satisfy all four prongs of the Complete Auto Transit test – demonstrating nexus, fair apportionment, non-discrimination, and a reasonable relationship to state-provided services – then nothing in the current law would prevent it from imposing a jock tax on student-athletes. As NIL compensation becomes more widespread and legally recognized, states will increasingly look to extend these taxes to student-athletes, regardless of disparities in earnings.

[i] Breaking Down the “Jock Tax,” H&R Block, https://www.hrblock.com/tax-center/income/wages/the-jock-tax/# (last visited Aug. 11, 2025).

[ii] See id.

[iii] See Andrew Wilford, Jock Taxes – Juice That Isn’t Worth the Squeeze?, NTUF (Aug. 15, 2024), https://www.ntu.org/foundation/detail/suggested-title-jock-taxes-juice-that-isnt-worth-the-squeeze.

[iv] See H&R Block, supra note i.

[v] Wilford, supra note iii.

[vi] Andrew Coleman, Understanding the Jock Tax: What Athletes and Remote Workers Need to Know, Taxes For Expats, https://www.taxesforexpats.com/articles/expat-tax-rules/jock-tax.html (last updated July 22, 2024).

[vii] See The Jock Tax: What Athletes Need to Know and How to Manage It, Navalign (Sep. 14, 2024), https://navalign.com/updates/the-jock-tax-what-athletes-need-to-know-and-how-to-manage-it.

[viii] Nexus, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/nexus (last visited Aug. 11, 2025).

[ix] See Alex Oxford, What’s California’s Economic Nexus Law for Out-of-State Businesses?, TaxValet, https://thetaxvalet.com/blog/what-is-californias-economic-nexus-threshold-for-sales-tax (last visited Aug. 11, 2025).

[x] Elizabeth C. Ekmekjian, The Jock Tax: State and Local Income Taxation of Professional Athletes, 4 Seton Hall J. Sport L. 229, 234 (1994).

[xi] Id.

[xii] See State Income Tax: Life After Wayfair – an ASC 740 Perspective, Andersen (Mar. 15, 2023), https://www.andersen.com/pressroom/state-income-tax-life-after-wayfair-an-asc-740-perspective.

[xiii] Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977).

[xiv] Id.