Casinos Not Giving Up on Tax Break

May 25, 2015

A new tax break for Iowa’s casino industry has so far not made it through the Iowa legislature. 

But backers say if it doesn’t pass this year, they will bring the issue back in 2016.  

Wes Ehrecke with the Iowa Gaming Association says casinos shouldn’t have to pay state sales tax on the full amount if a gambler is paying part of his bill with a coupon.

“You have a tax on unreal money, it’s fake money, it’s a coupon,” Ehrecke says. “And  when you go to Kohl’s or Hy-Vee or somewhere and you get a $20, coupon the business doesn’t pay tax on that.” 

For example, Ehrecke says, if you were to use that $20 coupon to make a $100 purchase at a retailer in Iowa, only $80 of that purchase would be taxed.

One version of the bill would cap the sales tax casinos pay on so-called promotional offers at $27 million, then reduce that by $5 million the following year.  

Anti-gambling groups are registered against the bill, and some environmentalists are concerned because casino taxes help pay for conservation projects.

Ehrecke admits some people are worried that if casinos pay lower taxes, then the projects those taxes pay for would be cut.

“We do a tremendous amount of dollars,  $300 million  dollars that go to a large number of projects,” Ehrecke says. “There’s a question about how this would impact [those]."

The bill cleared an initial tax-writing committee but stalled in the full Iowa House.