Senate approves gaming tax increase

Posted: Friday, May 16, 2003

JUNEAU (AP) The Senate approved a measure Thursday to increase the tax on the state's pull-tab industry.

But it also amended the bill to prohibit municipalities from taxing pull-tabs. Sen. Con Bunde, R-Anchorage proposed the amendment.

Bunde said very few communities impose the tax on pull-tabs and the amendment was meant to allow some charities the ability to continue to receive pull-tab revenues.

Sen. Kim Elton, D-Juneau, argued against the amendment. The state should not prohibit local governments from raising revenues by taxing pull-tabs, Elton said. Juneau uses revenues it receives from pull-tab taxes to aid nonprofits, Elton said.

Senate Bill 102 would impose a 15 percent tax on the ideal net receipts from pull-tabs. Ideal net is the anticipated income from pull-tabs after winnings are paid out.

The measure raises only about $9 million, which was far less than earlier proposed by Gov. Frank Murkowski.

Murkowski, who has expressed criticism of how the industry shares revenues with charities, had earlier asked for a tax on gross earnings that would shield charities from the lost revenues and return about $22 million for the state.

The state's pull-tab industry generated about $274 million in revenues in 2001, netting about $23 million for charities and other organizations. About $214 million was paid out in prizes and the remainder was spent on taxes and expenses.

Alaska receives about $2 million from taxes on pull-tabs and about 12 local governments draw sales tax revenues from the parlors.

Murkowski had originally proposed an 8 percent tax on gross receipts as part of an overall $113 million package of revenue and tax measures to help close the state's budget shortfall.

Murkowski has complained about how gambling revenues are shared with charities, pointing out in budget materials that they received less than 10 percent of the take in 2001.

Senate Bill 102 was approved by a vote of 12-8, with all Democrats voting against the measure.

Under a procedural move, the bill could come for a vote again today. It would then go to the House for consideration.

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