Saturday, August 01, 2009

This is wrong:

Republican governor signs bill introduced by a Democrat:
Hawaii residents now taxed on Vegas winnings even if they lose
Under new law, state will tax all winnings

A new bill signed into law this month by Gov. Linda Lingle has some frequent Las Vegas visitors and local CPAs scratching their heads.

Under House Bill 1495, no longer will gamblers be able to offset their winnings with their losses for Hawai'i state income tax purposes. Previously gamblers would be taxed only on their net winnings, but now they will be taxed on gross winnings.

A Hawai'i resident who wins $10,000 in a year, for example, and loses $9,000 in the same year used to be taxed only on the $1,000 in net winnings. Under the new law, that resident would be taxed on the full $10,000 in winnings.

Even if you end up a net loser, you will still be taxed on whatever you won along the way.

Dennis Kohara, a certified public accountant in Honolulu, called the law "ridiculous." (...)

The law is expected to add about $300,000 a year to Hawai'i tax revenue.

Chong, D-49th (Mauna- wili, Olomana, Enchanted Lake), introduced the measure as a way to bring in additional revenue at a time when the state is "undergoing a significant and possibly protracted economic downturn in tandem with the national and global economic and financial crises."

He said no one wanted to increase taxes, but something had to be done to address the state's budget deficit. Chong said his bill was one of numerous measures taken to address the shortfall.


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