Texas NIL law gives college athletes a statutory right to earn money from their name, image, and likeness under Section 51.9246 of the Texas Education Code, and as of June 2025, it also lets Texas colleges pay athletes directly for that NIL use. High school athletes are governed separately by the University Interscholastic League, which imposes tighter age-based limits. The rules below cover both, plus the disclosure, tax, and representation obligations that come with any NIL deal.
What College Athletes Can Do
A Texas college or university cannot adopt any policy that stops a student-athlete from earning compensation for the use of their name, image, or likeness when the athlete is not engaged in official team activities.1State of Texas. Texas Education Code 51.9246 – Compensation and Professional Representation of Student Athletes Participating in Intercollegiate Athletic Programs Each school defines “official team activities” itself, so confirm that definition with your compliance office before scheduling anything.
In practice, the protected activities include sponsored social media posts, paid appearances, autograph signings, branded merchandise, endorsement deals, and similar commercial work. Athletes can also hire professional representation, including a licensed attorney, to handle NIL contracts, and the school cannot penalize them for doing so.1State of Texas. Texas Education Code 51.9246 – Compensation and Professional Representation of Student Athletes Participating in Intercollegiate Athletic Programs
One thing that catches athletes off guard: using school logos, uniforms, or other university intellectual property in a personal deal is a separate matter that usually requires a licensing arrangement with the institution. Some schools run group licensing programs where three or more teammates can co-brand with institutional marks, but an individual athlete generally cannot include school branding on their own.
Direct Payments From Schools After HB 126
House Bill 126, signed by Governor Abbott in June 2025 with an immediate effective date, struck the clause that had barred compensation provided “by the institution” from the statute.2Texas Legislature Online. HB 126 – Engrossed Version – Bill Text Texas colleges can now pay athletes directly for NIL use.
HB 126 also repealed the ban on pre-enrollment NIL arrangements and the ban on using future NIL compensation as a recruiting tool.3Texas Legislature Online. HB 126 – Committee Report (Unamended) Version – Bill Analysis Texas passed the bill in anticipation of the House v. NCAA settlement, approved on June 6, 2025, which introduced revenue sharing across Division I and permits each school to pay athletes up to roughly $20.5 million per year beginning in 2025–26.
One limit survived. Compensation still cannot be provided purely “in exchange for athletic performance.”2Texas Legislature Online. HB 126 – Engrossed Version – Bill Text A deal structured as a bonus for winning games or hitting statistical benchmarks would violate the statute. The payment has to be tied to actual use of the athlete’s name, image, or likeness.
Endorsements That Are Off-Limits
Texas law keeps a firm list of industries an athlete cannot endorse, and the list applies whether the deal is with a third-party brand or the school itself.2Texas Legislature Online. HB 126 – Engrossed Version – Bill Text The prohibited categories are:
- Alcohol, including beer, wine, spirits, and related products
- Tobacco products, e-cigarettes, and other nicotine delivery devices
- Anabolic steroids
- Sports betting and casino gambling
- Any firearm the athlete cannot legally purchase
- Sexually oriented businesses as defined under the Texas Local Government Code
Signing a contract in a prohibited category puts eligibility and school discipline on the line.
Disclosing an NIL Contract
Before signing any NIL contract, the athlete must disclose the proposed deal to their institution in the manner the school prescribes.1State of Texas. Texas Education Code 51.9246 – Compensation and Professional Representation of Student Athletes Participating in Intercollegiate Athletic Programs The statute says “before entering into the contract,” not after. Athletes who sign first and disclose later are already out of compliance. Every compliance office has its own reporting forms, so get familiar with them early.
The school reviews the disclosed contract for conflicts. An athlete cannot enter an NIL deal if any provision conflicts with the athlete’s team contract, an institutional sponsorship agreement, an athletic department policy, or the school’s honor code.1State of Texas. Texas Education Code 51.9246 – Compensation and Professional Representation of Student Athletes Participating in Intercollegiate Athletic Programs If the school flags a conflict, it must promptly notify the athlete or their representative, and the athlete then has 10 days to resolve it.
A common scenario: your university has an exclusive apparel deal with one brand, and you sign a personal endorsement with a competitor. That contract conflicts with the institutional agreement, and you would have 10 days to renegotiate or walk away.
The Separate NCAA Rule
On top of the state requirement, NCAA Division I rules require athletes to disclose NIL agreements worth more than $600 to their school within 30 days of signing.4NCAA. Division I Council Approves NIL Disclosure and Transparency Rules The NCAA disclosure must include contact information for all parties, the services to be rendered, the term length, and the compensation structure. State and NCAA obligations are separate, and both have to be satisfied.
High School Athletes and UIL Rules
Texas high school athletes fall under the University Interscholastic League, not the state NIL statute. Section 441 of the UIL Constitution and Contest Rules governs amateur status, and the 2025–26 guidance sets specific limits.5University Interscholastic League. NIL – 2025-2026 Information
A student in grades 9–12 loses amateur status, and with it their eligibility, if they receive money or other valuable consideration for participating in a UIL-sponsored sport, or if they receive valuable consideration for allowing their name to promote a product or service related to a UIL sport.6University Interscholastic League. Constitution and Contest Rules – Subchapter M
There is a narrow carve-out for college recruits. Students 17 or older may sign NIL agreements with postsecondary institutions in line with state law and NCAA rules. Students 16 or younger cannot sign NIL agreements with anyone. And any NIL agreement with an entity other than a postsecondary institution cannot be executed until the student has exhausted UIL eligibility in that sport.5University Interscholastic League. NIL – 2025-2026 Information
The UIL does not prohibit a prospective college athlete from hiring professional representation for NIL matters, so a high schooler can work with an agent or attorney to prepare for college deals while still competing. The age lines and the college-versus-third-party distinction are where families make costly mistakes.
Checking Whether an Agent Is Registered
Anyone who recruits or solicits a Texas athlete to enter an agent contract, financial services contract, or professional sports services contract must first register with the Texas Secretary of State under Chapter 2051 of the Texas Occupations Code.7Office of the Texas Secretary of State. Athlete Agents Registration applies to individuals, not firms.
Texas recognizes two categories. Professional athlete agents must hold certification from at least one national professional sports association such as the NFLPA, NBPA, or MLBPA. Limited athlete agents do not need that certification but can only represent athletes in sports without a certifying body, such as golf or tennis. Registered agents must file bonds with the Secretary of State and renew annually.
Unregistered activity or prohibited conduct, like initiating unauthorized contact with an athlete or offering something of value in exchange for a contract, can result in fines, civil liability, or criminal prosecution.7Office of the Texas Secretary of State. Athlete Agents Verify current registration before signing anything.
International Athletes on F-1 Visas
Federal immigration law creates a serious complication for international student-athletes that domestic athletes do not face. F-1 visa holders face strict limits on U.S. employment, and the federal definition of employment is broad enough to cover NIL work like filming a commercial, posting sponsored content, or making a paid appearance. Those activities count as off-campus work that requires authorization most F-1 students do not have.
Unauthorized NIL work in the United States can jeopardize visa status, trigger removal proceedings, and create lasting barriers to future U.S. visas. The one recognized workaround is that work performed while the student is physically outside the country falls outside F-1 employment restrictions. Recording sponsored content while home on break is one example. Any international athlete considering NIL activity should consult both their compliance office and an immigration attorney first.
Paying Taxes on NIL Income
NIL income is taxable, and the IRS treats athletes who earn it as independent contractors. No taxes are withheld from the payments, so the athlete is responsible for reporting and paying income tax, Social Security, and Medicare.8Internal Revenue Service. Name, Image and Likeness Income
If your net NIL earnings hit $400 or more in a year, you have to file a tax return and pay self-employment tax, even if your overall income is otherwise below the standard deduction.8Internal Revenue Service. Name, Image and Likeness Income NIL income is reported on Schedule C with your Form 1040. Royalty income from licensing your likeness goes on Schedule E.
Because nothing is withheld, athletes earning meaningful amounts may need to make quarterly estimated tax payments using Form 1040-ES to avoid underpayment penalties. Starting in 2026, the threshold for a company to issue a Form 1099-NEC rises from $600 to $2,000 per payee per calendar year.9Internal Revenue Service. Publication 1099 (2026), General Instructions for Certain Information Returns The higher threshold changes only whether a form arrives in the mail. It does not change the obligation to report the income. Every dollar is reportable whether or not a 1099 shows up.
Athletes still claimed as dependents on a parent’s return face additional complexity. The standard deduction for a dependent with earned income is calculated differently, and NIL income can affect financial aid eligibility. A tax professional is worth the cost during the first year of earnings, and the fees you pay that professional may be deductible as a business expense on Schedule C.