This state might exempt NIL pay from income tax

Already boasting one of the highest rated football recruiting classes for 2025, the University of Georgia might soon have another incentive to attract top athletes to the school.

Georgia lawmakers introduced legislation this week to exempt college athletes from a 5.39% state income tax on their name, image and likeness deals.

Some have taken to calling the measure the “Kirby Smart bill” after Georgia’s two-time national championship winning football coach.

“Listen, recruiting is a very, very competitive sport,” Republican state Sen. Brandon Beach told the Athens Banner-Herald on Tuesday. “When you’re recruiting these five-star athletes, they all have agents and we’re competing with Tennessee, Texas and Florida who have no state income tax. Eventually, we’ll get there and we won’t have a state income tax. I hope that happens, but until then we’ve got to get Kirby and these football coaches and basketball coaches, these coaches a tool in their toolbox to be able to compete.”

Tennessee, Texas and Florida all have universities in the Southeastern Conference that compete with Georgia for recruits.

Wednesday is national signing day for college athletes, though the day has lost its luster over the years. Most have already committed to schools. As of Wednesday, Texas, Georgia, Ohio State, Alabama and Oregon had the top-rated recruiting classes, per 247Sports.

Nick Saban’s role in Georgia bill

Beach said he’s actually not talked to Smart about the bill, but said the idea came after a dinner he had with former Alabama coach Nick Saban and others. He said Saban told him Missouri passed an NIL law after losing recruits to schools like Texas and Texas A&M that didn’t pay state income tax.

It’s interesting the suggestion came from Saban. He allowed last summer that NIL played a role in his retirement.

“All the things I believed in for all these years, 50 years of coaching, no longer exist in college athletics. It was always about developing players, it was always about helping people be more successful in life,” he said.

Saban related that his wife came to him just before he retired and said, “All they care about is how much you’re going to pay them. They don’t care about how you’re going to develop them, which is what we’ve always done, so why are we doing this?”

“To me that was sort of a red alert that we really are creating a circumstance here that is not beneficial to the development of young people,” Saban said.

College athlete revenue sharing

Last fall, Georgia Gov. Brian Kemp put schools in the state in a position to directly pay college athletes with an order that insulates schools in the state from any action the NCAA might take against them.

Starting in July, schools will be able to directly compensate college athletes, pending final approval of the House v. NCAA settlement this spring.

In that case, the parties negotiated an agreement to distribute nearly $2.6 billion in NIL “back pay” to former and current college athletes who competed in 2016 through Sept. 15, 2024. It also allows schools that opt into the settlement to directly pay athletes.

Universities could earmark as much as $20.5 million in the 2025-26 school year for revenue sharing. Most Power Four schools are expected to spend $15 to $17 million on their football rosters.

Last month, the U.S. Department of Education deemed NIL payments as financial aid that must be proportionate between male and female college athletes.

While many universities have publicly stated that the majority of the revenue sharing would go to football and men’s basketball players, the Education Department says that would be in violation of Title IX.

“When a school provides athletic financial assistance in forms other than scholarships or grants, including compensation for the use of a student-athlete’s NIL, such assistance also must be made proportionately available to male and female athletes,” according to a memo from the department’s Office of Civil Rights.