Monday, August 16, 2010


Box CarsThis article comes from a question that was asked a few weeks ago involving casinos. This happens to be one of the topics that I don't know much about because I never research it before doing a class. I never get any questions about casinos. There aren't that many states that even have casinos; and people that work for a casino never ask. Like utility companies, heavily regulated businesses like casinos already know how they're taxed.

As I was preparing this, I realized I needed to write another article first, on First Americans, since that's an important part of this topic. So the original question generated two articles and an excuse to take a picture (see above). Kudos to the person who asked!

So I did the research and figured it out. I searched my trusty RIA database for "casino" and found quite a few hits. Unfortunately for casino operators, not many of those hits are good things for their tax planning. In fact, most of the "hits" were rules to make sure that, when casinos give away complimentary rooms and gifts, the use tax is paid.

If you think about it, the reason states even allow legalized gambling is for the tax revenue. So why would they give any tax exemptions? There are even a couple of places where casinos in enterprise zones don't get the exemption that every other business gets. "Yeah, that manufactuer gets this exemption but you're a casino? I don't think so."

I did find two states (IN and MS) that have some exemptions for construction costs related to riverboat type casinos.

And then, of course, there are casinos on reservations. This is the biggest potential exemption for casinos. Since they're owned by First American tribal organizations, their purchases would apparently be exempt. But some states do work out arrangements for taxes anyway. And the casino sales? Since most of the customers are not First Americans, sales taxes are still imposed on the restaurant, gift shop, hotel and admission charges.

Gee, now that I've been talking about this, there are a couple of riverboats near my house. And I'm feeling lucky. See ya later.

The Sales Tax Guy

See the disclaimer - this is for education only. Research these issues thoroughly before making decisions. Remember: there are details we haven't discussed, and every state is different. Here's more information

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Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo.

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