Marylanders that enjoy slot machines will love the federal legislation co-sponsored by a Maryland representative.
Rep. Anthony Brown was part of the group of federal legislators that filed the SLOT Act Thursday. If passed, the bill would more than quadruple the amount that triggers an IRS reporting on a slot machine win.
Currently, Gamblers are given tax paperwork to fill out when a spin results in a payout of $1,200 or greater. The SLOT Act would raise that figure to $5,000.
The bill has bipartisan support with Rep. Dina Titus, D-Nev. And Rep. Guy Reschenthaler, R-Pa. as the main sponsors.
Brown represents Maryland’s 4th Congressional District, which encompasses parts of Prince George’s County and Anne Arundel County. Those counties are home to the two largest casinos in the state – MGM National Harbor and Live! Casino & Hotel.
Inflation driving tax reform on slot machines
The $1,200 benchmark was set in 1977 and hasn’t been moved since. However, since the figure was established, inflation ran rampant throughout the U.S.
In fact, since Pres. Richard Nixon took the dollar off the gold standard in 1971, the dollar lost 85% of its value. Furthermore, most of that devaluation took place after 1977 when the current slot standard was created.
According to the U.S. Labor Department’s Consumer Price Index, $1,200 in 1977 is worth $5,567 in today’s dollars.
As a result, Reschenthaler cited a “drastic increase in reportable jackpots, which trigger tax burdens for winners and compliance burdens for casinos.”
According to the Las Vegas Review-Journal, “gaming and resort associations” back the bill as well.
As president and CEO of the American Gaming Association Bill Miller said in a statement:
“Increasing the slot tax threshold to account for inflation is a long overdue change that will alleviate the unnecessary administrative burdens on casino operators, their customers and an understaffed and overwhelmed IRS.”
Bill wouldn’t affect Maryland state tax revenue
In January, Maryland casinos generated nearly two-thirds of their gross gaming revenue from slot machines. Of the $153.8 million in reported revenue, the six casinos won $95.6 million of that from slots.
Casino Slot Machine Revenue Live! Casino & Hotel $36.3 Million MGM National Harbor $35 Million Horseshoe Baltimore $10.1 Million Hollywood Casino Perryville $5.7 Million Ocean Downs Casino $5 Million Rocky Gap Casino $3.7 Million
The state government taxes slot revenue at a 67% rate, with most of that going to the Education Trust Fund.
But this is federal legislation, and the IRS is a federal collection agency. Maryland’s state tax rates won’t change. Therefore, the state tax revenue won’t fluctuate.
The federal tax revenue, on the other hand, could change. But the effects of the bill on the federal budget haven’t been studied yet.
The legislation will soon be assigned to a House committee and the Congressional Budget Office will look through the bill to project the costs of implementation and changes to federal finances.