Provides gross income tax exclusion for all compensation earned by college athletes for use of name, image, or likeness.

2026-2027 Regular Session

New Jersey would exclude from gross income all compensation college athletes earn from name, image, or likeness, allowing them to keep 100% of NIL earnings for state taxes.

Introduced, Referred to Assembly Higher Education Committee

Purpose and Intent

A-4851 proposes a gross income tax exclusion for all compensation earned by college athletes for the use of their name, image, or likeness (NIL).

The bill aims to ensure that student-athletes receive 100% of the compensation they earn from NIL activities, by excluding those amounts from their gross income for state tax purposes.

Key Provisions and Changes

Tax Exemption Scope: Establishes a gross income tax exclusion applicable to all compensation received by a college athlete specifically for the use of their name, image, or likeness. This would apply to compensation from NIL activities (e.g., endorsements, social media deals, autograph sessions, licensing of NIL rights, marketing appearances, etc.).

Tax Calculation Impact: For affected student-athletes, the amount earned from NIL would not be included in New Jersey gross income, effectively reducing state income tax liability associated with NIL earnings.

Administration: The bill would require consideration of how NIL-related income is reported on state tax filings and how it interacts with existing tax definitions of gross income. It may necessitate guidance or rules from the state tax authority to properly administer the exclusion.

Who Would Be Affected

Primary Beneficiaries: College athletes enrolled at colleges or universities within New Jersey who earn compensation from NIL activities.

Secondary/Related Parties: Universities, athletic departments, sponsors, agents, and the state tax department, which would need to address reporting, compliance, and potential revenue impacts.

Potential Indirect Effects: Local economies and higher education institutions could see changes in NIL-related activity and financial planning for athletes.

Procedural and Timeline Aspects

Status: Introduced and referred to the Assembly Higher Education Committee on May 4, 2026.

Next Steps: Typically, after committee consideration, the bill would move to the full Assembly floor for debate, potential amendments, and a vote. If passed, it would proceed to the Senate (and potentially to a conference committee if there are differences between House and Senate versions) and eventually to the governor for signature or veto.

Effective Date: The bill summary does not specify an effective date; potential future versions often specify an effective date or a phased implementation. The actual text would determine when the exclusion would apply (e.g., for tax year starting on or after a particular date).

Potential Impacts and Considerations

Revenue Implications: Excluding NIL compensation from gross income could reduce state tax revenue from affected earners; the overall fiscal impact would depend on the number of NIL participants and the amount of NIL income reported by New Jersey student-athletes.

** Equity and Alignment**: The bill aligns New Jersey tax policy with broader NIL developments in collegiate athletics and may complement similar or adjacent state-level NIL initiatives.

** Compliance**: Clear guidance would be needed to ensure proper reporting and to prevent double-dipping or ambiguity with federal tax treatment.

Conclusion

A-4851 seeks to formally exclude from New Jersey gross income any compensation college athletes earn from NIL activities, thereby ensuring that student-athletes keep the full value of their NIL earnings for state tax purposes. The bill is in the early stage of the legislative process, having been referred to the Assembly Higher Education Committee for consideration.

Bill