To help Iowa’s gambling industry stay competitive, legislators advanced a house study bill to lower the graduated gaming tax rate applicable to casinos from 22% to 19% within the next three years. Study bills are developed for committee consideration, and once approved, they are assigned a Senate File or House File number.
As per data available on the website of the American Gaming Association, Iowa currently has 19 commercial casinos, with an economic impact of $4.43 Billion for 2023, representing a slight decrease compared to 2022. Apart from slots and table games, the state’s gambling establishments offer sports betting.
To enable land-based casino operators to preserve market relevance and adapt to the changing dynamics, such as the launch of new gambling establishments in adjacent jurisdictions, lawmakers considered the said tax reduction. If passed, the bill would lower the state tax rate to be approximately the same as the ones in Missouri and Nebraska.
The current 22% rate applies to riverboat and land-based casinos with adjusted gross receipts of over $3 Million. Under the bill, the rate would be gradually reduced to 19% by Fiscal Year 2027.
Gambling establishments with adjusted gross receipts between $1 Million and $3 Million are subjected to a tax rate of 10%, while those with adjusted gross receipts of up to $1 Million incur a 5% tax rate.
State Representative Jane Bloomingdale Comments on House Study Bill 719
As reported by Iowa Capital Dispatch, State Representative Jane Bloomingdale commented on House Study Bill 719, underlining that it had been brought up at the same time as lawmakers considered proposals for tax cuts for individuals and businesses: “If we’re going to lower taxes for everyone across the state of Iowa, we maybe need to look at everyone.”
Among these tax cut bills is Governor Kim Reynolds’s proposal that would lower the current 5.7% individual income tax rate to 3.65% in 2024, with a further drop to 3.5% in 2025.
State Representative Monica Kurth also commented on House Study Bill 719, sharing her apprehensions that the tax reduction could result in lost funds for various improvement projects.
Bloomingdale further stated that while she was not confident about the bill’s progress, she thought it was of essential importance to put it forward. She considered all the improvements that have been accomplished within the local communities thanks to revenue generated from gambling taxes.
The tax reduction would bring in more funds being reinvested in the state’s economy and facilities, according to her: “So I look at the things that they’ve done in our communities that, you know, if they have 1% more income, that money would go directly into our communities.”
