RALEIGH, N.C. — North Carolina state Rep. Keith Kidwell is advocating for a bill to allow gamblers to deduct their losses from state taxes, aiming to alleviate the financial burden of the state’s current tax rules on gambling winnings.
According to WRAL, North Carolina taxes gross gambling income without allowing deductions for losses, meaning gamblers must pay state taxes on their winnings even if their overall gambling activities result in a net loss.
The proposed bill, supported by Kidwell and state Rep. Erin Pare, seeks to change this by permitting gambling losses to be itemized deductions, aligning state tax rules more closely with federal guidelines.
“He wins about $300,000 every year,” Kidwell said of a client. “He also loses about $300,000 every year. ... But at the end of the day, he paid over $20,000 in taxes to the state of North Carolina for money he literally did not have.”
Rev. Mark Creech, a longtime opponent of gambling-related bills, argued, “By allowing taxpayers to deduct their gambling losses, the bill reduces the immediate financial impact of losing money.”
According to WRAL, the bill would only apply to gamblers who itemize their taxes, excluding those who take the standard deduction. This means that only individuals who gamble extensively enough to benefit from itemizing would see a change in their tax obligations.
Despite bipartisan support in the past, a similar bill filed by Pare in 2024 failed to pass the legislature. Concerns remain about the potential financial impact on the state’s tax revenue, with estimates suggesting North Carolina could miss out on $20 million or more if the bill is enacted.
The debate over the bill highlights the tension between addressing financial fairness for gamblers and concerns about the social implications of gambling. As the legislative session continues, the bill’s supporters face the challenge of convincing both fiscal and social conservatives of its merits.
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