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Hawaii residents now taxed on Vegas winnings even if they lose

HawaiiHawaii: Hawaii residents now taxed on Vegas winnings even if they lose
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Huh?

HONOLULU — A new bill signed into law this month by Gov. Linda Lingle has some frequent Las Vegas visitors and local CPAs scratching their heads.

Under House Bill 1495, no longer will gamblers be able to offset their winnings with their losses for Hawaii state income tax purposes. Previously gamblers would be taxed only on their net winnings, but now they will be taxed on gross winnings.

A Hawaii resident who wins $10,000 in a year, for example, and loses $9,000 in the same year used to be taxed only on the $1,000 in net winnings. Under the new law, that resident would be taxed on the full $10,000 in winnings.

Even if you end up a net loser, you will still be taxed on whatever you won along the way.

Dennis Kohara, a certified public accountant in Honolulu, called the law "ridiculous."

"You sit down at the blackjack table. You win a hand. You lose the next one. You win another hand. You lose the next one," he said.

And, under the new law, you now owe taxes on all the winning hands, which are not offset by any of the losing hands, Kohara said.

State Rep. Pono Chong, who sponsored the legislation, acknowledged that Kohara is correct.

However, Chong said, the new law will mainly affect those who have substantial winnings, along with substantial losses.

The law is expected to add about $300,000 a year to Hawaii tax revenue.

Chong, D-49th (Mauna- wili, Olomana, Enchanted Lake), introduced the measure as a way to bring in additional revenue at a time when the state is "undergoing a significant and possibly protracted economic downturn in tandem with the national and global economic and financial crises."

He said no one wanted to increase taxes, but something had to be done to address the state's budget deficit. Chong said his bill was one of numerous measures taken to address the shortfall.

He also noted that Hawaii is one of only two states where gambling is not permitted. The previous statute that allowed offsetting wagering income with wagering losses "in effect subsidizes the other 48 states that do allow gambling."

Some in Vegas have not taken the news lightly. Even before the new bill had been signed into law, April Gardner, staff editor for CasinoGamblingWeb.com, criticized Chong as hypocritical for questioning whether it's good policy to allow Hawaii taxpayers to make deductions for an activity that's not even allowed in their state.

"Of course," wrote Gardner, "the state has no problem taking the taxes on money that is won in other jurisdictions."

Frequent Vegas traveler Robyn Oshita-Vranesevic falls into the category of the average gambler — win a little here, lose overall.

She used to have plenty of losses to offset her winnings.

"When we did go to Vegas I lost my behind," she said.

She said she understands the government's need to make up for lost income but suggested they do it elsewhere.

"I can see why the government wants to do it," she said. "Because there's probably a lot of untapped money out there. But you know what? Make marijuana legal and tax that instead."

The Department of Taxation, which supported the bill, has said it's unclear how much the law will actually bring in to the state. However, if it is assumed the gambling losses remain at the $5 million level currently claimed, the revenue gain could be $300,000 a year, the department said in testimony in support of the measure.

The new law is retroactive to January of this year.

Thanks to truecritic for the tip.

Honolulu Advertiser

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23 comments. Last comment 7 years ago by dingo.
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vincejr's avatar - wallace
Somewhere in VA
United States
Member #1944
July 29, 2003
130 Posts
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Posted: July 30, 2009, 9:38 am - IP Logged

Man, what a record keeping nightmare. I can just see the pit bosses going nuts on the casino floor when all of the Hawaiians pull out their calculators and pads of paper to keep track of their winnings. "No sir, I am not counting cards, I am keeping track of my winnings for tax purposes."

 

Bash

    LottoPools's avatar - bee
    Houston, TX
    United States
    Member #4496
    April 29, 2004
    71 Posts
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    Posted: July 30, 2009, 10:25 am - IP Logged

    Stupid.  Just absolutely stupid.  This bill should definitely be taken into consideration at election time.

    ________________________

    Playing together to make a splash in the pool of lottery winners.  It's just a matter of time.

      Avatar
      Columbia City, Indiana
      United States
      Member #2978
      December 9, 2003
      381 Posts
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      Posted: July 30, 2009, 12:14 pm - IP Logged

      "The new law is retroactive to January of this year."

      First of all, ARE YOU FREAKIN' KIDDING ME??? How is this even possible and, more importantly, WHY are we putting up with these shenanigans from the people we elect to "represent" our interests???

      Second, "retroactive" is just another word for the legal term, "ex post facto," meaning "after the fact." Such laws were previously prohibited by Article One, Section 10, Clause 1 of the United States Constitution, which reads,
           "Section 10, Clause 1 (Contracts Clause): No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

      The document in its entirety was comically "proposed" by the men who founded this country several years ago but, beginning sometime around 1994, our Supreme Court decided that it really isn't necessary to take any of it seriously, and so they began to dismantle it and to discredit its doctrines and principles. To demonstrate their infinite wisdom, our "Supreme" justices ruled unanimously that retroactive tax laws were perfectly legal and that the Constitution did not apply, provided their application was "supported by a legitimate legislative purpose furthered by rational means."

      Uh-huh. In other words, lawmakers can do anything they want, and there's nothing you can do about it because we said so.

      This, of course, is only my own meager opinion, but I believe Mr. Polo Chong should be hanged from the highest tree, dismembered and tossed chunk by stupid chunk into the gaping maw of Kilauea while he's still twitching.

      Justice Rehnquist adorned his robe with four gold stripes on each sleeve to demonstrate his obvious supremacy over his colleagues (and over the rest of us, the "little people" who comprise the serfdom). He was allowed to get away with it because it was dismissed as a benign act of frivolous indulgence by an eccentric old man but, from where I sit, it simply moved us one step closer to coronation ceremonies when our elitist elected officials grant themselves Titles of Nobility.

      How much more crap do we have to eat before we stand up and tell our government, "No thanks. We've had enough; YOU eat it."?

      Come, Pinky; we must prepare for tomorrow night...

      Jim

        Set4life's avatar - 2554
        East Hampton, NY
        United States
        Member #41995
        June 25, 2006
        1137 Posts
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        Posted: July 30, 2009, 12:41 pm - IP Logged

        Oogle<snip> thats ridiculous lol, whoever voted yes for this nonsense should be shot. 

        This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

             $Group Hug$

             FOR THE WIN!

          konane's avatar - wallace
          Atlanta, GA
          United States
          Member #1265
          March 13, 2003
          3333 Posts
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          Posted: July 30, 2009, 1:09 pm - IP Logged

          Stupid legislation  ..... 2010 elections are going to be interesting.

          Good luck to everyone!

            MADDOG10's avatar - smoke
            Beautiful Florida
            United States
            Member #5709
            July 18, 2004
            20110 Posts
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            Posted: July 30, 2009, 5:06 pm - IP Logged

            If you look, the majority of new legislation for new taxes are from the democrats. These people need to remember this at election time, The democrats here in NJ did the same thing and this puppet of a Governor we have says he did'nt know what was in the bill????? 

            Maybe next time I'll have them add all my outstanding debts and have him pay for it.   Tax repeal should start this year. I think they ought to have a politician repeal....! 

                                                         

                                                           "  When Injustice Becomes Law, Resistance Becomes Duty "

              MADDOG10's avatar - smoke
              Beautiful Florida
              United States
              Member #5709
              July 18, 2004
              20110 Posts
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              Posted: July 30, 2009, 5:12 pm - IP Logged

              Jin695 says.:

              How much more crap do we have to eat before we stand up and tell our government, "No thanks. We've had enough; YOU eat it."?

              ____________________________________________________________________________________

              In my opinion jim, the people in the U.S. don't have the intestonal fortitude to tell them where to stick it, they would rather eat crow than stand up and be counted. Sad shape of affairs were in....!

                                                           

                                                             "  When Injustice Becomes Law, Resistance Becomes Duty "

                diamondpalace's avatar - Untitled 2.jpg
                Dallas, TX
                United States
                Member #60284
                April 12, 2008
                3856 Posts
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                Posted: July 30, 2009, 6:13 pm - IP Logged

                Whoever came up with this idea is ignorant and selfish, and whoever approved the idea is also the same.

                  Rocket 455's avatar - rocket
                  Bellevue, KY
                  United States
                  Member #53340
                  July 4, 2007
                  2622 Posts
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                  Posted: July 30, 2009, 6:58 pm - IP Logged

                   Well I'm a registered democrat soon to be third party and a lifetime liberal, but I'm feeling the tax burdon myself! Part of me says enough is enough! But, another part of me understands that in order to bail out wall street to the tune of trillions and to keep spreading democracy throughout the world, also to the tune of trillions... both of which are crucial to the security of the United States Of America, somebody has to pay. So being patriotic and all I'm going to just grin and bear it. If I have to pay a few more dollars in taxes in order to keep my freedom so be it.

                   Peace Hippy Keep refueling! lol

                  She was made for the straitaways
                  She grew up hatin' Chevrolets
                  She's a rocket
                  She was made to burn. ~Kathy Mattea

                    Avatar
                    Columbia City, Indiana
                    United States
                    Member #2978
                    December 9, 2003
                    381 Posts
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                    Posted: July 30, 2009, 7:10 pm - IP Logged

                    Jin695 says.:

                    How much more crap do we have to eat before we stand up and tell our government, "No thanks. We've had enough; YOU eat it."?

                    ____________________________________________________________________________________

                    In my opinion jim, the people in the U.S. don't have the intestonal fortitude to tell them where to stick it, they would rather eat crow than stand up and be counted. Sad shape of affairs were in....!

                    You're right, MADDOG10, and THANK YOU for telling it like it is!

                    We the people have lost our will and our American resolve. We really have become a nation of cowards, afraid to stand up to those who work for us. Our new mantra is, "Why, that's outrageous! SOMEONE should do something, but I'm not getting involved - I don't want to get into trouble." I'm pretty good at math, but I can't count the number of times I've heard people say those very words.

                    I have some disturbing news for you, folks: YOU'RE ALREADY IN TROUBLE! The vast majority of you are just too meek and stupid to realize it. You would all rather sit on your hands and HOPE things will improve with no effort on your part.

                    Shameful. Absolutely shameful!

                    Come, Pinky; we must prepare for tomorrow night...

                    Jim

                      Darth Tigger's avatar - starwars09
                      New Member

                      United States
                      Member #11515
                      February 16, 2005
                      5 Posts
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                      Posted: July 30, 2009, 9:29 pm - IP Logged

                      Beofre you all start howling conspiracy nut or anything of that nature, please read all and then decide.

                      Most people will not stand up and fight back, for very simple reason.  Dear old Uncle, using all the toos in his little bag could make our lives pretty <snip> miserable and even get us lost in the Justice system.

                       

                      !.  Does anybody remember when, I think it was him, Ted Kenndy got put on the no fly list and look how long it took to get him off it and he is a US senator.  Not that I disagree, but that's a personal opinion.

                       

                      2.  How often have we read in the paper that somebody spends a long time in pre-trial jail and then when thier case gets heard and this person is found to be innocent, and not through legal trickery.

                       

                      3. Racial Profiling, need I say more?

                       

                      I would love to stand up and challenge the government, but I choose my battles wisely or at least find somebody with big enough balls that I wont be "missing."

                      This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

                      My mother would always say, you can't win anything, if you take all the money you played and used it for something else.... To which I would respond, you can't win if you don't play, and if you hit a minimum of the grand or second prizes the it would pay off all that you have invested.  Needless to say, you can't win if you don't play, and as I would say, why don't you play?  Because the prize is to small, well dang son, the back seat of a set of jaguars is small.

                        TheGameGrl's avatar - character catafly.jpg
                        A long and winding road
                        United States
                        Member #17084
                        June 10, 2005
                        4525 Posts
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                        Posted: July 30, 2009, 10:28 pm - IP Logged

                        oy vey! Does this hold true for stock gain and loses? No longer able to write off or what?

                        Sorry but picking a battle isnt a political issue its a human issue for financial survival.

                        Lose the person. the family income/ or benefits of staying in a state and soon that state will see a drop in population. Folks will go to where it benefits them most.

                        In no way does this *retro-activated* law benefit the common tax payer. Eleviating a budget that the common payer had no say in how it was spent ...seems weird.

                        ~~Is it true, Is it kind,Is it necessary. ~~~

                         Thanks be to the giving numbers: 1621,912,119 02014

                          joshuacloak's avatar - Money Swim-uncle-scrooge-mcduck-35997717-677-518.jpg

                          United States
                          Member #32537
                          February 12, 2006
                          698 Posts
                          Offline
                          Posted: July 31, 2009, 7:27 am - IP Logged

                          i rise them a boycut

                           

                          i had plans on going their next late year sometime

                           

                          i know their so far removed form reality to the states,

                          like if that was to happen over here, they be the laughed out of office

                           

                          i hear they have some insane gun control laws to boot, aka people who commit crime dont care about your"laws" and gun control is useless to stoping "crime with guns"

                          crime dont care about no stupid laws.

                          i guest the dumbest people get the dumbest laws, they deserve this

                           this right here is why democracy is dumb

                          its only as great as its  stupid voters

                          the sec you let them take money form the rich or anyone else for that matter to pay for their "needs",  you found a evil more then tyranny people could ever hope for, its supported by a army of welling suckers and tools

                           

                          their not gatting a peny in sales tax  form me now to help them stupid voters of that state

                          i put up with a lot, but that laws takes the cake of stupid and selfish to no ends

                            Rocket 455's avatar - rocket
                            Bellevue, KY
                            United States
                            Member #53340
                            July 4, 2007
                            2622 Posts
                            Offline
                            Posted: July 31, 2009, 12:05 pm - IP Logged

                             "Chong, D-49th (Mauna- wili, Olomana, Enchanted Lake), introduced the measure as a way to bring in additional revenue at a time when the state is "undergoing a significant and possibly protracted economic downturn in tandem with the national and global economic and financial crises."

                             I mean, Chong has a point. With actual unemployment reaching twenty percent or more and loss of revenue from the effects of said unemployment and record forcloseurs, the spread of wealth going to just a few percent and fewer working stiffs able to foot the bill, how can states come up with the money to pay for the trillions of dollars going to ponzi scheme banksters and spreading democracy around the globe?

                             With so many unemployed and desperate to survive, violence and criminal acts rise with it. Are we going to put everyone who can't make it in prison? What would that cost the taxpayers? lol it seems so very fragile this capitalist system, especially when those on top get too greedy.

                             Well, with a name like Chong I'm sure he'll come up with something.

                             Peace Hippy

                            She was made for the straitaways
                            She grew up hatin' Chevrolets
                            She's a rocket
                            She was made to burn. ~Kathy Mattea