Internal Revenue Code:Sec. 4401. Imposition of tax

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle D - Miscellaneous Excise Taxes
       CHAPTER 35 - TAXES ON WAGERING
        Subchapter A - Tax on Wagers
      

Statute

    Sec. 4401. Imposition of tax
 
    (a) Wagers
      (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.
    (b) Amount of 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.
    (c) Persons liable for tax
      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.
 

Sources

    (Aug. 16, 1954, ch. 736, 68A Stat. 525; Pub. L. 85-859, title I,
    Sec. 151(a), Sept. 2, 1958, 72 Stat. 1304; Pub. L. 93-499, Sec.
    3(a), Oct. 29, 1974, 88 Stat. 1550; Pub. L. 94-455, title XIX, Sec.
    1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97-362, title
    I, Sec. 109(a), Oct. 25, 1982, 96 Stat. 1731.)
 

Miscellaneous

                                 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).''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 4411 of this title.