Proposal calls for imposing tax on out-of-state gamblers

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A state lawmaker wants to impose Connecticut's income tax on people from other states who win money from slot machines at Foxwoods Resort Casino and the Mohegan Sun.

Rep. Shawn Johnston, D-Putnam, said the measure could produce $4 million to $8 million in revenue for the state, which is facing a two-year, $1 billion budget deficit.

"Why should we walk away from this revenue," said Johnston, who is trying to convince leaders of the legislature's Finance Revenue and Bonding Committee to propose the tax in an amendment to existing legislation.

When Connecticut residents win $1,200 or more from a slot machine, they must pay income tax. People who win money from table games are exempt from taxes because those winnings are too difficult to track, state officials say.

Connecticut residents who won money at the casinos paid $1.9 million in state taxes in 1998, $2.4 million in 1999 and $2.6 million in 2000, according to the state Department of Revenue Services. Figures from 2001 were not yet available.

Winners of casino games are supposed to claim the winnings on their federal income tax forms and pay state income tax to their own state.

Under Johnston's bill, an out-of-state winner may have to pay taxes in two states.

"To me, it does not seem fair that a Connecticut resident would be responsible for winnings at a casino but an out-of-state winner would not," Johnston said.

--Associated Press