Creating a 'competitive advantage' for Alabama athletes: new bill would cut taxes on NIL earnings
State representative Joe Lovvorn of Auburn introduced House Bill 240, the Competitive Edge NIL Tax Cut Act. It would make Alabama athletes' NIL earnings exempt from state taxes.
A new bill could aid the recruiting and roster management efforts of Alabama's
Kalen DeBoer and other college coaches in the state.
State representative Joe Lovvorn of Auburn is seeking to create what he says is a "competitive edge" for college athletes in Alabama by making their name, image and likeness earnings exempt from Alabama's individual income tax.
Lovvorn introduced
House Bill 240, the Competitive Edge NIL Tax Cut Act, on Tuesday.
Representatives Danny Garrett (R-Trussville) and Chris Blackshear (R-Phenix City) helped write the bill.
The bill, if it is signed into law, would go into effect on October 1. It would apply retroactively to Jan. 1, 2025, and remain in effect through the end of 2027.
A similar bill was
introduced in Georgia earlier this month.
The bills would theoretically level the playing field when it comes to colleges in states that don't have individual income tax like Florida and Texas.
Alabama's individual income tax rate is 2% on the first $500 of taxable income, 4% on the next $2,500 of taxable income and 5% on all taxable income over $3,000.
"One common thread shared among Alabamians is their love for collegiate athletics,"
Lovvorn said of the bill. "Alabama is proudly home to many of the nation's top programs, and celebrating their success is a central part of our state's identity. As NIL continues to change the landscape of college sports, the state must work to foster an environment that helps our schools land America's top recruits. Exempting NIL earnings from state income tax gives Alabama a competitive edge, leading to more students receiving a quality education here and more championships coming home to Alabama."
Last week, SEC commissioner Greg Sankey went on The Paul Finebaum Show and spoke about how NIL laws vary from state to state.
"This can't function on a state-by-state basis, he said. “We just had a group of football leaders, and we talked candidly about that. They deserve to have the same standards across their competition so we can have a College Football Playoff and a Final Four. … if Congress elects not to act, and says we have more important things, then I'll go back to my observation: the universities that are competing with each other — and I use that phrase intentionally, with each other — need to come together to say we are committed to solutions. Not going state-by-state to have different laws to figure out the next one-up."
