WASHINGTON, D.C. — Members of the House Ways and Means Committee held a nearly four-hour hearing on Tuesday, June 30, 2026, to examine tax incentives for professional sports teams and the tax treatment of name, image, and likeness (NIL) income for college athletes.

Committee Chairman Jason Smith, a Republican from Missouri, addressed the Kansas City Chiefs' relocation from Missouri to Kansas, characterizing the move as "corporate greed triumphing over community benefit." Smith stated, "This decision, being made based on where the team can extract the most taxpayer dollars, reflects the reality that ultimately these teams, or at the very least their C-suite leadership, are more loyal to their bottom line than to their fans." The Chiefs moved following a public financing proposal process involving both states.

Lawmakers noted that some cities and states utilize tax-exempt bonds to provide incentives for professional sports teams to relocate. Some lawmakers also stated that tax-exempt bonds require state and local governments to search for other sources of revenue to fund stadium construction projects.

The hearing also addressed tax issues for college athletes. College athletes receiving NIL income are considered self-employed and do not have taxes withheld from their earnings. Thad Madden, a former IRS employee and NIL tax consultant, testified that he has seen "more and more athletes leaving college with large tax liabilities and no current means of repaying it" due to the current tax landscape. Lawmakers discussed mandatory withholding for student athletes as a potential way to address these tax issues.

Rep. Mike Thompson, the top Democrat on the committee's Tax Subcommittee, said, "Sports have always evolved. Our tax code should keep up, and it should evolve in a way that supports communities, protects taxpayers, promotes fair competition, and gives young athletes every opportunity to succeed both on and off the field." Thompson told Smith, "This has been an interesting hearing, Mr. Chairman, but what it tells me is we need a lot more." Lawmakers also discussed financial literacy efforts to ensure athletes pay taxes and enable them to invest their money.

Why It Matters

The House Ways and Means Committee's hearing addresses ongoing financial issues within professional and college sports. Discussions focused on the use of tax incentives for professional sports teams and the financial impact of NIL income on college athletes. The Supreme Court ruled in 2021 that the NCAA violated antitrust law with its rules on compensation for athletes, leading to the current NIL landscape. These tax discussions occur as Senate Commerce Committee Chair Ted Cruz hopes Senate Majority Leader John Thune will bring a broader college sports bill to the floor for a vote before the end of July 2026, following the removal of a revised bill earlier in the year due to concerns from the Congressional Black Caucus and the NAACP.