Abstract

This article considers the effects of the California Fair Pay to Play Act—permitting a student athlete at any California college, beginning in 2023, to profit from income generated by the athlete’s “name, image, or likeness”—and the NCAA’s apparent acceptance of that principle on the liability of big-time athletic colleges for the unrelated business income tax (UBIT). College athletic teams historically have not been subject to UBIT because of the pretense that the participants are student athletes. Although the Fair Pay to Play Act and the NCAA’s response might not yet require discarding that pretense, the probable next step—direct compensation by the colleges, beyond scholarships, for participation in athletics—will make characterization of many athletes as “student athletes” untenable.

Keywords

unrelated business income, unrelated business income tax (UBIT), college athletics, student athlete, National Collegiate Athletic Association, Fair Pay to Play Act

Publication Date

2020

Document Type

Article

Publication Information

Journal of Taxation of Investments, Winter 2020, at 59

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COinS Erik M. Jensen Faculty Bio