If applicable, the payor (school and/or collective) would have to allocate the payments based on games played in the various states. Also, you need to consider if the athlete is a Virginia resident or out of state resident. State income tax rules can be quite complicated. Depending on the state, some allow credits for taxes paid to other states, some states do not, and some states like Florida, Texas, Montana, Washington, Tennessee, etc. do not have individual state income taxes. The tax exempt status of the payor institution does not enter into the taxability of payments to the athletes, or employees for that matter, except for federal unemployment taxes. And I doubt the states that do assess income taxes would be willing to exempt from taxation payments to college athletes for NIL purposes.