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US slot machines: Will the tax allowance increase to USD 5,000?

US slot machines: Will the tax allowance increase to USD 5,000?

In the US, you have to pay taxes on winnings from slot machines

In the USA, taxes must be paid on winnings generated from slot machines. The only exceptions are smaller jackpots worth up to USD 1,200. Now there are bipartisan efforts in the country to raise the tax allowance to winnings of USD 5,000 or more.

The initiative was spurred last week by several members of the Congressional Gaming Caucus in the U.S. House of Representatives, which deals with national gaming issues. The campaign, led by co-chairs Dina Titus and Guy Reschenthaler, aims to raise the exemption amount for winnings earned on slot machines, such as Teen Patti online, by more than 350%.

The maximum limit in force since 1977

The initiators cite an inflation adjustment of the maximum amount as the reason. The currently applicable amount of USD 1,200 was already set in 1977.

Reschenthaler explained:

"Because the threshold has not kept pace with inflation, it has led to a dramatic increase in reportable jackpots, which trigger a tax burden for winners and a tracking burden for casinos. Raising the amount will eliminate the administrative burden and ensure that the gaming industry can continue to drive economic growth (...) across the country."

If the inflation that has occurred in more than 45 years since it was set were added to the USD 1,200, the amount obtained would be USD 5,567. Thus, the tax exemption would be approximately the amount intended at the time.

Various advantages

According to the proponents, relief for gamblers has a number of advantages. For one, slot machines would gain in attractiveness thanks to the reduced income tax on winnings, which would ultimately have a positive effect on the tax levies of casinos and other slot operators.

Furthermore, slot machine manufacturers and operators would benefit from the relief. This helps secure thousands of jobs across the country, politicians said.

Another reason, according to Reschenthaler, is the significant reduction in bureaucracy. There are now many more winnings between $1,200 and $5,000 than legislators at the time had expected, he said. As a result, he said, the number of tax returns that operators and players have to file and that government agencies have to review has multiplied.

Various advantages

The politicians have received support from the American Gaming Association. Its president, Bill Miller, praised Titus and Reschenthaler's commitment to the gaming industry.

However, before the measures can be implemented, a corresponding law would first have to be formulated and adopted in the US Congress, reported by midwestcup.org. Only then would players in the USA be able to enjoy tax-free slot machine winnings of up to USD 5,000.

 

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