In 2018, the Oklahoma legislature capped taxpayer’s itemized deductions at $17,000 a year under HB 1011xx. This year, HB 2667, sponsored by state Rep. Kevin Wallace, would allow gambling losses to be excluded from that itemized deduction limit. Charitable donations and medical expenses already are excluded.
State Senator Dewayne Pemberton and other opponents of the gambling loss exclusion claim the state would lose nearly $9 million in education funding. Pemberton explained, “For me, it is a fiscal responsibility thing. I’m not voting for these deductions, because we will be back next time we hit a downturn trying to get them back. We only bring in about half our possible taxable income and wonder why we are last in education funding.”
Pemberton added, “Plus, it’s gambling debts. Gambling is a sport or entertainment. If I go watch a movie, I can’t write off the ticket. When I go fishing and don’t catch any fish, where is my bait exemption? I know the federal government allows it, and that was part of the proponents’ argument, but writing off gambling losses rubs me the wrong way. But my vote didn’t matter. It will pass, and I figure Governor Kevin Stitt will sign it.”
Cherokee Nation Businesses Government Relations Vice President Kim Teehee said the bill was a “priority” for the CN. “House Bill 1011xx was passed during a special legislative session last year, but one of the unintended consequences of that bill was putting at risk more than a thousand jobs and millions of dollars meant for education under the tribal gaming compacts. Oklahoma is the only state to cap deductions on gaming losses. That cap may also force some casino patrons to pay state income tax on money not earned. While the Oklahoma Tax Commission estimates an annual revenue reduction of $8.9 million from HB 2667, it doesn’t take into consideration approximately $20 million in education funding that could be lost statewide from out-of-state casino patrons who choose to game in income tax friendlier states. That is revenue our state and our schools cannot afford to lose as more neighboring states expand gaming.”
