Casinos’ Gifts Not Subject to Sales and Use Tax in Louisiana

In a notice dated September 26,2024, the Louisiana Department of Revenue has declared that the actual cash amount paid at the time it is provided is the sales price for state sales tax purposes for items provided complimentary or at a discounted rate by a casino as an incentive to patrons. This means that complimentary items, which can include rooms, cabanas, VIP experiences, meals, or other comparable goods, are not subject to the state’s sales and use tax. In the event that a casino is offering discounted items or services, tax is calculated on the actual cash amount paid at the time, rather than the full sales price.

Theoretical or actual winnings realized by the casino are not included as consideration given for any of the gifted items; as a result, sales or use tax is not owed on the complimentary items. Further, any cost the casino incurs for the items they are gifting is subject to sales tax. Thus, if a casino used a resale certificate to purchase an item that is later gifted to a patron, the casino is subject to use tax on the item.

Taxpayers should be aware of the way tax is handled on discounted transactions to ensure that they are correctly charging and remitting tax. Also, if items are purchased for resale, taxpayers must take care to correctly assess use tax if the items are used by the business and not resold. (Notice, “Discounted and Complimentary Items Provided by a Casino or Gaming Establishment“, signed by Richard Nelson, Secretary, Dated September 26,2024)

Posted on October 17, 2024