Repeal of Withholding Tax Hinges on Conference

The United States House of Representatives June 17 passed the American Jobs Creation Act of 2004, another step toward possible repeal of the 30% withholding tax on pari-mutuel winnings by foreign bettors on U.S. races.

The House approved the measure--the Foreign Sales Corporation/Extra-Territorial Income Bills bill--by a vote of 251-178. The Senate version of the bill, passed May 11 by a vote of 92-5, included the withholding tax provision.

The FSC bill now moves to a conference to reconcile the Senate and House versions. The gambling provision is considered major for the U.S. pari-mutuel industry, which is attempting to expand into international markets.

"We are pleased to have cleared an additional hurdle to passage of the FSC bill, which we believe will help open the $85-billion international pari-mutuel market to the American simulcast product," National Thoroughbred Racing Association deputy commissioner Greg Avioli said. "As soon as we know which conferees will be assigned this bill, we will begin intensive lobbying to ensure that our provision remains intact and appears in the final legislation."

Prior to being sent to President Bush, the product of the House and Senate Conference will need to pass another vote in the House and Senate.