Belmont Track to Dems: We won’t collect your gambling tax
July 1, 2009As we all know, with the new state budget comes a bevy of new taxes, including a 10% tax on gambling winings. Well, now The Lodge at Belmont is saying they will not collect the tax for the state, and part of that has to do with how the language is written about the tax:
On the eve of beginning to levy the tax, which state officials and lawmakers estimate will yield $14-million during the 2010-2011 biennium, confusion reigned over how to collect it. Newman said that while the Lottery Commission may be prepared to collect tax on winning lottery tickets, he does not know how the state intends to collect the tax on pari-mutuel wagers and charitable gaming. “The law says that the Racing and Charitable Gaming Commission will withhold the tax,” he said, “but the commission doesn’t pay out any money so how can it deduct any tax?” Nor can the tracks collect it. “We will not be deducting the tax,” Newman continued. “The law does not require us to deduct it and more important, we have no authority to deduct it.” On Monday, the Racing and Charitable Gaming Commission wrote to the Department of Revenue Administration, raising nearly two dozen concerns about the administration and collection of the tax.
Executive Director Paul Kelley told the New Hampshire Union-Leader “we don’t believe we can fairly and accurately start the tax collection process until we know what criteria they are going to set,” adding that in places the law appears to contradict itself.
So, in their haste to add this new tax to the budget, the budget writers neglected to figure out how to collect it. While, I’m sure the state will figure out how to collect this new levy, it just shows how businesses that will be burdened by this tax will fight for thier business and begin to fight for their customers and not letting the state slide by that easilly.
TimothyHorrigan
Jul 2, 2009
The applicable paragraph says: “The lottery commission and the charitable gaming and racing commission shall withhold all tax due and payable to the state from any payout of gambling winnings.” And the rest of the legalese in HB2 states relatively clearly that the actual tax may turn out to be more or less than the withholding.
That does seem to indicate that withholding only applies to lottery winnings, assuming it is true that the Charity Gaming and Racing Commission never pays out winnings. Having never won any money at any of our racetracks, I frankly do not know who actually pays the winnings. I do know the lobbyist who (presumably) wrote The Lodge’s press release and in my experience he usually gets his facts right.
However, the withholding is merely a prepayment. Just like with the withholding of your income tax to Uncle Sam, you are basically just lending Uncle John some bucks which you might get back as a refund after the new year.
Ultimately, the winner has to pay up after the end of the current tax year regardless of whether or not any bucks at all were withheld. And it is a good bet that the state will know who the winners were and how much they won.
Grant Bosse
Jul 2, 2009
This tax was never about the tracks, or even Foxwoods or Vegas. It was a backdoor way to lower the payouts for Powerball and Tri-State Megabucks. We have agreements with the other states to not alter the payout schedules on jackpots, but nothing prevents us from taxing it back when they write the check.
That’s why there’s no provision to deduct losses. You don’t deduct losing Megabucks tickets from your jackpot winnings. Wait until Maine and Vermont sue us next.