Paul L. Caron
Dean


Tuesday, November 5, 2019

Brunson: Taxing Student Athletes

Sam Brunson (Loyola-Chicago), Taxing Student Athletes: An Explainer:

NCAA LogoAbout a month ago, California Governor Newsom signed the Fair Pay to Play Act, which allowed California college athletes to be paid for the use of their image, name, and likeness. Other states, including Illinois, have proposed similar legislation. And today, the NCAA caved; though its concession is not entirely clear, it looks like the NCAA has paved the way to allow NCAA athletes to make money off of their image.

For some reason, this has provoked backlash by Senator Burr of North Carolina. On Twitter, he announced that he plans on introducing legislation that would tax college athletes who accepted payment for the use of their image, etc., on their scholarships.

The ensuing discussion following his tweet has evinced a lot of misunderstanding of what’s going on here, what the current tax treatment of scholarships is, and what “double taxation” means, among other things. So I thought I’d do a quick explainer: ...

 I really don’t get the reasons behind Senator Burr’s desire to tax student-athletes’s scholarships if they make money from their image. It’s not a new thing, though: five years ago, Treasury responded to a question he asked about the treatment of athletic scholarships in light of an NLRB decision that Northwestern football players were employees.

Unless and until he articulates a cogent reason why earning money should transform an untaxed scholarship into a taxable one, and why that reason should only apply to student-athletes, I’m going to assume that he actually doesn’t have a sound reason for it. I will continue to wonder, though, what constituency he’s trying to appeal to.

https://taxprof.typepad.com/taxprof_blog/2019/11/brunson-taxing-student-athletesstrong.html

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