A 1.5 percent tax on big-dollar gambling earnings does not have the blessing of Amherst veterans and social clubs.
But officials, including city law director Tony Pecora and treasurer Richard Ramsey, say they have no choice but to collect when winners do.
The debate was hashed out Monday on the floor of council as several residents stepped forward to complain about changes being made as part of the Ohio General Assembly’s municipal tax reforms.
If there’s a city tax, people will stop gambling — which means groups such as the Amherst Eagles and American Legion Post 118 won’t have as much money to donate to local causes, said Jose Torres, Lorain County Veteran Services Network commissioner.
“They’re going to stop playing and it’s going to hurt the community in general,” he told Amherst council members.
Pecora said there is no plan to tax non-profits themselves.
But those who are already issue W-2G forms for gambling winnings above a certain threshold will now have to file that paperwork with the city as well as Internal Revenue Service, he said.
Those minimum thresholds under federal law are $1,200 for a bingo or slots pay-out, $1,500 for Keno, $600 to $5,000 for various types of sweepstakes and raffles (including lotteries), and $5,000 for poker tournaments.
Veteran James Pisegna said the Amherst Legion post does not have pay-outs that large.
He was alarmed by a rumor that winnings of $200 or more would be taxed, but Pecora denied the rumor. He said it sprang from a hypothetical example made at another meeting by councilman Chuck Winiarski and was not based in what the law calls for Amherst to do.
Whether state law requires Amherst to tax gambling winnings is a matter of dispute.
Pisegna told council members that he had been in contact with officials in Columbus who denied the city would have to collect on gambling earnings as part of new tax code language handed down by the state.
But Ramsey and Pecora pointed to passages of the new code that redefined gambling earnings as income.
Some cities have collected on bingo and lottery winnings for years.
Oberlin taxes winnings of $1 million and above. But finance director Sal Talarico said he plans to introduce legislation to council this fall (as part of the state’s changes) eliminating that amount and making all gambling earnings taxable.
Amherst officials said they are not happy with the changes here but are required to make them.
“What you’re voting on is a local ordinance that has been dictated by the state of Ohio, not anyone in this room,” Ramsey told council. “Frankly, no one in this room likes it.”
On Pecora’s recommendation, council tabled further adoption of the gambling tax language. That will give officials time to confer with Columbus.
Jason Hawk can be reached at 440-988-2801 or @EditorHawk on Twitter.
Public domain Gambling earnings are at the center of a three-way controversy between Amherst, the state, and veterans groups.