The American Gaming Association has voiced its support for the bipartisan legislation introduced by the Congressional Gaming Caucus to raise the antiquated slot tax threshold.
Recently introduced by CGC Co-Chairs Representatives Dina Titus and Guy Reschenthaler, the legislation looks to raise the tax threshold to $5,000, with the current amount of $1,200 having not been adjusted for inflation since it was established 1977 – despite jackpots having steadily increased with inflation over the past several decades.
This is said to have caused a “dramatic increase” in the number of slot jackpots casinos and their customers must report to the Internal Revenue Service.
“Increasing the slot tax threshold to account for inflation is a long overdue change that will alleviate unnecessary administrative burdens on casino operators, their customers and an understaffed and overwhelmed IRS,” commented AGA President and CEO, Bill Miller.
According to federal regulation, when a casino patron wins a slot machine jackpot of $1,200 or more, the machine is temporarily taken out of service while the patron is required to complete a W-2G tax reporting form.
When adjusted for inflation, a $1,200 jackpot in 1977 would be equivalent to more than $5,000 today. Because the threshold hasn’t tracked with inflation, there has been a “significant increase” in the number of reportable jackpots, causing more operational inefficiencies for casino operators and adding to the number of W-2G forms said to be “flooding” the IRS each year.
The legislation is also said to “build on efforts” by the AGA and CGC that led to Congress directing the US Department of the Treasury to investigate the possibility of updating the slot tax threshold through regulation – although Treasury has not yet submitted that report to Congress.
Miller added: “Today’s legislation provides Congress a direct path to modernise the slot reporting threshold. We look forward to continuing to work with these bipartisan leaders on Capitol Hill to address outdated regulations that impact our industry.”