The Tax-Exempt Status Of Name, Image, And Likeness Collectives

Andres Castillo (J.D. 2024, Maryland), Comment, False Start: Federal Legislation is Needed to Prevent Name, Image, and Likeness Collectives From Improperly Receiving 501(C)(3) Tax-Exempt Status, 19 J. Bus. & Tech. L. 173 (2023): 

Name, Image, and Likeness (“NIL”) is a prominent topic in college sports. States have adopted NIL laws regulating a student athlete’s ability to earn compensation from their NIL. However, states, universities, and the National Collegiate Athletic Association (“NCAA”) alike are looking to Congress for federal NIL legislation. This Comment argues in support of federal NIL legislation generally. Specifically, Congress should first declare that monetizing a student athlete’s NIL and developing paid NIL opportunities for student-athletes are substantial non-exempt purposes that preclude NIL collectives from exemption under section 501(c)(3) of the Internal Revenue Code (the “Code”). Second, Congress should enact the Athlete Opportunity and Taxpayer Integrity Act (“AOTIA”).

Part I is an introduction to NIL. Part II summarizes the history of college sports and evaluates how NIL fits into that history. Part III assesses NIL laws in other states and examines Maryland’s NIL laws. Part IV provides an overview of section 501(c)(3) of the Code. Part V analyzes the status of NIL collectives under section 501(c)(3). Part VI proposes language that Congress should adopt in its federal NIL legislation regarding the status of NIL collectives under section 501(c)(3). Part VII is the conclusion.

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