HB240 Alabama 2025 Session

Summary

Primary Sponsor

Joe LovvornRepresentative

Republican

Session

2025 Regular Session

Title

Income Tax; to exempt compensation earned by a student athlete for the use of their name, image, or likeness from income tax

Summary

HB240 would exempt student athletes’ compensation for the use of their name, image, or likeness from Alabama state income tax, with retroactive effect for 2025–2027.

What This Bill Does

If a student athlete at an Alabama postsecondary institution earns money for the use of their name, image, or likeness and that income is included in their federal adjusted gross income, it would be exempt from Alabama state income tax. The exemption applies to tax years beginning January 1, 2025 through December 31, 2027, and includes retroactive effect. The bill defines key terms and specifies that Alabama Community College System institutions are not included in the defined postsecondary institutions. The act becomes effective October 1, 2025.

Who It Affects

• Student athletes at Alabama postsecondary educational institutions (excluding Alabama Community College System institutions) who earn NIL compensation and have it included in their federal adjusted gross income.
• State tax filers who report NIL income from student athletes, as this income would be exempt from Alabama state income tax under the bill.

Key Provisions

• Exempts from Alabama state income tax any NIL compensation received by a student athlete if the income is included in the taxpayer's federal adjusted gross income.
• Applies to tax years 2025 through 2027, with retroactive effect to 2025.
• Defines terms: NAME, IMAGE, OR LIKENESS; POSTSECONDARY EDUCATIONAL INSTITUTION; STUDENT ATHLETE, and specifies that Alabama Community College System institutions are not included in the defined scope.
• Effective date of the act is October 1, 2025.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue