1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," providing for gaming privilege assessment; and
11establishing the Public Education Improvement Fund.

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
15the Tax Reform Code of 1971, is amended by adding an article to
16read:

17ARTICLE XVI-B.1

18gaming privilege assessment

19Section 1601-B.1. Scope.

20This article relates to assessments on net gambling income.

21Section 1602-B.1. Definitions.

1The following words and phrases when used in this article
2shall have the meanings given to them in this section unless the
3context clearly indicates otherwise:

4"Department." The Department of Revenue of the Commonwealth.

5"Gambling losses." The term includes losses incurred from
6lotteries, raffles, horse races and casinos.

7"Gross gambling income." The term includes:

8(1) Winnings from lotteries, raffles, horse races and
9casinos.

10(2) Cash winnings.

11(3) The fair market value of prizes.

12"Net gambling income." The term includes gross gambling
13income minus gambling losses properly claimed under the Internal
14Revenue Code (Public Law 99-514, 26 U.S.C. § 1 et seq.) and
15itemized on IRS Form 1040, Schedule A.

16"Payer." The individual or entity responsible for
17remunerating net gambling income to the maker of a wager.

18"Secretary." The Secretary of Revenue of the Commonwealth.

19"Single event." The result of a single wager placed
20irrespective of amount wagered, including a single spin, dealt
21hand, race or similar event.

22Section 1603-B.1. Assessment.

23(a) Imposition.--In addition to any tax imposed by the
24Commonwealth under Article III, an assessment is imposed on all
25net gambling income earned as a result of a wager placed in this
26Commonwealth. The provisions of Article III shall apply to the
27tax.

28(b) Rate.--The assessment imposed under subsection (a) shall
29be a percentage assessment of 5% of the amount of the net
30gambling income earned by the individual.

1(c) Noncash income.--Gambling income not paid in cash shall
2be valued at its fair market value as determined by the
3secretary.

4(d) Payment.--Except as otherwise provided for under
5subsection (f)(2) or (g), the assessment imposed under this
6article shall be paid by the individual and remitted to the
7department through a procedure determined by the secretary.

8(e) Deposit.--The proceeds of the assessment imposed under
9this article shall be deposited in the Public Education
10Improvement Fund established under section 1604-B.1.

11(f) Payer duties.--A payer shall have no duty to track,
12report or otherwise administer the assessment, except that the
13payer shall:

14(1) forward information required by the Internal Revenue
15Service to the department in a manner determined by the
16secretary; and

17(2) remit to the department an amount equal to the
18appropriate amount of the assessment imposed under this
19article for all net gambling income of $5,000 or more in a
20single event.

21(g) Voluntary withholding.--The individual may elect to have
22an appropriate amount of the assessment withheld by the payer
23for remission to the department.

24Section 1604-B.1. Public Education Improvement Fund.

25(a) Establishment.--There is hereby established in the State
26Treasury a special fund to be known as the Public Education
27Improvement Fund, which shall receive money from the assessment
28imposed under this article and any other money from any source
29designated for deposit in the Public Education Improvement Fund.

30(b) Use of money.--Money in the Public Education Improvement

1Fund shall be used for additional funding for all school
2districts in this Commonwealth as specified by law and is
3appropriated.

4Section 2. The addition of Article XVI-B.1 of the act shall
5apply to gross gambling income earned during taxable years
6beginning after December 31, 2013.

7Section 3. This act shall take effect immediately.