Burr introduces NIL bill that would tax some college scholarships for student-athletes

WASHINGTON (WTVD) -- North Carolina Republican Sen. Richard Burr introduced on Wednesday the NIL Scholarship Tax Act.

The legislation was designed to protect the integrity of amateur athletics at colleges and universities across the nation, Burr's office said. This proposal would allow student-athletes to choose between receiving a tax-free scholarship for a post-secondary degree or the opportunity to earn outside compensation for their Name, Image, or Likeness (NIL).

"Collegiate athletes are given the unique opportunity of competing for their school while receiving a quality, post-secondary education," Burr said. "The NCAA's recent decision to rescind its long-standing prohibition on outside compensation will fundamentally change the landscape of college athletics."

Since 2019, nearly 30 states have taken action to allow student-athletes to earn outside income for their Name, Image, and Likeness. On June 30, 2021, the NCAA approved a new, interim policy, effective July 1 to parallel states' recent decisions, further blurring the line between amateur and professional athletics, Burr's office said.

"As one of only two former scholarship athletes serving in the U.S. Senate, I remain concerned that the NCAA's action ignores the fact that only a handful of revenue-generating sports financially support the majority of non-revenue generating sports on college campuses," Burr said. "Some students go on to play professionally, but the vast majority do not. The majority of student-athletes rely on their college education for future earnings."

Burr, who played college football on scholarship at Wake Forest, said the premise of this bill is simple: if a student chooses to monetize their name, image, and likeness based on their connection to their school - in some cases earning them $1 million or more a year - their scholarship should be subject to federal income taxation.

"It's critical that we help protect the successful collegiate sports model that has provided students with educational and professional opportunities for more than a century," Burr said.

Under the proposal, student-athletes earning less than $20,000 from outside compensation would continue to receive their scholarship under the same tax treatment; however, students who earn more than $20,000 per year would be required to include their scholarship in Adjusted Gross Income for federal income tax.