Arkansas athlete NIL now exempt from income taxes

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As states across the country drafted bills to exempt NIL dollars from state income tax, one is now signed into law. Arkansas Gov. Sarah Huckabee Sanders signed the transformative bill Friday.

Under the law – which amended the Arkansas Student-Athlete Publicity Rights Act – funds related to NIL or revenue-sharing directly from a university will be exempt from state income tax. Additionally, the bill states financial information related to payments to athletes will be confidential and not subject to the Freedom of Information Act.

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“Income received by a student-athlete from an institution of higher education as compensation for the use of his or her name, image, or likeness or as a percentage of institutional athletic revenue permitted by the institution of higher education’s governing athletic association or conference under this subchapter is exempt from state income tax,” the law states.

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Arkansas was one of a handful of states with bills looking to exempt NIL dollars from income tax. Alabama, Louisiana and Georgia were among those in the South to do so, and Illinois saw a similar bill emerge in its state legislature. Arkansas is believed to be the first state to sign such a bill into law.

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