35 Miss. Admin. Code Pt. III, Subpt. 11, Ch. 22 — Withholding on Gambling Winnings

100 Definitions
101 Gaming establishment means any establishment where gambling games are conducted or
operated within this state and any party that provides or is responsible for the payment of
cash or other remuneration resulting directly or indirectly from play at gambling games
within this state. Gaming establishments include those establishments required to be
licensed under the Mississippi Gaming Control Act, establishments which would be
licensed under the Mississippi Gaming Control Act but for a federal preemption, and the
Mississippi Lottery Corporation.
102 Gaming winnings includes all amounts that are paid, whether in cash or other form, by
gaming establishments to patrons which are subject to the withholding and/or reporting
requirements of the Internal Revenue Code (IRC) as specified in Miss. Code Ann. Sections
27-7-901 and 27-7-903. Such amounts are not limited to cash or remuneration from play at
a gambling game, but include, without limitation, amounts considered prizes, awards,
tournament winnings or similar types of compensation. There is no reduction for tax
withholdings or other reserves and may not be less than the amount reported for federal tax
purposes. This is the amount that is subject to the withholding or reporting requirements of
the IRC.
103 (Reserved)
200 General Requirements
201 According to Miss. Code Ann. Section 27-7-901, there is a three percent (3%) tax levy of
the amount of gaming winnings received from gaming establishments licensed by the
Mississippi Gaming Control Act which shall be withheld and remitted by the gaming
establishment.
202 According to Miss. Code Ann. Section 27-7-903, there is a three percent (3%) tax levied of
the amount of gaming winnings received from gaming establishments not licensed by the
Mississippi Gaming Control Act. The Department of Revenue may enter into tax
collection agreements regarding this tax with the gaming establishment.
203 The gaming establishment must register to withhold Mississippi income tax in the same
manner as stated in Title 35, Part III, Subpart 11 Chapter 17 of the Mississippi
Administrative Code, Registration of Employers. The withholding account used to report
the withholding on wages cannot be used to report withholding on gaming winnings. A
separate account for withholding on gaming winnings must be obtained from the
withholding division of the Mississippi Department of Revenue. A monthly return must be
filed and the tax paid on or before the 15th day of the month following the month for which
such amounts were withheld.
204 Gaming establishments are not required to complete the Mississippi withholding exemption
certificate form for gaming winnings. However, the gaming establishment must keep the
following records and information for three (3) years after the date the tax becomes due or
is paid, whichever is later:

# 1.

Total gaming winnings paid.

# 2.

Amount of Mississippi income tax withheld.

# 3.

Name, address and social security or identification number of the party in receipt of
gaming winnings.

# 4.

Name, address and Mississippi identification number of the gaming establishment.

# 5.

Payment period -- calendar year unless indicated otherwise.
205 Each gaming establishment, in the form and manner prescribed by the Commissioner, shall
prepare Federal Form W-2Gs, or other federal forms which are used to report income for
federal tax purposes with the preceding information for those patrons whose gaming
winnings were subject to Mississippi withholding. If the federally prescribed information
return does not allow for the recording of both state income and state tax withholdings, then
a W-2G should be completed and attached as part of the filing.
206 The original state copy is filed in accordance with Title 35, Part III, Subpart 11 Chapter 14
of the Mississippi Administrative Code.
207 If it becomes necessary to correct Form W -2G after it has been given to a patron, a
corrected statement should be mailed to the Commissioner, such copy to be clearly marked
"corrected by gaming establishment." In case a withholding statement is lost or destroyed, a
substituted copy may be issued marked "reissued by gaming establishment."
208 Multi-period payoffs: If a patron is entitled to receive either a lump -sum payment or a
series of periodic payments received at least annually, then a levy of 3% is levied on the
lump-sum amount in the year it is constructively received under the constructive receipt
doctrine. The constructive receipt doctrine does not apply to lottery winnings. The 3%
levy is a liability of the Mississippi gaming establishment which was a party to the wager,
regardless of whether it is the paying agent.
209 The Commissioner will follow Federal Rules, Regulations, and Revenue Procedures
relating to gaming winnings to the extent that such procedures are not deemed contrary to
the context and intent of Mississippi Law.
210 (Reserved)
300 Thresholds for Withholding Requirements
301 Lottery proceeds of six hundred dollars ($600.00) or more are subject to withholding under
Miss. Code Ann. Section 27-115-43.
302 Keno gaming winnings of one thousand five hundred dollars ($1,500.00) or more, reduced
by wager, are subject to withholding. Keno tournaments have the same threshold amount
prior to becoming subject to withholding.
303 Slot or Bingo gaming winnings of one thousand two hundred ($1,200.00) or more, not
reduced by wager, are subject to withholding. Slot or Bingo tournaments have the same
threshold amount prior to becoming subject to withholding.
304 The thresholds for withholding vary for tournaments, other than those for slots, Bingo, or
Keno, such as poker tournaments, depending on the odds involved in the tournament, the
amount of the proceeds won and whether there is an entry fee. In regard to these other
tournaments, gaming establishments shall withhold and remit based on this chart:
Tournament Reporting and Withholding
Footnote:
• Proceeds are reduced by the wager (entry fee paid).
• If the entry fee is paid by the participant, only a W -2G can be issued
(tournament contributions by the company are irrelevant).
• Reporting and withholding is not triggered until the participant cashed out
(final round).
• For reporting and withholding requirements under the IRC on gambling
winnings of nonresident aliens, see instructions to IRS Form 1042 -S and IRS
Entry Fee Payout Over $600
AND Odds Greater than 300-1
Issue W-2G and
withhold
Issue 1099 if over
$600 and withhold Payout Over
$5,000
No Reporting or
Withholding
Issue W-2G and
withhold
No
No
Yes
Yes
Yes
No
Publication 515 or any replacement thereof. The gaming establishment
should substitute a 1042-S for the W-2G or 1099 MISC.
Examples:
• Patron pays tournament entry fee and wins satellite tournament. Patron
receives no cash but does move on to next round. W -2G reporting and
withholding is only triggered when patron cashes out. The reportable amount
is reduced by the entry fee (subject to above flowchart).
• Patron pays tournament entry fee and wins tournament. Patron receives no
cash but does receive a paid (comp'd) entry fee to a third party tournament.
Patron gets a W -2G for the value of the comp reduced by the original paid
entry fee. Gaming establishments may have to gross up the W -2G for
Mississippi withholding tax purposes.
• Gaming establishment comps a tournament entry fee for a patron. A 1099
MISC must be issued for any payout of $600 or more. The reportable amount
is not reduced by the comp'd entry fee.
305 (Reserved)
35.III.11.22 revised effective October 4, 2021
Chapter 23 - Transfer of Assessments
100 Definitions
101 For purposes of this chapter, t he term "employer" means a person doing business in, or
deriving income from sources within the state, who has control of the payment of wages
to an individual for services performed, or a person who is the officer or agent of the
person having control of the payment of wages. "Employer" is further defined under Title
35, Part III, Subpart 11, Chapter 05 of the Miss. Admin. Code.
102 The term "person" means and includes individuals, fiduciaries, corporations,
partnerships, associations, the state and its political subdivisions, and the federal
government, its agencies and instrumentalities.
103 (Reserved)
200 General
201 Persons owning stock of ten percent (10%) or more of a total corporation or ten percent
(10%) interest or more in a limited liability company (LLC) with thirty -five (35) or less
owners, and are exercising responsibility for fiscal management at the time that the tax
was withheld or required to be withheld are liable for the taxes due.
202 Exercising responsibility for fiscal management includes, but is not limited to, any one of
the following activities:
1. A significant involvement in the day-to-day management of the business;
2. the authority to sign business checks or tax returns;
3. the authority to direct payment of business funds to creditors;
4. the authority to pledge business assets as collateral for loans, advances, or lines of
credit for the business;
5. the authority to bind the business to contracts;

# 6.

the authority to hire or fire employees who are authorized to perform any act
described in three (3) through five (5) of this paragraph;

# 7.

acting as a high ranking officer of the corporation or LLC, including, but not limited
to, President, Vice-President, Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer, Chairman, Vice -Chairman, Director, Controller, Secretary and/or
Treasurer;

# 8.

ownership of more than fifty percent (50%) interest in the corporation or LLC unless
an operating agreement exists at the time the tax liability is accrued specifying that
the taxpayer is not responsible for fiscal management; or

# 9.

participating in decisions regarding the purchase or sale of the business or the
authority to participate in decisions regarding the purchase or sale of the business.
203 The Department must transfer the assessment from the corporation or LLC to the
employer or person exercising fiscal management within thirty -six (36) months of when
the liability of the corporation or LLC becomes final. A notice will be issued to the
transferee, and once received the transferee will have sixty (60) days in which to appeal
the transfer of assessment. The transfer is appealable on the issue of the ownership
interest and fiscal management requirements only.
204 Bankruptcy of the transferee does not prevent the Department from transferring a
liability.
205 (Reserved)
35.III.11.23 revised effective January 7, 2019
112 (Reserved)
Subpart 12 Franchise Tax