Posted: April 13, 2017
An effort to change regulations related to taxation and reporting of pari-mutuel winnings has gained assistance from 12 members of United States House of Representatives via a letter to the U.S. Department of Treasury.
The National Thoroughbred Racing Association April 12 said the letter is in response to changes proposed by the Department of Treasury and Internal Revenue Service based on input from the NTRA and its lobbyists. The proposed regulations suggest the amount of wager should be based on the entire amount wagered into a single pool by a player rather than the winning base amount for the bet.
For instance, if someone wagers $100 on various combinations on a $1 superfecta and is successful, taxes and reporting on the winnings would be based on $100, not $1. The regulations would have to be made on a single totalizator ticket for on-track bets or through a single account if advance deposit wagering systems are used.
The idea is to allow players to keep more of their winnings and perhaps in turn reinvest money in pari-mutuel pools.
The letter from members of Congress notes the regulations would update existing Treasury rules (Treas. Reg. Sec. 31-3402(q)-1).
“These rules have not been updated since the 1970s and we were pleased that Treasury responded to our requests to bring these regulations up to date,” the lawmakers wrote in a letter dated April 4, only days after a 90-day public comment period concluded. “The proposal better reflects the current pari-mutuel wagering environment and will lead to increased compliance while reducing burdensome paperwork, creating an overall system that will be more accurate and equitable for taxpayers.
“We look forward to these modernized rules being fully implemented and request that you act on this matter as quickly as practicable.”
The bipartisan letter was co-authored by Democrat John Yarmuth of Kentucky and Republican Patrick Meehan of Pennsylvania. Additional signatories are Republicans Andy Barr, James Comer and Brett Guthrie of Kentucky; Donald Norcross of New Jersey; Devin Nunes of California; and Thomas Rooney of Illinois. Democratic signatories are Bill Pascrell Jr. of New Jersey, Hal Rogers of Kentucky, Kurt Schrader of Oregon, and Paul Tonko of New York.
The NTRA began working on the proposed tax changes about three years ago, NTRA President and Chief Executive Officer Alex Waldrop said.
“There is widespread agreement that these newly proposed Treasury regulations will reduce burdensome paperwork while creating a new system that is more accurate and equitable for taxpayers,” Waldrop said in a release. “Throughout this process, the issue has received bipartisan support from members of Congress, and we thank Representatives Yarmuth and Meehan, along with the other co-signatories, for leading the effort to modernize these regulations related to pari-mutuel winnings.”
The NTRA earlier said it hoped the new regulations would be in place in time for this year’s Triple Crown series.
The complete letter from the members of Congress is available here.
(Photo courtesy of U.S. Department of Treasury)