Koi Perich Transfer Portal

[Bob_Loblaw]

Players don’t have W2 income in college football. They’ll be 1099

Players have W2 income in the nfl


It’s not apples to apples.


You’re correct I’m out of my depth.
But if it’s revenue share does the revenue share include when big ten shows games after the fact on various networks?
Does it include big ten media days?
Does it include big ten awards shows and contractually obligated media appearances?
Etc

A lot of moving parts.


Perhaps you can answer all these questions. I’m not really making claims. Just thinking out loud

Taxation in sports and entertainment is always incredibly complicated. I believe NIL would be just like NFL. The NFL also has a tremendous amount of revenue sharing (they don't sell their individual TV rights).

Being a 1099 also does not have an impact on them for these questions.

As to exactly how it work, it's a complicated taxation issue just like it is for everywhere with the jock tax. I'd guess the clever NIL programs are structuring the deals in a way that is the most beneficial to the players.

I'm trying to figure out a way a clever tax attorney would structure the deal to avoid paying California state income taxes. For example, if a TT player's NIL deal was based on them being an ambassador to the school and representative of Texas Tech University, I don't think that would work. Assuming they had a game against UCLA, California would argue that an essential part of his contract is doing business in California. The income earned by that business would be taxable income in California.

Now if you structured it like explicitly listing events all located in Lubbock, then a player could literally hold out for away games and not be in breach of contract. "You want me to play in this game at Michigan, I'll sit out unless you pay me."

I'm sure there is a way but states are often just as clever.


FYI - Some wild speculation and tin foil hat conspiracy: A ton of players are going to have major IRS issues in the future unless the NCAA proactively helps them. I don't think the NCAA is going to do that because I think they want it to be as chaotic as possible right now to force Congress to act.

 

[xyz1]

"A ton of players are going to have major IRS issues in the future unless the NCAA proactively helps them" - I had this very thought the other day. It's quite hard to imagine that many 18-21 year olds who suddenly have lots and lots of money for the first time ever, and are possibly being advised only by unregulated and in some cases unethical or simply stupid agents, are going to make sure they're reporting everything accurately for tax purposes.

 

[Some guy]

Taxation in sports and entertainment is always incredibly complicated. I believe NIL would be just like NFL. The NFL also has a tremendous amount of revenue sharing (they don't sell their individual TV rights).

Being a 1099 also does not have an impact on them for these questions.

As to exactly how it work, it's a complicated taxation issue just like it is for everywhere with the jock tax. I'd guess the clever NIL programs are structuring the deals in a way that is the most beneficial to the players.

I'm trying to figure out a way a clever tax attorney would structure the deal to avoid paying California state income taxes. For example, if a TT player's NIL deal was based on them being an ambassador to the school and representative of Texas Tech University, I don't think that would work. Assuming they had a game against UCLA, California would argue that an essential part of his contract is doing business in California. The income earned by that business would be taxable income in California.

Now if you structured it like explicitly listing events all located in Lubbock, then a player could literally hold out for away games and not be in breach of contract. "You want me to play in this game at Michigan, I'll sit out unless you pay me."

I'm sure there is a way but states are often just as clever.


FYI - Some wild speculation and tin foil hat conspiracy: A ton of players are going to have major IRS issues in the future unless the NCAA proactively helps them. I don't think the NCAA is going to do that because I think they want it to be as chaotic as possible right now to force Congress to act.

I think it’s incredibly complicated as well.
It gets simpler if the revenue sharing is just revenue sharing for game revenue. But the big ten media deals are more than just games. Particularly big ten network obligations


I don’t really know how exactly the revenue sharing is structured so I’m more thinking out loud than making claims

 

[GopherTheJugular]

"A ton of players are going to have major IRS issues in the future unless the NCAA proactively helps them" - I had this very thought the other day. It's quite hard to imagine that many 18-21 year olds who suddenly have lots and lots of money for the first time ever, and are possibly being advised only by unregulated and in some cases unethical or simply stupid agents, are going to make sure they're reporting everything accurately for tax purposes.

Isn't that how we ended up with The Fresh Prince of Bel-Air? Young kid earned tons of money, didn't understand taxes?

 

[GopherTheJugular]

I'm trying to figure out a way a clever tax attorney would structure the deal to avoid paying California state income taxes. For example, if a TT player's NIL deal was based on them being an ambassador to the school and representative of Texas Tech University, I don't think that would work. Assuming they had a game against UCLA, California would argue that an essential part of his contract is doing business in California. The income earned by that business would be taxable income in California.

Now if you structured it like explicitly listing events all located in Lubbock, then a player could literally hold out for away games and not be in breach of contract. "You want me to play in this game at Michigan, I'll sit out unless you pay me."

Maybe I'm missing something, but can't the athlete claim the NIL was earned apart from playing football? Like if Koi is on a billboard in Lubbock in exchange for his NIL money, then that has nothing at all to do with him playing football games in a different state, does it? We all know it's pay for play, but from a legal standpoint, he technically got paid for his image on a billboard, not for playing a game in California, Colorado, etc.

Example, I remember seeing Joe Mauer on billboards. I'd think that income he earned would be treated separately (for tax purposes) than his income from playing baseball.

Am I wrong?

 

[Some guy]

Maybe I'm missing something, but can't the athlete claim the NIL was earned apart from playing football? Like if Koi is on a billboard in Lubbock in exchange for his NIL money, then that has nothing at all to do with him playing football games in a different state, does it? We all know it's pay for play, but from a legal standpoint, he technically got paid for his image on a billboard, not for playing a game in California, Colorado, etc.

Example, I remember seeing Joe Mauer on billboards. I'd think that income he earned would be treated separately (for tax purposes) than his income from playing baseball.

Am I wrong?

Correct: and if a commerical runs nationally like the Chambliss phone commercial last night


if a guy does a commercial for the big ten conference as part of rev share is that out of Illinois (big ten headquarters), his place of legal residence, where he plays?
Is it separate from rev sharing

Super complicated

 

[50PoundHead]

A few problems:

1. Texas Tech only plays 8/12 games in the state of Texas next year

2. These NIL deals are not for playing football, they’re for NIL. If NIL reaches outside the state of Texas it may be subject to that states tax laws

3. The revenue sharing deal is revenue sharing of conference revenue not Texas tech revenue in the state of Texas


I suspect the tax situation is much more complicated than “there is not income tax in Texas”



But I agree tech probably helps their people figure it out

In the simplest form:
1 million dollars in Texas is 908k in MN all else being equal due to Mn state income tax
But all else is not equal. So it’s more complicated than that.

I would guess--and this is merely a guess-is that NIL will be treated as income for tax purposes in the state in which it is earned. If I work for a multinational corporation with headquarters in New York but live in Minnesota, I pay Minnesota taxes on my earnings, Same with Federal employees or recipients of Federal benefits like Social Security. It will depend on where the athlete establishes their residence. If Perich goes to Texas Tech or Miami and rents an apartment and establishes residency in that state (get a drivers' license for that state or other government ID) and meets residency requirements in terms of days lived there, that will be his tax home. Same issues have cropped up for military personnel.

 

[Cobra]

What.....you don't enjoy long conversations about taxes and tax implications?

It’s all I live for...

 

[GopherTheJugular]

Correct: and if a commerical runs nationally like the Chambliss phone commercial last night


if a guy does a commercial for the big ten conference as part of rev share is that out of Illinois (big ten headquarters), his place of legal residence, where he plays?
Is it separate from rev sharing

Super complicated

I'd like to think it's more about where you accepted the check than it is where your image was shown though.

I mean, you make a movie in Hollywood and you pay taxes to California. You don't have to pay taxes in every state that the movie is shown in, because that would be the theaters making money in those states, not the actors. The actors have already been paid before the movie got to the theater.

So I'd assume in the case of Chambliss, he got paid when he made the commercial in whatever state he was in at the time. Someone besides him collected money for the commercial being shown last night.

 

[Some guy]

I'd like to think it's more about where you accepted the check than it is where your image was shown though.

I mean, you make a movie in Hollywood and you pay taxes to California. You don't have to pay taxes in every state that the movie is shown in, because that would be the theaters making money in those states, not the actors. The actors have already been paid before the movie got to the theater.

So I'd assume in the case of Chambliss, he got paid when he made the commercial in whatever state he was in at the time. Someone besides him collected money for the commercial being shown last night.

Well it’s not whatever state he collected the money in? Otherwise why wouldn’t I just drive to South Dakota once a month to collect my check?

 

[Some guy]

I would guess--and this is merely a guess-is that NIL will be treated as income for tax purposes in the state in which it is earned. If I work for a multinational corporation with headquarters in New York but live in Minnesota, I pay Minnesota taxes on my earnings, Same with Federal employees or recipients of Federal benefits like Social Security. It will depend on where the athlete establishes their residence. If Perich goes to Texas Tech or Miami and rents an apartment and establishes residency in that state (get a drivers' license for that state or other government ID) and meets residency requirements in terms of days lived there, that will be his tax home. Same issues have cropped up for military personnel.

Yeah which is why I don’t think it’s as simple as go to tech and avoid all state income taxes

 

[Dave H]

 

[GopherTheJugular]

Well it’s not whatever state he collected the money in? Otherwise why wouldn’t I just drive to South Dakota once a month to collect my check?

I was going off the assumption that he got the check while working. Like, if I was famous and someone asked me to come to California to shoot a commercial, I'm accepting the check at the same time I'm actually doing the commercial.

Whereas if you do the work in MN but then drive across the border to collect the check, isn't in the same vein as I was going for. But if you were a contractor and drove across the border to do work and get paid in real time, then I'd say you're obligated to south dakota taxes and not MN.

 

[Bob_Loblaw]

Maybe I'm missing something, but can't the athlete claim the NIL was earned apart from playing football? Like if Koi is on a billboard in Lubbock in exchange for his NIL money, then that has nothing at all to do with him playing football games in a different state, does it? We all know it's pay for play, but from a legal standpoint, he technically got paid for his image on a billboard, not for playing a game in California, Colorado, etc.

Example, I remember seeing Joe Mauer on billboards. I'd think that income he earned would be treated separately (for tax purposes) than his income from playing baseball.

Am I wrong?

No, you're right.

Where it gets complicated is if Koi agrees to have his name on billboard for $1,500,000 and then refuses to play the games, he has still satisfied his contract. If a stipulation in the contract is that he stays an active member on the TT football team, then California is going to argue that part of his income was earned from playing that game against UCLA. It's a clearly part of the consideration for the income of $1,500,000.

If all you really want is the billboard, yeah, it's just where that billboard is located. If you're using that as a way to circumvent paying income tax in other states, you're getting into a game of cat and mouse with your tax professionals and the particular states.

It's even more complicated for people on NIL because it's not as hashed out as the NFL. The NFL has their teams give game checks and likely pull out the proper taxation for each game. So if they played the Chargers, they could look at the paycheck and see the CA state income tax pulled out.

I doubt that's being done with NIL.


If anyone ever wonders why athletes and musicians often have tax issues, this is it.
(By the way, for our hypotheticals, I'm pretending TT is playing UCLA every year to make it easier)

 

[GopherTheJugular]

No, you're right.

Where it gets complicated is if Koi agrees to have his name on billboard for $1,500,000 and then refuses to play the games, he has still satisfied his contract. If a stipulation in the contract is that he stays an active member on the TT football team, then California is going to argue that part of his income was earned from playing that game against UCLA. It's a clearly part of the consideration for the income of $1,500,000.

If all you really want is the billboard, yeah, it's just where that billboard is located. If you're using that as a way to circumvent paying income tax in other states, you're getting into a game of cat and mouse with your tax professionals and the particular states.

It's even more complicated for people on NIL because it's not as hashed out as the NFL. The NFL has their teams give game checks and likely pull out the proper taxation for each game. So if they played the Chargers, they could look at the paycheck and see the CA state income tax pulled out.

I doubt that's being done with NIL.


If anyone ever wonders why athletes and musicians often have tax issues, this is it.
(By the way, for our hypotheticals, I'm pretending TT is playing UCLA every year to make it easier)

Thanks, that cleared up where I was confused.

I wonder then, can Koi or any athlete still do the billboard thing and get around the stipulation that you have to play for Texas Tech, but instead you have to appear at a certain number of "events" on Friday nights before home games in Lubbock Texas, such that there's no way Koi could be in Lubbock to honor that contract if he was on another team?

That would protect the NIL fund from him just leaving, while also not tying hte money to playing football.

Actually, im almost like "nevermind" - the hypotheticals can go on forever lol.

Thanks again for the clarity.

 

[Gopher_In_NYC]

Isn't that how we ended up with The Fresh Prince of Bel-Air? Young kid earned tons of money, didn't understand taxes?

View attachment 41405

I thought it was because he was evading bullies in Philly.

 

[PMWinSTP]

Taxation in sports and entertainment is always incredibly complicated. I believe NIL would be just like NFL. The NFL also has a tremendous amount of revenue sharing (they don't sell their individual TV rights).

Being a 1099 also does not have an impact on them for these questions.

As to exactly how it work, it's a complicated taxation issue just like it is for everywhere with the jock tax. I'd guess the clever NIL programs are structuring the deals in a way that is the most beneficial to the players.

I'm trying to figure out a way a clever tax attorney would structure the deal to avoid paying California state income taxes. For example, if a TT player's NIL deal was based on them being an ambassador to the school and representative of Texas Tech University, I don't think that would work. Assuming they had a game against UCLA, California would argue that an essential part of his contract is doing business in California. The income earned by that business would be taxable income in California.

Now if you structured it like explicitly listing events all located in Lubbock, then a player could literally hold out for away games and not be in breach of contract. "You want me to play in this game at Michigan, I'll sit out unless you pay me."

I'm sure there is a way but states are often just as clever.


FYI - Some wild speculation and tin foil hat conspiracy: A ton of players are going to have major IRS issues in the future unless the NCAA proactively helps them. I don't think the NCAA is going to do that because I think they want it to be as chaotic as possible right now to force Congress to act.

Yeah, just like any other independent contractors who work in multiple states. Taxes would be do to the state where the work took place. I also assume the collective or player agent (maybe both) would provide the legal tax resources.

 

[NYtoWItoMN]

Isn't that how we ended up with The Fresh Prince of Bel-Air? Young kid earned tons of money, didn't understand taxes?

View attachment 41405

Yup, I remember those lyrics:
....
When a couple of guys who were up to no good
Gave me too much money without proper IRS knowledge for my neighborhood
I bought one Maserati, and my mom got scared
And said, "You're movin' with your auntie and uncle in Bel-Air"

 

[btowngopher]

All conference designations are more of a popularity contest then they are a measure of how truly good you are. Safeties that stayed at the U and were better all around players:

1. Antoine Winfield Jr
2. Tyler Nubin
3. Jordan Howden
4. Kerry Brown

I got laughed at when I said under Fleck our starting safeties usually get drafted.

 

[ottertail]

Everything is complicated. I come here to avoid these legal conversations I have daily so I skipped ahead on this thread, lol. Hope he makes the best decision for himself but that decision is most likely what whoever tells him what he wants to hear, not what is actually best for him. Or is it, idk anymore…

 

[Some guy]

Yeah, just like any other independent contractors who work in multiple states. Taxes would be do to the state where the work took place. I also assume the collective or player agent (maybe both) would provide the legal tax resources.

The complication is there isn’t payment for work.
There is revenue sharing.

 

[Mick Turition]

Koi will make more money by staying in school for the 2027 season than by going pro for 2027 draft.

 

[Some guy]

Koi will make more money by staying in school for the 2027 season than by going pro for 2027 draft.

I think there is about a 90-95% chance that’s true

If he makes major mental steps forward he has the physical tools to be a high pick though. So that’s why it isn’t a 100%

S Sanders would’ve made more money having a career ending injury in the Alamo bowl than he did from his first nfl contract due to his insurance policy

 

[BadassMotherFlecker]

Is there Koi news buried somewhere in the posts not understanding how taxes work?

 

[gophmeister]

No,
Your income was derived when you withdrew the assets from the mutual funds

The mutual fund growing didn’t make you income.
So suppose all that non game revenue would be at their residence

What about dividends and capital gains? I get a 1099-DIV every year from my broker.