Athletes Sue the NCAA & States Push for NIL Tax Breaks
Feb 17, 2025
The world of college sports continues to evolve as athletes, lawmakers, and organizations battle over fair compensation. Last week brought two major developments that could shape the future of NIL: a wave of lawsuits against the NCAA and new legislation aimed at giving student-athletes a financial edge.
More Athletes Opt-Out & File Lawsuits Against the NCAA
The fight for athlete compensation is heating up. Last week, roughly 100 current and former athletes filed two new lawsuits against the NCAA and power conferences, seeking greater payouts than what the House v. NCAA settlement offers.
- Hill v. NCAA (California) – Led by former Mississippi State RB Kylin Hill
- Allen v. NCAA (Kentucky) – Led by Wyoming basketball player Dontaie Allen
With these lawsuits, at least 250 athletes have now opted out of the House Settlement, sending a clear message: they believe they deserve more. The outcome of these cases could have major implications for how college athletes are compensated in the future.
Alabama & Georgia Push for NIL Tax Breaks
Meanwhile, states are stepping in to shape the NIL landscape. Both Alabama and Georgia have introduced bills that would exempt NIL earnings from state income taxes. The goal? To make their schools more attractive to recruits by allowing athletes to keep more of their earnings. Currently only 9 states, including Texas and Florida, don't have state income tax which may make them more appealing to student-athletes.
If passed, these laws could create a competitive advantage for schools in those states and set a precedent for others to follow. With NIL already a key factor in recruitment, these tax breaks could further shift the power dynamics in college sports.
What's Next?
Between lawsuits challenging the NCAA’s settlement and new state laws reshaping NIL incentives, one thing is clear—change is happening fast. Will more athletes opt out of the settlement? Will other states introduce similar NIL tax breaks? We’ll be watching closely.
Stay tuned for more updates, and as always, keep building your brand both on and off the field!