StarBulletin.com

Chance 'em


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POSTED: Friday, January 29, 2010

Some lawmakers are betting that Hawaii residents heading to Las Vegas or other gambling meccas might be willing to pay $10 now to avoid paying state taxes if they win big later.

“;Everybody goes with the idea that they are going to win money,”; said state Sen. Clarence Nishihara, who introduced the bill (Senate Bill 2001) in the Senate. “;If they're lucky enough, 10 bucks is cheap.”;

Nishihara said the idea has support from constituents who are upset that the Legislature took away the state tax deduction for gambling losses to offset winnings.

“;Most of them are retirees and they go to Vegas, and a lot of them think it (the tax waiver fee) is a good idea because they think they'll win,”; Nishihara said.

Gamblers heading to Las Vegas yesterday like the odds of the proposed fee.

“;I'm not a big gambler so I might not pay it,”; said Piilani Klein. “;But this trip I'm going to win $1 million so I would pay it right now. I think it (the fee) is a win-win.”;

“;I get plenty of the W-Gs (IRS gambling winning forms),”; said Segundino Corpuz, who said he goes to Las Vegas four times a year. “;But you spend $3,000 to win $1,500. You lose plenty to get the wins, and you cannot claim your losses.”;

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Nadine Shibata and her husband, Lance, hesitated for a split second when asked whether they would pay a gambling waiver fee.

“;How often do we win?”; she asked her husband. “;But maybe if we pay the fee, that will make us money.”;

Shibata thinks the state will come out ahead with the fee, as does Malia Deramos.

“;I'd bet on the state,”; she said. “;What's 10 bucks? It's like water up there.”;

Nishihara (D, Waipahu-Pearl City) said the gambling fee is not a tax because it is voluntary.

“;You can take your chances,”; he said, adding that it would help the state recover some of the money Hawaii residents spend in Las Vegas.

The bill's fate is still uncertain. A hearing has yet to be scheduled in the Senate or in the House, where a companion bill, House Bill 1923, has also been introduced.

The waiver would allow gamblers a five-day period for state tax-free winnings. Gamblers who stay longer than five days would have to buy another waiver, and those who take multiple trips would have to buy a waiver for each trip.

“;I think it's a way of helping our state if you're going to go Vegas anyway, and it's less than the cost of paying for baggage,”; Nishihara said.

A study in 2004 estimated Hawaii accounts for about 350,000 visitors a year to Las Vegas. Not all would pay the fee, but Nishihara thinks it could bring in up to $2 million a year.

It is not clear how much it would cost to administer the fee.

Nishihara acknowledged that the state could lose money if someone hits a big jackpot. But, he said, those jackpots are normally paid out over several years, and winners can take advantage of other tax breaks.

Besides, he said, what are the odds of that really happening to someone from Hawaii?