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BPAA State Policy Update - September 21

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TAX

  • Maine legislators reached and enacted a mixed-bag compromise response to the federal tax-cut bill. The compromise eschews the most extreme versions that would have exacerbated the costly and regressive nature of the federal bill and includes some property tax help for homeowners and renters, but still reduces total revenues at a time when building up reserves and boosting investments would be more prudent.
  • South Dakota legislators held a brief special session to ensure the state, which was the petitioner in the Wayfair Supreme Court case on online sales taxes, will be able to collect those revenues beginning in November. 
  • Colorado and Wisconsin also joined the list of states requiring online retailers to collect sales taxes. 
  • The Minnesota Department of Revenue announced that taxpayers will be able to claim the larger of their state standard or itemized deductions regardless of what they claimed on their federal taxes for tax year 2018. This will prevent some taxpayers from a state tax hike if they benefit from new higher standard deductions on their federal taxes. 
  • Lawmakers in Nebraska are meeting this summer to try to find agreement on perennial property tax and school funding issuesSome interests in the state are focused on increasing the state’s reliance on regressive sales taxes to pay for property tax reductions, but actual Nebraskans recently polled prefer the opposite: investing in the middle class by raising taxes on wealthy individuals and corporations. 
  • Lawmakers in Wyoming, looking to diversify their revenue base, reexplore the possibility of instituting a state corporate income tax.  
  • The majority of New Jersey residents polled would support legalized recreational cannabis if the revenue went toward property tax reductions. 
  • Texas Gov. Greg Abbott supports amending the state’s constitution to ban an income tax. The state does not currently levy an income tax but is authorized to do so with a majority vote by Texas voters. Amending the constitution to prohibit an income tax requires 2/3rds support from both legislative chambers and a majority vote from voters. 
  • South Dakota school districts are increasingly using “opt-outs” to raise needed revenue in the face of stagnating state aid.

 

FOOD & BEVERAGE

  • Pennsylvania: First Draft: Brewers boiling over new beer tax: Pennsylvania is changing the way breweries collect and remit tax on the beer they sell to customers, and local brewers aren't happy about it. The tax change affects breweries that sell beer to customers on-site in a taproom or to-go. Previously, brewery beer sales were exempt from sales tax. Starting Jan. 1, breweries will have to start charging a 6 percent sales tax. The change is not the result of new legislation or Pennsylvania Liquor Control Board policy, though. It came about through a decision by the state Department of Revenue, said Ted Zeller, an Allentown attorney who specializes in liquor law. Zeller, who is the general counsel for Brewers of Pennsylvania, the state's official brewers guild, said the department issued a ruling in 2015 that has widely been interpreted as exempting breweries from having to collect and remit sales tax for direct sales to consumers at their facilities, whether that was for a pint on premises or a six-pack, case or keg to-go. Read full story here: http://www.readingeagle.com/weekend/article/brewers-boiling-over-new-beer-tax
  • Wisconsin
    • Wisconsin Agricultural Tourism Association Responds to Tavern League Claims: As part of the effort by the Wisconsin Tavern League (WTL) to get the state legislature to crack down on competition from agricultural entertainment venues (AEVs), commonly referred to as “wedding barns,” the League has issued a series of talking points to influence the Legislative Council Study Committee on Alcohol Beverages Enforcement. The Alcohol Beverages Enforcement committee, heavily weighted with Tavern League representation, is considering recommending legislation that would regulate these agricultural tourism venues from Madison, an unusual step to limit competition for a favored industry. The committee is scheduled to meet next on September 26. Read the following talking points written by Pete Madland, the Executive Director of the Tavern League and a member of the Alcohol Beverages Enforcement committee.
  • California Voters Could Undo Soda Tax Ban With 2-Cent Tax:
    • California’s doctors and dentists want voters to undo a 12-year ban on soda taxes enacted in June and approve a statewide two-cent-per-ounce tax on soda and other sugary drinks in 2020. Most of the $2 billion to $3 billion a year in tax revenue would go to existing medical and dental programs to prevent or treat diseases linked to sugar-sweetened drinks. The California Medical Association and California Dental Association are backing the measure. Soda taxes are popular and effective in reducing consumption and improving public health, especially among children, CMA Chief Executive Officer Dustin Corcoran said in a Sept. 6 prepared statement. “That’s why the health provider community is united behind giving California voters the long-overdue opportunity to pass a statewide soda tax in 2020,” he said. The CDA said if the state uses the revenue for existing health care programs such as Medicaid, it could double its money by receiving federal matching funds.
    • The proposed tax ballot measure would also allow local governments to enact their own soda taxes in addition to the statewide tax. Local soda taxes got their start in 2014, when voters in Berkeley, Calif., approved a penny-per-ounce tax on sugar-sweetened beverages.
    • Other states: While state tax and health-warning-label bills aimed at sugary beverages have failed in the California Legislature in recent years, local taxes have since passed in the California cities of San Francisco, Oakland, and Albany, as well as in Philadelphia, Seattle, and Boulder, Colo. Cook County, Ill., enacted and then repealed a soda tax, while Arizona and Michigan have enacted statewide bans on local soda taxes.
    • New York: Former New York Mayor Michael Bloomberg, a long-time critic of the health effects of sweetened beverages, favors Philadelphia’s soda tax and has paid for advertising that supports it and similar taxes. Bloomberg Tax is operated by entities controlled by Michael Bloomberg.
  • California: Will Soda Industry have Allies in Fight Against New Tax Proposal?: Doctors and dentists filed a tax increase initiative on sugary drinks for the 2020 ballot. Naturally, the soda industry is opposed. The question is will they have allies in this fight to oppose the measure if it makes the ballot? Follow the twisting path of the battle over soda taxes to understand the reason this question is fairly asked. Business and taxpayer groups were working with the soda industry to push a ballot initiative for the 2018 election to strengthen the two-thirds vote requirement on local tax measures. Each organization had reasons for supporting the initiative and they were working in unison on the measure. Since a number of municipalities already passed a soda tax and others threatened to do so, the main funding for this measure to make it harder to raise taxes came from the soda industry. Read more at the Fox and Hounds Daily.

 

SPORTS BETTING

  • Proskauer – Blockchain and the Law: Blockchain and sports gambling seem to be a natural fit. Sports gambling has been at the forefront of the news cycle since the U.S. Supreme Court struck down a federal statute that banned states from authorizing sports gambling in Murphy v. NCAA. Since then, New Jersey, Delaware, Mississippi and West Virginia have passed laws allowing wagering on the results of certain sporting events. New York, Pennsylvania and Rhode Island are quickly moving towards the legalization of sports gambling and a number of other states are expected to follow.
    • Blockchain has already proven to be a reliable partner for online casino gambling. In the past few years, a fruitful relationship between online casino gambling platforms and blockchain technologies has developed. Satoshi Dice, which first gained popularity in 2012, allows users to gamble their cryptocurrency through a blockchain-based, peer-to-peer dice prediction game. Virtue Poker, a ConsenSys-backed, decentralized poker platform, uses blockchain to ensure that casino operators (the “house”) cannot tamper with the integrity of a wager. And ZeroEdge uses smart contracts and blockchain to eliminate the “house” fee that is typically passed on to gamblers.
    • Thus, given the opening for sports gambling, it is easy to imagine a relationship forming between sports betting and blockchain technologies. Blockchain may allow casino operators and other entities to reduce transaction fees, speed up payment processing, increase gambler anonymity and flag problematic transactions. Some sports betting entities, such as daily fantasy sports behemoth FanDuel, have already begun exploring such opportunities.
    • However, even within states that have already legalized sports gambling, there are still a number of factors to consider for those aiming to utilize blockchain technologies within their sports betting platforms. Read the rest of the story here.
  • New Jersey Sports Betting Generates Nearly $100 Million In August Wagers: Sports bettors in New Jersey placed more than $95 million in total wagers during August across retail and online channels. Of that amount, casinos and racetracks held about $9.2 million in revenue.
    • Those numbers come from the NJ Division of Gaming Enforcement, which released its monthly report on Wednesday.
    • It’s the third revenue update since NJ sports betting went live in June, and the first with mobile and online sports wagering factored in. That segment performed quite well, as expected, generating more than $21 million in handle. Read more here.
  • Bloomberg Government reports, Sports Betting Bill Debuts in Nation’s Capital: The nation’s capital could become the next jurisdiction to legalize sports betting. District of Columbia council member Jack Evans (D) introduced a bill Sept. 18 that would allow bets and levy a 10 percent tax on gross revenue from wagers. The bill is the latest proposal since the U.S. Supreme Court cleared the way for states to allow bets on sports in its May ruling in Murphy v. NCAA, which repealed the federal Professional and Amateur Sports Protection Act of 1992 (PASPA). That law had prohibited states from “authorizing” gambling related to professional and amateur sports leagues. “Today, we take the first steps towards capturing this exciting new stream of revenue, instead of watching District resident dollars fill the coffers of other jurisdictions,” Evans said in a news release. He said the city should take advantage of its ability to act before Virginia or Maryland and create a thriving betting market that draws bettors to D.C. Joe Florio, Evans’ communications director, told Bloomberg Tax Sept 19 he is confident the bill will pass by December. It must go through a council hearing, which will take place in October, he said. 
  • Legal Sports Report: West Virginia Sports Betting Shakeup Is ‘Disturbing The Hell Out Of’ Lawmakers: West Virginia was the first state to pass a law to legalize sports betting in 2018 and the fourth outside of Nevada to launch a state-regulated industry. WV sports betting kicked off at Hollywood Casino at the tail end of August, and The Greenbrier recently opened its FanDuel Sportsbook, too. Despite a smooth and profitable start, some troubling regulatory developments are stirring beneath the surface. Alan Larrick, the former director of the WV Lottery Commission, departed suddenly and without explanation just two days after the soft-launch at Hollywood. More recently, it’s become apparent that managing general counsel Danielle Boyd is also missing from her post. Acting Director Doug Buffington had the chance to provide updates before the Joint Standing Committee on Finance on Monday, and his testimony did not go over well with some lawmakers. Read more here.

 

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