GOP senator seeks to tax scholarships of athletes with endorsements

Laura Davison Bloomberg

Big-time college athletes could find themselves with a tax bill after a rule change that will allow student players to accept endorsement deals, according to Republican Senator Richard Burr.

Burr of North Carolina said he plans to introduce a bill that would require student athletes to pay taxes on their scholarships if they also earn money from endorsements. The National Collegiate Athletic Association announced Tuesday it would permit athletes to be compensated for their names, images and likenesses, a reversal of a previous rule that prohibited athletes from being paid.

The legislation is still in the works, but the tax wouldn’t apply to scholarships for college athletes who don’t profit from their likeness or image, said Caitlin Carroll, a spokeswoman for Burr. That indicates the legislation would likely to apply to high-profile men’s basketball and football players who would likely be offered endorsement deals.

The legislation will add fuel to the debate about how to tax athletes on their winnings. Congress passed legislation in 2016 that exempted most Olympic medalists from owing taxes on their winnings and medals, but athletes earning more than $1 million a year still have to pay the levy.