35 Miss. Admin. Code Pt. III, Subpt. 3, Ch. 09 — Gaming Winnings and Gaming Income

100 Amounts received in cash or other remuneration from play at a gambling game or as a
prize, lottery, award, or tournament winning are subject to an income tax levy. However,
the reporting requirements and tax levy will vary depending on the source of the income.
101 Terms

# 1.

The term "Mississippi gaming establishment" or "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.

# 2.

The term "Mississippi gaming winnings" or "gaming winnings" includes all amounts
that are paid, whether in cash or other form, by Mississippi 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.

# 3.

The term "paid" means the gross amount of gaming winnings without respect to any
reduction for tax withholdings or other reserves and may not be less than the amount
reported for federal tax purposes.
102 Mississippi Gaming Winnings
1. A tax levy of three percent (3%) is made on all Mississippi gaming winnings. Such
amount is required to be withheld by the Mississippi gaming establishment. The
amount of tax withheld from gaming winnings will be reflected on Federal Form W-
2G or other information return filed by the gaming establishment to report the
transaction. The amount to be withheld is three percent (3%) of the amount paid,
whether in cash or other form, to the recipient.
2. 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 tax of three percent
(3%) is levied on the lump-sum amount in the year it is constructively received. The
three percent (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.
3. The three percent (3%) withheld on Mississippi gaming winnings reflects the tax due
and once such proper amounts are remitted to the Department of Revenue by the
Mississippi gaming establishment, as well as a properly completed W -2G, 1099, or
other federally prescribed informational statement (filed annually or as prescribed by
the Commissioner), the patron has no further filing requirements. 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 of such statement.

# 4.

The W-2G or 1099 reflecting the income and Mississippi withholding once remitted
by the Mississippi gaming establishment to the Department of Revenue serves as the
patrons return filing for such income. Accordingly, Mississippi gaming winnings are
not reported on the patron's regular income tax return filing. Likewise, the amounts
withheld cannot be claimed on an income tax return filing to offset a tax liability,
create a refund, or to generate any other type of credit or offset.
103 Other Mississippi Gaming Income
Except for the amounts described in paragraph 102, all other gaming income is subject to
the income tax levy provided for in Miss. Code Ann. Section 27 -7-3. Any gaming losses
incurred at Mississippi gaming establishments are a reduction, as compared to an itemized
deduction, to Mississippi gaming income. The net of such amounts, if positive, is
reportable by the patron as taxable Mississippi income. Mississippi gaming income
includes any gaming income not covered by the three percent (3%) levy described in
paragraph 102 received from a Mississippi gaming establishment. Mississippi gaming
losses may not be taken as a separate deduction or otherwise offset any income other than
Mississippi gaming income not subject to the three percent (3%) withholding requirement
and resulting from a wager.
104 Non-Mississippi Gaming Income
Mississippi follows federal rules, regulations, and revenue procedures to the extent not
contrary to the laws of this state in determining the amount of gaming income received and
gaming losses incurred by Mississippi residents at non-Mississippi gaming establishments.
Non-Mississippi gaming income is reported apart from any non-Mississippi gaming losses
incurred. Non -Mississippi gaming losses are allowed as an itemized deduction to the
extent of any non -Mississippi gaming income. In no event may the deduction for such
losses exceed the non-Mississippi gaming income.
105 (Reserved)
35.III.3.09 revised effective October 4, 2021
Subpart 04 Adjustments to Gross Income