June 22, 2016
UPDATE ON TAX MODERNIZATION FOR PARI-MUTUEL WINNINGS

Modernization of Internal Revenue Service (IRS) regulations for withholding and reporting pari-mutuel winnings continues to progress in Washington, D.C. Both the U.S. Senate and U.S. House of Representatives Committees on Appropriations recently passed the Financial Services and General Government Appropriations Bill. The bill makes appropriations for the United States Treasury, IRS and certain other agencies and includes language that encourages the IRS to modernize the regulations.

These actions by the Senate and House are part of an ongoing industry-wide effort, spearheaded by the NTRA and championed by numerous Members of Congress, to request the IRS and Treasury to examine current pari-mutuel tax withholding rules. Updates proposed by the NTRA would clarify regulations by redefining the “amount of the wager” to include all of a bettor’s investment into a single pari-mutuel pool, and not simply the base amount for the winning combination.

NTRA President and Chief Executive Officer Alex Waldrop addressed this issue at a hearing before Treasury and IRS officials in June of 2015. Treasury and IRS also heard from horse racing’s customers who last year submitted nearly 12,000 supportive comments.

The full House is expected to vote this summer on the bill.