NC House Bill proposed State Tax on Sweepstakes Cafes, Local Option Included

NC State Representative Bill Owens (D-Elizabeth City) filed H1180 on Tuesday in the North Carolina General Assembly to establish a State Tax on Internet Sweepstakes Cafes, businesses recently deemed Constitutional to operate by the North Carolina Supreme Court and already subject to local privilege licensing and taxation.

Representative Owens’ bill, primarily co-sponsored by Representatives Timothy Spear (D-Creswell), Jeff Collins (R-Rocky Mount) and Bill McGee (R-Clemmons), establishes State Taxes on the licensing of Internet Sweepstakes Cafes on both per business ($2,000) and per machine ($1,000) bases. The bill also includes a 4% Gross Receipts Tax on Cafe revenues.

County and Municipal Law enforcement will receive a small portion of revenue from the State Tax for business and machine, with 4% going to County Sheriffs and 2% to Municipal Police Departments, both distributed on a per capita basis. The remaining revenues from the State Tax will be earmarked to the State Board of Education.

County and Municipal Governments will also have the opportunity levy a standard local option privilege license tax of $1,000 per business and excise tax of $500 per machine. These taxes would be imposed annually on a calendar year basis, with payments received by the North Carolina Department of Revenue and distributed by them back to the imposing local government on a quarterly basis.

If the bill becomes law, current local privilege license and excise taxes on Internet Sweepstakes Cafes would be nullified going forward.

Click here for more information on this bill

According to the North Carolina League of Municipalities, this bill does have significant support in the House and will likely come for a vote within the next week. Its future is uncertain in the State Senate.