Congressional Gaming Caucus Co-Chairs, Nevada Representative Dina Titus and Pennsylvania Representative Guy Reschenthaler have proposed legislation to raise the slot tax threshold to $5,000 and to allow for future increases due to inflation.
The American Gaming Association (AGA) has voiced its support of the proposed legislation. Its members include commercial and tribal casino operators, as well as gaming industry suppliers.
“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,” said AGA President and CEO Bill Miller.
The last time the slot tax threshold was adjusted for inflation was in 1977 when it increased to its current $1,200 limit. Inflation has risen steadily over the years, and the proposed $5,000 threshold amounts to $1,200 in 1977 dollars.
Because the current threshold hasn’t tracked with today’s inflation, and because of the increase in reported jackpot winnings, the IRS receives numerous W-2Gs every year. The boost in activity has also created casinos to operate less efficiently than in the past.
Under the current federal regulation, slot machines must be temporarily taken out of service when someone wins more than $1,200. The winner must fill out a W-2G tax form as well.
Miller said Congress now has an opportunity to update the current law on the books and adjust the threshold to modern levels.
“Today’s legislation provides Congress a direct path to modernize the slot reporting threshold,” he said. “We look forward to continuing to work with these bipartisan leaders on Capitol Hill to address outdated regulations that impact our industry.”