Sec. 2. Tax on Internet gambling
1,230 words·~6 min read·
/bill/113/hr/3491/ih/section-2·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Chapter 36 (relating to certain other excise taxes) is amended by adding at the end the following new subchapter: Sec. 4491. Imposition of Internet gambling license tax. Sec. 4492. Record requirements. Sec. 4493. Elective State and Indian tribal government online gambling tax. Sec. 4494. Regulations. There is hereby imposed a tax on each Internet gambling licensee in an amount equal to 4 percent of all funds deposited by customers making deposits while located within the United States during the preceding month into an account maintained by that Internet gambling licensee or any agent of that licensee that can be used for the purpose of placing a bet or wager as defined in section 5362(1) of title 31, United States Code.
The tax imposed by subsection
(a)shall be the direct and exclusive obligation of the Internet gambling operator and may not be deducted from the amounts available as deposits to the person placing a bet. Notwithstanding the preceding sentence, any person making a deposit for the purpose of placing a bet or wager with a person who is required but has failed to obtain a license pursuant to subchapter V of chapter 53 of title 31, United States Code, shall be liable for and pay the tax under this subchapter on all such deposits, but such liability shall not excuse any failure to pay the tax on the part of the person who is required but has failed to obtain such license. The person making the deposit shall not be liable for the tax on deposits in cases of fraud. There is hereby imposed a tax on any person who accepts a bet or wager and who is not authorized pursuant to section 5383(b) of title 31, United States Code, to accept such bet or wager. The amount of such tax shall be equal to 50 percent of all funds deposited into an account that can be used for placing a bet or wager within the meaning of section 5362(1) of that title. There shall be allowed as a credit against the tax imposed by this section an amount equal to the sum of the following taxes which are paid on any funds returned by or on behalf of an Internet gambling licensee to the account of a customer: The tax imposed by this section. Any State or Indian tribal Internet gambling tax imposed under section 4493(b). Any tax imposed on overseas Internet gambling under section 4493(d). The amount allowed as a credit under paragraph
(1)with respect to a customer may not exceed 12 percent of the funds received in deposits from the customer. The tax imposed by this section shall be due at by the end of each calendar month with respect to deposits during the preceding month. For purposes of this subchapter— The term Internet gambling licensee means a licensee, as defined in section 5382 of title 31, United States Code. Deposits made by or on behalf of an Internet gambling licensee of Internet gambling winnings or returns of funds by or on behalf of an Internet gambling licensee to the account of a customer shall not be treated as a deposit for purposes of this section. Each person liable for taxes under this subchapter, except for a person making a deposit who is liable for taxes pursuant to section 4491(a)(2), shall keep a daily record showing deposits (within the meaning of this subchapter), in addition to all other records required pursuant to section 6001. On a monthly basis, each Internet gambling licensee shall pay to each qualified State and each qualified Indian tribal government an amount equal to the monthly pro rata State and Indian tribal government online gambling tax. For purposes of this section, with respect to a qualified State and a qualified Indian tribal government for any calendar month, the monthly pro rata online gambling tax is the amount of the taxes described in subsection
(b)received with respect to such calendar month. For purposes of this section, the terms qualified State and qualified Indian tribal government mean a State or an Indian tribal government, respectively, for which an election to receive funds under this section is in effect. Notice of such election shall be provided by the Governor, principal chief, or other chief executive officer in such form and manner as the Secretary may prescribe. An election by a State under subparagraph
(A)to receive funds under this section shall not constitute an election to be so included on behalf of any Indian tribe located within or partially within the geographic boundaries of such State. A State or Indian Tribal government may revoke its election by notice provided by the Governor, principal chief, or other chief executive officer and in such form and manner as the Secretary may prescribe. Revocation of state election shall take effect the later of 6 months after receipt by the Secretary of such revocation, or on January 1st of the year following receipt by the Secretary of such revocation. The term State means any State, the District of Columbia, or any commonwealth, territory or other possession of the United States. The term Indian tribal government means the government of an Indian tribe (within the meaning of section 4 of the Indian Gaming Regulatory Act). The payment made under this subsection with respect to any calendar month shall be made not later than the 11th day of the succeeding calendar month. The Secretary shall maintain a current list of qualified States and qualified Indian tribal governments and shall publish such list online. The State and Indian tribal government online gambling tax shall be an amount equal to 8 percent of all deposited funds deposited by customers located in each qualified state or area subject to the jurisdiction of a qualified Indian tribal government at the time of the deposit. Acceptance by a State or Indian tribal government of the State and Indian tribal government online gambling tax shall relieve Internet gambling licensees from the obligation to pay any other fee or tax to the State or Indian tribal government relating to its online gambling services, except for— applicable State individual and corporate income taxes, which shall be unaffected by the election, and any fees associated with an Internet gambling licensee’s choice to rely on a State or Indian tribal regulatory body certification of suitability in connection with a Federal online gambling licensing application. There is hereby imposed a tax on each Internet gambling licensee in an amount equal to 12 percent of all funds deposited by customers making deposits while located without the United States during the preceding month into an account maintained by that Internet gambling licensee or any agent of that licensee that can be used for the purpose of placing a bet or wager as defined in section 5362(1) of title 31, United States Code. Deposited funds subject to the State and Indian tribal government Internet gambling tax under this section shall not be taken into account for purposes of the preceding sentence. The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this subchapter. . The table of subchapters for chapter 36 is amended by adding at the end the following new item: Subchapter E. Internet Gambling. . The amendments made by this section shall apply to bets or wagers placed after the date of the enactment of this Act.