TO ALL NH CITIZENS AND PPA MEMBERS:
The NH House recently included a "gamblig winnings tax" in its proposed budget. That legislation is now in the State Senate where it will be acted upon next. THIS BILL AS WRITTEN MUST BE STOPPED!
The important part of the legislation (for us) is as follows:
77:38 Definitions.
I. “Gambling winnings” means any money distribution to winners of any gambling activity whether in-state or out-of-state including, but not limited to, bingo, lucky 7, sweepstakes, pari-mutuel, charitable gaming, casino gaming, internet gaming, or the equivalent.
II. “Payor” means any individual or entity that pays gambling winnings.
77:39 Registration.
I. No payor shall pay out any gambling winnings without first registering with the department. The registration shall not be assignable and shall not be transferred. Any payor who fails to register as provided in this section shall be subject to the penalty provisions of RSA 21-J:39.
....
77:40 Tax Imposed. A tax is hereby imposed at a rate of 10 percent upon:
I. Any individual who is an inhabitant or resident of this state whose gambling winnings from any payor either in-state or out-of-state equals $600 or more.
II. Any individual who is not a resident of this state whose gambling winnings from any in-state payor equals $600 or more.
77:41 Withholding. Each payor operating in-state shall withhold the tax from the distribution of taxable gambling winnings to the winner. Within 10 days after the end of each month, the payor shall pay over such tax to the department accompanied by such form or return as determined by the commissioner. The payor shall keep books and records in a form acceptable to the department showing the amount of all taxes collected.
77:42 Returns and Payment of Tax by Individuals. Every resident who receives taxable gambling winnings from an out-of-state payor shall pay the tax imposed under this subdivision and file a return on or before the fifteenth day of the fourth month following the expiration of the tax year.
77:43 Nature of Tax; Penalties and Violations.
I. The tax imposed by this subdivision shall become state funds at the moment a payor distributes gambling winnings to the winner.
II. Any resident who fails to pay tax or file returns as required by RSA 77:42 shall be subject to failure to file penalties under RSA 21-J:31 and failure to pay penalties under RSA 21-J:33.
A 10% tax any time you win $600 or more is bad enough, but note how the bill fails to clarify that the $600 or more must be won on a single wager. If this is a tax on cumulative winnings, also note how it does not allow for deductions based on either the amount of the wager or losses from other wagers.
If every time you bet and win you have to keep track of it, and then if the total is greater than $600 in year you have to report it an pay or be guilty of tax evasion NO ONE WILL BE ABLE TO PLAY POKER, BUY SCRATCH TICKETS, OR GAMBLE IN LAS VEGAS WITHOUT BECOMING A TAX CHEAT. No one is going to count every time a slot machine gives them a win, ignore every time it doesnt, and report and pay taxes when their "winnings" exceed $600.
THIS IS OUTRAGEOUS AS WRITTEN!
I have drafted the following form letter for our state Senators. I will be emailing a copy of it to all NH PPA members next week. Until then, I invite comments on how to improve this letter:
Dear Senator ____________,
As a constituent of yours I am writing to express my great disgust at the NH House's inclusion of a poorly written and thus very dangerous "gambling winnings tax" in the proposed budget. I urge you to oppose this tax or, at the minimum demand it be amended so that it does not diminish the revenue currently generated by the Lottery, nor turn the vast majority of NH citizens who choose to occasionally gamble into Tax cheats.
Specifically, the legislation proposing this new tax is so ambiguously drafted that is not unlikely that a future tax collection official will interpret this tax to require every NH citizen who plays any gambling game to keep track of every single time they have a winning wager, and then report the sum of those winning wagers at the end of the year, paying a 10% tax if the total exceeds $600. It is not at all unusual for many of your constituents to spend roughly $20 a week on the lottery and/or scratch tickets. That equals $1000 per year. Equally common is for that constituent to win back over $600. Since all of it is coming from one "payor" and since the tax has no provision to allow for your constituents to deduct their non-winning wagers, aside from the $400 that constituent has already contributed to NH by his playing the lottery and buying scratch tickets, he or she would now be required to report those cumulative winnings and pay an additional $60 to the state. THAT IS AN OUTRAGE, and no citizen of NH is going to do it. So they either stop playing the lottery and buying scratch tickets, or they will break the law and simply not file.
And not only would this tax as written apply to those who play our lottery, consider its effects on charitable gaming. Last year you adopted a 10% tax on our charitable games, and this year you want an additional 10% from the same source? Hardly wise policy during difficult financial times like these.
Also, consider when people play our charitable games, or vacation in one of the states with casinos, it is again quite common to rack up $600 in winnings during that vacation. Of course, almost always the person has lost more than that $600 at other times. Must a NH citizen in Las Vegas count every time a slot machine gives them a win and, ignoring all the times the slot machine takes the bet but gives nothing, report those wins if they have enough of them to amount to more than $600? Fat chance of our citizens actually doing that, so why make a law that would turn them into criminals if they got caught not reporting such events?
And how this would apply to your poker playing constituents is even more problematic. Poker players routinely win and lose small amounts while playing - are we going to tax them on their winning hands without letting them deduct their losing hands? Even the IRS does not stoop to that level of unfairness.
In sum, this is the most unfair tax yet proposed. It singles out one group of citizens and requires them to shoulder more than their fair share of the burden. I urge you to oppose this tax in its entirety. If you cannot bring yourself to vote against this tax completely, at least insure that it is rewritten to reflect that it should only apply to winnings of $600 or more ON A SINGLE WAGER. While still unfair, and still a tax that will make our lottery and charitable gaming less competitive, that at least will not require the citizens of NH who enjoy the occasional gamble to become tax criminals.
Sincerely,
Lets get going on this my friends,
Patrick "Skallagrim" Fleming
PPA NH State Director