The Taxation of Big 12 Basketball and Football Athletes

By Jonathan Nehring | Disclaimer

Taking our second stop in the the Midwest for the day, we now turn to the Big 12. 

  

If this is your first time stopping by, here are some articles to get you caught up to speed in the series on the impact state income taxes could have on NCAA recruiting. 

  

• NCAA Overview
• SEC
• PAC-12

• Big Ten
• Big 12
• ACC

• American
• MWC
• Big East

While the Big 12 suffered in the past two waves of conference realignment, they may now become a destination conference if college athletes are paid for their services. Aside from the American Conference, the Big 12 conference averages the lowest state income tax bill among NCAA conferences. Big 12 football and basketball players would owe 26% and 32% less, respectively in state income taxes than the average NCAA football or basketball player would owe. 

Although the Big 12 may enjoy the upper hand against other conference’s tax bills, competition for recruits within the conference will likely be fierce. 

Big 12 football has the second largest tax bill variance among their conference teams in comparison to all other NCAA conferences. This large variance is evidenced by the grouping of teams in the graphic above. Texas, which has no state income tax, hosts nearly half of the Big 12 football programs and makes out the lowest “group” of the Big 12 with an average tax bill of $85. The “middle class” of the Big 12 combines the Oklahoma and Kansas programs to bring about an average tax bill of $8,403. However, on the other end of the spectrum, Iowa State’s football players will be responsible for the 4th highest state income tax bill for the entire NCAA.

Big 12 basketball fans, especially in Texas, may find pleasure in the possibility that state income taxes will provide some teams a competitive edge over Kansas – the holder of 10 straight regular season conference titles. (Disclaimer: The writer of this post attended KU during 7 of those 10 years.) The Texas schools will be able to offer $16,809 more annually to their basketball stars than KU. For the author’s sanity sake, let’s hope the lure of passing UCLA’s record of 13 straight conference titles is worth more than $16,809.

Of all the programs within the Big 12, Iowa State would suffer the greatest blow from paying college athletes. Having never won the Big 12 football championship and last winning the Big 12 basketball regular season title in 2001, they would now also be forced to offer their athletes some of the lowest net income offers among the NCAA. 

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NOTE:

This article only discusses state income taxes. College athletes would also be subject to federal and local income taxes. Provisions in the federal tax code allow for the deduction of state and local income taxes for certain income thresholds. Given this potential deduction on federal taxes, the variance in total income taxes owed may not be as drastic between conferences and schools. However, for simplicity sake - this article solely focuses on state income taxes. 

Estimated football and basketball salaries provided by CNBC's Mark Koba (@MarkKobaCNBC). 

• Estimated football salary: $178,000
  
• Estimated basketball salary: $375,000