House Bill 14, which would permit gamblers to deduct their losses from state income taxes, is now making headway in the North Carolina House. Despite criticism, the bill was recently passed by a House committee and will now be reviewed further by the House Finance Committee.
The burgeoning gaming business in North Carolina is the driving force behind this legislation. Over $6 billion has been wagered since internet sports betting was legalized in March 2024. However, due to present state tax legislation, gamblers are not allowed to deduct losses and must pay taxes on all earnings.
While federal tax law allows deductions for losses up to the amount of winnings, North Carolina does not offer the same benefit. House Bill 14 seeks to change that by allowing deductions for gambling losses—but only up to the amount won. This ensures that no one claims a net loss as a tax benefit.
Supporters Emphasize Fairness, Opponents Warn of Risks
The bill’s sponsor, Rep. Keith Kidwell, a well-known opponent of gambling, emphasized that the goal of the proposal is tax equity rather than gambling promotion. He maintained that taxing gains from gambling without permitting loss deductions results in an unjust financial burden.
The legislation is also supported by Representatives Erin Paré and Bryan Cohn, who claim that bringing state tax laws into compliance with federal requirements would make it easier for residents of North Carolina to file their taxes. According to Rep. Cohn, the bill’s argument for tax equality is strengthened by conformity with federal standards.
However, opposition remains strong. Reverend Mark Creech, a lobbyist for the conservative group Return America, criticized the bill as a potential “gift to the gambling industry.” He expressed concerns that the deductions could encourage more gambling, particularly among problem gamblers, ultimately benefiting operators at the public’s expense.
A major concern surrounding the bill is its potential impact on state revenue. Lawmakers have yet to receive official projections on how much tax revenue North Carolina could lose if the measure is enacted. Given the billions wagered since online sports betting launched, critics argue that the financial impact could be significant, potentially affecting state-funded programs.
House Bill 14 has already passed the House Commerce and Economic Development Committee. It now awaits a hearing in the House Finance Committee before potentially advancing to a full House vote. If approved, the bill will then move to the State Senate for further consideration.
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