Illinois Joins in Alarming Surge of Bills Shielding NIL From Taxes

Illinois follows wave of state legislation to exempt NIL from income tax, meddling in college football recruiting and setting a concerning precedent.

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An unexpected player has emerged in the NIL landscape in college football; state legislation on income tax.

Illinois is the latest state to join the fervent race of lawmakers aiming to gain recruiting edges for their college sports teams. 

CBS Sports obtained a draft of the bill expected to be filed in the House of Representatives, sponsored by Travis Weaver and intended to amend the state’s tax code.

"The nice thing about this is it's not existing revenue, which I think makes it a lot easier," Weaver said. "It's hard to cut a tax when it's something that you have been collecting and it's baked into your budget, whereas this, we've never been taxing, NIL [income], not to mention that there hasn't really been any, right? I mean, this is just such a wild, wild west."

Georgia sparked a wave when they introduced a bill on Feb. 3 to shield NIL earnings from the flat 5.49% income tax — Alabama quickly followed suit.

Now the Illinois Fighting Illini and Northwestern Wildcats have legislators on their side for a run in the Big Ten and a shot at competing in the College Football Playoff. 

What message does that send to the constituents that live there, including surrounding college students on campus?

What message does it send about the state of college sports?

Weaver’s rationale, while logical, ultimately feels hollow.

There are 13 in-state schools that play Division I men’s and women’s college basketball, and three FBS football teams; Illinois, Northwestern, and the Northern Illinois Huskies.

Weaver feels the increased competitiveness of the in-state programs offsets lost revenue from the exemption on the flat 4.95% state income tax rate for student athletes; he further justifies winning correlating with increased enrollment.

"The reality is, we're going to collect more tax revenue when Illinois football is successful," Weaver said. "We're going to sell a heck of a lot more tee shirts and baseball caps, and we're going to have more people staying in our hotels, and they go to the U of I for games. So I think we have to continue to be competitive in sports, and we've got to keep up with what other states are doing."

There is precedent for athletes gaining exemptions from taxation, with former President Barack Obama signing a bill that shielded Olympic medal earnings that were under $1 million annually. 

That doesn’t land the same with college students who live amongst others on campus who are subject to the laws every person in the state is otherwise.

Influencers outside of sports capitalize on their name, image, and likeness. They would not fall under the exemption their athlete classmates would be granted.

The student workers who grant college football players access to a library or entry to their dorms would not be exempt like their peers. The professors who teach the athletes to obtain a college degree are taxed on their earnings.

Critics of NIL have pointed to the lack of regulations and the complete Wild West landscape that has seen multimillion-dollar deals become the norm.

Will $5k of $100,000 really move the needle for a high school recruit to choose a program in a state with no income tax?

In contrast, the advocates for NIL have pointed to increased financial literacy and responsibility that comes with financial obligations — skills they’ll need to operate at the professional level.

This teaches athletes the direct opposite; laws and accountability need not apply as long as you’re a college football or basketball player.

Is that message worth it to benefit 16 total in-state teams?

It teaches the students around them that they’re treated differently by their university and the state they chose to live in.

It sets a disturbing trend of state involvement in college sports and NIL, one they frankly have little business in. 

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