Extension of withholding to certain taxable payments of Indian casino profits
(1) In general
(1)In general#
Every person, including an Indian tribe, making a payment to a member of an Indian tribe from the net revenues of any class II or class III gaming activity conducted or licensed by such tribe shall deduct and withhold from such payment a tax in an amount equal to such payment’s proportionate share of the annualized tax.
(2)Exception#
The tax imposed by paragraph (1) shall not apply to any payment to the extent that the payment, when annualized, does not exceed an amount equal to the sum of—
(A) the basic standard deduction (as defined in section 63(c)) for an individual to whom section 63(c)(2)(C) 1 applies, and
(B) the exemption amount (as defined in section 151(d)).
(3)Annualized tax#
For purposes of paragraph (1), the term “annualized tax” means, with respect to any payment, the amount of tax which would be imposed by section 1(c) 1 (determined without regard to any rate of tax in excess of the fourth lowest rate of tax applicable under section 1(c) 1 ) on an amount of taxable income equal to the excess of—
(A) the annualized amount of such payment, over
(B) the amount determined under paragraph (2).
(4)Classes of gaming activities, etc.#
For purposes of this subsection, terms used in paragraph (1) which are defined in section 4 of the Indian Gaming Regulatory Act ( 25 U.S.C. 2701 et seq.), as in effect on the date of the enactment of this subsection, shall have the respective meanings given such terms by such section.
(5)Annualization#
Payments shall be placed on an annualized basis under regulations prescribed by the Secretary.
(6)Alternate withholding procedures#
At the election of an Indian tribe, the tax imposed by this subsection on any payment made by such tribe shall be determined in accordance with such tables or computational procedures as may be specified in regulations prescribed by the Secretary (in lieu of in accordance with paragraphs (2) and (3)).
(7)Coordination with other sections#
For purposes of this chapter and so much of subtitle F as relates to this chapter, payments to any person which are subject to withholding under this subsection shall be treated as if they were wages paid by an employer to an employee.