04/21/2015 9:50AM

NTRA comes out in support of revised tax rules

Email

The National Thoroughbred Racing Association has sent an official response to proposed rules that would sharply reduce the tax liability on parimutuel winnings, kicking off a campaign to draw support for the changes from the racing community.

The response was submitted at the outset of a six-week period in which the U.S. Treasury Department and Internal Revenue Service will accept comments on the proposed rules. The comment period ends June 2, after which the two agencies will deliberate over whether to accept the changes.

The changes would allow horseplayers to count the total amount they wagered to hit the bet for the purposes of determining tax liability. While the trigger for generating a W-2G tax form would remain the same – a payout of greater than 300-1 – the ability to include the total amount bet would eliminate a vast number of payouts from automatic reporting, since many of the forms are generated from payouts in pools where bettors wager large amounts, such as trifectas, pick fours, pick fives, and pick sixes.

The NTRA has argued that the current tax rules are archaic and that they treat parimutuel winnings unfairly. The association had lobbied for changes to the tax rules for years by attempting to gain support for federal legislation, but legislators resisted that effort, in large part because many media sources characterized the changes as a windfall to horseplayers.

But last year, the NTRA changed tack, abandoning the federal legislative effort in favor of going directly to the Treasury Department. The tactic worked, with Treasury agreeing earlier this year to consider the tax changes.

In a release, the NTRA said it will spend the next six weeks on a publicity effort to encourage horseplayers and industry groups to submit comments in support of the changes through a link on its website.

“The two-step process can be completed in Secretariat time – under two minutes,” said Keith Chamblin, the senior vice president of the NTRA, in reference to Secretariat’s time in the 1973 Kentucky Derby.

The NTRA also said that Alex Waldrop, the organization’s president, will travel to Washington several times over the next six weeks to meet with federal legislators in an attempt to curry support for the changes. Last year, 17 federal legislators signed a letter sent to Treasury arguing for the changes.