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SECTION 236
Disposition of pari-mutuel pools; percentage payable to state as a tax; authority of counties or certain cities to impose a tax
Racing, Pari-Mutuel Wagering and Breeding Law (PML) CHAPTER 47-A, ARTICLE 2
§ 236. Disposition of pari-mutuel pools; percentage payable to state
as a tax; authority of counties or certain cities to impose a tax. 1.
Every corporation authorized under this chapter to conduct pari-mutuel
betting at a race meeting on races run thereat, except as provided in
section two hundred thirty-eight of this article with respect to the
franchised corporation, shall distribute all sums deposited in any
pari-mutuel pool to the holders of winning tickets therein, providing
such tickets be presented for payment before April first of the year
following the year of their purchase, less an amount that shall be
established and retained by such racing corporation of between fourteen
to twenty percent of the total deposits in pools resulting from regular
on-track bets and less sixteen to twenty-two percent of the total
deposits in pools resulting from multiple on-track bets and less twenty
to thirty percent of the total deposits in pools resulting from exotic
on-track bets and less twenty to thirty-six percent of the total pools
resulting from super exotic on-track bets, plus the breaks. The
retention rate to be established is subject to the prior approval of the
commission. Such rate may not be changed more than once per calendar
quarter to be effective on the first day of the calendar quarter.
"Exotic bets" and "multiple bets" shall have the meanings set forth in
section five hundred nineteen of this chapter and breaks are hereby
defined as the odd cents over any multiple of five for payoffs greater
than one dollar five cents but less than five dollars, over any multiple
of ten for payoffs greater than five dollars but less than twenty-five
dollars, over any multiple of twenty-five for payoffs greater than
twenty-five dollars but less than two hundred fifty dollars, or over any
multiple of fifty for payoffs over two hundred fifty dollars. "Super
exotic bets" shall have the meaning set forth in section three hundred
one of this chapter. Of the amount so retained there shall be paid by
such corporation to the department of taxation and finance as a
reasonable tax by the state for the privilege of conducting pari-mutuel
betting on the races run at the race meeting held by such corporation,
which tax is hereby levied, the following percentages of the total pool,
plus fifty-five percent of the breaks; the applicable rates for regular
and multiple bets shall be one and one-half percent; the applicable
rates for exotic bets shall be six and three-quarter percent and the
applicable rate for super exotic bets shall be seven and three-quarter
percent. Effective on and after September first, nineteen hundred
ninety-four, the applicable tax rate shall be one percent of all wagers,
provided that, an amount equal to one-half the difference between the
taxation rate for on-track regular, multiple and exotic bets as of
December thirty-first, nineteen hundred ninety-three and the rates on
such on-track wagers as herein provided shall be used exclusively for
purses. Provided, however, that for any twelve-month period beginning on
April first in nineteen hundred ninety and any year thereafter, each of
the applicable rates set forth above shall be increased by one-quarter
of one percent on all on-track bets of any such racing corporation that
did not expend an amount equal to at least one-half of one percent of
its on-track bets during the immediately preceding calendar year for
enhancements consisting of capital improvements as defined by section
two hundred thirty-seven of this article, repairs to its physical plant,
structures, and equipment used in its racing or wagering operations as
certified by the commission to the commissioner of taxation and finance
no later than eighty days after the close of such calendar year, and
five special events at each track in each calendar year, not otherwise
conducted in the ordinary course of business, the purpose of which shall
be to encourage, attract and promote track attendance and encourage new
and continued patronage, which events shall be subject to the prior
approval of the commission for purposes of this subdivision. In the
determination of the amounts expended for such enhancements, the
commission may consider the immediately preceding twelve-month calendar
period or the average of the two immediately preceding twelve-month
calendar periods. Provided further, however, that of the portion of the
increased amounts retained by such corporation above those amounts
retained in nineteen hundred eighty-four, an amount of such increase
shall be distributed to purses in the same proportion as commissions and
purses were distributed during nineteen hundred eighty-four as certified
by the commission. Such corporation in the second zone shall receive a
credit against the daily tax imposed by this subdivision in an amount
equal to four-tenths of one percent of total daily pools resulting from
the simulcast of such corporation's races to licensed facilities
operated by regional off-track betting corporations in accordance with
section one thousand eight of this chapter, provided however, that sixty
percent of the amount of such credit shall be used exclusively to
increase purses for overnight races conducted by such corporation; and,
provided further, that in no event shall such total daily credit exceed
four-tenths of one percent of the total daily pool of such corporation.

Such corporation shall pay to the New York state thoroughbred breeding
and development fund one-half of one percent of the total daily on-track
pari-mutuel pools from regular, multiple and exotic bets, and three
percent of super exotic bets. The corporation shall receive credit as a
reduction of the tax by the state for the privilege of conducting
pari-mutuel betting for the amounts, except amounts paid from super
exotic betting pools, paid to the New York state thoroughbred breeding
and development fund after January first, nineteen hundred
seventy-eight.

Such corporation shall distribute to purses an amount equal to fifty
percent of any compensation it receives from simulcasting or from
wagering conducted outside the United States. Such corporation shall pay
to the commission as a regulatory fee, which fee is hereby levied,
six-tenths of one percent of the total daily on-track pari-mutuel pools
of such corporation.

2. The balance of the retained percentage of such pool and of the
breaks shall be held by such corporation for its own use and purposes,
except that in addition to any payments to purses provided for in
subdivision one of this section, an amount equal to two and one-half
percent of the total pools resulting from on-track regular bets and
exotic bets and an amount equal to three and one-half percent of the
total pools resulting from on-track multiple bets and an amount equal to
twelve percent of on-track super exotic bets shall be used exclusively
for the purpose of increasing purses (including stakes, premiums and
prizes) awarded to horses in races conducted by such corporation. Such
two and one-half percent and three and one-half percent shall be in
addition to (i) four and one-half percent of such total pools resulting
from regular and multiple wagers and five and one-half percent of such
total pools resulting from exotic wagers, or (ii) the percentage of such
total pools used for purses (including stakes, premiums and prizes)
during the year nineteen hundred eighty-two, whichever is larger. Such
percentage of the total pools mentioned in this subdivision shall be
used for purses (including stakes, premiums and prizes) in races
hereafter conducted by such corporation, and any portion not so used
during any year shall be so used during the following year, failing
which such portion shall be payable to the commissioner of taxation and
finance as additional tax. The commission shall report annually, on or
before July first, to the director of the budget, the chair of the
senate finance committee and the chair of the assembly ways and means
committee the extent to which such corporation used and retained
percentages and breakage for operations, maintenance, capital
improvements, advertising and promotion, administration and general
overhead and evaluate the effectiveness and make recommendations with
respect to the application of the reduced rates of taxation as provided
for in subdivision one of this section in accomplishing the objectives
stated therein. Such report shall also specify the amount of such
retained percentages and breakage used for investments not directly
related to racing activities and such amounts used to declare dividends
or other profit distributions, additions to capital stock, its sale and
transfer and additions to retained earnings. Such reports shall also
include an analysis of any such agreements or proposals to conduct or
otherwise expand wagers authorized under article ten of this chapter and
present its conclusions with respect to the conduct of such wagering,
the nature of such proposals and agreements, and recommendations to
ensure the future maintenance of the intent of this article.

3. Tax rates in event of a failure to maintain pari-mutuel racing
activity. a. Notwithstanding any other provision of this section to the
contrary, for any calendar year commencing on or after January first,
nineteen hundred eighty-nine, in which a racing corporation in zone two
does not conduct a minimum number of pari-mutuel programs and
pari-mutuel races at its facilities equal to at least ninety percent of
the programs and races so conducted during nineteen hundred eighty-five
or during nineteen hundred eighty-six, whichever is less, in lieu of the
tax rates set forth in subdivision one of this section the applicable
pari-mutuel tax rates for such corporation with respect to on-track
pari-mutuel betting pools during such year shall be increased by one
percent of regular, multiple and exotic betting pools. Notwithstanding
the foregoing, no increase shall be proposed unless such corporation has
been afforded notice and opportunity to be heard. The commission shall
promulgate rules and regulations to implement the provisions relating to
notice and hearing.

b. The provisions of this subdivision shall not apply to a corporation
for any calendar year for which the commission certifies to the
commissioner of taxation and finance:

(i) by December fifteenth of the year immediately preceding such year,
that such corporation has been assigned for such year, from the programs
and races it requested, at least the minimum number of programs and
races prescribed in paragraph a of this subdivision, or, if fewer than
such number were assigned for such year, that the assignment of such
lesser number was for good cause due to factors beyond the control of
such corporation or because the commission found that it would be
uneconomical or impractical for such corporation to be assigned the
prescribed number; and

(ii) by January thirty-first of the year immediately subsequent to
such year, that such corporation did conduct such number of programs and
races as were certified pursuant to subparagraph (i) of this paragraph,
or if it failed to conduct such number that such failure was for good
cause due to factors beyond its control or because the commission found
it uneconomical or impractical for such corporation to conduct such a
number.

c. For any calendar year for which the commission does not certify
pursuant to the provisions of subparagraph (i) of paragraph b of this
subdivision with respect to a corporation, the tax imposed by this
section shall be computed by substituting the provisions of paragraph a
of this subdivision for the provisions of subdivision one of this
section and shall pay the tax so computed to the commissioner of
taxation and finance. In such computation and payment, all other
provisions of this section shall apply as if the provisions of this
paragraph and of paragraph a of this subdivision had been incorporated
in whole in subdivision one of this section.

d. For any calendar year for which the commission does not certify
pursuant to the provisions of subparagraph (ii) of paragraph b of this
subdivision with respect to a corporation, the tax required to be paid
hereunder for such year shall be equal to the difference between the tax
imposed pursuant to paragraph a of this subdivision and the tax imposed
pursuant to the provisions of subdivision one of this section less
one-half of such difference in recognition of purses that were required
to be paid, plus an additional amount equal to ten percent of such tax
in the event of a willful failure to comply with the provisions of
subparagraph (ii) of paragraph b of this subdivision, and such
corporation shall pay the tax so computed to the commissioner of
taxation and finance on or before March fifteenth of the following year.
Notwithstanding the provisions of this subdivision, in the event that
upon appeal from the determination of the commission that the
certification provided in paragraph b of this subdivision will not be
made, it is finally determined that the commission erred in failing to
so certify and that any moneys received by the commissioner of taxation
and finance under paragraph c of this subdivision were paid in error,
the same shall be refunded at the rate of interest of six percent per
annum. Payment of such balance of tax due, or the anticipation of such
payment, shall not affect the determination of purses in the year in
which such tax arises or in the year in which such payment is made nor
shall such payment in any other manner be considered in any statutory or
contractual calculation of purse obligations.

e. Written notice of the certification of the commission pursuant to
the provisions of paragraph b of this subdivision shall be given by the
commission to the applicable corporation by the dates therein specified.
In like manner, written notice that such certification will not be made
shall be given by the commission to the commissioner of taxation and
finance and the applicable corporation by such dates.

4. The payment of the state tax imposed by this section shall be made
to the commissioner of taxation and finance on the last business day of
each month and shall cover taxes due for the period from the sixteenth
day of the preceding month through the fifteenth day of the current
month provided, however, that such payments required to be made on March
thirty-first shall include all taxes due and accruing through the last
full week of racing in March of the current year or as otherwise
determined by the commissioner of taxation and finance, and shall be
accompanied by a report under oath, showing the total of all such
contributions, together with such other information as the commissioner
of taxation and finance may require. A penalty of five per centum and
interest at the rate of one per centum per month from the date the
report is required to be filed to the date of payment of the tax shall
be payable in case any tax imposed by this section is not paid when due.
If the commissioner of taxation and finance determines that any moneys
received under this subdivision were paid in error, the commissioner of
taxation and finance may cause the same to be refunded without interest
out of any moneys collected thereunder, provided an application therefor
is filed with the commissioner of taxation and finance within one year
from the time the erroneous payment was made. Such taxes, interest and
penalties when collected, after the deduction of refunds of taxes
erroneously paid, shall be paid by the commissioner of taxation and
finance into the general fund of the state treasury.

5. No county, city, town, village or other political subdivision of
the state may impose, levy or collect a tax on admission fees or tickets
of admission, on wagers made by patrons, in the form of purchases of
pari-mutuel tickets or upon such tickets, on pari-mutuel pools, on
breaks, on dividends or payments made to winning bettors, or on that
part of the pari-mutuel pools or breaks to be retained by racing
corporations under this section, except as otherwise provided in this
chapter.