HSB 719 (LSB 6254YC (2) 90)

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.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 99F.11, subsection 2, Code 2024, is amended to read as follows:
   2.  The tax rate imposed each fiscal year on any amount of adjusted gross receipts over three million dollars shall be as follows:
   a.  If the licensee is an excursion gambling boat or gambling structure,: 
   (1)  For fiscal years beginning prior to July 1, 2024, twenty-two percent.
   (2)  For the fiscal year beginning July 1, 2024, and ending June 30, 2025, twenty-one percent.
   (3)  For the fiscal year beginning July 1, 2025, and ending June 30, 2026, twenty percent.
   (4)  For the fiscal year beginning July 1, 2026, and ending June 30, 2027, and for each fiscal year thereafter, nineteen percent.
   b.  If the licensee is a racetrack enclosure conducting gambling games and another licensee that is an excursion gambling boat or gambling structure is located in the same county, then one of the following rate rates, as applicable:
   (1)  If the licensee of the racetrack enclosure has not been issued a table games license during the fiscal year or if the adjusted gross receipts from gambling games of the licensee in the prior fiscal year were less than one hundred million dollars,: 
   (a)  For fiscal years beginning prior to July 1, 2024, twenty-two percent.
   (b)  For the fiscal year beginning July 1, 2024, and ending June 30, 2025, twenty-one percent.
   (c)  For the fiscal year beginning July 1, 2025, and ending June 30, 2026, twenty percent.
   (d)  For the fiscal year beginning July 1, 2026, and ending June 30, 2027, and for each fiscal year thereafter, nineteen percent.
   (2)  If the licensee of the racetrack enclosure has been issued a table games license during the fiscal year or prior fiscal year and the adjusted gross receipts from gambling games of the licensee in the prior fiscal year were one hundred million dollars or more,: 
   (a)  For fiscal years beginning prior to July 1, 2024, twenty-two percent on adjusted gross receipts received prior to the operational date and twenty-four percent on adjusted gross receipts received on or after the operational date. For purposes of this subparagraph division, the operational date is the date the commission determines table games became operational at the racetrack enclosure.
   (b)  For the fiscal year beginning July 1, 2024, and ending June 30, 2025, twenty-three percent.
   (c)  For the fiscal year beginning July 1, 2025, and ending June 30, 2026, twenty-two percent.
   (d)  For the fiscal year beginning July 1, 2026, and ending June 30, 2027, and for each fiscal year thereafter, twenty-one percent.
   c.  If the licensee is a racetrack enclosure conducting gambling games and no licensee that is an excursion gambling boat or gambling structure is located in the same county,: 
   (1)  For fiscal years beginning prior to July 1, 2024, twenty-four percent.
   (2)  For the fiscal year beginning July 1, 2024, and ending June 30, 2025, twenty-three percent.
   (3)  For the fiscal year beginning July 1, 2025, and ending June 30, 2026, twenty-two percent.
   (4)  For the fiscal year beginning July 1, 2026, and ending June 30, 2027, and for each fiscal year thereafter, twenty-one percent.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to tax rates on receipts from gambling games.
   Under current law, if a person licensed under Code chapter 99F (licensee) is an excursion gambling boat or gambling structure, the tax rate imposed each fiscal year on any amount of adjusted gross receipts over $3 million is 22 percent. Under the bill, the tax rate is decreased to 21 percent for FY 2024-2025, 20 percent for FY 2025-2026, and 19 percent for FY 2026-2027 and thereafter.
   Under current law, if the licensee is a racetrack enclosure conducting gambling games and another licensee that is an excursion gambling boat or gambling structure is located in the same county and the licensee of the racetrack enclosure has not been issued a table games license during the fiscal year or if the adjusted gross receipts from gambling games of the licensee in the prior fiscal year were less than $100 million, the tax rate imposed each fiscal year on any amount of adjusted gross receipts over $3 million is 22 percent. Under the bill, the tax rate is decreased to 21 percent for FY 2024-2025, 20 percent for FY 2025-2026, and 19 percent for FY 2026-2027 and thereafter.
   Under current law, if the licensee is a racetrack enclosure conducting gambling games and another licensee that is an excursion gambling boat or gambling structure is located in the same county and the licensee of the racetrack enclosure has been issued a table games license during the fiscal year or prior fiscal year and the adjusted gross receipts from gambling games of the licensee in the prior fiscal year were $100 million or more, the tax rate imposed each fiscal year on any amount of adjusted gross receipts over $3 million is 22 percent on adjusted gross receipts received prior to the operational date and 24 percent on adjusted gross receipts received on or after the operational date. Under the bill, the tax rate is altered to 23 percent for FY 2024-2025, 22 percent for FY 2025-2026, and 21 percent for FY 2026-2027 and thereafter, regardless of operational date.
   Under current law, if the licensee is a racetrack enclosure conducting gambling games and no licensee that is an excursion gambling boat or gambling structure is located in the same county, the tax rate imposed each fiscal year on any amount of adjusted gross receipts over $3 million is 24 percent. Under the bill, the tax rate is decreased to 23 percent for FY 2024-2025, 22 percent for FY 2025-2026, and 21 percent for FY 2026-2027 and thereafter.
   Taxes collected under Code section 99F.11 on the adjusted gross receipts from gambling games are used to support a variety of programs and funds including the county endowment fund; operational support grants, community cultural grants, and regional tourism marketing of the economic development authority; the rebuild Iowa infrastructure fund; the revenue bonds debt service fund and revenue bonds federal subsidy holdback fund; the water quality infrastructure fund; the Iowa skilled worker and job creation fund; and the levee improvement fund.