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Companion Tax Bill Introduced in US

20 June 2011 by admin

This might sound a tad bit familiar. Last year Representative Barney Frank was working to spearhead a movement to repeal the Unlawful Internet Gambling Enforcement Act (UIGEA) and to regulate online gambling, online casinos or online poker in the US. To go along with last year’s bill was a companion bill, proposed by Congressman Jim McDermott, to declare how online gambling and online casinos would be taxed. Due to economic troubles and the subsequent debates on Capitol Hill, both bills fell by the wayside while nationwide economic measure and matters were examined. Despite Frank’s pushing, last year’s attempt was unsuccessful.

But here we all are in a new year with new developments. Despite the attempt to scare US citizens into running away from playing in the best online casino sites and top online poker sites, the Black Friday and Blue Monday seizures only served to bring the issue of online gambling and how Americans spend their own money into the limelight in a positive way. The move to regulate online gambling is now stronger than it was last year.

So now we come to the point where this year’s companion bill is put forth. Frank and his partner this year, Representative John Campbell, put forth this year’s bill to regulate online gambling and online casinos in the US. Now the time has come for the companion bill to sail forth, and again McDermott is at that helm. The hope is that with the new momentum that has swirled up this year, online gambling regulation can be pushed through.

As for the companion bill, HR2230, which Frank and Campbell are naturally supporting, gives the details for taxing the online gambling industry in the US, hence why it is the companion bill for the regulation bill. As it stands in the bill, online casino operators will have to withhold 28% of their revenue for taxes. Furthermore operators will have to provide the US government with details about their patrons for tax purpose; information such as names, address, tax ID numbers, gross winnings and losses as well as gross wagers. While the 28% is the operation tax, there is another 2% federal tax the bill wishes to tack on. Furthermore, individual states in the US will also have the option of taxing online gambling providers at a 6% rate; we here at are assuming this would be for the purpose of online operators housing servers and operating out of those states. And finally online casino operators would have to pay 2% tax on the gross amount of deposits; the stimulation on this last part is that operators cannot take that money from players’ deposits; they must pay whatever 2% amounts to be out of their own profits.

So now that we have established how the money will collected, what will happen to it? According to the companion tax bill, 25% would go to help fund programs that care for foster children and disadvantaged children. I am not going to lie; I like that revenue from online gambling will help children. The remaining 75% will go into the country’s general treasury.

We here at will continue to follow both bills’ passages through the legislative process on Capitol Hill.

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