07/08/2016 11:30AM

U.S. House passes bill calling for parimutuel tax changes

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The U.S. House of Representatives passed a bill Thursday night that includes language urging the Treasury Department to consider revisions to how parimutuel winnings are taxed, a focus of a recent horse-racing lobbying effort.

The bill, which provides $21.7 billion in funding for the Treasury Department, Judiciary, and Securities and Exchange Commission, along with other agencies, states that the U.S. Treasury should “expedite final consideration of the guidance which would modernize the rules governing parimutuel wagering.” Lobbyists who have been pressing for changes to the tax treatment of parimutuel winnings believe the language would result in revisions that would be highly favorable for horseplayers.

The language does not require the Treasury to act on the recommendation, but it is a significant endorsement, according to racing lobbyists. A companion bill in the Senate also includes the language.

The National Thoroughbred Racing Association has been lobbying for the changes for a year, using a strategy to go directly to the IRS and Treasury instead of pressing for legislative changes. Efforts to gain support for bills that would codify the tax treatment changes have been unsuccessful in recent years, largely because of pushback from groups claiming that the revisions would be a handout to gamblers.

The revisions that have been suggested include allowing horseplayers to count their entire investment in a parimutuel pool for the purposes of determining whether reporting or automatic withholding requirements are triggered. The revisions likely would greatly reduce the number of winning bets that are affected by the requirements, especially for linked bets such as the pick four, pick five, and pick six.

Currently, the IRS counts only the cost of the single winning bet when determining if the requirements are triggered. The new rule would allow bettors to count the entire cost of the bet in a single pool.

Michael Zeisler More than 1 year ago
Its a start
frank More than 1 year ago
To bad we are not as political connected as the NRA.  we wouldn't pay taxes on any amount!!!
Mike Oliveto More than 1 year ago
LOL!
VICTOR More than 1 year ago
No mention of $5,000 deiling
Dahorsecapper More than 1 year ago
fingers crossed
Cold More than 1 year ago
so when will this be applied? Soon or just like everything else years from now...