College sports, especially football, are in the middle of a structural shift that would have been hard to imagine a decade ago. Name, image and likeness (NIL) money, the transfer portal, and now revenue sharing have changed how athletes evaluate opportunities — and how schools sell themselves. One emerging question is whether state income tax policy could become a meaningful recruiting advantage.
There’s no hype required to see why the idea has traction. With some college athletes now earning millions of dollars through NIL deals, the financial realities once reserved for professional sports have entered the college game.
Why Taxes Are Even Part of the Conversation
Professional athletes have long considered taxes when choosing where to play. Florida’s lack of a state income tax famously helped sway wide receiver Tyreek Hill to sign with the Miami Dolphins rather than the New York Jets, and billionaire Jeff Bezos moved from Washington to Florida to avoid capital gains taxes.
Now that college athletes can earn real income — through endorsements, appearances, autograph sessions, and branding — the same math applies. Schools in states with low or no income tax can reasonably point out that athletes may keep more of what they earn compared to peers in higher-tax states.
As Josh Lens, associate professor of instruction at the University of Iowa, put it, “It has impacted college football a lot, and I think we’re seeing that play out in real time.”
Recruiting pitches have always included facilities, playing time, coaching staffs, and campus life. Taxes are simply another data point schools can now highlight.
Does It Actually Matter to Athletes?
So far, there’s no hard data showing that athletes are choosing schools based on state income tax rates. Sports economist Andrew Zimbalist acknowledged the uncertainty, saying, “To what extent the players and their agents are responding to that incentive difference, I can’t tell you. We don’t have data on that yet, but I’ll be shocked if it doesn’t have an impact.”
That said, several former players and analysts urge caution before overstating the importance of taxes in college decision-making.
“If I’m looking at the list of things, it’s like six or seven on my list of things that matter,” said Femi Ayanbadejo, a seven-year NFL veteran and current analyst. In his view, taxes are secondary to football realities.
“What’s a motivator is the aggregate amount of money you’re going to get, where you’re going to go play, and are you going to start and what does that mean for your draft status?” Ayanbadejo said. “Your draft status is way more important than saving 10% or 20% in tax money.”
For most players, especially those with professional aspirations, development, exposure, and coaching likely outweigh tax considerations — at least for now.
Agents, Oversight, and a New Layer of Complexity
The legalization of NIL also opened the door for college athletes to hire agents specifically for NIL deals. That has introduced new oversight challenges.
The Federal Trade Commission recently sent letters to 20 schools to determine whether agents working with student-athletes are complying with the Sports Agent Responsibility and Trust Act. The concern is whether young athletes are adequately protected in a rapidly evolving marketplace.
“Most states have a law that regulates agents,” Lens said. “Well, I think we’re finding that it’s very easy to call yourself an NIL agent. Do they really have the athletes’ best interests in mind?”
Taxes, contracts, and long-term financial planning are now part of decisions athletes may be making before they turn 21.
NIL, Revenue Sharing, and Shifting Power
NIL is only part of the transformation. A judge’s ruling last year now allows schools to share revenue from television contracts directly with athletes.
“Schools are getting tens of millions of dollars in television money,” Zimbalist said. “And they’re allowed to share that with the players.”
In low-tax states, that shared revenue may go further in take-home pay, adding another wrinkle to recruiting. As Zimbalist noted, “It’s not just NIL money, but it’s also revenue sharing money.”
Major programs with deep-pocketed donors are best positioned to benefit. Miami has prominent backers such as Dana White and John Ruiz. Indiana is supported by billionaire alum Mark Cuban. Other schools, like Oregon, benefit from long-standing corporate ties.
“Schools like Oregon, with its Nike backing, they could have a leg up,” Lens said.
The Transfer Portal and Player Control
The transfer portal has further empowered athletes by allowing them to move more freely between programs.
“It’s time that players have a little say in how this goes, because their coach can leave at any time, but a player can’t? No,” Ayanbadejo said.
Whether state income tax plays a meaningful role in transfer decisions remains unclear. Zimbalist described today’s environment bluntly: “The top players are free agents in football, and they change schools looking for the best offer that they can get.”
Winning Still Isn’t Just About Money
This season’s national championship matchup between Indiana University and the University of Miami highlights how unpredictable the new landscape can be. Neither school ranked in the top ten in NIL spending, yet both reached the title game.
“Indiana was a perennial loser for 100 years,” Ayanbadejo said. “It shows what a good coach can do when young players move in unison and learn about culture and the system.”
A Likely Factor — Not the Deciding One
State income tax policy may become a marginal recruiting advantage, especially as NIL deals and revenue sharing continue to grow. But for most athletes, it appears to be one variable among many, not the deciding factor.
