Moves are underway in US congress to increase the slot machine tax threshold from its current US$1,200 up to US$5,000.
According to information from the American Gaming Association (AGA), bipartisan legislation was introduced on Thursday (US time) by Co-Chairs Dina Titus and Guy Reschenthaler which would increase the tax threshold to US$5,000 while also providing a mechanism for future increases based on inflation.
The current US$1,200 slot tax threshold has not been adjusted for inflation since 1977, causing a dramatic increase in the number of slot jackpots casinos and their customers must report to the Internal Revenue Service (IRS), the AGA said.
“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,” explained AGA President and CEO Bill Miller.
“Today’s legislation provides Congress a direct path to modernize the slot reporting threshold. We look forward to continuing to work with these bipartisan leaders on Capitol Hill to address outdated regulations that impact our industry.”
The introduction of bipartisan legislation recognises the issues created by the current threshold, which requires a machine to be temporarily taken out of service whenever a patron wins a jackpot of US$1,200 or more. The machine is then put back online once the patron has completed a W-2G tax reporting form.
The AGA noted that, when adjusted for inflation, a US$1,200 jackpot in 1977 would be equivalent to more than US$5,000 today.
“Because the threshold hasn’t tracked with inflation, there has been a significant increase in the number of reportable jackpots, causing more operational inefficiencies for casino operators and adding to the sea of W-2G forms flooding the IRS each year,” the AGA said.
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