Relating to an animal welfare trust.

2025 Regular Session Introduced by David Gomberg and 2 co-sponsors

The bill creates a state income tax deduction for NIL compensation received by qualifying student-athletes, equal to the amount included in federal AGI.

In committee upon adjournment.

Purpose

HB 3871 amends the Illinois Income Tax Act to create a state income tax deduction for compensation received by a student‑athlete for use of the student's name, image, and likeness (NIL). The bill is intended to ensure that NIL income that is included in a taxpayer’s federal adjusted gross income (AGI) is not taxed again under Illinois law.

Key provisions

Adds a subtraction to the definition of “base income” in Section 203 of the Illinois Income Tax Act.

Specifically allows an individual taxpayer who is a “student‑athlete” to deduct, for Illinois income tax purposes, an amount equal to NIL compensation that:

was earned by the taxpayer during the taxable year, and
is included in the taxpayer’s federal adjusted gross income for that year.

The deduction applies only to NIL compensation included in federal AGI (i.e., it does not create a state subtraction for NIL amounts that are excluded from federal AGI).

Who is affected

Primary: Illinois resident individual taxpayers who are student‑athletes and who receive compensation for their name, image, and likeness.

Secondary: Universities, athletic programs, tax preparers, and the Illinois Department of Revenue (administration, guidance, and enforcement).

State fiscal impact: The deduction would reduce taxable income reported to Illinois for eligible taxpayers, thereby reducing state individual income tax revenues to the extent of NIL compensation claimed. (No revenue estimate is included in the bill text.)

Implementation and administrative issues

The bill text in the provided excerpt does not define “student‑athlete” or specify documentation or reporting requirements, which may leave administrative questions about eligibility verification and compliance to the Department of Revenue or future implementing rules.

Because the deduction is tied to amounts included in federal AGI, differences in federal treatment of NIL and related recordkeeping will affect Illinois tax administration.

The precise fiscal impact depends on the number of eligible student‑athletes, aggregate NIL payments, and taxpayer claiming behavior.

Legislative status and timeline (selected actions)

Filed / First readings: Feb–Mar 2025 (filed by Rep. Travis Weaver; first reading Feb. 25, 2025).

Referred to multiple committees: Rules; Agriculture, Land Use, Natural Resources, and Water (with subsequent referral to Ways and Means); later Trade, Workforce & Economic Development.

Hearings/work sessions: Public hearing (Mar. 17, 2025); Work Session (Apr. 2, 2025).

Committee recommendation: Apr. 7, 2025 — “Do pass with amendments,” printed A‑Engrossed and referred to Ways and Means by prior reference.

Motions: May 20, 2025 — Motion to suspend Rule 21 prevailed.

Current status: In committee upon adjournment (June 28, 2025).

Notes / Uncertainties

The bill excerpt does not specify an effective date or transitional rules; therefore, the date when the subtraction would apply is not stated in the provided text.

Because “student‑athlete” is not defined in the shown language, related interpretation could hinge on other statutory definitions or administrative guidance.

Bill