House Study Bill 641 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act excluding certain promotional play receipts from the 1 definition of adjusted gross receipts for purposes of the 2 wagering tax on gambling games. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6033YC (2) 86 ec/nh

H.F. _____ Section 1. Section 99F.1, Code 2016, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 19A. “Promotional play receipts” means 3 the total sums wagered on gambling games with tokens, chips, 4 electronic credits, or other forms of cashless wagering 5 provided by the licensee without an exchange of money as 6 described in section 99F.9, subsection 3. 7 NEW SUBSECTION . 22. “Taxable gross receipts” means 8 the adjusted gross receipts less promotional play receipts 9 received after the date in any fiscal year that the commission 10 determines that the wagering tax imposed pursuant to section 11 99F.11 on all licensees in that fiscal year on the portion of 12 adjusted gross receipts representing promotional play receipts 13 exceeds twenty-five million eight hundred twenty thousand 14 dollars. 15 Sec. 2. Section 99F.4A, subsection 6, Code 2016, is amended 16 to read as follows: 17 6. The adjusted taxable gross receipts received from 18 gambling games shall be taxed at the same rates and the 19 proceeds distributed in the same manner as provided in section 20 99F.11 . 21 Sec. 3. Section 99F.11, subsection 1, Code 2016, is amended 22 to read as follows: 23 1. A tax is imposed on the adjusted taxable gross receipts 24 received each fiscal year from gambling games authorized under 25 this chapter at the rate of five percent on the first one 26 million dollars of adjusted taxable gross receipts and at the 27 rate of ten percent on the next two million dollars of adjusted 28 taxable gross receipts. 29 Sec. 4. Section 99F.11, subsection 2, unnumbered paragraph 30 1, Code 2016, is amended to read as follows: 31 The tax rate imposed each fiscal year on any amount of 32 adjusted taxable gross receipts over three million dollars 33 shall be as follows: 34 Sec. 5. Section 99F.11, subsection 2, paragraph b, 35 -1- LSB 6033YC (2) 86 ec/nh 1/ 3

H.F. _____ subparagraph (2), Code 2016, is amended to read as follows: 1 (2) If the licensee of the racetrack enclosure has been 2 issued a table games license during the fiscal year or prior 3 fiscal year and the adjusted gross receipts from gambling games 4 of the licensee in the prior fiscal year were one hundred 5 million dollars or more, twenty-two percent on adjusted taxable 6 gross receipts received prior to the operational date and 7 twenty-four percent on adjusted taxable gross receipts received 8 on or after the operational date. For purposes of this 9 subparagraph, the operational date is the date the commission 10 determines table games became operational at the racetrack 11 enclosure. 12 Sec. 6. Section 99F.11, subsection 3, paragraphs a, b, and 13 c, Code 2016, are amended to read as follows: 14 a. If the gambling excursion originated at a dock located 15 in a city, one-half of one percent of the adjusted taxable 16 gross receipts shall be remitted to the treasurer of the city 17 in which the dock is located and shall be deposited in the 18 general fund of the city. Another one-half of one percent of 19 the adjusted taxable gross receipts shall be remitted to the 20 treasurer of the county in which the dock is located and shall 21 be deposited in the general fund of the county. 22 b. If the gambling excursion originated at a dock located 23 in a part of the county outside a city, one-half of one percent 24 of the adjusted taxable gross receipts shall be remitted to 25 the treasurer of the county in which the dock is located and 26 shall be deposited in the general fund of the county. Another 27 one-half of one percent of the adjusted taxable gross receipts 28 shall be remitted to the treasurer of the Iowa city nearest to 29 where the dock is located and shall be deposited in the general 30 fund of the city. 31 c. Eight-tenths of one percent of the adjusted taxable gross 32 receipts tax shall be deposited in the county endowment fund 33 created in section 15E.311 . 34 Sec. 7. Section 99F.11, subsection 3, paragraph d, 35 -2- LSB 6033YC (2) 86 ec/nh 2/ 3

H.F. _____ unnumbered paragraph 1, Code 2016, is amended to read as 1 follows: 2 Two-tenths of one percent of the adjusted taxable gross 3 receipts tax shall be allocated each fiscal year as follows: 4 Sec. 8. Section 99F.11, subsection 3, paragraph e, Code 5 2016, is amended to read as follows: 6 e. The remaining amount of the adjusted taxable gross 7 receipts tax shall be credited as provided in section 8.57, 8 subsection 5 . 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill concerns wagering taxes on gambling game receipts 13 as provided in Code chapter 99F. 14 Code section 99F.1 is amended by adding two new definitions. 15 “Promotional play receipts” is defined as the total sums 16 wagered on gambling games with tokens, chips, electronic 17 credits, or other forms of cashless wagering provided by 18 a licensee without an exchange of money. “Taxable gross 19 receipts” is defined as adjusted gross receipts less 20 promotional play receipts received after the date in any 21 fiscal year that the wagering tax on the portion of adjusted 22 gross receipts representing promotional play receipts exceeds 23 $25,820,000. 24 Code section 99F.11, providing for the wagering tax, is 25 amended to provide that the wagering tax is calculated on the 26 taxable gross receipts of a gambling game licensee instead of 27 the adjusted gross receipts. 28 -3- LSB 6033YC (2) 86 ec/nh 3/ 3