Legislation changes casino tax withholding procedure

Friday, Feb. 16, 2001 | 11:25 a.m.

THE ASSOCIATED PRESS

JACKSON, Miss. -- The state would collect a lower percentage of withholding taxes from gambling winnings under a bill pending in the state Senate.

In return, taxpayers would not have to declare the winnings as income at tax time, said Deputy State Tax Commissioner Lester Herrington.

Presently, the state requires a 5 percent state tax to be withheld on jackpots of $1,200 or more. Usually this involves hand-paid jackpots on slot machines, in which the players is given a withholding statement.

The bill, approved this week by the Senate Finance Committee, would reduce the withholding to 3 percent and not require the player to declare the winnings as income for state tax purposes.

Casinos currently report the winnings to the Internal Revenue Service and gamblers would still be expected to pay what's due come tax time.

Herrington said the present procedure was a paperwork nightmare for the Tax Commission. He said the commission had found that it was processing 100,000 tax forms a year from out-of-state residents who got a refund of a portion of taxes withheld by the casino.