Players of slot games can now rest easy after the Internal Revenue Service has dropped a 2015 slot winnings tax reporting proposal.
The American Gaming Association is reporting a win for the casino industry as well as players after the Internal Revenue Service released their final regulation for a proposal from 2015 that deal with the subject of tax reporting associated with slot wins. Geoff Freeman is the CEO and President of the AGA who stated that the final regulation is a win for gaming companies as well as casino visitors, plus the state and local governments.
Burdensome federal requirements would be led to local and state governments earning less in tax gaming dollars if the proposal had remained as is from its inception. Freeman stated that a campaign by the AGA helped to mobilize casino consumers and members of Congress from eleven different states to urge restraint within the IRS on the matter. Research was used to demonstrate the tax threshold and how it should be at a minimum, $4,700, when adjusted for inflation. The AGA now looks forward to working with the IRS and federal partners to help modernize regulations and protect the millions of casino customers who are located around the world.
This week, the IRS reported their final regulations in regards to the proposal first mentioned in 2015. The regulations drops the electronic player tracking proposal as well as drops the conceptual idea of lower the slow win reporting thresholds. The final regulations also incorporates many suggestions by the AGA on the technical side including using gaming day for optional aggregation.
Going back a bit, it is easier to understand the entire ordeal. In June of 2015, Freeman was at a hearing hosted by the IRS to discuss the proposed rules for electronic player tracking with loyalty cards. This process was to be used for tax reporting. The concern of the industry, as noted by Freeman, was that the proposal mandated the electronic player tracking. This would be a challenge since tools used for marketing are not equipped to serve the purpose of tax tracking and customers do not feel comfortable with this method. Freeman also noted that the mandate is not consistent with the state requirements that currently exist as well as the mandate being inflexible.
During the hearing, Freeman also stated that the industry is opposed to a potential proposal that would lower the reporting threshold for slot jackpot prizes. The amount would have been cut in half to $600 from $1,200. Freeman said that such a change would leave slot machines inactive for periods of time that would be significant to the industry.
Before Freeman testified, the AGA would file complaints on the proposal and members of Congress would send letters discussing their concerns of the proposal. States that took part include Mississippi, Florida, Colorado, New Jersey, Nevada and Arizona. After a public comment period on the matter closed, over 13,000 individuals had shown opposition to the proposal by signing a petition, commenting directly to the IRS or by contacting a member of Congress via phone or social media.
Lobbyists Excited Over the New Rules Announcement
Lobbyists for the gaming industry are now happy with the outcome of the regulations posted by the IRS. If the rules had stayed the same as first drawn up, the casinos would have lost $300,000 to $600,000 every year based on size with a threshold of $600. The tax regulations in the other format would have been difficult and costly for the casinos to be able to make the changes for.
The AGA’s efforts goes to show that organizations such as theirs do have weight. The AGA worked hard to pull together resources to be able to see the outcome that was presented this week with the gaming industry earning the win.