In determining the amount of any wager for the purposes of this subchapter, all charges incident to the placing of such wager shall be included; except that if the taxpayer establishes, in accordance with regulations prescribed by the Secretary, that an amount equal to the tax imposed by this subchapter has been collected as a separate charge from the person placing such wager, the amount so collected shall be excluded.
Each person who is engaged in the business of accepting wagers shall be liable for and shall pay the tax under this subchapter on all wagers placed with him. Each person who conducts any wagering pool or lottery shall be liable for and shall pay the tax under this subchapter on all wagers placed in such pool or lottery. Any person required to register under section 4412 who receives wagers for or on behalf of another person without having registered under section 4412 the name and place of residence of such other person shall be liable for and shall pay the tax under this subchapter on all such wagers received by him.
26 U.S.C. § 4401
AMENDMENTS1982-Subsec. (a). Pub. L. 97-362 substituted provision that there shall be imposed on any wager authorized under the law of the State in which accepted an excise tax equal to 0.25 percent of the amount of such wager and that there shall be imposed on any other wager an excise tax equal to 2 percent of the amount of such wager for provision that there be imposed on wagers, as defined in section 4421, an excise tax equal to 2 percent of the amount thereof. 1976-Subsec. (b). Pub. L. 94-455 struck out "or his delegate" after "Secretary".1974-Subsec. (a). Pub. L. 93-499 substituted "2 percent" for "10 percent". 1958-Subsec. (c). Pub. L. 85-859 made all persons required to register under section of this title who receive wagers for or on behalf of another person without having registered under section of this title the name and place of residence of such other person liable for the tax on all such wagers received by them.
EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97-362, title I, §109(c)(1), Oct. 25, 1982, 96 Stat. 1731, provided that: "The amendment made by subsection (a) [amending this section] shall take effect on January 1, 1983."
EFFECTIVE DATE OF 1974 AMENDMENT Pub. L. 93-499, §3(d)(1), Oct. 29, 1974, 88 Stat. 1551, provided that: "The amendments made by this section [enacting section 4424 and amending this section and sectionof this title] take effect on December 1, 1974, and shall apply only with respect to wagers placed on or after such date."
EFFECTIVE DATE OF 1958 AMENDMENT Pub. L. 85-859, title I, §151(b), Sept. 2, 1958, 72 Stat. 1304, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to wagers received after the date of the enactment of this Act [Sept. 2, 1958]."
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
- The term "lottery" includes the numbers game, policy, and similar types of wagering. The term does not include-(A) any game of a type in which usually(i) the wagers are placed,(ii) the winners are determined, and(iii) the distribution of prizes or other property is made, in the presence of all persons placing wagers in such game, and(B) any drawing conducted by an organization exempt from tax under sections 501 and 521, if no part of the net proceeds derived from such drawing inures to the benefit of any private shareholder or individual.
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- The term "taxpayer" means any person subject to any internal revenue tax.
- The term "wager" means-(A) any wager with respect to a sports event or a contest placed with a person engaged in the business of accepting such wagers,(B) any wager placed in a wagering pool with respect to a sports event or a contest, if such pool is conducted for profit, and(C) any wager placed in a lottery conducted for profit.