Michigan lawmakers introduce NIL bill for college athletes
November 6th, 2019 at 2:10 PM ^
Every state is trying to get the ‘me too’ bill out there. It is the right thing to do - and the momentum is overwhelming.
November 6th, 2019 at 2:13 PM ^
Exactly right but what would be wrong is then to tax these student athletes on their scholarships which I've seen is an idea being floated around.
November 6th, 2019 at 2:24 PM ^
I think that's why the ultimate solution will be a federal law on the matter since otherwise you run the risk of schools being punished by state income tax rules, for example, and my guess is the highest-paid public employees in most states (college coaches) won't stand for such a recruiting liability.
November 6th, 2019 at 2:34 PM ^
But don't you think that NIL income should be taxable? I can concede that scholarships as a form of financial aid can be made tax exempt, but otherwise, NIL income should be treated like every other income.
November 6th, 2019 at 2:44 PM ^
My thinking too. Scholarships should definitely be tax exempt while NIL's should definitely be taxable.
November 6th, 2019 at 3:16 PM ^
I don't think there is any question that NIL income is just like any other income. Only difference is now the athletes can cash in.
November 6th, 2019 at 5:03 PM ^
I think NIL should be treated as income but should be treated differently than scholarship money. But I also think more generally NIL income should be more formalized (perhaps as part of a school's administration of your scholarship) so that proper payment of taxes is handled properly and not left to a bunch of college students to figure out.
November 6th, 2019 at 8:52 PM ^
I think NIL money should be completely separate from the University. Tons of college kids have income and get their taxes done. And if a person's individual income is administered by a third party, there are sure to be unjust results. Remember the end of The Professional?
November 6th, 2019 at 10:06 PM ^
If they tax NIL income I foresee a bunch of IRS letters going out to student athletes for delinquent tax payments. Or they pull the taxes automatically out of the payment. But I don't see how that can happen. I'm guessing most 19 year old college students have no clue how to file tax returns.
November 7th, 2019 at 12:01 AM ^
presumably they would have their parents doing it for them, though I was filing tax returns for myself when I was 15.
November 7th, 2019 at 12:53 AM ^
come on. you mean students can complete admission applications, financial aid applications, student loan applications,etc but they can't fill out a tax return? give me a break.
November 6th, 2019 at 3:14 PM ^
The only place I've seen it suggested that scholarships should be taxed is disgruntled fans who are upset that these students don't know their place and should get back in line and not change anything.
November 6th, 2019 at 3:24 PM ^
Well, except for at least one US Senator:
If college athletes are going to make money off their likenesses while in school, their scholarships should be treated like income. I’ll be introducing legislation that subjects scholarships given to athletes who choose to “cash in” to income taxes. https://t.co/H7jXC0dNls
— Richard Burr (@SenatorBurr) October 29, 2019
November 6th, 2019 at 4:06 PM ^
Like I said, grumpy fan who doesn't want to see change.
November 6th, 2019 at 4:12 PM ^
...a grumpy fan with the power to introduce and vote on legislation...
November 6th, 2019 at 4:51 PM ^
Or just a dick
November 6th, 2019 at 4:51 PM ^
I'm no lawyer but if you tax the scholarship as income then couldn't they be considered employees? If there employees then they should be able to collect workmen's comp and form a union? I think this would be the last thing any University or the NCAA wants.
November 6th, 2019 at 7:00 PM ^
They would be employees, but not of the school itself. The schools are not going to be paying them but outside companies/individuals will.
November 7th, 2019 at 8:50 AM ^
If the scholarships are taxable income, then they're employees of the university, because the scholarship is now payment given to them in exchange for a service.
November 7th, 2019 at 12:58 AM ^
this is a dumb idea; taxing scholarships. it would be like taxing a coupon when you buy groceries at a store. it is basically just a discount on money you have to shell out already. now if someone gets money over and above tuition, room and board; like a stipend or something, i could see that potentially being taxed.
November 6th, 2019 at 3:18 PM ^
This has been a general strategy on the right for other similar situations. Graduate student tuition waivers were going to be taxed under the original version of the tax bill in 2017, meaning grad students getting, say, $20,000 in living stipends or TAships would all of the sudden find themselves getting taxed as if they made five times that amount. Never mind that they never actually saw a penny of that tuition money when it got shuffled from one university account to another.
November 6th, 2019 at 4:01 PM ^
I don't know if it's necessarily a "left-right" issue (I mean, does *everything* need to be political??) but you're otherwise correct that taxing scholarships and stipends has been a proposal floated many times over the past few years. I could *almost* be persuaded that a stipend is a bit different than a scholarship, (where one is typically deposited directly into a student's university financial account, and a stipend is typically a check or direct deposit into a bank account). But in practice, that's a distinction without a difference.
For the purposes of NIL, it's illogical to lump it together with scholarships and stipends for the purpose of determining taxable income (which definitely makes it good fodder for politicians who seldom see a target for taxes they don't like). A normal student can have a scholarship and a full- or part-time job, where only the job is considered taxable income. Same should apply to athletes who realize income from NIL.
November 6th, 2019 at 4:11 PM ^
Well, in this case it is a left-right issue. Guess who wrote the 2017 tax bill? Graduate education is a particular pinata for the right, but that's another discussion.
And we're not talking about taxing TAships and stipends, which are income. We're talking about taxing tuition waivers as if they're income. Which they're absolutely not. The same is true of athletic scholarships, which are predominantly made up of similar tuition waivers. In the case of a Michigan football player, whose tuition is paid as out-of-state as a matter of policy, that would mean opening up athletes to income tax liability that would add up to a fairly substantial upper-middle-class income.
November 6th, 2019 at 10:41 PM ^
You've definitely given me some things to think about. I was unaware that the proposal on the table was/is to tax tuition wavers as taxable income. That's definitely bullshit, and I'd never be in support of it, in the same way that I'd never support taxing a true scholarship.
I know you're probably aware that the proposal to tax tuition wavers didn't make it into law, so the right policy prevailed in the end. I'm sure that grad students and others who rely on tuition wavers had a few sleepless nights while it was debated, which should never happen. I completely agree that people with the lowest income should not ever be a negotiating chip. It's repugnant.
November 6th, 2019 at 6:26 PM ^
Disproportionately taxing college students and other groups of low-income earners is definitely a right-left issue and has been since the US implemented the income tax a century ago.
November 7th, 2019 at 9:35 AM ^
"Disproportionate" is the wrong term. If taxes were strictly proportional to income, then we'd have a flat tax rate for all income earners. In fact, we have a progressive tax rate, where higher income earners pay a higher rate. What some (but not all) on the right have argued that the U.S. should adopt is something closer to a flat tax. I agree that such a policy would be patently unfair to low-income earners, because the Cost of Living is what it is, and a flat 25% rate or whatever, would mean less money for basic necessities.
Personally, I think the model in some European countries that assesses many kinds of fees (including speeding tickets, etc.) based on income level is a good policy in general. A speeding ticket to a high-income earner should have the same "sting" as it would to someone who is barely scratching out a living.
November 6th, 2019 at 3:32 PM ^
I've seen that floated around as not so much an "idea" but as a bad faith argument by people that don't want to see the players paid.
November 6th, 2019 at 3:43 PM ^
Why tax the scholarship? Do they do that for academic scholarships too?
Assuming no, just tax their NIL earnings as income and be done with it.
November 6th, 2019 at 4:06 PM ^
Because it's a bad faith argument on preventing athletes from getting paid plus it would effectively make them an employer which opens up another can of worms for the universities.
Taxing them would not be a good idea for several reasons.
November 6th, 2019 at 4:49 PM ^
Tuition reimbursement from an employer that exceeds $5,250 is taxed as a fringe benefit.
November 6th, 2019 at 5:03 PM ^
Our daughter received tuition remission at the university at which my husband was a faculty member. IIRC, we paid taxes on that amount... She also received academic and talent scholarships (she was a theater major) which was not taxed.
November 6th, 2019 at 5:43 PM ^
Yes, that'd be the wrong move, especially considering not every college athlete would be cashing in on NIL equally. Many athletes could end up with a net loss if their scholarships are being taxed. NIL profits should be taxed, but not scholarships. I also hope schools set up programs to help athletes navigate these newly charted financial waters. I remember my level of confusion trying to file taxes for the first time (long, long ago mind you).
November 6th, 2019 at 6:37 PM ^
What ever happened to that movie tax credit we had under Granholm? That was fun while it lasted.
November 6th, 2019 at 2:12 PM ^
I think bloggers should be paid... there i said it.... how brave
November 6th, 2019 at 4:31 PM ^
But bloggers can get paid
November 6th, 2019 at 5:45 PM ^
Not at my skill level, unfortunately :(
November 6th, 2019 at 6:24 PM ^
Have you seen some of the YouTubers making money? I don't think skill has anything to do with it.
November 6th, 2019 at 9:57 PM ^
Bloggers already get paid. However, us blog commenters are getting nothing.
November 6th, 2019 at 2:13 PM ^
IANAL (I am not a lawyer) but I'm curious how the NCAA couldn't be accused of violating anti trust laws for even having such a rule?
November 6th, 2019 at 2:25 PM ^
What type of rule? You mean against NIL, or one that tries to set a base that has to be met by all schools even if a particular state hasn't codified an NIL law yet?
November 6th, 2019 at 2:43 PM ^
UANAL? U are not a lawyer?
November 6th, 2019 at 2:53 PM ^
HIANAL. He is absolutely not a lawyer.
November 6th, 2019 at 4:11 PM ^
ILTANAL, but the wife ain't havin' it.
November 6th, 2019 at 3:35 PM ^
IANAL either, but I think the "workaround" is that NCAA membership is entirely voluntary. All the schools and players have "agreed" to these rules.
November 6th, 2019 at 6:43 PM ^
I❤ANAL ... MadHatter?
November 7th, 2019 at 8:39 AM ^
Give or take...
November 6th, 2019 at 2:54 PM ^
Good. The only reason the NCAA has gotten off their lazy, rich asses on this is because of the pressures of new legislation from multiple states.
The NCAA's efforts on this front to date have been pathetic.
November 6th, 2019 at 2:59 PM ^
Good, when my kids get an e-games scholarship, they can get paid to play games.
November 6th, 2019 at 3:02 PM ^
I'd prefer my lawmakers work pass legislation to get the sportsbooks up and running in Michigan. There's three casinos in Detroit and I swear it would draw more interest in our professional teams.
November 6th, 2019 at 3:28 PM ^
Technically they're introducing it tonight. I spoke to the author of the press release who said he'd send me the language once it's entered into record.