Here's one that you can educated yourself from

Posted on: April 4, 2022 at 14:58:31 CT

(I don't write it - but it's rather straightforward.) Again - the kids getting $5k/yr probably won't get hit, but the UT QB making $2m/yr, will likely owe in every state (and city that has an income tax) that UT goes on the road to (as I pointed out, TN doesn't have a SIT.)

https://andywittry.substack.com/p/talking-taxes-how-state-and-local?s=r

College athletes could owe taxes in multiple states

“Something that we have to remember too,” Batey said, “is that some of this is going to be sponsorship income and the question then is, even if you have a Florida athlete but they’re playing games in different states and they’re earning sponsorship income maybe by wearing the logos or [doing] commercials or whatever, then is there a responsibility for these athletes to file in multiple states?

“It’s not just your state of college residence. It could potentially open it up to whatever arena you’re playing in, depending on the state rules. That’s the other area that’s going to have to be analyzed and figured out on a state-by-state basis. Then that disparity doesn’t really matter for [whether an athlete is in] Florida or California, it’s kind of like, ‘Well, where did you earn income?’”

“It gets complicated very fast,” Kurdziel added.

Batey brought up the example of a race car that has decals of its sponsors. Some states allocate income earned based on the number of races that take place in the state each year.

“Let’s say AT&T sponsors the company,” Batey said. “You’ve got 30 races over the year but you do two races in North Carolina. Well then North Carolina says, ‘Hey, you’ve got to allocate that [portion of races], two over 30, part of that advertising revenue was earned in our state,’ and so it’s going to be very specific on the state rules and regulations as to how that [income] is allocated. Like Georgia doesn’t have any allocation rules for professional athletes, but there’s still an obligation to report it in Georgia. It’s going to vary. Some of this is going to be based on professional athlete rules that are already out there – entertainers, celebrities, things like that – so we have a base of rules for that type of industry, but it’s applying it now to collegiate athletics.”

Individuals are required to file a tax return in their state of residency, but they could be subject to double taxation if their income is earned in another state. However, many states provide a credit for taxes paid in another state. If an individual’s state of residency has a higher tax rate than the state in which income is earned, then the individual would pay the difference in the tax rate, which is an incentive for athletes to consider establishing residency in a more tax-friendly state.