4-36-306 - Amount of money retained by associations Taxes Breakage Outstanding tickets Racing development fund. - Tennessee Statutes

4-36-306. Amount of money retained by associations Taxes Breakage Outstanding tickets Racing development fund.

(a)  Each association may retain, subject to the payment of privilege taxes and the purses, an amount not to exceed seventeen percent (17%) of all money wagered, plus an additional amount equal to three and one-half percent (3½%) of the amount wagered on multiple wagering that involves a single wagering interest on two (2) horses, plus an additional amount equal to eight percent (8%) of the amount wagered on a multiple wagering that involves a single wagering interest on three (3) or more horses. In addition, each association shall retain one half of one percent (.5%) of all money wagered, which shall be forwarded to the department of revenue for allocation to the “racing development fund” established in § 4-36-105.

(b)  (1)  Each association conducting a race meeting under the provisions of this chapter shall pay to the department within forty-eight (48) hours after the close of a racing day, a tax in the amount established by the following table:

          (A)  Up to and including the first six hundred thousand dollars ($600,000) of daily pari-mutuel handle  . . . . .      1%

          (B)  Over six hundred thousand dollars ($600,000)  . . . . .      2%

     (2)  If an association conducts more than one (1) program on any day, each program shall be considered a separate racing day for the purpose of calculating the tax due. The tax shall be applied separately to the pari-mutuel handles at each track or simulcast teletheater, or both. The association shall indicate to the department the amount of tax paid for each track and/or simulcast teletheater and the name of the municipality or county (if outside the corporate boundaries of a municipality) wherein the track and/or simulcast teletheater is located.

     (3)  (A)  The department shall pay thirty percent (30%) of the tax paid by a track under this subsection (b) to the director of finance or other appropriate financial officer of the municipality wherein such track is located. If a track is not located within the corporate boundaries of a municipality, the department shall pay thirty percent (30%) of the tax paid by such track under this subsection (b) to the director of finance or other appropriate financial officer of the county wherein such track is located. If a track is located in any county having a metropolitan form of government, the department shall pay thirty percent (30%) of the tax paid by such track under this subsection (b) to the director of finance of the metropolitan government. The proceeds designated by this subdivision (b)(3)(A) for a local government shall be earmarked for law enforcement, rehabilitation referral services or programs for problem and compulsive gamblers, and education programs. If the commission determines that a proposed track will increase expenditures in a city or county other than the city or county in which the track is located, the commission shall have the power to require that a portion of the tax proceeds allocated in this subsection (b) shall be paid by the department to such city or county.

          (B)  The department shall pay thirty percent (30%) of the tax paid by a satellite teletheater under this subsection (b) to the director of finance or other appropriate financial officer of the municipality wherein such satellite teletheater is located. If a satellite teletheater is not located within the corporate boundaries of a municipality, the department shall pay thirty percent (30%) of the tax paid by a satellite teletheater under this subsection (b) to the director of finance or other appropriate financial officer of the county wherein such satellite teletheater is located. If a satellite teletheater is located in any county having a metropolitan form of government, the department shall pay thirty percent (30%) of the tax paid by a satellite teletheater under this subsection (b) to the director of finance of the metropolitan government. The proceeds designated by this subdivision (b)(3)(B) for a local government shall be earmarked for law enforcement, rehabilitation referral services or programs for problem and compulsive gamblers and education programs. If the commission determines that a proposed satellite teletheater will increase expenditures in a city or county other than the city or county in which the satellite teletheater is located, the commission shall have the power to require that a portion of the tax proceeds allocated in this subsection (b) shall be paid by the department to such city or county.

     (4)  The remaining seventy percent (70%) shall be allocated to local governments as follows:

          (A)  Thirty-three percent (33%) of the amount available shall be paid to counties in accordance with the percentage that the population of each county bears to the total state population;

          (B)  Thirty-three percent (33%) of the amount available shall be paid to counties in accordance with the percentage that the total acreage of each county bears to the total acreage of the state; and

          (C)  Thirty-four percent (34%) of the amount available shall be paid to incorporated municipalities in accordance with the percentage that the population of each incorporated municipality bears to the population of all incorporated municipalities; provided, that the local governmental entity receiving the tax proceeds under subdivision (b)(3) shall not participate in the distribution under this subdivision (b)(4).

(c)  No other organization license fee, privilege tax, excise tax or racing fee, except as provided in this chapter, shall be assessed or collected from any association by the state or any unit of local government; and, notwithstanding the provisions of § 67-4-712(c) or any other section to the contrary, the transfer of ownership of a horse by means of a claiming race shall not be subject to taxation.

(d)  Breakage shall at all times be computed on a basis not to exceed ten cents (10¢) on the dollar. An association is entitled to retain thirty-three percent (33%) of the total amount of breakage each day. Thirty-three percent (33%) shall be remitted to the department, which shall pay the money into the “racing development fund” established in § 4-36-105. The remaining thirty-four percent (34%) shall be remitted to the department, which shall pay the money equally to each of the major zoological institutions in this state that contains a zoological garden and collection of living animals and provides for their care and housing for public exhibition and that is owned, operated or leased by a municipal or county government.

(e)  (1)  Funds for payment of outstanding pari-mutuel tickets shall be held by the association in an interest-bearing special escrow account for one (1) year from the date of issuance.

          (A)  The interest earned shall be apportioned and paid out as set out for the principal in this subsection (e).

          (B)  Within the special escrow account, the commingling of funds from outstanding pari-mutuel tickets and any interest earned thereon with funds from other sources is prohibited.

     (2)  At the end of one (1) year, thirty-three percent (33%) of the funds shall become the property of the association.

     (3)  Thirty-three percent (33%) shall be remitted to the department, which shall pay the money into the “racing development fund” established in § 4-36-105.

     (4)  The remaining thirty-four percent (34%) shall be remitted to the department, which shall pay the money equally to each of the major zoological institutions in this state that contains a zoological garden and collection of living animals and provides for their care and housing for public exhibition and that is owned, operated or leased by a municipal or county government.

(f)  If, after one (1) year, a pari-mutuel ticket is presented to the association for payment, the association shall pay the same and may charge the amount thereof against unpaid money similarly accumulated on account of pari-mutuel tickets not presented for payment.

[Acts 1987, ch. 311, § 28; 1990, ch. 684, §§ 6-9; 1993, ch. 248, §§ 4, 5; 1996, ch. 1080, §§ 4, 5.]