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Mississippi tax tidbit: casino tax

Mississippi flag Mississippi added a new revenue source in 1990 when the state passed the Gaming Control Act legalizing dockside casino gaming.

The counties that border the Mississippi River or the Gulf Coast can legalize gambling. Currently, the state is home to 30 dockside casinos and an inland casino on a Choctaw reservation.

In fiscal 2009, the Magnolia State collected more than $312 million in taxes from the floating casinos. And there's some talk of raising the casino tax rate.

Plus, the state collects taxes from individuals on their winnings.

To make sure Mississippi tax collectors are getting all they're due from bettors, since 2002 gambling winnings that casinos must report on a W2G, 1099 or other information returns have been subject to a 3 percent income tax that's collected by upfront withholding. 

Since the casinos take the money off the top at the time of payout, the state says lucky Mississippians shouldn't include the amount of withheld winnings as income when they file their state returns.

As for out-of-state visitors to a dockside casino, the tax will be withheld from your winnings, too. But you don't have to worry about filing a Mississippi tax return.

The tax document from the casino showing the withholding is considered the income tax return for this type of Mississippi nonresident income and proves that the tax was paid to the state.

Tax trip around the United States: This post is part of our series highlighting tax information from the 50 U.S. states and Washington, D.C. You can read other state tax blurbs at our Complete menu of tasty state tax tidbits.

The State Tax Departments page provides links to official state and District of Columbia revenue Web sites so that you can find out more about your home's tax laws and filing requirements.

As we work through the 2010 tax season, a different state will be featured each day as noted in Don't forget your state taxes! Check back to see what tax tidbit we share about your home.

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