
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC4401]

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

(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.)


                               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].''

                  Section Referred to in Other Sections

    This section is referred to in section 4411 of this title.
