26 U.S.C. § 4401
Section 4401 · Imposition of tax
Amended 5 times on record
Applied in 207 court decisions — leading case Grosso v. United States (1968)
Most recently applied in 277 F. App'x 560 - United States v. Hammon (May 2008)
Applied most in the Fifth Circuit Circuit (27 decisions)
Cases citing this section usually also cite 26 U.S.C. § 4411 · 26 U.S.C. § 4412 · 26 U.S.C. § 7203
How often courts cite this section
Court decisions citing this, by year.Markers show enactment, consequential amendments, and circuit splits over this section — watch for a citation surge after a change or a disagreement. The dip in the last several years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the most recent years, so recent citations are undercounted.
(1) State authorized wagers
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.
(2) Unauthorized wagers
There shall be imposed on any wager not described in paragraph (1) an excise tax equal to 2 percent of the amount of such wager.
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.
Editorial notes U.S. Code · Office of the Law Revision Counsel
Amendments
1982—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 4412 of this title who receive wagers for or on behalf of another person without having registered under section 4412 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
Section 109(c)(1) of Pub. L. 97–362 provided that: “The amendment made by subsection (a) [amending this section] shall take effect on January 1, 1983.”
Effective Date of 1974 Amendment
Section 3(d)(1) of Pub. L. 93–499 provided that: “The amendments made by this section [enacting section 4424 and amending this section and section 4411 of 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
Section 151(b) of Pub. L. 85–859 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].”
Cross References
Imposition of occupational tax, see section 4411 of this title.