N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 1351: Tax on gaming revenues; permissive supplemental fee

§ 1351. Tax on gaming revenues; permissive supplemental fee. * 1. (a)

For a gaming facility in zone two, there is hereby imposed a tax on

gross gaming revenues. The amount of such tax imposed shall be as

follows; provided, however, should a licensee have agreed within its

application to supplement the tax with a binding supplemental fee

payment exceeding the aforementioned tax rate, such tax and supplemental

fee shall apply for a gaming facility:

(1) in region two, forty-five percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources.

(2) in region one, thirty-nine percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources.

(3) in region five, thirty-seven percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources; provided however, that in the Tioga county portion of region

five, for the period of fiscal years two thousand twenty-four, two

thousand twenty-five, and two thousand twenty-six, during which both of

the following criteria are met (i) any facility's tax rate is adjusted

by the commission pursuant to paragraph (b) of this subdivision, and

(ii) a vendor track that is located within Oneida county, within fifteen

miles of a Native American class III gaming facility maintains at least

seventy percent of full-time equivalent employees as they employed in

the year two thousand sixteen, the tax rate on facilities located in the

Tioga county portion of region five shall be thirty percent of gross

gaming revenue from slot machines, and ten percent of gross gaming

revenue from all other sources. Any money realized from the decrease in

their slot machine tax rate shall only be used by the facility to offer

childcare for employees, food and beverage conversion, any other project

or use that improves the economic infrastructure of the facility, or for

rehiring laid-off workers, hiring new workers or retaining current

workers at the facility. The facility shall provide an initial report to

the governor, the speaker of the assembly, the temporary president of

the senate, and the commission detailing the projected use of funds

resulting from such tax adjustment and a plan that prescribes the manner

in which the licensed gaming facility receiving the reduction in its

slot machine tax rate will rebuild their economic infrastructure through

the offering of childcare for employees, food and beverage conversion,

or any other project or use that improves the economic infrastructure of

the facility, or for rehiring laid-off workers, hiring new workers, or

retaining current workers at the facility or the creation of new jobs.

Such plan shall also clearly establish quarterly and annual employment

goals of increasing full-time employees. The facility shall be subject

to the conditions set forth in clause (ii) of subparagraph three of

paragraph (b) of this subdivision. Such initial report and accompanying

plan shall be due ninety days after such reduction goes into effect.

Thereafter, an annual report shall be made to the governor, the speaker

of the assembly, the temporary president of the senate, and the

commission detailing actual use of the funds resulting from such tax

adjustment. Such report shall include, but not be limited to, any impact

on employment levels since receiving the funds, an accounting of the use

of such funds, any other measures implemented to improve the financial

stability of the gaming facility, and any other information as deemed

necessary by the commission. Such report shall be due no later than the

first day of the fourth quarter in each year such tax rate has been

granted.

(b) (1) Notwithstanding the rates in paragraph (a) of this

subdivision, a gaming facility may petition the commission to lower the

tax rate applicable to its slot machines to no lower than thirty

percent. In analyzing such request, the commission shall evaluate the

petition using the following criteria:

(i) the ability of the licensee to satisfy the license criterion of

financial stability absent the tax rate reduction;

(ii) a complete examination of all financial projections, as well as

gaming revenues generated for the prior annual period;

(iii) the licensee's intended use of the funds resulting from a tax

adjustment;

(iv) the inability of the operator to remain competitive under the

current tax structure;

(v) positions advanced by other gaming operators in the state in

response to the petition;

(vi) the impact on the competitive landscape;

(vii) other economic factors such as employment and the potential

impact upon other businesses in the region; and

(viii) the public interest to be served by a tax adjustment, including

the impact upon the state in the event the operator is unable to remain

financially viable.

(2) The commission shall report their recommendation solely based on

the criteria listed in subparagraph one of this paragraph to the

director of the division of budget who will make a final approval.

(3) (i) As a condition of the lower slot machine tax rate, such gaming

facility shall provide an initial report to the governor, the speaker of

the assembly, the temporary president of the senate, and the commission

detailing the projected use of funds resulting from such tax adjustment

and a plan that prescribes the manner in which the licensed gaming

facility potentially receiving the reduction in its slot machine tax

rate will rebuild their economic infrastructure through the rehiring of

laid-off employees or the creation of new jobs. Such plan shall also

clearly establish quarterly and annual employment goals of increasing

full-time employees. Such initial report and accompanying plan shall be

due at the time a facility is granted a tax adjustment. Thereafter, an

annual report shall be made to the governor, the speaker of the

assembly, the temporary president of the senate, and the commission

detailing actual use of the funds resulting from such tax adjustment.

Such report shall include, but not be limited to, any impact on

employment levels since receiving the funds, an accounting of the use of

such funds, any other measures implemented to improve the financial

stability of the gaming facility, any relevant information that helped

in the determination of such slot tax rate reduction, and any other

information as deemed necessary by the commission. Such report shall be

due no later than the first day of the fourth quarter after such tax

rate has been granted.

(ii) (A) At the conclusion of each year, a licensed gaming facility

shall provide an affirmation in writing to the commission stating the

employment goal in clause (i) of this subparagraph or subparagraph three

of paragraph (a) of this subdivision, was either met or not met as

described in the initial report. If the licensed gaming facility is

found to have not adhered to the plan by the commission, then the

applicable slot tax rate shall be adjusted at the discretion of the

commission as follows:

1. If the actual employment number is more than fifty percent less

than the employment goal, then the slot tax rate shall be increased by

ten percentage points.

2. If the actual employment number is more than forty percent less

than the employment goal, then the slot tax rate shall be increased by

eight percentage points.

3. If the actual employment number is more than thirty percent less

than the employment goal, then the slot tax rate shall be increased by

six percentage points.

4. If the actual employment number is more than twenty percent less

than the employment goal, then the slot tax rate shall be increased by

four percentage points.

5. If the actual employment number is more than ten percent less than

the employment goal, then the slot tax rate shall be increased by two

percentage points.

(B) Such finding and the reasoning thereof shall occur no later than

thirty days following submission of the written affirmation.

(iii) A licensed gaming facility may petition the commission to lower

the tax rate applicable to its slot machines to no lower than thirty

percent no more than once annually after the effective date of the

chapter of the laws of two thousand twenty-one which amended this

subdivision. A licensed gaming facility may request a revision to its

plan in its initial report due to unforeseen circumstances.

* NB Effective until April 1, 2026

* 1. (a) For a gaming facility in zone two, there is hereby imposed a

tax on gross gaming revenues. The amount of such tax imposed shall be as

follows; provided, however, should a licensee have agreed within its

application to supplement the tax with a binding supplemental fee

payment exceeding the aforementioned tax rate, such tax and supplemental

fee shall apply for a gaming facility:

(1) in region two, forty-five percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources.

(2) in region one, thirty-nine percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources.

(3) in region five, thirty-seven percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources.

(b) (1) Notwithstanding the tax rates on gross gaming revenue from

slot machines provided in paragraph (a) of this subdivision, for the

period of April first, two thousand twenty-six through June thirtieth,

two thousand thirty-one, each gaming facility in zone two shall continue

to be subject to the same tax rate on gross gaming revenue from slot

machines as was imposed in the preceding fiscal year.

(2) As a condition of the lower slot machine tax rate, the licensed

gaming facility must:

(i) be current on all statutory obligations to the state or have

entered into and be in compliance with a repayment agreement with the

state. If the commission, in its sole discretion, determines that a

gaming facility has not adhered to this condition for any such time

period, the gaming facility shall forfeit this lower slot machine tax

rate for such time period.

(ii) have provided the initial report to the governor, the speaker of

the assembly, the temporary president of the senate, and the commission

as required pursuant to subdivision one-b of this section.

(3) (i) Each gaming facility shall provide an annual fiscal report to

the governor, the speaker of the assembly, the temporary president of

the senate, director of the division of budget and the commission

detailing actual use of the funds resulting from the lower slot machine

tax rate. Such report shall include, but not be limited to, any impact

on employment levels since receiving the lower slot machine tax rate, an

accounting of the use of such funds, any other measures implemented to

improve the financial stability of the gaming facility and any other

information as deemed necessary by the commission. Such report shall be

due no later than January first of each year and shall be posted on the

commission website.

(ii) At the conclusion of each year, a licensed gaming facility shall

provide an affirmation in writing to the commission stating the

employment goal in subdivision one-b of this section was either met or

not met as described in the initial report. If the licensed gaming

facility is found to have not adhered to the plan by the commission,

then the applicable slot tax rate may be adjusted at the discretion of

the commission as follows:

(A) If the actual employment number is more than fifty percent less

than the employment goal, then the slot tax rate shall be increased by

ten percentage points.

(B) If the actual employment number is more than forty percent less

than the employment goal, then the slot tax rate shall be increased by

eight percentage points.

(C) If the actual employment number is more than thirty percent less

than the employment goal, then the slot tax rate shall be increased by

six percentage points.

(D) If the actual employment number is more than twenty percent less

than the employment goal, then the slot tax rate shall be increased by

four percentage points.

(E) If the actual employment number is more than ten percent less than

the employment goal, then the slot tax rate shall be increased by two

percentage points.

(iii) Such finding and the reasoning thereof shall occur no later than

thirty days following submission of the written affirmation.

* NB Effective April 1, 2026 until July 1, 2031

* 1. (a) For a gaming facility in zone two, there is hereby imposed a

tax on gross gaming revenues. The amount of such tax imposed shall be as

follows; provided, however, should a licensee have agreed within its

application to supplement the tax with a binding supplemental fee

payment exceeding the aforementioned tax rate, such tax and supplemental

fee shall apply for a gaming facility:

(1) in region two, forty-five percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources.

(2) in region one, thirty-nine percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources.

(3) in region five, thirty-seven percent of gross gaming revenue from

slot machines and ten percent of gross gaming revenue from all other

sources; provided however, that in the Tioga county portion of region

five, for the period of fiscal years two thousand twenty-four, two

thousand twenty-five, and two thousand twenty-six, during which both of

the following criteria are met (i) any facility's tax rate is adjusted

by the commission pursuant to paragraph (b) of this subdivision, and

(ii) a vendor track that is located within Oneida county, within fifteen

miles of a Native American class III gaming facility maintains at least

seventy percent of full-time equivalent employees as they employed in

the year two thousand sixteen, the tax rate on facilities located in the

Tioga county portion of region five shall be thirty percent of gross

gaming revenue from slot machines, and ten percent of gross gaming

revenue from all other sources. Any money realized from the decrease in

their slot machine tax rate shall only be used by the facility to offer

childcare for employees, food and beverage conversion, any other project

or use that improves the economic infrastructure of the facility, or for

rehiring laid-off workers, hiring new workers or retaining current

workers at the facility. The facility shall provide an initial report to

the governor, the speaker of the assembly, the temporary president of

the senate, and the commission detailing the projected use of funds

resulting from such tax adjustment and a plan that prescribes the manner

in which the licensed gaming facility receiving the reduction in its

slot machine tax rate will rebuild their economic infrastructure through

the offering of childcare for employees, food and beverage conversion,

or any other project or use that improves the economic infrastructure of

the facility, or for rehiring laid-off workers, hiring new workers, or

retaining current workers at the facility or the creation of new jobs.

Such plan shall also clearly establish quarterly and annual employment

goals of increasing full-time employees. The facility shall be subject

to the conditions set forth in clause (ii) of subparagraph three of

paragraph (b) of this subdivision. Such initial report and accompanying

plan shall be due ninety days after such reduction goes into effect.

Thereafter, an annual report shall be made to the governor, the speaker

of the assembly, the temporary president of the senate, and the

commission detailing actual use of the funds resulting from such tax

adjustment. Such report shall include, but not be limited to, any impact

on employment levels since receiving the funds, an accounting of the use

of such funds, any other measures implemented to improve the financial

stability of the gaming facility, and any other information as deemed

necessary by the commission. Such report shall be due no later than the

first day of the fourth quarter in each year such tax rate has been

granted.

(b) (1) Notwithstanding the rates in paragraph (a) of this

subdivision, a gaming facility may petition the commission to lower the

tax rate applicable to its slot machines to no lower than thirty

percent. In analyzing such request, the commission shall evaluate the

petition using the following criteria:

(i) the ability of the licensee to satisfy the license criterion of

financial stability absent the tax rate reduction;

(ii) a complete examination of all financial projections, as well as

gaming revenues generated for the prior annual period;

(iii) the licensee's intended use of the funds resulting from a tax

adjustment;

(iv) the inability of the operator to remain competitive under the

current tax structure;

(v) positions advanced by other gaming operators in the state in

response to the petition;

(vi) the impact on the competitive landscape;

(vii) other economic factors such as employment and the potential

impact upon other businesses in the region; and

(viii) the public interest to be served by a tax adjustment, including

the impact upon the state in the event the operator is unable to remain

financially viable.

(2) The commission shall report their recommendation solely based on

the criteria listed in subparagraph one of this paragraph to the

director of the division of budget who will make a final approval.

(3) (i) As a condition of the lower slot machine tax rate, such gaming

facility shall provide an initial report to the governor, the speaker of

the assembly, the temporary president of the senate, and the commission

detailing the projected use of funds resulting from such tax adjustment

and a plan that prescribes the manner in which the licensed gaming

facility potentially receiving the reduction in its slot machine tax

rate will rebuild their economic infrastructure through the rehiring of

laid-off employees or the creation of new jobs. Such plan shall also

clearly establish quarterly and annual employment goals of increasing

full-time employees. Such initial report and accompanying plan shall be

due at the time a facility is granted a tax adjustment. Thereafter, an

annual report shall be made to the governor, the speaker of the

assembly, the temporary president of the senate, and the commission

detailing actual use of the funds resulting from such tax adjustment.

Such report shall include, but not be limited to, any impact on

employment levels since receiving the funds, an accounting of the use of

such funds, any other measures implemented to improve the financial

stability of the gaming facility, any relevant information that helped

in the determination of such slot tax rate reduction, and any other

information as deemed necessary by the commission. Such report shall be

due no later than the first day of the fourth quarter after such tax

rate has been granted.

(ii) (A) At the conclusion of each year, a licensed gaming facility

shall provide an affirmation in writing to the commission stating the

employment goal in clause (i) of this subparagraph or subparagraph three

of paragraph (a) of this subdivision, was either met or not met as

described in the initial report. If the licensed gaming facility is

found to have not adhered to the plan by the commission, then the

applicable slot tax rate shall be adjusted at the discretion of the

commission as follows:

1. If the actual employment number is more than fifty percent less

than the employment goal, then the slot tax rate shall be increased by

ten percentage points.

2. If the actual employment number is more than forty percent less

than the employment goal, then the slot tax rate shall be increased by

eight percentage points.

3. If the actual employment number is more than thirty percent less

than the employment goal, then the slot tax rate shall be increased by

six percentage points.

4. If the actual employment number is more than twenty percent less

than the employment goal, then the slot tax rate shall be increased by

four percentage points.

5. If the actual employment number is more than ten percent less than

the employment goal, then the slot tax rate shall be increased by two

percentage points.

(B) Such finding and the reasoning thereof shall occur no later than

thirty days following submission of the written affirmation.

(iii) A licensed gaming facility may petition the commission to lower

the tax rate applicable to its slot machines to no lower than thirty

percent no more than once annually after the effective date of the

chapter of the laws of two thousand twenty-one which amended this

subdivision. A licensed gaming facility may request a revision to its

plan in its initial report due to unforeseen circumstances.

* NB Effective July 1, 2031

1-a. For a gaming facility licensed pursuant to title two-A of this

article, there is hereby imposed a tax on gross gaming revenues with the

rates to be determined by the gaming commission pursuant to a

competitive bidding process as outlined in title two-A of this article;

provided however that the tax rate on gross gaming revenue from slot

machines shall be no less than twenty-five percent and the tax rate on

gross gaming revenue from all other sources shall be no less than ten

percent.

* 1-b. As a condition of the lower slot machine tax rate taking effect

April first, two thousand twenty-six, pursuant to subdivision one of

this section, the licensed gaming facility must provide an initial

report to the governor, the speaker of the assembly, the temporary

president of the senate, and the commission clearly detailing the

established quarterly and annual employment goals of increasing

full-time employees for each year that the facility will receive a lower

tax rate and any substantial changes to the initial plan. This report is

due no later than January first, two thousand twenty-six and shall be

posted on the commission's website.

* NB Repealed July 1, 2031

2. Permissible deductions. (a) A gaming facility may deduct from gross

gaming revenue the amount of approved promotional gaming credits issued

to and wagered by patrons of such gaming facility. The amount of

approved promotional credits shall be calculated as follows:

(1) for the period commencing on April first, two thousand eighteen

and ending on March thirty-first, two thousand twenty-one, an aggregate

maximum amount equal to nineteen percent of the base taxable gross

gaming revenue amount during the specified period;

(2) for the period commencing on April first, two thousand twenty-one

and ending on March thirty-first, two thousand twenty-three, a maximum

amount equal to nineteen percent of the base taxable gross gaming

revenue amount for each fiscal year during the specified period; and

(3) for the period commencing on April first, two thousand

twenty-three and thereafter, a maximum amount equal to fifteen percent

of the base taxable gross gaming revenue amount for each fiscal year

during the specified period.

(b) For purposes of paragraph (a) of this subdivision, "base taxable

gross gaming revenue amount" means that portion of gross gaming revenue

not attributable to deductible promotional credit.

(c) Any tax due on promotional credits deducted during the fiscal year

in excess of the allowable deduction shall be paid within thirty days

from the end of the fiscal year.

(d) Only promotional credits that are issued pursuant to a written

plan approved by the commission as designed to increase revenue at the

facility may be eligible for such deduction. The commission, in

conjunction with the director of the budget, may suspend approval of any

plan whenever they jointly determine that the use of the promotional

credits under such plan is not effective in increasing the amount of

revenue earned.