N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 236

§ 236. Disposition of pari-mutuel pools; percentage payable to state\nas a tax; authority of counties or certain cities to impose a tax. 1.\nEvery corporation authorized under this chapter to conduct pari-mutuel\nbetting at a race meeting on races run thereat, except as provided in\nsection two hundred thirty-eight of this article with respect to the\nfranchised corporation, shall distribute all sums deposited in any\npari-mutuel pool to the holders of winning tickets therein, providing\nsuch tickets be presented for payment before April first of the year\nfollowing the year of their purchase, less an amount that shall be\nestablished and retained by such racing corporation of between fourteen\nto twenty percent of the total deposits in pools resulting from regular\non-track bets and less sixteen to twenty-two percent of the total\ndeposits in pools resulting from multiple on-track bets and less twenty\nto thirty percent of the total deposits in pools resulting from exotic\non-track bets and less twenty to thirty-six percent of the total pools\nresulting from super exotic on-track bets, plus the breaks. The\nretention rate to be established is subject to the prior approval of the\ncommission. Such rate may not be changed more than once per calendar\nquarter to be effective on the first day of the calendar quarter.\n"Exotic bets" and "multiple bets" shall have the meanings set forth in\nsection five hundred nineteen of this chapter and breaks are hereby\ndefined as the odd cents over any multiple of five for payoffs greater\nthan one dollar five cents but less than five dollars, over any multiple\nof ten for payoffs greater than five dollars but less than twenty-five\ndollars, over any multiple of twenty-five for payoffs greater than\ntwenty-five dollars but less than two hundred fifty dollars, or over any\nmultiple of fifty for payoffs over two hundred fifty dollars. "Super\nexotic bets" shall have the meaning set forth in section three hundred\none of this chapter. Of the amount so retained there shall be paid by\nsuch corporation to the department of taxation and finance as a\nreasonable tax by the state for the privilege of conducting pari-mutuel\nbetting on the races run at the race meeting held by such corporation,\nwhich tax is hereby levied, the following percentages of the total pool,\nplus fifty-five percent of the breaks; the applicable rates for regular\nand multiple bets shall be one and one-half percent; the applicable\nrates for exotic bets shall be six and three-quarter percent and the\napplicable rate for super exotic bets shall be seven and three-quarter\npercent. Effective on and after September first, nineteen hundred\nninety-four, the applicable tax rate shall be one percent of all wagers,\nprovided that, an amount equal to one-half the difference between the\ntaxation rate for on-track regular, multiple and exotic bets as of\nDecember thirty-first, nineteen hundred ninety-three and the rates on\nsuch on-track wagers as herein provided shall be used exclusively for\npurses. Provided, however, that for any twelve-month period beginning on\nApril first in nineteen hundred ninety and any year thereafter, each of\nthe applicable rates set forth above shall be increased by one-quarter\nof one percent on all on-track bets of any such racing corporation that\ndid not expend an amount equal to at least one-half of one percent of\nits on-track bets during the immediately preceding calendar year for\nenhancements consisting of capital improvements as defined by section\ntwo hundred thirty-seven of this article, repairs to its physical plant,\nstructures, and equipment used in its racing or wagering operations as\ncertified by the commission to the commissioner of taxation and finance\nno later than eighty days after the close of such calendar year, and\nfive special events at each track in each calendar year, not otherwise\nconducted in the ordinary course of business, the purpose of which shall\nbe to encourage, attract and promote track attendance and encourage new\nand continued patronage, which events shall be subject to the prior\napproval of the commission for purposes of this subdivision. In the\ndetermination of the amounts expended for such enhancements, the\ncommission may consider the immediately preceding twelve-month calendar\nperiod or the average of the two immediately preceding twelve-month\ncalendar periods. Provided further, however, that of the portion of the\nincreased amounts retained by such corporation above those amounts\nretained in nineteen hundred eighty-four, an amount of such increase\nshall be distributed to purses in the same proportion as commissions and\npurses were distributed during nineteen hundred eighty-four as certified\nby the commission. Such corporation in the second zone shall receive a\ncredit against the daily tax imposed by this subdivision in an amount\nequal to four-tenths of one percent of total daily pools resulting from\nthe simulcast of such corporation's races to licensed facilities\noperated by regional off-track betting corporations in accordance with\nsection one thousand eight of this chapter, provided however, that sixty\npercent of the amount of such credit shall be used exclusively to\nincrease purses for overnight races conducted by such corporation; and,\nprovided further, that in no event shall such total daily credit exceed\nfour-tenths of one percent of the total daily pool of such corporation.\n Such corporation shall pay to the New York state thoroughbred breeding\nand development fund one-half of one percent of the total daily on-track\npari-mutuel pools from regular, multiple and exotic bets, and three\npercent of super exotic bets. The corporation shall receive credit as a\nreduction of the tax by the state for the privilege of conducting\npari-mutuel betting for the amounts, except amounts paid from super\nexotic betting pools, paid to the New York state thoroughbred breeding\nand development fund after January first, nineteen hundred\nseventy-eight.\n Such corporation shall distribute to purses an amount equal to fifty\npercent of any compensation it receives from simulcasting or from\nwagering conducted outside the United States. Such corporation shall pay\nto the commission as a regulatory fee, which fee is hereby levied,\nsix-tenths of one percent of the total daily on-track pari-mutuel pools\nof such corporation.\n 2. The balance of the retained percentage of such pool and of the\nbreaks shall be held by such corporation for its own use and purposes,\nexcept that in addition to any payments to purses provided for in\nsubdivision one of this section, an amount equal to two and one-half\npercent of the total pools resulting from on-track regular bets and\nexotic bets and an amount equal to three and one-half percent of the\ntotal pools resulting from on-track multiple bets and an amount equal to\ntwelve percent of on-track super exotic bets shall be used exclusively\nfor the purpose of increasing purses (including stakes, premiums and\nprizes) awarded to horses in races conducted by such corporation. Such\ntwo and one-half percent and three and one-half percent shall be in\naddition to (i) four and one-half percent of such total pools resulting\nfrom regular and multiple wagers and five and one-half percent of such\ntotal pools resulting from exotic wagers, or (ii) the percentage of such\ntotal pools used for purses (including stakes, premiums and prizes)\nduring the year nineteen hundred eighty-two, whichever is larger. Such\npercentage of the total pools mentioned in this subdivision shall be\nused for purses (including stakes, premiums and prizes) in races\nhereafter conducted by such corporation, and any portion not so used\nduring any year shall be so used during the following year, failing\nwhich such portion shall be payable to the commissioner of taxation and\nfinance as additional tax. The commission shall report annually, on or\nbefore July first, to the director of the budget, the chair of the\nsenate finance committee and the chair of the assembly ways and means\ncommittee the extent to which such corporation used and retained\npercentages and breakage for operations, maintenance, capital\nimprovements, advertising and promotion, administration and general\noverhead and evaluate the effectiveness and make recommendations with\nrespect to the application of the reduced rates of taxation as provided\nfor in subdivision one of this section in accomplishing the objectives\nstated therein. Such report shall also specify the amount of such\nretained percentages and breakage used for investments not directly\nrelated to racing activities and such amounts used to declare dividends\nor other profit distributions, additions to capital stock, its sale and\ntransfer and additions to retained earnings. Such reports shall also\ninclude an analysis of any such agreements or proposals to conduct or\notherwise expand wagers authorized under article ten of this chapter and\npresent its conclusions with respect to the conduct of such wagering,\nthe nature of such proposals and agreements, and recommendations to\nensure the future maintenance of the intent of this article.\n 3. Tax rates in event of a failure to maintain pari-mutuel racing\nactivity. a. Notwithstanding any other provision of this section to the\ncontrary, for any calendar year commencing on or after January first,\nnineteen hundred eighty-nine, in which a racing corporation in zone two\ndoes not conduct a minimum number of pari-mutuel programs and\npari-mutuel races at its facilities equal to at least ninety percent of\nthe programs and races so conducted during nineteen hundred eighty-five\nor during nineteen hundred eighty-six, whichever is less, in lieu of the\ntax rates set forth in subdivision one of this section the applicable\npari-mutuel tax rates for such corporation with respect to on-track\npari-mutuel betting pools during such year shall be increased by one\npercent of regular, multiple and exotic betting pools. Notwithstanding\nthe foregoing, no increase shall be proposed unless such corporation has\nbeen afforded notice and opportunity to be heard. The commission shall\npromulgate rules and regulations to implement the provisions relating to\nnotice and hearing.\n b. The provisions of this subdivision shall not apply to a corporation\nfor any calendar year for which the commission certifies to the\ncommissioner of taxation and finance:\n (i) by December fifteenth of the year immediately preceding such year,\nthat such corporation has been assigned for such year, from the programs\nand races it requested, at least the minimum number of programs and\nraces prescribed in paragraph a of this subdivision, or, if fewer than\nsuch number were assigned for such year, that the assignment of such\nlesser number was for good cause due to factors beyond the control of\nsuch corporation or because the commission found that it would be\nuneconomical or impractical for such corporation to be assigned the\nprescribed number; and\n (ii) by January thirty-first of the year immediately subsequent to\nsuch year, that such corporation did conduct such number of programs and\nraces as were certified pursuant to subparagraph (i) of this paragraph,\nor if it failed to conduct such number that such failure was for good\ncause due to factors beyond its control or because the commission found\nit uneconomical or impractical for such corporation to conduct such a\nnumber.\n c. For any calendar year for which the commission does not certify\npursuant to the provisions of subparagraph (i) of paragraph b of this\nsubdivision with respect to a corporation, the tax imposed by this\nsection shall be computed by substituting the provisions of paragraph a\nof this subdivision for the provisions of subdivision one of this\nsection and shall pay the tax so computed to the commissioner of\ntaxation and finance. In such computation and payment, all other\nprovisions of this section shall apply as if the provisions of this\nparagraph and of paragraph a of this subdivision had been incorporated\nin whole in subdivision one of this section.\n d. For any calendar year for which the commission does not certify\npursuant to the provisions of subparagraph (ii) of paragraph b of this\nsubdivision with respect to a corporation, the tax required to be paid\nhereunder for such year shall be equal to the difference between the tax\nimposed pursuant to paragraph a of this subdivision and the tax imposed\npursuant to the provisions of subdivision one of this section less\none-half of such difference in recognition of purses that were required\nto be paid, plus an additional amount equal to ten percent of such tax\nin the event of a willful failure to comply with the provisions of\nsubparagraph (ii) of paragraph b of this subdivision, and such\ncorporation shall pay the tax so computed to the commissioner of\ntaxation and finance on or before March fifteenth of the following year.\nNotwithstanding the provisions of this subdivision, in the event that\nupon appeal from the determination of the commission that the\ncertification provided in paragraph b of this subdivision will not be\nmade, it is finally determined that the commission erred in failing to\nso certify and that any moneys received by the commissioner of taxation\nand finance under paragraph c of this subdivision were paid in error,\nthe same shall be refunded at the rate of interest of six percent per\nannum. Payment of such balance of tax due, or the anticipation of such\npayment, shall not affect the determination of purses in the year in\nwhich such tax arises or in the year in which such payment is made nor\nshall such payment in any other manner be considered in any statutory or\ncontractual calculation of purse obligations.\n e. Written notice of the certification of the commission pursuant to\nthe provisions of paragraph b of this subdivision shall be given by the\ncommission to the applicable corporation by the dates therein specified.\nIn like manner, written notice that such certification will not be made\nshall be given by the commission to the commissioner of taxation and\nfinance and the applicable corporation by such dates.\n 4. The payment of the state tax imposed by this section shall be made\nto the commissioner of taxation and finance on the last business day of\neach month and shall cover taxes due for the period from the sixteenth\nday of the preceding month through the fifteenth day of the current\nmonth provided, however, that such payments required to be made on March\nthirty-first shall include all taxes due and accruing through the last\nfull week of racing in March of the current year or as otherwise\ndetermined by the commissioner of taxation and finance, and shall be\naccompanied by a report under oath, showing the total of all such\ncontributions, together with such other information as the commissioner\nof taxation and finance may require. A penalty of five per centum and\ninterest at the rate of one per centum per month from the date the\nreport is required to be filed to the date of payment of the tax shall\nbe payable in case any tax imposed by this section is not paid when due.\nIf the commissioner of taxation and finance determines that any moneys\nreceived under this subdivision were paid in error, the commissioner of\ntaxation and finance may cause the same to be refunded without interest\nout of any moneys collected thereunder, provided an application therefor\nis filed with the commissioner of taxation and finance within one year\nfrom the time the erroneous payment was made. Such taxes, interest and\npenalties when collected, after the deduction of refunds of taxes\nerroneously paid, shall be paid by the commissioner of taxation and\nfinance into the general fund of the state treasury.\n 5. No county, city, town, village or other political subdivision of\nthe state may impose, levy or collect a tax on admission fees or tickets\nof admission, on wagers made by patrons, in the form of purchases of\npari-mutuel tickets or upon such tickets, on pari-mutuel pools, on\nbreaks, on dividends or payments made to winning bettors, or on that\npart of the pari-mutuel pools or breaks to be retained by racing\ncorporations under this section, except as otherwise provided in this\nchapter.\n