Posted on: March 6, 2023, 11:08h.
Last updated on: March 6, 2023, 12:37h.
A Nevada Congresswoman is spearheading federal legislation that would raise the tax reporting threshold on slots jackpots from $1,200 to $5,000 nationwide.
US Rep. Dina Titus (D) believes the current system is anachronistic, claiming it’s burdensome to casinos, customers, and the IRS.
The existing reporting policy was established in 1977, but someone forgot to index it for inflation. According to DollarTimes.com’s inflation calculator, $1,200 would be $6,120 in today’s money.
The machine locks up and stops play when a player hits a slots jackpot above the $1,200 threshold. Staff must then check the player’s ID and issue them with a W-2G form filed to the IRS. They must also examine the machine to validate the jackpot’s accuracy.
Casinos and other venues that house slots are the only businesses that have to take their core assets temporarily out of operation for tax purposes, the American Gaming Association (AGA) has noted.
In 2020, the last year for which figures are available, more than 15 million W-2Gs were filed, according to the AGA. This was a year when casinos were periodically closed because of the pandemic.
Players sometimes have to wait an hour or two before the paperwork can be filled in. There are stories of jackpot winners at Harry Reid International Airport missing their flights because of the delay.
Titus believes enough is enough. In addition to raising the threshold, her bill would ensure it increases in line with inflation.
“There was a time when we were trying to get the Treasury Department to do this through regulation, but they never moved, so we’re just going to push the legislation instead,” Titus told The Las Vegas Review-Journal. “One of the important things is we’re not just doing this just for Las Vegas, we’re doing it for everybody.”
Titus doesn’t foresee any significant opposition to the proposed bill and expects it to win bipartisan support, provided lawmakers consider it enough of a priority.
The bill is supported by the AGA, which in 2016, successfully fought an attempt by the IRS to lower the threshold to $600. The revenue service wanted to use player loyalty cards to track wins electronically to help enforce the proposed rule but was persuaded to reconsider.
“This threshold was set back in the ’70s, and we all know how inflation works and what it looks like today,” Alex Costello, vice president of government relations for the AGA, told the Review-Journal. “Back then, a $1,200 jackpot meant something completely different than what it means today.”