The Senate Tax Committee considered several bills this week aiming to reduce taxes paid by charitable gaming organizations. The proposals vary from providing sales tax exemptions on the purchase of pulltabs and paddlewheels, to reducing the overall tax rates applied to an organization’s earnings.
The idea to reduce taxes paid by charitable groups – such as VFWs, local athletic associations, and other groups sponsoring gambling activities – has been around for several years. Advocates typically include nonprofits sponsoring gambling operations and some of the charities who are the beneficiaries of gambling revenue. Some nonprofits have testified that their tax bills are about double what they contribute to charity each year. They argue that reducing tax obligations would free up more money to spend on the programs they support, including little league teams and veterans’ groups.
On the other hand, opponents raise concerns about spending the state’s limited tax-relief dollars on gambling. Some legislators have been reluctant to endorse using state dollars to support gambling operations, and others prefer to target tax-relief investments toward families or businesses. Some of the proposals carry large price tags of up to $150 million per biennium.