§ 1351 — Tax on gaming revenues; permissive supplemental fee

New York § 1351

• Jurisdiction: New York
• Law PML: Racing, Pari-Mutuel Wagering and Breeding Law
• Title 6: Taxation and Fees
• Art. 13: Destination Resort Gaming

Text

§ 1351. Tax on gaming revenues; permissive supplemental fee. * 1. (a)\nFor a gaming facility in zone two, there is hereby imposed a tax on\ngross gaming revenues. The amount of such tax imposed shall be as\nfollows; provided, however, should a licensee have agreed within its\napplication to supplement the tax with a binding supplemental fee\npayment exceeding the aforementioned tax rate, such tax and supplemental\nfee shall apply for a gaming facility:\n (1) in region two, forty-five percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources.\n (2) in region one, thirty-nine percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources.\n (3) in region five, thirty-seven percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources; provided however, that in the Tioga county portion of region\nfive, for the period of fiscal years two thousand twenty-four, two\nthousand twenty-five, and two thousand twenty-six, during which both of\nthe following criteria are met (i) any facility's tax rate is adjusted\nby the commission pursuant to paragraph (b) of this subdivision, and\n(ii) a vendor track that is located within Oneida county, within fifteen\nmiles of a Native American class III gaming facility maintains at least\nseventy percent of full-time equivalent employees as they employed in\nthe year two thousand sixteen, the tax rate on facilities located in the\nTioga county portion of region five shall be thirty percent of gross\ngaming revenue from slot machines, and ten percent of gross gaming\nrevenue from all other sources. Any money realized from the decrease in\ntheir slot machine tax rate shall only be used by the facility to offer\nchildcare for employees, food and beverage conversion, any other project\nor use that improves the economic infrastructure of the facility, or for\nrehiring laid-off workers, hiring new workers or retaining current\nworkers at the facility. The facility shall provide an initial report to\nthe governor, the speaker of the assembly, the temporary president of\nthe senate, and the commission detailing the projected use of funds\nresulting from such tax adjustment and a plan that prescribes the manner\nin which the licensed gaming facility receiving the reduction in its\nslot machine tax rate will rebuild their economic infrastructure through\nthe offering of childcare for employees, food and beverage conversion,\nor any other project or use that improves the economic infrastructure of\nthe facility, or for rehiring laid-off workers, hiring new workers, or\nretaining current workers at the facility or the creation of new jobs.\nSuch plan shall also clearly establish quarterly and annual employment\ngoals of increasing full-time employees. The facility shall be subject\nto the conditions set forth in clause (ii) of subparagraph three of\nparagraph (b) of this subdivision. Such initial report and accompanying\nplan shall be due ninety days after such reduction goes into effect.\nThereafter, an annual report shall be made to the governor, the speaker\nof the assembly, the temporary president of the senate, and the\ncommission detailing actual use of the funds resulting from such tax\nadjustment. Such report shall include, but not be limited to, any impact\non employment levels since receiving the funds, an accounting of the use\nof such funds, any other measures implemented to improve the financial\nstability of the gaming facility, and any other information as deemed\nnecessary by the commission. Such report shall be due no later than the\nfirst day of the fourth quarter in each year such tax rate has been\ngranted.\n (b) (1) Notwithstanding the rates in paragraph (a) of this\nsubdivision, a gaming facility may petition the commission to lower the\ntax rate applicable to its slot machines to no lower than thirty\npercent. In analyzing such request, the commission shall evaluate the\npetition using the following criteria:\n (i) the ability of the licensee to satisfy the license criterion of\nfinancial stability absent the tax rate reduction;\n (ii) a complete examination of all financial projections, as well as\ngaming revenues generated for the prior annual period;\n (iii) the licensee's intended use of the funds resulting from a tax\nadjustment;\n (iv) the inability of the operator to remain competitive under the\ncurrent tax structure;\n (v) positions advanced by other gaming operators in the state in\nresponse to the petition;\n (vi) the impact on the competitive landscape;\n (vii) other economic factors such as employment and the potential\nimpact upon other businesses in the region; and\n (viii) the public interest to be served by a tax adjustment, including\nthe impact upon the state in the event the operator is unable to remain\nfinancially viable.\n (2) The commission shall report their recommendation solely based on\nthe criteria listed in subparagraph one of this paragraph to the\ndirector of the division of budget who will make a final approval.\n (3) (i) As a condition of the lower slot machine tax rate, such gaming\nfacility shall provide an initial report to the governor, the speaker of\nthe assembly, the temporary president of the senate, and the commission\ndetailing the projected use of funds resulting from such tax adjustment\nand a plan that prescribes the manner in which the licensed gaming\nfacility potentially receiving the reduction in its slot machine tax\nrate will rebuild their economic infrastructure through the rehiring of\nlaid-off employees or the creation of new jobs. Such plan shall also\nclearly establish quarterly and annual employment goals of increasing\nfull-time employees. Such initial report and accompanying plan shall be\ndue at the time a facility is granted a tax adjustment. Thereafter, an\nannual report shall be made to the governor, the speaker of the\nassembly, the temporary president of the senate, and the commission\ndetailing actual use of the funds resulting from such tax adjustment.\nSuch report shall include, but not be limited to, any impact on\nemployment levels since receiving the funds, an accounting of the use of\nsuch funds, any other measures implemented to improve the financial\nstability of the gaming facility, any relevant information that helped\nin the determination of such slot tax rate reduction, and any other\ninformation as deemed necessary by the commission. Such report shall be\ndue no later than the first day of the fourth quarter after such tax\nrate has been granted.\n (ii) (A) At the conclusion of each year, a licensed gaming facility\nshall provide an affirmation in writing to the commission stating the\nemployment goal in clause (i) of this subparagraph or subparagraph three\nof paragraph (a) of this subdivision, was either met or not met as\ndescribed in the initial report. If the licensed gaming facility is\nfound to have not adhered to the plan by the commission, then the\napplicable slot tax rate shall be adjusted at the discretion of the\ncommission as follows:\n 1. If the actual employment number is more than fifty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nten percentage points.\n 2. If the actual employment number is more than forty percent less\nthan the employment goal, then the slot tax rate shall be increased by\neight percentage points.\n 3. If the actual employment number is more than thirty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nsix percentage points.\n 4. If the actual employment number is more than twenty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nfour percentage points.\n 5. If the actual employment number is more than ten percent less than\nthe employment goal, then the slot tax rate shall be increased by two\npercentage points.\n (B) Such finding and the reasoning thereof shall occur no later than\nthirty days following submission of the written affirmation.\n (iii) A licensed gaming facility may petition the commission to lower\nthe tax rate applicable to its slot machines to no lower than thirty\npercent no more than once annually after the effective date of the\nchapter of the laws of two thousand twenty-one which amended this\nsubdivision. A licensed gaming facility may request a revision to its\nplan in its initial report due to unforeseen circumstances.\n * NB Effective until April 1, 2026\n * 1. (a) For a gaming facility in zone two, there is hereby imposed a\ntax on gross gaming revenues. The amount of such tax imposed shall be as\nfollows; provided, however, should a licensee have agreed within its\napplication to supplement the tax with a binding supplemental fee\npayment exceeding the aforementioned tax rate, such tax and supplemental\nfee shall apply for a gaming facility:\n (1) in region two, forty-five percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources.\n (2) in region one, thirty-nine percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources.\n (3) in region five, thirty-seven percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources.\n (b) (1) Notwithstanding the tax rates on gross gaming revenue from\nslot machines provided in paragraph (a) of this subdivision, for the\nperiod of April first, two thousand twenty-six through June thirtieth,\ntwo thousand thirty-one, each gaming facility in zone two shall continue\nto be subject to the same tax rate on gross gaming revenue from slot\nmachines as was imposed in the preceding fiscal year.\n (2) As a condition of the lower slot machine tax rate, the licensed\ngaming facility must:\n (i) be current on all statutory obligations to the state or have\nentered into and be in compliance with a repayment agreement with the\nstate. If the commission, in its sole discretion, determines that a\ngaming facility has not adhered to this condition for any such time\nperiod, the gaming facility shall forfeit this lower slot machine tax\nrate for such time period.\n (ii) have provided the initial report to the governor, the speaker of\nthe assembly, the temporary president of the senate, and the commission\nas required pursuant to subdivision one-b of this section.\n (3) (i) Each gaming facility shall provide an annual fiscal report to\nthe governor, the speaker of the assembly, the temporary president of\nthe senate, director of the division of budget and the commission\ndetailing actual use of the funds resulting from the lower slot machine\ntax rate. Such report shall include, but not be limited to, any impact\non employment levels since receiving the lower slot machine tax rate, an\naccounting of the use of such funds, any other measures implemented to\nimprove the financial stability of the gaming facility and any other\ninformation as deemed necessary by the commission. Such report shall be\ndue no later than January first of each year and shall be posted on the\ncommission website.\n (ii) At the conclusion of each year, a licensed gaming facility shall\nprovide an affirmation in writing to the commission stating the\nemployment goal in subdivision one-b of this section was either met or\nnot met as described in the initial report. If the licensed gaming\nfacility is found to have not adhered to the plan by the commission,\nthen the applicable slot tax rate may be adjusted at the discretion of\nthe commission as follows:\n (A) If the actual employment number is more than fifty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nten percentage points.\n (B) If the actual employment number is more than forty percent less\nthan the employment goal, then the slot tax rate shall be increased by\neight percentage points.\n (C) If the actual employment number is more than thirty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nsix percentage points.\n (D) If the actual employment number is more than twenty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nfour percentage points.\n (E) If the actual employment number is more than ten percent less than\nthe employment goal, then the slot tax rate shall be increased by two\npercentage points.\n (iii) Such finding and the reasoning thereof shall occur no later than\nthirty days following submission of the written affirmation.\n * NB Effective April 1, 2026 until July 1, 2031\n * 1. (a) For a gaming facility in zone two, there is hereby imposed a\ntax on gross gaming revenues. The amount of such tax imposed shall be as\nfollows; provided, however, should a licensee have agreed within its\napplication to supplement the tax with a binding supplemental fee\npayment exceeding the aforementioned tax rate, such tax and supplemental\nfee shall apply for a gaming facility:\n (1) in region two, forty-five percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources.\n (2) in region one, thirty-nine percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources.\n (3) in region five, thirty-seven percent of gross gaming revenue from\nslot machines and ten percent of gross gaming revenue from all other\nsources; provided however, that in the Tioga county portion of region\nfive, for the period of fiscal years two thousand twenty-four, two\nthousand twenty-five, and two thousand twenty-six, during which both of\nthe following criteria are met (i) any facility's tax rate is adjusted\nby the commission pursuant to paragraph (b) of this subdivision, and\n(ii) a vendor track that is located within Oneida county, within fifteen\nmiles of a Native American class III gaming facility maintains at least\nseventy percent of full-time equivalent employees as they employed in\nthe year two thousand sixteen, the tax rate on facilities located in the\nTioga county portion of region five shall be thirty percent of gross\ngaming revenue from slot machines, and ten percent of gross gaming\nrevenue from all other sources. Any money realized from the decrease in\ntheir slot machine tax rate shall only be used by the facility to offer\nchildcare for employees, food and beverage conversion, any other project\nor use that improves the economic infrastructure of the facility, or for\nrehiring laid-off workers, hiring new workers or retaining current\nworkers at the facility. The facility shall provide an initial report to\nthe governor, the speaker of the assembly, the temporary president of\nthe senate, and the commission detailing the projected use of funds\nresulting from such tax adjustment and a plan that prescribes the manner\nin which the licensed gaming facility receiving the reduction in its\nslot machine tax rate will rebuild their economic infrastructure through\nthe offering of childcare for employees, food and beverage conversion,\nor any other project or use that improves the economic infrastructure of\nthe facility, or for rehiring laid-off workers, hiring new workers, or\nretaining current workers at the facility or the creation of new jobs.\nSuch plan shall also clearly establish quarterly and annual employment\ngoals of increasing full-time employees. The facility shall be subject\nto the conditions set forth in clause (ii) of subparagraph three of\nparagraph (b) of this subdivision. Such initial report and accompanying\nplan shall be due ninety days after such reduction goes into effect.\nThereafter, an annual report shall be made to the governor, the speaker\nof the assembly, the temporary president of the senate, and the\ncommission detailing actual use of the funds resulting from such tax\nadjustment. Such report shall include, but not be limited to, any impact\non employment levels since receiving the funds, an accounting of the use\nof such funds, any other measures implemented to improve the financial\nstability of the gaming facility, and any other information as deemed\nnecessary by the commission. Such report shall be due no later than the\nfirst day of the fourth quarter in each year such tax rate has been\ngranted.\n (b) (1) Notwithstanding the rates in paragraph (a) of this\nsubdivision, a gaming facility may petition the commission to lower the\ntax rate applicable to its slot machines to no lower than thirty\npercent. In analyzing such request, the commission shall evaluate the\npetition using the following criteria:\n (i) the ability of the licensee to satisfy the license criterion of\nfinancial stability absent the tax rate reduction;\n (ii) a complete examination of all financial projections, as well as\ngaming revenues generated for the prior annual period;\n (iii) the licensee's intended use of the funds resulting from a tax\nadjustment;\n (iv) the inability of the operator to remain competitive under the\ncurrent tax structure;\n (v) positions advanced by other gaming operators in the state in\nresponse to the petition;\n (vi) the impact on the competitive landscape;\n (vii) other economic factors such as employment and the potential\nimpact upon other businesses in the region; and\n (viii) the public interest to be served by a tax adjustment, including\nthe impact upon the state in the event the operator is unable to remain\nfinancially viable.\n (2) The commission shall report their recommendation solely based on\nthe criteria listed in subparagraph one of this paragraph to the\ndirector of the division of budget who will make a final approval.\n (3) (i) As a condition of the lower slot machine tax rate, such gaming\nfacility shall provide an initial report to the governor, the speaker of\nthe assembly, the temporary president of the senate, and the commission\ndetailing the projected use of funds resulting from such tax adjustment\nand a plan that prescribes the manner in which the licensed gaming\nfacility potentially receiving the reduction in its slot machine tax\nrate will rebuild their economic infrastructure through the rehiring of\nlaid-off employees or the creation of new jobs. Such plan shall also\nclearly establish quarterly and annual employment goals of increasing\nfull-time employees. Such initial report and accompanying plan shall be\ndue at the time a facility is granted a tax adjustment. Thereafter, an\nannual report shall be made to the governor, the speaker of the\nassembly, the temporary president of the senate, and the commission\ndetailing actual use of the funds resulting from such tax adjustment.\nSuch report shall include, but not be limited to, any impact on\nemployment levels since receiving the funds, an accounting of the use of\nsuch funds, any other measures implemented to improve the financial\nstability of the gaming facility, any relevant information that helped\nin the determination of such slot tax rate reduction, and any other\ninformation as deemed necessary by the commission. Such report shall be\ndue no later than the first day of the fourth quarter after such tax\nrate has been granted.\n (ii) (A) At the conclusion of each year, a licensed gaming facility\nshall provide an affirmation in writing to the commission stating the\nemployment goal in clause (i) of this subparagraph or subparagraph three\nof paragraph (a) of this subdivision, was either met or not met as\ndescribed in the initial report. If the licensed gaming facility is\nfound to have not adhered to the plan by the commission, then the\napplicable slot tax rate shall be adjusted at the discretion of the\ncommission as follows:\n 1. If the actual employment number is more than fifty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nten percentage points.\n 2. If the actual employment number is more than forty percent less\nthan the employment goal, then the slot tax rate shall be increased by\neight percentage points.\n 3. If the actual employment number is more than thirty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nsix percentage points.\n 4. If the actual employment number is more than twenty percent less\nthan the employment goal, then the slot tax rate shall be increased by\nfour percentage points.\n 5. If the actual employment number is more than ten percent less than\nthe employment goal, then the slot tax rate shall be increased by two\npercentage points.\n (B) Such finding and the reasoning thereof shall occur no later than\nthirty days following submission of the written affirmation.\n (iii) A licensed gaming facility may petition the commission to lower\nthe tax rate applicable to its slot machines to no lower than thirty\npercent no more than once annually after the effective date of the\nchapter of the laws of two thousand twenty-one which amended this\nsubdivision. A licensed gaming facility may request a revision to its\nplan in its initial report due to unforeseen circumstances.\n * NB Effective July 1, 2031\n 1-a. For a gaming facility licensed pursuant to title two-A of this\narticle, there is hereby imposed a tax on gross gaming revenues with the\nrates to be determined by the gaming commission pursuant to a\ncompetitive bidding process as outlined in title two-A of this article;\nprovided however that the tax rate on gross gaming revenue from slot\nmachines shall be no less than twenty-five percent and the tax rate on\ngross gaming revenue from all other sources shall be no less than ten\npercent.\n * 1-b. As a condition of the lower slot machine tax rate taking effect\nApril first, two thousand twenty-six, pursuant to subdivision one of\nthis section, the licensed gaming facility must provide an initial\nreport to the governor, the speaker of the assembly, the temporary\npresident of the senate, and the commission clearly detailing the\nestablished quarterly and annual employment goals of increasing\nfull-time employees for each year that the facility will receive a lower\ntax rate and any substantial changes to the initial plan. This report is\ndue no later than January first, two thousand twenty-six and shall be\nposted on the commission's website.\n * NB Repealed July 1, 2031\n 2. Permissible deductions. (a) A gaming facility may deduct from gross\ngaming revenue the amount of approved promotional gaming credits issued\nto and wagered by patrons of such gaming facility. The amount of\napproved promotional credits shall be calculated as follows:\n (1) for the period commencing on April first, two thousand eighteen\nand ending on March thirty-first, two thousand twenty-one, an aggregate\nmaximum amount equal to nineteen percent of the base taxable gross\ngaming revenue amount during the specified period;\n (2) for the period commencing on April first, two thousand twenty-one\nand ending on March thirty-first, two thousand twenty-three, a maximum\namount equal to nineteen percent of the base taxable gross gaming\nrevenue amount for each fiscal year during the specified period; and\n (3) for the period commencing on April first, two thousand\ntwenty-three and thereafter, a maximum amount equal to fifteen percent\nof the base taxable gross gaming revenue amount for each fiscal year\nduring the specified period.\n (b) For purposes of paragraph (a) of this subdivision, "base taxable\ngross gaming revenue amount" means that portion of gross gaming revenue\nnot attributable to deductible promotional credit.\n (c) Any tax due on promotional credits deducted during the fiscal year\nin excess of the allowable deduction shall be paid within thirty days\nfrom the end of the fiscal year.\n (d) Only promotional credits that are issued pursuant to a written\nplan approved by the commission as designed to increase revenue at the\nfacility may be eligible for such deduction. The commission, in\nconjunction with the director of the budget, may suspend approval of any\nplan whenever they jointly determine that the use of the promotional\ncredits under such plan is not effective in increasing the amount of\nrevenue earned.\n