Throwing out a Tax Dodge

Thanks to a legislative change in tax policy, Mississippi will be able to staunch tax losses on out-of-state gambler income next year.

Thanks to a legislative change in tax policy, Mississippi will be able to staunch tax losses on out-of-state gambler income next year.

Under current law, if gamblers win jackpots of more than $1,500 in a Mississippi casino, 5 percent is automatically withheld for tax purposes. If gamblers claim that they had a net gambling loss over the year, they can file to get their money back. The percentage of the rebate depends on how much of their income was earned in Mississippi.

Out-of-state visitors were not always honest about the details. It was possible--although highly implausible--for a resident of, say, Chicago to earn 100 percent of his income in Mississippi and file an out-of-state gambling tax return in Mississippi for a full rebate.

The problem with that system, says Ed Buelow, chairman of Mississippi's tax commission, is that the state doesn't require any proof of income or gambling losses. Although the state does not know how much revenue it has been losing each year to fraudulent filings, it receives about 100,000 out-of-state gambling tax returns per year.

In the past, the state audited a few tax returns that looked suspicious. This year, officials are reviewing every return, asking filers to also submit W-2 forms and gambling logs.

When the new law goes into effect, there will be no need for such paperwork. Instead of taking out 5 percent of jackpots, with a possibility for gamblers to recoup some of the money, the state will now take out a flat 3 percent of jackpot winnings. "It should be a wash" for gamblers, Buelow says.

Special Projects
Sponsored Stories
Sponsored
Creating meaningful citizen experiences in a post-COVID world requires embracing digital initiatives like secure and ethical data sharing, artificial intelligence and more.
Sponsored
GHD identified four themes critical for municipalities to address to reach net-zero by 2050. Will you be ready?
Sponsored
As more state and local jurisdictions have placed a priority on creating sustainable and resilient communities, many have set strong targets to reduce the energy use and greenhouse gases (GHGs) associated with commercial and residential buildings.
Sponsored
As more people get vaccinated and states begin to roll back some of the restrictions put in place due to the COVID-19 pandemic — schools, agencies and workplaces are working on a plan on how to safely return to normal.
Sponsored
The solutions will be a permanent part of government even after the pandemic is over.
Sponsored
See simple ways agencies can improve the citizen engagement experience and make online work environments safer without busting the budget.
Sponsored
Whether your agency is already a well-oiled DevOps machine, or whether you’re just in the beginning stages of adopting a new software development methodology, one thing is certain: The security of your product is a top-of-mind concern.
Sponsored
The World Economic Forum predicts that by 2022, over half of the workforce will require significant reskilling or upskilling to do their jobs—and this data was published prior to the pandemic.
Sponsored
Part math problem and part unrealized social impact, recycling is at a tipping point. While there are critical system improvements to be made, in the end, success depends on millions of small decisions and actions by people.