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Public Act 306 of 2004 (Additional Wagering Tax)

Background

The Michigan Gaming Control & Revenue Act of 1997, as amended, currently imposes a wagering tax of 24% of a licensee's adjusted gross receipts received from gaming. The city in which a casino is located may collect 11.9% of the licensee's adjusted gross receipts by including a provision in the city's development agreement with the casino, or levying the tax by ordinance. If the city does so, the State's portion of the wagering tax rate is 12.1% and the revenue must be deposited in the State School Aid Fund. (Under the Act, the term "city" applies only to the City of Detroit, which does collect its 11.9% share of the wagering tax.) 

Public Act 306 (PDF)
The new tax law imposes a wagering tax of 6%, in addition to the existing 18% tax, on a licensee's adjusted gross receipts from gaming, subject to provisions for increasing or reducing the additional tax. Revenue from the 6% additional tax must be deposited in the State Casino Gaming Fund and allocated as follows:

  • 1/3 to the city for use in connection with specified purposes (e.g., hiring and training of street patrol officers; neighborhood and downtown economic development programs; and public safety programs).
  • 7/12 to the General Fund.
  • 1/12 to the Agriculture Equine Industry Development Fund.

 

State of Michigan wagering tax rate

The new tax rate, effective September 1, 2004, paid to the State Gaming Casino Fund is 12.1%.

City of Detroit wagering tax rate
The new tax rate, effective September 1, 2004, paid to the City of Detroit is 11.9%. The city may collect its share of this tax directly either through a provision in its development agreement or by ordinance. While licensee is paying the city's share of the tax directly to the city, the payment to the State Casino Gaming Fund will be 4% and allocated 7/8 to the General Fund and 1/8 to the Agriculture Equine Industry Development Fund. 1

 

1   The Source of the above information is the Michigan Senate Fiscal Agency

 

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