Mississippi Aims to Exempt College Athletes from NIL Taxes

State hopes to boost recruiting for Ole Miss and Mississippi State by eliminating state income taxes on NIL earnings.

Published on Mar. 2, 2026

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The Mississippi House has passed a bill to exempt college athletes from paying state income taxes on their name, image, and likeness (NIL) earnings. The goal is to help schools like Ole Miss and Mississippi State attract top talent by providing a financial advantage over other states. The bill still needs to pass the state Senate, but if enacted, it would make Mississippi the latest state to offer this type of NIL tax exemption.

Why it matters

This move by Mississippi is part of a broader trend of states trying to gain a recruiting edge by offering favorable tax treatment for college athlete NIL earnings. As NIL deals have become a major factor in where top prospects choose to play, states without income taxes or with NIL-specific exemptions have a clear financial advantage. Mississippi hopes this legislation will help its flagship programs better compete with recruiting powerhouses in states like Florida and Tennessee.

The details

The Mississippi House passed HB 4014, which would exempt NIL compensation from state income taxes. This mirrors a law passed in Arkansas in 2025 and aligns with the fact that several states like Florida, Tennessee, and Nevada do not have state income taxes at all. However, Mississippi's bill would only apply to college athletes, while regular citizens would still pay state income taxes.

  • The Mississippi House passed the NIL tax exemption bill on March 1, 2026.
  • The bill now heads to the Mississippi Senate for consideration.
  • Mississippi plans to phase out state income taxes completely by 2040, with a decrease to 3% by 2030.

The players

Mississippi House

The lower chamber of the Mississippi state legislature that passed the NIL tax exemption bill.

Ole Miss

The University of Mississippi, a major college sports program in the state that stands to benefit from the NIL tax exemption.

Mississippi State

Mississippi State University, another prominent college sports program in the state that could use the NIL tax exemption to aid recruiting.

Trey Lamar

A Republican member of the Mississippi House of Representatives who sponsored the NIL tax exemption bill.

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What they’re saying

“NIL is taking the country and coming by storm. Other states are doing it, and I believe it's time that Mississippi starts doing this as well.”

— Trey Lamar, State Representative, R-Senatobia (outkick.com)

What’s next

The NIL tax exemption bill must now pass the Mississippi Senate before it can be signed into law. If enacted, the exemption would likely go into effect for the 2027-28 academic year, providing a recruiting boost for Ole Miss, Mississippi State, and other college programs in the state.

The takeaway

Mississippi's proposed NIL tax exemption is the latest example of states trying to gain a competitive edge in college sports recruiting. By eliminating the state income tax burden for athletes, Mississippi hopes to make its flagship programs more attractive destinations for top talent, mirroring similar efforts in other states without income taxes. This reflects the growing importance of NIL deals in the modern landscape of college athletics.