Casino Did Not Owe Use Tax on Lottery Gaming Machines

Wednesday, January 10th, 2018

Lottery Gaming Machine at Casino.
Hotels, Casinos & Resorts

The Kansas Supreme Court recently ruled that a casino's purchase of electronic gaming machines was not subject to use tax.

A casino managed a lottery gaming facility in Kansas. Under Kansas law, the lottery gaming portion of the casino must be owned and operated by the state. The lottery gaming portion consisted of the gaming floor and its operations, including electronic gaming machines. The casino purchased gaming machines from out of state for use in the lottery gaming portion and paid use tax on the purchase. The casino then sought a refund for the use tax paid on the purchase.

The Kansas Supreme Court ruled that a taxpayer must own personal property to be subject to use tax on that property. Here, the casino did not own the electronic gaming machines because Kansas law required the state to own and operate the lottery gaming portion of the casino. Therefore, the casino was entitled a refund for the use tax paid on the purchase of the electronic gaming machines. Did Not Owe Use Tax on Lottery Gaming Machines

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