As North Carolina residents prepare to file their taxes, a significant oversight in the state's tax code concerning sports betting has caught the attention of lawmakers. Currently, bettors in North Carolina are expected to pay taxes on their winnings from sports betting, which was legalized just before March Madness last year, even if their net losses exceed their gains. As ABC11 reports, the state has since enjoyed $308 million in gross revenue from sports betting.
Under this current law, North Carolinians face a potential tax headache, as clarified by Johnny Avello, sports director with DraftKings, who told ABC11, that all winnings are taxable at the same 4.5% with no possibility of deducting losses. However, a new bill, House Bill 14, introduced by Rep. Erin Pare, R-Wake, seeks to amend the tax code to include deductions for gambling losses to mitigate what is seen by some, including Pare, as an issue of fairness; Pare said in a statement obtained by WRAL, "There's a lot of confusion right now since sports gambling is a new thing in North Carolina, that most people who have been engaging in that over the last year made the assumption that the state laws around this were the same as federal."
Additionally, according to the News & Observer, the North Carolina legislature has just convened and among the gamut of new bills, House Bill 14 is one of the most notable and would allow gambling losses to be deducted, but only for taxpayers who itemize deductions, bettors still wouldn't be able to write off more than their winnings.
Accountants are urging taxpayers to recall that no matter the job or side gig sports bets are taxable, as Aradhana Aggrawal, a local certified public accountant, emphasized to ABC11 that even if income is below $600 and no tax document is provided, it's incumbent upon taxpayers to account for all winnings, Alan Woodard with the NC Department of Revenue cautioned in a separate, interview that the common misconception is that taxpayers can net their gambling losses against their winnings which is, for now, inaccurate in North Carolina.
