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Ohio Tax Man Giveth, then Taketh from Gamblers

On June 30, 2013, Ohio Governor John Kasich signed into law Amended Substitute House Bill Number 59. The 3,747 page bill sets forth the Buckeye State’s 2014-15 fiscal year budget.

But that’s not all. Tucked into the bill is the following:

Sec. 5747.01….

As used in this chapter:

(A) “Adjusted gross income” or “Ohio adjusted gross income” means federal adjusted gross income, as defined and used in the Internal Revenue Code, adjusted as provided in this section:

(29) Deduct, to the extent not otherwise deducted or excluded in computing federal or Ohio adjusted gross income for the taxable year, any loss from wagering transactions that is allowed as an itemized deduction under section 165 of the Internal Revenue Code and that the taxpayer deducted in computing federal taxable income.

Gambling losses are no longer deductible as an itemized deduction for purposes of the Ohio income tax, effective immediately.

Gambling losses became deductible under Ohio tax law beginning January 1, 2013, as part of legislation expanding commercial gambling in Ohio.

I located one remark after a brief search for the purpose behind the repeal, in an article quoting a GOP budget fact sheet: “Why should Ohioans subsidize the risky behaviors and bad luck of others?”

I wasn’t fully satisfied, so I kept searching, and found this 2010 Columbus Dispatch op-ed that details the circumstances arising to allowing the deduction in the first place. Legislators have since been convinced otherwise, apparently.

From my reading, the repeal is retroactive. In other words, gambling losses are not deducible in Ohio in 2013 for any part of the tax year.

Ohio rejoins the list of other “bad” gambling states that do not permit gambling losses as an itemized deduction at all for income tax purposes:

  • Connecticut
  • Illinois
  • Indiana
  • Massachusetts
  • Michigan
  • West Virginia
  • Wisconsin

This change in the law does not impact professional gamblers in Ohio, of course. Professionals may deduct gambling losses up to the extent of gambling winnings as a trade or business expense.

  1. David Sell
    March 29th, 2014 at 07:23 | #1

    I wasn’t surprised when I read this article…not even a little bit. After all isn’t this the same state that gave the directive to adapt a curriculum that’s only geared towards passing the “State Test”. Don’t worry about the students knowing anything else but what’s on this test. But, it’s OK to build casinos in this state but whatever you do don’t go there and win any money. You can lose all you have and that’s ok but God forbid you win anything. Ohio will be standing in line to get what they think is there’s. It’s like flipping a coin and both sides of the coin have the Ohio governor’s head on it. You LOSE!!!!! (you want to see my shocked face)

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