US Code

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

26 U.S.C. § 4402

Exemptions

No tax shall be imposed by this subchapter—
(1)

Parimutuels

On any wager placed with, or on any wager placed in a wagering pool conducted by, a parimutuel wagering enterprise licensed under State law,

(2)

Coin-operated devices

On any wager placed in a coin-operated device (as defined in section 4462 as in effect for years beginning before ), or on any amount paid, in lieu of inserting a coin, token, or similar object, to operate a device described in section 4462(a)(2) (as so in effect), or

(3)

State-conducted lotteries, etc.

On any wager placed in a sweepstakes, wagering pool, or lottery which is conducted by an agency of a State acting under authority of State law, but only if such wager is placed with the State agency conducting such sweepstakes, wagering pool, or lottery, or with its authorized employees or agents.

Aug. 16, 1954, ch. 73668A Stat. 525Pub. L. 85–859, title I, § 152(b)72 Stat. 1305Pub. L. 89–44, title IV, § 405(a)79 Stat. 149Pub. L. 94–455, title XII, § 1208(a)90 Stat. 1709Pub. L. 95–600, title V, § 521(c)(1)92 Stat. 2884(, ; , , ; , title VIII, § 813(a), , , 170; , , ; , , .)

Editorial Notes

References in Text

Pub. L. 95–600, title V, § 521(b)92 Stat. 2884Section 4462, referred to in par. (2), was repealed by , , .

Amendments

Pub. L. 95–6001978—Par. (2). substituted “(as defined in section 4462 as in effect for years beginning before )” for “with respect to which an occupational tax is imposed by section 4461” and “(as so in effect), or” for “if an occupational tax is imposed with respect to such device by section 4461, or”.

Pub. L. 94–4551976—Par. (3). , among other changes, substituted in heading “State-conducted lotteries, etc.” for “State-conducted sweepstakes.”, and struck out provision that no tax be imposed on any wager placed in a sweepstakes, wagering pool, or lottery in which the ultimate winners are determined by the results of a horse race.

Pub. L. 89–44, § 405(a)1965—Par. (2). , substituted “section 4462(a)(2),” for “section 4462(a)(2)(B),”.

Pub. L. 89–44, § 813(a)Par. (3). , added par. (3).

Pub. L. 85–859section 4461 of this title1958—Par. (2). inserted provisions exempting from the tax amounts paid to operate a device described in section 4462(a)(2)(B), if an occupational tax is imposed with respect to such device by .

Statutory Notes and Related Subsidiaries

Effective Date of 1978 Amendment

Pub. L. 95–600, title V, § 521(d)(2)92 Stat. 2885

section 4901 of this title“The amendments made by subsections (b) [repealing sections 4461 to 4464 of this title] and (c) [amending this section and ] shall apply with respect to years beginning after .”
, , , provided that:

Effective Date of 1976 Amendment

Pub. L. 94–455, title XII, § 1208(c)(1)90 Stat. 1709

“The amendment made by subsection (a) [amending this section)] shall apply with respect to wagers placed after ”.
, , , provided that:

Effective Date of 1965 Amendment

Pub. L. 89–44, title VII, § 701(c)(2)79 Stat. 157

section 4901 of this titlesection 4914 of this title“The amendments made by sections 403 [amending sections 4461 and 4462 of this title] (relating to occupational tax on coin-operated devices) and 404 [repealing sections 4471 to 4474] (relating to occupational tax on bowling alleys, billiard and pool tables), and by subsections (a) [amending this section], (b) [amending ] and (d) [amending ] of section 405 (relating to technical and conforming changes) shall apply on and after .”
, , , provided in part that:

Pub. L. 89–44, title VIII, § 813(b)79 Stat. 170

“The amendment made by subsection (a) [amending this section] shall apply with respect to wagers placed after .”
, , , provided that:

Effective Date of 1958 Amendment

Pub. L. 85–859, title I, § 152(c)72 Stat. 1305Pub. L. 99–514, § 2100 Stat. 2095

section 4462 of this title“The amendments made by subsections (a) and (b) [amending this section and ] shall take effect on the effective date specified in section 1(c) of this Act [the first day of the first calendar quarter beginning more than 60 days after ]. In the case of the year beginning , where the trade or business on which the tax is imposed under section 4461 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] was commenced before such effective date, the tax imposed for such year solely by reason of the amendment made by subsection (a)—
“(1)
shall be the amount reckoned proportionately from such effective date through , and
“(2)
shall be due on, and payable on or before, the last day of the month the first day of which is such effective date.”
, , , as amended by , , , provided that: