Senate tax package addresses Internet gambling

Feb. 24, 2010 – Sens. Ron Wyden, D-Ore., and Judd Gregg, R-N.H., are eying a proposed rewrite of the federal tax code that would reduce individual and corporate tax rates, retain some popular exemptions and, among other things, address Internet gambling.

The proposal, unveiled Tuesday, seeks to simplify the tax code, keep down rates, continue a set of tax cuts in place now for the middle class and set 24 percent as the top corporate income tax rate. The bill preserves certain credits and deductions, including the deduction for mortgage interest paid and charitable contributions, and credits for children and earned income.

It would eliminate the alternative minimum tax. It also appears to revive previous proposals to replace current individual retirement accounts with a Retirement Savings Account and Lifetime Savings Account into which a married couple could contribute up to $14,000 a year.

Small businesses, or those with gross receipts of up to $1 million, would be able to expense all equipment and inventory costs in a single tax year.

The only mention of credit unions is in the bill’s section on gambling. The bill addresses withholding of tax from gambling winnings and then proceeds to address implementation of the Internet Gambling Regulation, Consumer Protection and Enforcement Act and protecting financial transaction providers from liability for “engaging in financial activities and transactions” for licensed persons.

The Internet gambling measure, offered to replace the Unlawful Internet Gambling Enforcement Act, was introduced last May as H.R. 2267 and is supported by NAFCU. The bill garnered its 64th and 65th cosponsors last month.

NAFCU opposed implementation of UIGEA, which essentially puts credit unions in the position of policing members’ online transactions for signs of illegal betting. Last November, Treasury and the Federal Reserve heeded industry concerns, and those expressed by lawmakers, in extending the compliance deadline for implementing rules until June 1 of this year.