Tuesday, August 04, 2009

Hawaii Residents Now Taxed On Vegas Winnings Even If They Lose!

State governments are scrambling to reform their tax codes in order to bring in more tax revenue. Are they lowering taxes to bring in more businesses, create more jobs, which generates more tax revenue? Well some states are, but the majority are finding every way they can to raise taxes.

Hawaii has recently increased its top marginal tax rate to 11 percent making it tied with Oregon for the highest in the country. Hawaii is also going to tax its residents on gross winnings from Las Vegas trips not just the net winnings.

Hawaii Gov. Linda Lingle signed the bill this month that will no longer allow gamblers to offset their winnings with their losses. So, what exactly does that mean?

Well, lets say you sit down at the roulette table and win $10,000 then you go and play black jack and lose it all. You then try your luck at the craps table, but you crap out there too and lose $5,000. So now you are down lets say $5,000. That is a net loss of $5,000, but your gross winnings were $10,000. You as a Hawaii resident would now owe taxes on $10,000. Your gross winnings!

Don’t you just love government and taxes?

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