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2003 House Bill 4556

Public Act 21 of 2003

  1. Introduced by Rep. Steve Bieda (D) on April 10, 2003, to impose the same income tax liability on the casino and horse race betting winnings of non-residents as is currently imposed upon Michigan residents. This bill is one of many authorizing “revenue enhancements” (tax and fee increases) which Gov. Jennifer Granholm has proposed to close a gap between state spending and expected revenue in the Fiscal Year 2003-2004 budget.
    • Referred to the House Tax Policy Committee on April 10, 2003.
    • Reported in the House on April 30, 2003, without amendment and with the recommendation that the bill pass.
  2. Passed 97 to 8 in the House on May 1, 2003.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the Senate on May 6, 2003.
    • Referred to the Senate Finance Committee on May 6, 2003.
    • Reported in the Senate on June 3, 2003, with the recommendation that the bill pass.
  4. Passed 34 to 4 in the Senate on June 5, 2003, to impose the same income tax liability on the casino and horse race betting winnings of non-residents as is currently imposed upon Michigan residents. This bill is one of many authorizing “revenue enhancements” which Gov. Jennifer Granholm has proposed to close a gap between state spending and expected revenue in the Fiscal Year 2003-2004 budget.
    Who Voted "Yes" and Who Voted "No"

  5. Signed by Gov. Jennifer Granholm on June 24, 2003.

Comments

Sen. Thomas' "no vote explanation"  by Admin003 on June 13, 2003 
Senator Thomas' statement is as follows:

I recognize, colleagues, that this is a revenue enhancement portion of the Governor's executive budget, and certainly, I am aware that we have to find at least $100 million of new revenue. I would submit to you that this is not an equity package, as it will be related to you. It will set up an unequal playing field for casinos that operate here within the state of Michigan--casinos that were voted on by all of the state of Michigan and that are regulated by this Legislature. The reality is this: Under current law, if you are an in-state resident or an out-of-state resident and you win over a certain dollar figure at a casino, that casino has to file a report to the IRS for your taxes. They do not withhold those taxes, but they file a report that you won that, and you are voluntarily requested to then pay that tax.

Under this legislation, the playing field actually is not leveled. Out-of-state winners at Michigan casinos would now have the same reporting requirement that in-state residents would have, yet they would also have a 4 percent tax automatically deducted off of their winnings. So this is not leveling the playing field. It is actually making it less competitive for out-of-state gamblers.

Now you may ask why that matters. Well, 20-30 percent of the revenue of these casinos that do happen to be located in Detroit are coming from out-of-state gamblers. Their major competitor is in Windsor, Ontario. Windsor, Ontario, markets their casino as having tax-free winnings. Any of us who see any billboard for Casino Windsor or any gaming enterprise in the province of Ontario know that they market tax-free. Other states around us market tax-free winnings with riverboat gambling. So we are putting the casinos in Detroit at a competitive disadvantage against their competitors. I don't think that's prudent. These casinos provide more than $100 million of revenue to the state of Michigan in taxes that they pay. They provide more that $100 million in revenue to the city of Detroit in taxes that they pay. Why would we want to take away their ability to pay tax back to the state?

This is not equity. This is setting up a separate taxing structure for folks who live out of state, and we've said time and again that we don't want to do that on out-of-state businesses that come in. So why would we want to do it on out-of-state tourists who come in? The tourists who come here are spending good dollars, and they're not just spending dollars in the casinos. They are spending it in the businesses that surround the casinos and the communities that surround the casinos. So the fiscal impact here is not as great as it has been represented by the Department of Treasury--as much as I hate to say it.

We heard testimony in committee that the $6.6 million in revenue Treasury estimates that they would receive off of this is actually more like $600,000, so their estimates are already off. So what happens then is that we create an inequitable situation for gaming enterprises that are based here in Michigan. We create a disincentive for out-of-state folks to come here when they can just go for an extra 20-minute drive to go to Windsor to gamble tax-free. In the end, we are going to lose gamers and revenue, so it is, in fact, a net loss for us, not a net gain. I think that if we really do want to raise revenue, there are much better ways to do it, and this is not the way to go. I would urge my colleagues to think very carefully about this.

The voters of the state of Michigan--the entire state of Michigan--voted to approve those three casinos in Detroit. They provide assets and resources for all of us--our schools, our roads, our towns, and our cities. Don't pull the legs out from under them and provide them this disadvantage against competition from Windsor.

doublespeak  by annrock on April 11, 2003 
So a" revenue enhancment" is a tax. Why not just be honest and tell the taxpayer? Did we ever think it might not be the best idea for Michigan to decry gambling and addiction and then promote it!!

2003 House Bill 4556  by admin on January 1, 2001 
Introduced in the House on April 10, 2003, to impose the same income tax liability on the casino and horse race betting winnings of non-residents as is currently imposed upon Michigan residents. This bill is one of many authorizing “revenue enhancements” (tax and fee increases) which Gov. Jennifer Granholm has proposed to close a gap between state spending and expected revenue in the Fiscal Year 2003-2004 budget

The vote was 97 in favor, 8 opposed and 4 not voting

(House Roll Call 93 at House Journal 34)

Click here to view bill details.

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