FAIRtax in Las Vegas
At a recent Board of Directors and Delegates Zoom meeting, I was in Las Vegas and decided to start the meeting with a twenty-second tutorial on how the FAIRtax treats gambling. I decided to make this tutorial available to you.
The FAIRtax handles gaming activities differently from other retail sales and services. Most retail sales pay tax at the point of sale to a customer. If that pattern held for gaming activities, there would be a tax on the chip or ticket.
But gaming activities are different. The FAIRtax for gaming is more like today’s corporate income tax. First, the gaming sponsor (the Las Vegas, the casino operator?) must register with the state sales tax authority before the sponsor may sell “chances” such as chips or tickets.
The chance is not taxable. Instead, the FAIRtax imposes a tax on the sponsor’s “taxable gaming services.” These services are the sponsor’s gross receipts minus the gaming payoffs and gaming-specific taxes from the federal, state, or local governments. There are no other deductions.
The FAIRtax gives the gaming sponsor an incentive to keep its overhead down. Normally, a sponsor, such as a casino, has expenses for its building, its croupiers, card dealers, and other employees, its tables and equipment, its water, and electricity, its local property taxes, and its insurance and accounting. The FAIRtax gives the casino no deduction for these items. In addition to assuring that receipts exceed payouts, the casino has to be sure that this excess minus 23% for the FAIRtax more than covers these items and gives the casino a reasonable profit. One might argue that there is no difference here between a casino and any other business. But the casino cannot simply add the FAIRtax onto the chip or ticket price and call it a day.
Maybe the casino needs to make money from its restaurants and shops.
Whatever the casino’s expenses are, the consumer buys chips and tickets without paying a visible tax. The tax cost is hidden and built into the casino’s margin.
But the consumer who wins in the Bellagio casino and takes their winnings to the Rolex or Cartier store at the Bellagio Hotel pays the FAIRtax on their watches and jewelry.
If you know why gambling is treated differently under the FAIRtax, I would love to hear from you.
The FAIRtax handles gaming activities differently from other retail sales and services. Most retail sales pay tax at the point of sale to a customer. If that pattern held for gaming activities, there would be a tax on the chip or ticket.
But gaming activities are different. The FAIRtax for gaming is more like today’s corporate income tax. First, the gaming sponsor (the Las Vegas, the casino operator?) must register with the state sales tax authority before the sponsor may sell “chances” such as chips or tickets.
The chance is not taxable. Instead, the FAIRtax imposes a tax on the sponsor’s “taxable gaming services.” These services are the sponsor’s gross receipts minus the gaming payoffs and gaming-specific taxes from the federal, state, or local governments. There are no other deductions.
The FAIRtax gives the gaming sponsor an incentive to keep its overhead down. Normally, a sponsor, such as a casino, has expenses for its building, its croupiers, card dealers, and other employees, its tables and equipment, its water, and electricity, its local property taxes, and its insurance and accounting. The FAIRtax gives the casino no deduction for these items. In addition to assuring that receipts exceed payouts, the casino has to be sure that this excess minus 23% for the FAIRtax more than covers these items and gives the casino a reasonable profit. One might argue that there is no difference here between a casino and any other business. But the casino cannot simply add the FAIRtax onto the chip or ticket price and call it a day.
Maybe the casino needs to make money from its restaurants and shops.
Whatever the casino’s expenses are, the consumer buys chips and tickets without paying a visible tax. The tax cost is hidden and built into the casino’s margin.
But the consumer who wins in the Bellagio casino and takes their winnings to the Rolex or Cartier store at the Bellagio Hotel pays the FAIRtax on their watches and jewelry.
If you know why gambling is treated differently under the FAIRtax, I would love to hear from you.
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CALL FOR PICTURES AND WRITEUPS
We need more of you to send in pictures and news. If you have something to share, please send your material to me, jim.bennett@fairtax.org, (908) 578-4975, or fax (908) 598-2888. When others see your activity, they are inspired, and the process snowballs. When the process snowballs, Congress Members, Senators, and even the President start to listen.
CALL FOR PICTURES AND WRITEUPS
We need more of you to send in pictures and news. If you have something to share, please send your material to me, jim.bennett@fairtax.org, (908) 578-4975, or fax (908) 598-2888. When others see your activity, they are inspired, and the process snowballs. When the process snowballs, Congress Members, Senators, and even the President start to listen.
Jim Bennett
AFFT Grassroots Coordinator & Secretary🇺🇸 Call For Pictures & WriteUps - When others see your activity, they are inspired, the process snowballs and Representatives, Senators and, yes, even the President start to listen to you and me. Please send your material to me at Jim.Bennett@FAIRtax.org.
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