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HSB 91

A bill for an act relating to state income tax withholdings on winnings from sports wagering, and including effective date provisions.

2025-2026 Regular Session

Iowa withholds state income tax on sports wagering winnings whenever federal withholding applies, aligning with federal rules; effective Jan 1, 2026.

Committee report approving bill, renumbered as HF 794.
#gambling #incometaxes #sportswagering
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WeVote Research Nonpartisan
Bill Summary · HSB 91

Summary: HSB 91 (renumbered HF 794) — Withholding on Sports Wagering Winnings

Overview

HSB 91, introduced January 28, 2025, addresses Iowa state income tax withholding on winnings from sports wagering. The bill would require Iowa state income tax to be withheld from sports wagering winnings whenever those winnings are subject to federal income tax withholding. The legislation takes effect January 1, 2026. The bill advanced through House committees and was renumbered as HF 794 during the 2025 session.

  • Status: Committee report approving bill; renumbered as HF 794
  • Introduced: January 28, 2025
  • Subject: Gambling, income taxes, sports wagering
  • Effective date: January 1, 2026

Key Provisions

  • Withholding Requirement: If sports wagering winnings are subject to federal income tax withholding, the bill requires Iowa state income tax to be withheld from those winnings.
  • Source of Withholding: The obligation appears to be triggered by the same winnings that would be subject to federal withholding; the bill does not specify new withholding thresholds beyond aligning with federal withholding triggers.
  • Implementation Scope: Applies to winnings from sports wagering where federal withholding is required, with the state tax withheld in the payout or similar withholding process.
  • Relationship to Existing Tax Law: Aligns Iowa’s state withholding practice for gambling winnings with federal withholding practices where applicable.

Effective Date and Implementation

  • Effective Date: January 1, 2026
  • Implementation Considerations: Likely requires sports wagering operators or payers to withhold Iowa state income tax at the point of payout whenever federal withholding is required, and to remit those amounts to the state tax authority in line with existing withholding procedures.

Affected Parties

  • Individual winners of sports wagering in Iowa whose winnings are subject to federal withholding
  • Sports wagering operators/payers in Iowa responsible for processing and remitting withholdings
  • Iowa Department of Revenue (as the recipient and administrator of withheld taxes)

Procedural History and Timetable

  • 2025-01-28: Introduced and referred to Ways and Means
  • 2025-02-11: Subcommittee meeting scheduled (House Lounge)
  • 2025-02-19: Subcommittee recommends passage
  • 2025-02-25: Committee report recommending passage; committee vote: Yeas 24, Nays 0, Excused 1
  • 2025-03-05: Committee report approving bill, renumbered as HF 794

Practical Implications

  • Tax Compliance: Provides clearer guidance for withholding on wagering winnings, ensuring alignment between federal and Iowa state tax collection where federal withholding applies.
  • Revenue Administration: Could increase withholding and remittance activity for gambling winnings, improving state tax collection from gaming activities.
  • Taxpayers: Winners may receive net winnings after withholdings unless they adjust tax payments or file returns/tay credits accordingly.

This summary captures the bill’s core intent, provisions, and timeline based on the introduced and committee materials.

Compiled from official sources — confirm details with the bill’s official record.

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