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Committee backs bill to allow up to $17,000 in gambling-loss deductions; fiscal cost questioned
Summary
The committee approved House Bill 26 46 to align state tax treatment of gambling losses with the cap on itemized deductions, but members raised concerns about an $80 million estimated cost and whether the change primarily benefits border casinos.
Representative Fettgetter presented House Bill 26 46, which would allow taxpayers to deduct gambling losses for state tax purposes up to the statutory cap of $17,000.
"House Bill 26 46 exempts gambling losses deductible, for tax purposes up to the $17,000 cap," Representative Fettgetter said.
Why it matters: The fiscal analysis cited during the hearing included an estimated cost to the state of roughly $80 million. Supporters said the change corrects an unintended consequence of earlier caps on itemized deductions that had made some casual gambling activity produce large taxable gains for customers who actually lost over the year. Opponents raised questions about the magnitude of the fiscal impact and the equity of a tax change that may chiefly help casino patrons.
Discussion highlights: Members and the sponsor debated how gaming operators track winnings and losses (sponsor noted use of player cards and transaction records), and whether the bill primarily affects casinos near state borders. Representative Fettgetter said the provision is intended to align state law with federal treatment and to address an unintended consequence of capping itemized deductions.
Outcome: The committee reported HB 26 46 with a due pass (vote reported as 28 ayes and 3 nays). The fiscal-impact estimate cited by committee staff remains a point of contention and may be revisited in further committee or floor review.
Ending: Sponsors argued the measure restores parity with federal tax rules for gambling losses; some members urged more analysis on the revenue impacts before final floor consideration.
