Hawaii residents now taxed on Vegas winnings even if they lose

[xkey]

Remind me not to move to Hawaii

http://www.honoluluadvertiser.com/article/20090729/NEWS01/907290363/Hawaii+residents+now+taxed+on+Vegas+winnings+even+if+they+lose

Hawaii residents now taxed on Vegas winnings even if they lose

Under new law, state will tax all winnings

By Will Hoover
Advertiser Staff Writer

A new bill signed into law this month by Gov. Linda Lingle has some frequent Las Vegas visitors and local CPAs scratching their heads.

Under House Bill 1495, no longer will gamblers be able to offset their winnings with their losses for Hawai'i state income tax purposes. Previously gamblers would be taxed only on their net winnings, but now they will be taxed on gross winnings.

A Hawai'i resident who wins $10,000 in a year, for example, and loses $9,000 in the same year used to be taxed only on the $1,000 in net winnings. Under the new law, that resident would be taxed on the full $10,000 in winnings.

Even if you end up a net loser, you will still be taxed on whatever you won along the way.

Dennis Kohara, a certified public accountant in Honolulu, called the law "ridiculous."

"You sit down at the blackjack table. You win a hand. You lose the next one. You win another hand. You lose the next one," he said.

And, under the new law, you now owe taxes on all the winning hands, which are not offset by any of the losing hands, Kohara said.

State Rep. Pono Chong, who sponsored the legislation, acknowledged that Kohara is correct.

However, Chong said, the new law will mainly affect those who have substantial winnings, along with substantial losses.

The law is expected to add about $300,000 a year to Hawai'i tax revenue.

Chong, D-49th (Mauna- wili, Olomana, Enchanted Lake), introduced the measure as a way to bring in additional revenue at a time when the state is "undergoing a significant and possibly protracted economic downturn in tandem with the national and global economic and financial crises."

He said no one wanted to increase taxes, but something had to be done to address the state's budget deficit. Chong said his bill was one of numerous measures taken to address the shortfall.

He also noted that Hawai'i is one of only two states where gambling is not permitted. The previous statute that allowed offsetting wagering income with wagering losses "in effect subsidizes the other 48 states that do allow gambling."

Some in Vegas have not taken the news lightly. Even before the new bill had been signed into law, April Gardner, staff editor for CasinoGamblingWeb.com, criticized Chong as hypocritical for questioning whether it's good policy to allow Hawai'i taxpayers to make deductions for an activity that's not even allowed in their state.

"Of course," wrote Gardner, "the state has no problem taking the taxes on money that is won in other jurisdictions."

Frequent Vegas traveler Robyn Oshita-Vranesevic falls into the category of the average gambler — win a little here, lose overall.

She used to have plenty of losses to offset her winnings.

"When we did go to Vegas I lost my behind," she said.

She said she understands the government's need to make up for lost income but suggested they do it elsewhere.

"I can see why the government wants to do it," she said. "Because there's probably a lot of untapped money out there. But you know what? Make marijuana legal and tax that instead."

The Department of Taxation, which supported the bill, has said it's unclear how much the law will actually bring in to the state. However, if it is assumed the gambling losses remain at the $5 million level currently claimed, the revenue gain could be $300,000 a year, the department said in testimony in support of the measure.

The new law is retroactive to January of this year.

[StatFreak]

...
However, Chong said, the new law will mainly affect those who have substantial winnings, along with substantial losses.

The law is expected to add about $300,000 a year to Hawai'i tax revenue.
...

Not if residents stop traveling to the mainland to gamble. Loss of revenue to the airlines, stateside resorts, and Hawaii.  ... and not if residents move, or, in the case of the wealthy (those they claim to be targeting the most), establish primary residence in another state to avoid paying Hawaii state taxes entirely.

IDIOTS.

...

The new law is retroactive to January of this year.

What a surprise. Notice that whenever the government passes a law reducing taxes or otherwise benefiting the taxpayer, it inevitably takes effect the following year, and sometimes takes several years to implement, but when the state gets greedy, the law takes effect retroactively.

 

[rickhunter]

Well other than getting W2'd, how in the world are they going to track that?  Are they going to ask every person who sits on a table, "Are you a resident of Hawaii" if so, we need to keep track of every hand you bet.  What about slot machine winnings <1,200, you don't have to put in a player card to play, but does that mean that now, everyone will be required to put a card to play in order to keep the accounting? 

[StatFreak]

Secondary states are not required to force people to conform to the laws of their resident states when they visit, and casinos would have no incentive whatsoever that I can see to comply with any such requests made by the Hawaiian government. Players would lose comp value by not being tracked, and it would be in their best interests to shift from slot play to table play, where only wins over $10,000 per day are reported. I also agree that those who continued to play slots would be highly motivated to restrict their play to machines which would not compromise the $1200 reporting threshold.

If I were a Hawaiian player playing at the tables or lower limit slots, I would carefully read the privacy policy of the player's club card and might also consider asking the casino directly (in writing) if they would turn over my non federally reported player tracking information to the state of Hawaii if it were so requested. I would make it clear that I would not patronize casinos that failed to hold my below-threshold gaming activity private. Again, I would think that the casinos ought to be motivated by how their actions would affect their profits, since the state of Hawaii would not be able to impose their will on them unless they had business interests in Hawaii.

[Magicslots]

Another crazy law from the the I am am gonna redistribute YOUR wealth party   That's why I never vote for democrats
As a life long student of political history, I know what the real records say about which party incessantly raises taxes everytime they are in power
I am not really that crazy about the Republicans lately, but they are a hell of a lot better for the American economy when they stick to their original party platform.
Actually I am a Constitutionalist   Oh well, I am never gonna be rich enough to visit Hawaii, much less live there Thank God

[Op-Bell]

I don't understand why anyone who has to fly over water to play, would come and do it in the US. We're the only major country in the entire freakin' world that taxes gambling winnings. Canada doesn't, nor Macau, nor any place in Europe or the Caribbean. Of course if you're a US citizen you're expected to pay taxes on what you win overseas, so there's no escape, but why in hell would foreigners come here? If a foreign visitor wins big in LV the casino will withhold 30%, even though the visitor has absolutely zero tax liability either here or at home. The only way to get it back is to apply through their own national tax authority, which has to extract it from the IRS, which typically takes two years.

Magicslots, did your study of political history have anything to say about the prominent Republican senator who floated a bill to abolish the deduction for gambling losses? Or do you only hear about Democrats? All the bastards are equally venal in my opinion.

[brichter]

All the bastards are equally venal in my opinion.

QFT!!!!!

[rickhunter]

Unfortunately, the favorite places for all Politicians to tax is vices.  So gambling, smoking and drinking get the First Round Pick treatment.  They do so in the auspices of "it's better for humanity," which of course is total BS, after all who appointed them moral enforcers.  Both parties have been tax and spend happy lately, but we are now seeing things that go beyond what we saw before.  Tax health benefits, cap and tax trade, tax business more, bailout irresponsible people and corporations, Vat Taxes, record deficits, and now they want "Universal Healthcare" so all the illegals can have their healthcare benefits while we TAXPAYERS get it up the $##.  Is there no more common sense in the US anymore?  I realize that healthcare is kind of a mess, but government run healthcare?  Look at the clunker law, they can't even manage that correctly.  I'm going to  before it gets out of hand.

[Magicslots]

 :79-Don't get me wrong, there have been plenty of Republicans that have created, offered, and voted for some really stupid laws!
I was raised as a 3rd generation Union Democrat, but at a young age my fascination for this country's history led me to my love of political history.
But if you go back and read the Congressional records, there is no doubt that the great bulk of tax increases, give away programs (read: buy poor peoples votes)
and out of control spending belongs to the Democrats.   President Woodrow Wilson was a committed Liberal Socialist, FDR and his Democratic cronies created some of the greatest boondoggles that still survive to this day.  Also a committed socialist. Truman was a Democrat, but a damn decent President, and reigned in some of the ridiculous spending sent his way.
JFK a conservative Democrat but had some very liberal ideas. But he was one of the old Democratic ilk. Gerald Ford was a bumbling idiot!   Jimmy Carter was and is an Imbecile! He bankrupted his own state and sheeple stil voted him into office. Both Bush presidencies had their major screwups and stupid policies.  Clinton was and is a self serving sleazebag
And Obama is without a doubt the most left leaning liberal Socialist to ever wield great power in U.S history. He will do damage to this country that we may never recover from. :81-l
  But it is Congress that controls the purse strings, approves the budgets, and wastes billions and now TRILLIONS of your and my money on ridiculous programs. 
If I had my way, there would be NO career politicians.  You would be allowed to serve one term in either the House or the Senate, and then you are DONE.. No pensions, no lifetime free Medical care, etc. etc.
They all take an Oath to uphold the Constitution of the United States, maybe they should start by reading the damn thing and realizing just how few powers that document grants them.
And I don't want to even get started on the increasing Violations of the Bill of rights, that these A___holes are supposed to be protecting and defending.   
Thus the Rant Ends

[racergiant]

    ^^^  I'm with him  ^^^

Did you see todays Yahoo news?  Michelle Obama's "green" vegetable garden isn't so green - and isn't so edible...

Seems the people in Clintons era 'fertilized' that section with sewage sludge...  The lead levels are not too high but almost to the limit that the FDA lets you eat food grown in it.

http://www.examiner.com/x-17874-Seattle-Green-Living-Examiner~y2009m7d31-Michelle-Obamas-organic-garden-goes-to-waste-thanks-to-Bill-and-Hillary-not-Twilight

[rickhunter]

It's a miracle they didn't blame that on the Bush administration.  Seems lilke it's this current regime's favorite escapegoat. 

[racergiant]

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. -
Thomas Jefferson