The Jock Tax and NIL: How State Income Taxes Follow Student-Athletes Across State Lines

Most student-athletes earning NIL income know — or eventually learn — that the IRS wants its share. What catches nearly everyone off guard is that state governments want their share too, and not just the state where you live.

The so-called "jock tax" has been applied to professional athletes for decades. Now, with NIL income flowing to college athletes who travel for games, bowl appearances, tournaments, and brand activations, the same rules are beginning to apply to student-athletes. The result: a single athlete can have filing obligations in five, eight, or even a dozen states in a single tax year — and most of them never file a single nonresident return.

That is a problem. Unfiled nonresident returns accumulate penalties and interest. Some states are aggressive about enforcement. And the complexity only grows as NIL deals get larger.

The "jock tax" is not a formal tax code term — it is a nickname for the practice of states taxing nonresident athletes on income earned within their borders. It became widely known after the 1991 NBA Finals, when California sent Michael Jordan a tax bill for income earned during games played in Los Angeles.

The legal basis is straightforward: most states tax income that is sourced to their state, regardless of where the earner lives. For an athlete, income is typically sourced to the state where the performance or service occurred.

For a professional athlete, this is relatively well-defined: you play a game in Ohio, Ohio gets to tax a portion of your salary. For a student-athlete with NIL income, the analysis is more complicated — but the principle is the same.

Income sourcing rules vary by state, but the general framework works like this:

If you earn NIL income by performing a service in a specific state — appearing at a store opening, signing autographs at a fan event, filming a commercial on location, or making a paid appearance — that income is typically sourced to the state where the performance occurred.

Example: An Arizona-based athlete travels to Texas for a paid brand activation. Texas has no income tax, so no issue there. But if that same athlete travels to California for a similar event, California will want to tax the income earned during that appearance.

This is where it gets more nuanced. Endorsement income — flat fees for wearing a logo, posting on social media, or licensing your name and likeness — is not always tied to a specific performance location. States handle this differently:

• Some states source endorsement income based on where the athlete's services were primarily performed (often the home state or the state where the team plays).
• Other states use a "duty days" method — they calculate what percentage of your total working days in the year were spent in their state, then apply that percentage to your total income.
• A few states source passive licensing income to the state of the payor's domicile or the state where the license is used.

There is no uniform national standard. Each state has its own rules, and they do not always agree with each other — which can theoretically result in the same dollar of income being taxed by two different states (though most states provide credits to prevent true double taxation).

For athletes who earn income tied to a team schedule — including NIL deals structured around team performance or appearances — many states use a duty days allocation formula:

"Duty days" typically include game days, practice days, training camp days, and required team activities. A student-athlete who plays 30 games in a season and travels to 15 different states could have a duty-days calculation that creates filing obligations in every one of those states.

Not all states enforce the jock tax with equal vigor, and nine states have no income tax at all (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). But several states are well known for aggressive enforcement:

California is the most aggressive. The Franchise Tax Board actively pursues nonresident athletes and has sophisticated matching programs. California sources income based on duty days and has a broad definition of what constitutes California-source income. Even a single appearance in California can trigger a filing requirement.

New York is similarly aggressive, particularly for athletes who play in New York City. New York City has its own income tax on top of the state tax, which applies to nonresidents who earn income in the city.

Ohio, Pennsylvania, and Illinois all have active enforcement programs and source income to the state of performance.

Massachusetts has historically been aggressive about taxing nonresident athletes and has pursued cases involving both professional and, increasingly, amateur athletes with significant income.

Student-athletes face complications that professional athletes typically do not:

A professional athlete typically has one primary income source: their team contract. A student-athlete might have:

• A flat-fee endorsement deal with a national brand
• Per-post social media payments
• Appearance fees from local businesses
• Revenue from a personal merchandise line
• Camp or clinic income
• Autograph signing fees

Each of these income streams may be sourced differently. The social media posts might be sourced to the home state. The appearance fees are sourced to where the appearance occurred. The merchandise revenue depends on how the deal is structured. Getting this right requires analyzing each income stream individually.

Professional athletes have teams that handle payroll and withhold state taxes. Student-athletes are independent contractors. Nobody is withholding state taxes on their behalf. The obligation to track, calculate, and pay falls entirely on the athlete — and most 19-year-olds are not equipped to do it.

For international student-athletes on F-1 or J-1 visas, athletic scholarships may be partially taxable at the federal level (the portion covering room, board, and non-required fees). Adding multi-state NIL income on top of scholarship taxation creates a genuinely complex return that requires someone who understands both international tax and state income sourcing.

Ignoring nonresident state filing obligations is not a victimless oversight. The consequences can include:

Penalties and interest. Most states impose failure-to-file and failure-to-pay penalties. California's penalties can reach 25% of the unpaid tax. Interest accrues from the original due date.

Notices and audits. States share information with the IRS and with each other. If the IRS receives a 1099 showing income paid to you, that information can flow to state tax authorities. California in particular has sophisticated data-matching programs.

Compounding complexity. An unfiled return from 2024 becomes harder to reconstruct in 2026. Travel records, contracts, and payment documentation become harder to locate. The longer you wait, the more expensive the fix.

Impact on future professional contracts. Athletes who turn professional with unresolved state tax issues can find those issues surfacing during contract negotiations or when teams conduct financial background reviews.

The good news is that this is a solvable problem — but it requires proactive record-keeping and professional help.

Keep a log of every state where you:

• Perform a service for compensation
• Make a paid appearance
• Film content for a brand deal
• Participate in a paid camp or clinic

Date, state, activity, and compensation amount. This log is the foundation of your multi-state return.

Most states that tax income provide a credit for taxes paid to other states on the same income. This prevents true double taxation — but you have to file the nonresident returns first to generate the credit. Your home state return is typically filed last, after all nonresident returns are complete.

Work with your tax advisor to categorize each NIL income stream by sourcing type before year-end. Flat endorsement fees, performance-based fees, and licensing income are treated differently. Getting this categorization right before you file is far easier than reconstructing it during an audit.

If you are earning significant NIL income across multiple states, you likely owe quarterly estimated payments to each state where you have a filing obligation — not just to the IRS. Missing these payments triggers underpayment penalties at the state level, which compound the federal underpayment penalties you may already be facing.

This is not a situation where a general tax preparer or a software program is adequate. Multi-state income sourcing for athletes requires someone who understands:

• The duty days method and how each state applies it
• The difference between performance income and endorsement income
• How state credits interact with each other
• The specific enforcement posture of high-risk states like California and New York

Consider a student-athlete at a major university in Arizona. During the 2025–2026 academic year, she earns the following NIL income:

Her total NIL income is $34,500. She has federal self-employment tax on all of it. She has Arizona income tax on the bulk of it. But she also has:

• A California nonresident filing obligation on the $3,000 bowl game appearance fee
• An Illinois nonresident filing obligation on the $1,500 Chicago signing fee

California's income tax rate on $3,000 of income at her marginal rate might be $270. Illinois might be $60. Neither amount is enormous — but both are legally owed, and neither will be withheld automatically. If she does not file, California will eventually send a notice. If she ignores the notice, the penalties will exceed the original tax.

Arizona will give her a credit for the California and Illinois taxes paid, so the total tax burden is not dramatically higher than if all the income were Arizona-source. But the filing complexity is real, and the consequences of ignoring it are real.

NIL income has created a generation of student-athletes who are, for tax purposes, small business owners operating across state lines. The jock tax — once a concern only for professional athletes — now applies to any college athlete earning meaningful NIL income who travels for games, appearances, or brand activations.

The athletes who handle this correctly are the ones who start tracking early, work with advisors who understand the specific rules, and file every return they owe — even when the tax due is small. The athletes who ignore it are building a problem that will be significantly more expensive to fix later.

If you are a student-athlete earning NIL income and you are not sure whether you have multi-state filing obligations, the answer is almost certainly yes. The question is just how many states and how much.

Send us an inquiry — we work with student-athletes and their families to navigate NIL taxation, multi-state filing, and the full range of tax obligations that come with earning income as a college athlete.