Kansas' tax deduction for gambling losses bites dust

7/29/2013

TOPEKA (AP) — Kansas lawmakers spent a great deal of time this year haggling over income tax deductions and whether to budge on sales tax changes, but a provision aimed at gamblers who deduct their losses on the state income tax for gained quick consensus.

TOPEKA (AP) — Kansas lawmakers spent a great deal of time this year haggling over income tax deductions and whether to budge on sales tax changes, but a provision aimed at gamblers who deduct their losses on the state income tax for gained quick consensus.

Rep. Richard Carlson, a St. Marys Republican who is chairman of the House Taxation Committee, said the provision, which eliminates the gambling loss deduction, was part of a larger strategy to simplify the tax code and broaden the tax base, The Topeka Capital-Journal reported.

Starting in 2014, gamblers will no longer be able to deduct their losses, but their wins will still be taxed. During the current calendar year, the gambling deduction and other itemized deductions, other than for charitable giving, are trimmed by 30 percent. Starting in 2014 the other items, including the home mortgage deduction, will be gradually stepped down by 50 percent in 2018.

The gambling loss deduction will be gone completely.

Sen. Les Donovan, a Wichita Republican, said it appeared few Kansans use the deduction. Carlson said it was a way to broaden the tax base without putting more on the shoulders of the poor.

"Principally, it would be due to the fact that gambling is a totally discretionary 'sport,' I guess you might call it, so it was not going to harm lower-income people," Carlson said.

The Capital-Journal received a call from one Topeka resident complaining about the change, but said he didn't want his name associated with gambling because his daughter works in the school system. He said he contacted his House representative, Topeka Democrat Annie Tietze, who confirmed that she had heard from him but said nobody else had complained to her about it.

Kansas has three state-owned casinos that bring in about $90 million a year, according to the American Gaming Association.

The state had the largest jump in gambling tax revenue from 2011 to 2012, a six-fold increase fueled by the opening of Hollywood Casino in Kansas City, Kan., and the Kansas Star's first full year of operation, according to Stateline, a Pew Charitable Trusts news organization.

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