No Tax on NIL: MS House Bill 4014 🏈

Recently, many Mississippians have taken to social media to voice their concerns over MS House Bill 4014 – an act to amend Mississippi’s existing income tax law to add NIL deals. A majority of their concerns are warranted, considering that they are rooted in the fact that the state government has continued to leave Mississippi teachers with one of the lowest salaries in the country. However, MS House Bill 4014 may actually benefit many Mississippians more than they realize.

MS House Bill 4014 allows NIL compensation to be one of the income types that are excluded from “gross income” for tax purposes – meaning that college athletes in Mississippi will owe zero state income tax on their NIL earnings (but still owe federal). The bill is a direct result of the House v. NCAA case that was filed in 2020. In the House v. NCAA case, plaintiffs argued that the NCAA and power conferences (ACC, SEC, Big Ten, Big 12, Pac 12, etc.) worked together to exploit student-athlete labor without legal representation and to illegally limit the compensation athletes would receive. The result of this case was a settlement that established a $20.5 million revenue sharing cap per school for 2025-2026, increasing 4% annually. Prior to MS House Bill 4014, states with no income tax such as Florida, Texas, and Tennessee had a recruiting advantage over Mississippi. Nowhere is it more evident than in the NCAA’s Revenue reports. As of 2026, six schools out of thirty that are ranked with the highest revenue are schools in Florida, Texas, and Tennessee. These high revenues are also apparent in the facilities the athletes practice in, and in the venues and stadiums they play at.

NIL-third party collective payments (such as Ole Miss’ The Grove Collective) aren’t required to be publicly disclosed. However, the University of Mississippi (Ole Miss) has listed on their website that they were preparing to share approximately $20 – $22 million with student athletes for the 2025 – 2026 year, pending approval of the House vs. NCAA settlement – meaning that Ole Miss planned to be a full cap spender of the settlement, not a conservative one. Currently, Ole Miss is ranked #30 in revenue, and their athletic department reported a $7,714,598 deficit for the fiscal year of 2024 and a $5,147,021 deficit for the fiscal year of 2025. One may ask: okay, but what does that have to do with me?

With Mississippi’s current tax rate as 0% on the first $10,000 of taxable income and 4% on the remaining, prior to this bill, an Ole Miss football player receiving $100,000 in NIL deals would have to pay $3,600 in state taxes. That type of money to a 17-21 year old is a lot of money left on the table. Also prior to this bill, the $20.5 million cap spend (House v. NCAA case settlement) would’ve been reduced – meaning that Ole Miss and other Mississippi schools would have to find ways to cover that deficit somehow: increasing prices of snacks and drinks at venues/stadiums, increasing prices of tickets, paying coaches and staff less, etc. And we all know what would happen if Mississippi schools cut their spending on coaches, staff, and athletes.

Now that HB4014 is in effect, the $20.5 million cap spend is now worth more than in take-home pay. What they’re betting on is a zero-sums arms race: “if we can make our total compensation package more attractive than comparable SEC schools by eliminating state taxes on athlete earnings, we can recruit better, and grow revenue enough to justify the deficit spending”. The goal: have more money to spend on athletes to recruit better players, and those better players (as an investment) hopefully create better teams that win – teams that more people want to see, so that more merchandise, tickets, and other items are sold – as a way to decrease the deficit of the athletic department. On an optimistic note, as Mississippians, we should be grateful our government is trying to assist the deficit so that schools such as Ole Miss are not looking at us to cover their deficit – and, that hopefully, our favorite college team may be a winning team as a result of this bill. But unfortunately, Ole Miss is one of our schools that currently cannot afford to lose on that bet. Only time will tell.

The Dirt on Policy