Some good news for the US gaming industry came from the federal government on Thursday. A bill that would raise the tax reporting threshold for jackpot winnings and make life a lot easier for the gambling sector was submitted to the US Congress. Let’s dig into the gambling winnings tax news.
The bill proposing higher reporting limits was filed by the Congressional Gaming Caucus. Citing inflation as the main reason, this piece of legislation proposes a higher threshold for when the gamblers have to report their slot machine jackpots to the Internal Revenue Service.
The gambling winnings tax proposal includes raising the winning mount that triggers reporting from the current $1,200 to $5.000. The bill is bipartisan and was filed by Rep. Dina Titus, D-Nev., and Rep. Guy Reschenthaler, R-Pa. Rep. Titus noted that the limit that’s in effect right now was set way back in 1977. Adjusted for inflation, that amount is at the proposed $5,000 today.
At the moment, winning the jackpot of $1,200 triggers a certain procedure. The casino or other business operating slots are required to shut down the machine immediately. At the same time, the winners need to fill out the IRS paperwork. All of this can weigh heavily on the gaming industry and create an unnecessary burden on casino owners and customers.
The representatives behind the bill also note that these establishments are often economic drivers for the local communities, especially in Southern Nevada. A bill of this kind is yet to be proposed in front of the Senate.
Gambling Winnings Tax Bill Receives Huge Support
This is not the first time Rep. Titus has been pushing this legislation forward. She was already trying to move the reporting threshold up during the Trump and Obama administrations but has failed so far. This time around, the bill seems to have a bit more support.
The legislation, dubbed the Shifting Limits on Thresholds, or the SLOT Act, has sponsors on both sides of the aisle. The co-sponsors, among others, include Steven Horsford from the Democratic Party and Republican Mark Amodei.
The bill also received support from the Maryland Democrat, Rep. Anthony Brown, who comes from the state with two casinos.
Rep. Guy Reschenthaler, who filed the bill alongside Titus, comes from Pennsylvania which also has legal slot machine businesses. He noted that the number of reportable jackpots has sharply increased due to failure to keep up with inflation.
This is an issue for both players, who are burdened with taxes, and the casinos who face compliance burdens.
The bill also received support from the gaming and resort associations
The representatives of the Nevada Resort Association note that the legislature would make streamline the process of winning jackpots and make it smoother. It would be good for business as it would enhance the customer experience and increase the number of return visits.
Bill Miller from the American Gaming Association said that the gambling winnings tax change is long overdue and that it would also help the overwhelmed and understaffed IRS. In 2020, his association and the Congressional Gaming Caucus plead to the Treasury Department to study and bring forward regulatory adjustments on the reporting limits.
The bill is now up for review by House committees. Also, the Congressional Budget Office will evaluate the proposed legislature and determine its implementation costs.
Source: Bill would raise tax reporting limit for casino jackpots From Reviewjournal.com.
