The Legislature’s Losing Bet

May 6th, 2009

Every session the Legislature’s tax-writing minions try to keep the federal tax code and the state tax code in line. If something is a federal deduction it is also a state deduction.

But this year, to chase a few extra bucks, the Legislature is repealing the deduction of wagering loses for state income tax purposes (HB 1495).

Don’t bet this will back-fill the state’s $2 billion shortfall, because according to the state tax department it will only pick up $300,000.

State Tax director Kurt Kawafuchi notes that “a taxpayer can only deduct wagering losses to the extent of gains, it is important to note that a taxpayer can only capitalize on gambling losses for tax purposes if the person also wins.”

The Tax Foundation of Hawaii notes “While the adoption of this measure would prohibit Hawaii taxpayers from deducting the gambling losses, it is questionable whether the amount of revenue generated from its enactment will result in a windfall.”

The bill, sponsored by Reps. Pono Chong and Blake Oshiro, has passed final reading in the House and is up for a Thursday vote in the Senate.

One Response to “The Legislature’s Losing Bet”

  1. Doug:

    Richard you hit the nail right on the head, band of monkyes is right!

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