House Study Bill 719 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act relating to tax rates on receipts from gambling games. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 6254YC (2) 90 nls/ns

H.F. _____ Section 1. Section 99F.11, subsection 2, Code 2024, is 1 amended to read as follows: 2 2. The tax rate imposed each fiscal year on any amount of 3 adjusted gross receipts over three million dollars shall be as 4 follows: 5 a. If the licensee is an excursion gambling boat or gambling 6 structure , : 7 (1) For fiscal years beginning prior to July 1, 2024, 8 twenty-two percent. 9 (2) For the fiscal year beginning July 1, 2024, and ending 10 June 30, 2025, twenty-one percent. 11 (3) For the fiscal year beginning July 1, 2025, and ending 12 June 30, 2026, twenty percent. 13 (4) For the fiscal year beginning July 1, 2026, and ending 14 June 30, 2027, and for each fiscal year thereafter, nineteen 15 percent. 16 b. If the licensee is a racetrack enclosure conducting 17 gambling games and another licensee that is an excursion 18 gambling boat or gambling structure is located in the same 19 county, then one of the following rate rates , as applicable: 20 (1) If the licensee of the racetrack enclosure has not been 21 issued a table games license during the fiscal year or if the 22 adjusted gross receipts from gambling games of the licensee 23 in the prior fiscal year were less than one hundred million 24 dollars , : 25 (a) For fiscal years beginning prior to July 1, 2024, 26 twenty-two percent. 27 (b) For the fiscal year beginning July 1, 2024, and ending 28 June 30, 2025, twenty-one percent. 29 (c) For the fiscal year beginning July 1, 2025, and ending 30 June 30, 2026, twenty percent. 31 (d) For the fiscal year beginning July 1, 2026, and ending 32 June 30, 2027, and for each fiscal year thereafter, nineteen 33 percent. 34 (2) If the licensee of the racetrack enclosure has been 35 -1- LSB 6254YC (2) 90 nls/ns 1/ 4

H.F. _____ issued a table games license during the fiscal year or prior 1 fiscal year and the adjusted gross receipts from gambling games 2 of the licensee in the prior fiscal year were one hundred 3 million dollars or more , : 4 (a) For fiscal years beginning prior to July 1, 2024, 5 twenty-two percent on adjusted gross receipts received prior 6 to the operational date and twenty-four percent on adjusted 7 gross receipts received on or after the operational date. 8 For purposes of this subparagraph division , the operational 9 date is the date the commission determines table games became 10 operational at the racetrack enclosure. 11 (b) For the fiscal year beginning July 1, 2024, and ending 12 June 30, 2025, twenty-three percent. 13 (c) For the fiscal year beginning July 1, 2025, and ending 14 June 30, 2026, twenty-two percent. 15 (d) For the fiscal year beginning July 1, 2026, and ending 16 June 30, 2027, and for each fiscal year thereafter, twenty-one 17 percent. 18 c. If the licensee is a racetrack enclosure conducting 19 gambling games and no licensee that is an excursion gambling 20 boat or gambling structure is located in the same county , : 21 (1) For fiscal years beginning prior to July 1, 2024, 22 twenty-four percent. 23 (2) For the fiscal year beginning July 1, 2024, and ending 24 June 30, 2025, twenty-three percent. 25 (3) For the fiscal year beginning July 1, 2025, and ending 26 June 30, 2026, twenty-two percent. 27 (4) For the fiscal year beginning July 1, 2026, and ending 28 June 30, 2027, and for each fiscal year thereafter, twenty-one 29 percent. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 This bill relates to tax rates on receipts from gambling 34 games. 35 -2- LSB 6254YC (2) 90 nls/ns 2/ 4

H.F. _____ Under current law, if a person licensed under Code chapter 1 99F (licensee) is an excursion gambling boat or gambling 2 structure, the tax rate imposed each fiscal year on any amount 3 of adjusted gross receipts over $3 million is 22 percent. 4 Under the bill, the tax rate is decreased to 21 percent for FY 5 2024-2025, 20 percent for FY 2025-2026, and 19 percent for FY 6 2026-2027 and thereafter. 7 Under current law, if the licensee is a racetrack enclosure 8 conducting gambling games and another licensee that is an 9 excursion gambling boat or gambling structure is located in the 10 same county and the licensee of the racetrack enclosure has 11 not been issued a table games license during the fiscal year 12 or if the adjusted gross receipts from gambling games of the 13 licensee in the prior fiscal year were less than $100 million, 14 the tax rate imposed each fiscal year on any amount of adjusted 15 gross receipts over $3 million is 22 percent. Under the bill, 16 the tax rate is decreased to 21 percent for FY 2024-2025, 20 17 percent for FY 2025-2026, and 19 percent for FY 2026-2027 and 18 thereafter. 19 Under current law, if the licensee is a racetrack enclosure 20 conducting gambling games and another licensee that is an 21 excursion gambling boat or gambling structure is located in the 22 same county and the licensee of the racetrack enclosure has 23 been issued a table games license during the fiscal year or 24 prior fiscal year and the adjusted gross receipts from gambling 25 games of the licensee in the prior fiscal year were $100 26 million or more, the tax rate imposed each fiscal year on any 27 amount of adjusted gross receipts over $3 million is 22 percent 28 on adjusted gross receipts received prior to the operational 29 date and 24 percent on adjusted gross receipts received on 30 or after the operational date. Under the bill, the tax rate 31 is altered to 23 percent for FY 2024-2025, 22 percent for FY 32 2025-2026, and 21 percent for FY 2026-2027 and thereafter, 33 regardless of operational date. 34 Under current law, if the licensee is a racetrack enclosure 35 -3- LSB 6254YC (2) 90 nls/ns 3/ 4

H.F. _____ conducting gambling games and no licensee that is an excursion 1 gambling boat or gambling structure is located in the same 2 county, the tax rate imposed each fiscal year on any amount 3 of adjusted gross receipts over $3 million is 24 percent. 4 Under the bill, the tax rate is decreased to 23 percent for FY 5 2024-2025, 22 percent for FY 2025-2026, and 21 percent for FY 6 2026-2027 and thereafter. 7 Taxes collected under Code section 99F.11 on the adjusted 8 gross receipts from gambling games are used to support a 9 variety of programs and funds including the county endowment 10 fund; operational support grants, community cultural grants, 11 and regional tourism marketing of the economic development 12 authority; the rebuild Iowa infrastructure fund; the revenue 13 bonds debt service fund and revenue bonds federal subsidy 14 holdback fund; the water quality infrastructure fund; the Iowa 15 skilled worker and job creation fund; and the levee improvement 16 fund. 17 -4- LSB 6254YC (2) 90 nls/ns 4/ 4