Summary of "Ohio Sports Gaming Receipts and Withholding Webinar 12 8 22"
Finance / Tax-Focused Summary (Sports Gaming in Ohio)
Presenters / Sources
- Cody Fitch — Sports gaming receipts tax
- Edward Duesenberry — Sports gaming receipts tax; referenced “Gateway/Gateway items”
- Marina King — Administrator, Employment Tax Division; sports gaming withholding
- Asa Tia Richardson — Employment Tax supervisor; Gateway/fileing steps for withholding
- Alan Moore — Assistant Administrator, Employment Tax Division; answered some Q&A on withholding
1) Sports Gaming Receipts Tax (Receipts Tax)
Scope & Timeline
- Legal basis: Ohio House Bill 29 (passed last December).
- Start date rule: Ohio Casino Control Commission establishes a universal start date; no later than Jan 1, 2023.
- Operational start referenced: Jan 1, 2023 (described as “right around the corner” / “January 1, 23”).
Taxpayer & Licensing Types
- Taxpayer (general): the sports gaming proprietor for receipts tax purposes.
- Exception: professional sports organizations may designate a service provider as the taxpayer.
- Types referenced:
- Type A: mobile online proprietors
- Type B: brick-and-mortar proprietors
- Type C: governed by the Lottery Commission
- Clarified later: Type C proprietors are not subject to receipts tax
Registration / Ohio Business Gateway
- Registration letters: expected near the end of December; include:
- start date
- account number
- filing frequency
- Discrepancy handling:
- If the license effective date is 1/1/23 but operations begin later, taxpayers must send back the correct account start date.
- If not corrected, expect a January 2023 return due to defaulting to 1/1.
Tax Base, Deductions, and Threshold Notes
- Sports gaming receipts definition: total gross receipts received from operating sports gaming in Ohio.
- Promotional credits: included in gross receipts, but deductions apply with time-based phasing:
- Cash / cash equivalents paid as winnings: deductible
- Voided wagers: deductible
- Promotional gaming credits:
- Not deductible until 1/1/2027
- Deduction rate increases:
- 10% beginning 1/1/2027
- 20% beginning 1/1/2028
- Negative tax months: if returns result in a negative, liability is treated as zero
- Caution: negatives cannot be carried forward
Return Frequency and Submission Rules
- Filing method: through Ohio Business Gateway.
- Due dates: monthly, due on the 15th day of the following month.
- Type A vs. Type B accounts:
- Type A and Type B proprietors typically have separate accounts → often two returns per month.
- If a Type A proprietor contracts with more than one Mobile Management Service Provider (MSP):
- typically one Type A return per month is expected
- figures may be gathered/combined and submitted in a single return (depending on the proprietor/service-provider arrangement)
Explicit Procedural Framework (Receipts Tax via Gateway)
- Create/verify Ohio Business Gateway account:
gateway.ohio.gov - Add service area: sports gaming receipt tax
- Add correct transaction types:
- ensure Type A vs. Type B return selection matches license type
- Optional (service provider access):
- grant permission to service providers to file on behalf of the proprietor via Gateway business access/account maintenance/user authorization
- File the return:
- select correct acknowledgment
- select correct account number
- set reporting period
- select type of filing
- enter wagering/winnings/promotional credits fields
- note promotional credits are not deductible until 2027+
- submit → receive filing confirmation number and amount owed
- Pay via Gateway:
- ACH debit referenced
- option to defer payment date to the due date if paying early
- Use Gateway history and receipts:
- history tab stores receipts for returns/payments
- PDFs include payment receipt and a “sports gaming receipts tax return” PDF
- Access disclosure:
- if a proprietor grants permissions, service providers can view transaction history for that proprietor’s filings/payments
2) Sports Gaming Withholding (Employment Tax Division)
Legal Framework & Trigger
- Governing authorities referenced:
- House Bill 29
- Ohio Revised Code 57 47.063 and 57.47.064
- linked to IRS Code §6041
- Key concept: if reporting is required to the IRS, then Ohio withholding applies.
Withholding Rate and Reporting Threshold
- Withholding rate: 4% of winnings.
- Threshold (two-prong test): withhold only when both are met:
- winnings are $600 or more
- proceeds are at least 300× the wager
- Examples summarized:
- Not reportable: $1 wager at 300:1 → $300 win (fails $600 threshold)
- Report & withhold: $2 wager at 300:1 → $600 win (meets both)
- Not reportable: $25 wager at 40:1 → $1,000 win (fails 300× wager rule)
- Report & withhold: $10 wager at 500:1 → $5,000 win (meets both)
Who Is the Taxpayer for Withholding?
- Type A (mobile) and Type B (brick-and-mortar):
- proprietor can allow an MSP/MMSP to serve as the taxpayer for withholding
- effect: W-2G winners are filed under the MSP/MMSP’s identity/Federal EIN (FDIN/FBI referenced)
- If proprietor wants their own name/EIN on W-2Gs but still prefers MSP/MMSP filing:
- filing permissions can be granted (details not fully expanded in the summary)
- Type C:
- proprietor is the designated taxpayer (on the withholding side)
Registration / Account Setup Instructions (with cautions)
- Do not register a withholding account via Gateway for the new withholding account number.
- Ohio Taxation will register/set up a separate withholding account based on the registration application.
- Separate account requirement:
- do not commingle
- existing employer withholding account for employees is separate from the new sports gaming winners withholding account
- Account communications:
- the division sends an email with the withholding account number
- if not received, email:
ewt@tax.state.oh.us(referenced as the provided inbox)
Where / What to File (and Due Dates)
- IT-501 (monthly employer withholding return)
- Not required if there is no Ohio income tax to remit
- due: 10th day of the month following the end of the reporting period
- IT-941 (annual reconciliation)
- due: Jan 31 following year
- W-2G winners report
- required monthly
- due: 10th day of the month following the end of the reporting period
- also due annual: Jan 31
- file layout: referenced as a link “w2g winners report specification” (~7 pages)
- optional: test file uploads can be scheduled by emailing for format verification
Explicit Procedural Framework (Withholding via Gateway)
- Confirm/add service area and transaction types:
- same Gateway mechanism, but for withholding:
- service area: employer withholding
- transaction types: IT-501, IT-941, W2G/1099 upload (W-2G winners report upload)
- same Gateway mechanism, but for withholding:
- IT-501 workflow:
- start IT-501 return from dashboard
- verify entity + employer withholding account number
- enter filing period and amount withheld
- summary review + perjury acknowledgment
- choose Gateway payment method (ACH debit or ACH credit)
- note: ACH credit implies a card fee
- add to cart → checkout → confirmation receipt
- IT-941 workflow:
- start annual reconciliation (IT-941)
- specify return type (original/amended) and account handling
- enter Ohio gross winnings and Ohio tax withheld by month
- enter total payments made throughout the year
- summary review + perjury acknowledgment; accept
- if amount due: add to card for payment
- W-2G winners report upload:
- select W2G winners report from “type of income statement” dropdown
- enter/confirm email address
- upload file (browse)
- check upload history for success/errors
Key Disclosures / Notices
- No continuing education credits offered.
- Webinar is recorded and will be posted with tutorials/job aids (informational posting note).
- Access disclosure (important): service providers with permissions can view history of transactions in the proprietor’s account.
- Cautionary statements:
- promo credit deductions begin no earlier than 1/1/2027
- negative tax months cannot be carried forward
- do not register a new withholding account through Gateway; Ohio Taxation registers it separately
Tickers / Financial Instruments / Markets Mentioned
- None. The content is administrative/tax procedure for sports gaming receipts and withholding (no investing instruments referenced).
Category
Finance
Share this summary
Is the summary off?
If you think the summary is inaccurate, you can reprocess it with the latest model.
Preparing reprocess...