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Posts Tagged ‘Las Vegas Review-Journal’

Online Poker Tournaments Now Taxable in Nevada

July 28th, 2013 2 comments

Back in February, the Las Vegas Review-Journal reported that the Nevada Gaming Control Board introduced a bill to tax online poker tournaments. Last month, Governor Brian Sandoval signed Senate Bill 9 into law.

Control Board Chairman A.G. Burnett had noted that in-person poker tournaments are not taxed in Nevada because of the significant costs incurred by the hosts to run these promotional events. Online tournaments, however, do not require the same expenses, such as utilities, floor space rental fees, and food and beverages.

Senate Bill 9 amended, among other things, Nevada Revised Statutes Chapter 463.0161(1) (amendments in bold italics):

“Gross revenue” means the total of all:
(a) Cash received as winnings;
(b) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and
(c) Compensation received for conducting any game, or any
contest or tournament in conjunction with interactive gaming, in
which the licensee is not party to a wager,
¬ less the total of all cash paid out as losses to patrons, those amounts paid to fund periodic payments and any other items made deductible as losses by NRS 463.3715. For the purposes of this section, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses, except that losses in a contest or tournament conducted in conjunction with an inter-casino linked system or interactive gaming may be deducted to the extent of the compensation received for the right to participate in that contest or tournament.

To be clear, this amendment does not make a player’s winnings from online poker tournaments subject to personal income tax in Nevada. (Nevada does not have a personal income tax.) Rather, an interactive gaming operator’s cut from online poker tournaments is now included as part of the 6.75 percent tax imposed on gross gaming revenue in Nevada.

This amendment has not yet been updated on the Nevada Legislature’s website.

Online Sales Tax or Internet Poker in 2012?

July 22nd, 2012 1 comment

Proponents of an online sales tax and of the legalization and regulation of internet poker received some intriguing news last week.

First, the possible federal online sales tax.

Amazon has recently reached agreements with several states to collect and remit sales tax on purchases in those states. One problem with this piecemeal approach, however, is that online retailers are stuck with the burdensome task of complying with each state’s different regime. Plus, not all states have entered into such agreements.

Last Thursday, Senate Majority Leader Harry Reid made remarks regarding possible online sales tax legislation, predicting it could pass this year, according to The Hill.

This WSJ piece provides additional background about the online sales tax issues and points of contention among lawmakers and lobbyists.

Second, internet poker.

Since the Department of Justice shifted its stance on the Wire Act last December, states have taken steps to legalize and regulate intrastate online gambling. Similar to the online sales tax issue, a state-by-state approach presents a variety of compliance obstacles for companies seeking to run internet poker websites licensed in the U.S.

The Las Vegas Review-Journal is reporting Senator Dean Heller (R-NV) is working to persuade fellow GOP lawmakers in Congress to support internet poker legislation. Senator Reid and Senator Kyl have reportedly agreed on a bill framework, although the bill hasn’t surfaced yet.

Reid has said he wants the internet poker sites run by Nevada gaming companies. This position has drawn the ire of Native American tribes and state lotteries, among other parties, who also want a piece of the action. In fact, this Thursday the U.S. Senate Committee on Indian Affairs will hold a hearing on the regulation of tribal gaming, to disuss both brick and mortar and internet gaming issues.

As for whether 2012 is the year legislation is passed in Congress, both issues face similar hurdles. Either bill would likely need to be attached to a legislative vehicle, and there aren’t many remaining. GOP support may be lacking as well. Of course, there’s always the lame duck session, but as The Hill notes, bigger ticket issues such as Bush-era tax rates and automatic spending cuts will likely dominate that agenda.

In the meantime, states will continue to address these issues as they please.

Nevada Tax Commission Approves Comped Meals Tax

June 27th, 2012 No comments

Last January the Nevada Tax Commission upheld a decision requiring a major casino company (Boyd Gaming) to collect and remit sales tax on the value of complementary meals provided to its gamblers. Boyd apparently plans to take the case to the Nevada Supreme Court.

In the meantime, the Nevada Tax Commission passed regulations on Monday requiring the state’s casinos and restaurants to pay sales tax on complementary meals provided to its employees and its patrons, reports the Las Vegas Review-Journal.

The Nevada Tax Department issued the regulations last February; casinos and restaurants must remit to the state, by July 15, taxes on meals comped as of February 15, 2012.

The tax base for comped employee meals is the cost of the food when purchased by the employer. The tax base for comped patron meals is the menu price.

Some implicated businesses may stop offering comped meals. Others may refuse to pay up awaiting a court decision and could face a possible 25 percent penalty, plus interest.

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