Taxation, the Student Athlete, and the Professionalization of College Athletics

26 Pages Posted: 11 Nov 2009

See all articles by Erik M. Jensen

Erik M. Jensen

Case Western Reserve University School of Law

Date Written: 1987

Abstract

It has become common to hear critics argue that big-time college athletes are being exploited by their institutions and that they should be paid fair market value for their services. This article argues that such a policy, if adopted, could have some unexpected consequences for the colleges. The traditional justification for not taxing athletic income (basically meaning, for most big-time schools, that from football and basketball) is that the participants are student athletes, that the activities are related to the colleges’ overall educational purposes, and that the athletic revenue is therefore not subject to the tax on unrelated business income. Recognizing that the athletes are professionals, and only marginally students, has something to be said for it if the goal is honesty. But openly severing the connection between education and athletics-doing away with the concept of the “student athlete”-could have the effect of treating football at Big State University as an unrelated business, with a potentially large tax bite for the University.

Keywords: Student Athlete, Unrelated Business Income Tax, Taxation, Athletic Income, University

JEL Classification: K34

Suggested Citation

Jensen, Erik M., Taxation, the Student Athlete, and the Professionalization of College Athletics (1987). Utah Law Review, No. 1, pp. 35-58, 1987. Available at SSRN: https://ssrn.com/abstract=1503580

Erik M. Jensen (Contact Author)

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-3613 (Phone)
216-368-2086 (Fax)

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