Mississippi Lawmakers Advance NIL Income Tax Exemption for Athletes

The Mississippi House passed a bill that would exempt college athletes’ NIL earnings from state income tax, potentially boosting recruiting for Ole Miss and Mississippi State.

Mississippi State Bulldogs quarterback Kamario Taylor (1) celebrates after scoring a touchdown against the Mississippi Rebels in the first half at Davis Wade Stadium at Scott Field. | Petre Thomas-Imagn Images

Mississippi’s NIL landscape may be on the verge of another shift, and it’s one that would directly affect Mississippi State and every other college program in the state trying to stay competitive in modern recruiting.

High school prospects and transfer portal players weigh a long list of factors when choosing a school, but the financial side of things has become a much bigger piece of the puzzle.

NIL money and how much of it a player actually keeps is now part of every serious recruiting conversation. That’s why the bill moving through the Mississippi legislature this week matters.

Mississippi on a path to waive state income tax on athlete revenue-share payments. Arkansas did it as well amid a pressurized recruiting environment within the SEC footprint, where Texas, Tennessee and Florida have no state income tax. https://t.co/E3hywio2Aq

— Ross Dellenger (@RossDellenger) March 2, 2026

The Mississippi House passed a measure Monday that would exempt athletes’ NIL earnings from state income tax. It’s only the first step (the bill still has to clear the Senate and get Gov. Tate Reeves’ signature) but it signals that lawmakers want Mississippi schools operating on equal footing with their peers.

And make no mistake, this is as much about keeping up as it is about gaining ground.

“NIL is taking the country and coming by storm,” Rep. Trey Lamar said, via the Clarion Ledger. “Other states are doing it, and I believe it’s time that Mississippi starts doing this as well.”

Arkansas already passed a similar exemption in 2025. Florida, Texas, and Tennessee don’t have state income taxes at all. Missouri and Texas have gone even further, passing laws that limit NCAA oversight of NIL activity.

Missouri even allows high school signees to start earning NIL money immediately after committing to an in‑state school.

So, Mississippi isn’t trying to reinvent the wheel. It’s trying to avoid falling behind in a recruiting world that changes every few months.

The Mississippi House passed a bill that makes college athletes’ NIL compensation (which includes rev share payments) exempt from state income tax.

One legislator opposed to the bill said athletes shouldn’t receive special treatment & should be taxed “like any other employee.” https://t.co/58x2yTJzXW pic.twitter.com/nxMQNNlUlu

— Mit Winter (@WinterSportsLaw) March 2, 2026

If the bill becomes law, Mississippi State, Ole Miss, Southern Miss, Jackson State, Alcorn State, Delta State, and others would all benefit from a cleaner pitch to recruits: you keep more of what you earn here.

Whether the bill ultimately passes is still up to the Senate and the governor, but the direction seems clear.

Mississippi isn’t the only state in the SEC footprint to do it, Arkansas does it as well.

Waiving state income on NIL (Avg 3.5%)

They do it to “match” the other states that have no state income tax at all. (Texas, Tennessee, Florida)

Razor thin recruiting margins 🤷‍♂️

— Peter Burns (@PeterBurnsESPN) March 2, 2026

Mississippi is moving toward a system that gives its programs a fair shot in the NIL era, and that’s something every school in the state including Mississippi State can get behind.