Public Law 119-73 (01/23/2026)

26 U.S.C. § 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. 73668A Stat. 525Pub. L. 85–859, title I, § 151(a)72 Stat. 1304Pub. L. 93–499, § 3(a)88 Stat. 1550Pub. L. 94–455, title XIX, § 1906(b)(13)(A)90 Stat. 1834Pub. L. 97–362, title I, § 109(a)96 Stat. 1731(, ; , , ; , , ; , , ; , , .)

Editorial Notes

Amendments

Pub. L. 97–3621982—Subsec. (a). 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.

Pub. L. 94–4551976—Subsec. (b). struck out “or his delegate” after “Secretary”.

Pub. L. 93–4991974—Subsec. (a). substituted “2 percent” for “10 percent”.

Pub. L. 85–859section 4412 of this titlesection 4412 of this title1958—Subsec. (c). made all persons required to register under who receive wagers for or on behalf of another person without having registered under the name and place of residence of such other person liable for the tax on all such wagers received by them.

Statutory Notes and Related Subsidiaries

Effective Date of 1982 Amendment

Pub. L. 97–362, title I, § 109(c)(1)96 Stat. 1731

“The amendment made by subsection (a) [amending this section] shall take effect on .”
, , , provided that:

Effective Date of 1974 Amendment

Pub. L. 93–499, § 3(d)(1)88 Stat. 1551

section 4411 of this title“The amendments made by this section [enacting section 4424 and amending this section and ] take effect on , and shall apply only with respect to wagers placed on or after such date.”
, , , provided that:

Effective Date of 1958 Amendment

Pub. L. 85–859, title I, § 151(b)72 Stat. 1304

“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 [].”
, , , provided that: