HSB 733 (LSB 6169YC (2) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON NORDMAN)

A BILL FOR

An Act modifying state income tax withholdings for winnings derived from slot machines, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.16, subsection 2, paragraph d, Code 2026, is amended to read as follows:
   d.  For the purposes of this subsection, state income tax shall be withheld on winnings in excess of six hundred dollars derived from gambling activities authorized under chapter 99B or 99G. State income tax shall be withheld on winnings in excess of one thousand dollars from gambling activities authorized under chapter 99D. State income tax shall be withheld on winnings in excess of one thousand two hundred dollars derived from slot machines authorized under chapter 99F if the winnings are required to be reported on an information return for federal purposes. State income tax shall be withheld on winnings from sports wagering authorized under chapter 99F whenever federal income tax is required to be withheld from the same winnings in accordance with the Internal Revenue Code.
    Sec. 2.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill modifies state income tax withholdings for winnings derived from slot machines.
   Currently, state income tax is required to be withheld from winnings derived from a slot machine in excess of $1,200. The bill strikes the $1,200 threshold requirement, and requires state income tax withholdings only if the slot machine winnings are required to be reported on an information return for federal purposes. An information return is generally a return that sends information to the federal Internal Revenue Service that reports specific transactions but does not calculate the amount of tax owed.
   The bill takes effect upon enactment.