UIGEA Era Taxation Issues

With the rules being as unclear as they currently are, everybody is up in arms over a debate over whether or not online slots casino affiliate companies should be taxed. Right now, the debate is centered in New York, where Amazon.com is fighting to protect its currently non taxable affiliates, since the state is pushing to tax all affiliates as if they were part of the actual online retailer itself and logically then, subject to taxation.

In a similar debate, Californians will be deciding if veterinarian services should be taxed, although services are usually exempt, it is apparently in vogue to consider doggie care a tangible product, as well as human medical expenses, they are looking to add a tax there too. It seems that everybody is trying to find new things to tax, in order to squeeze a revenue out of somewhere in these tough times. However, anybody will tell you that right now is now the time to start taxing the citizens of an ailing county with an ailing economy. It’s like beating somebody up when they’re down.

Many people are also gambling more because of the chance that they might win some money. The idea that even that pastime should be taxed is preposterous, because the state already is receiving revenue for state run gambling.

Furthermore the taxation issue also raises the question of authority and jurisdiction with online legislation and regulation. Who decides what rules apply to whom? Will it be based on location? If so, how will the government regulate and monitor that? Either way, where will it get the funding to post watchdogs that will enforce the laws? Another major issue is that the decision now in New York will set the stage for future decision making, and has the potential to decide the future of online slots in the United States.

Back to January 2009 Archive.