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    "title": "GATT & Indian Gaming Tax Revenue Collection",
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    "ocrText": "FOIA Number: 2006-0197-F\nFOIA\nMARKER\nThis is not a textual record. This is used as an\nadministrative marker by the William J. Clinton\nPresidential Library Staff.\nCollection/Record Group:\nClinton Presidential Records\nSubgroup/Office of Origin:\nDomestic Policy Council\nSeries/Staff Member:\nMichael Schmidt\nSubseries:\nOA/ID Number:\n7351\nFolderID:\nFolder Title:\nGATT and Indian Gaming Tax Revenue Collection\nStack:\nRow:\nSection:\nShelf:\nPosition:\nS\n98\n7\n2\n1\n08/03/94 10:02\n2025461755\nNIGA\n5.\n002\nDESCRIPTION OF CHAIRMAN'S MARK\nRELATING TO FINANCING OPTIONS\nFOR IMPLEMENTING THE\nURUGUAY ROUND AGREEMENT\nOF THE\nGENERAL AGREEMENT ON TARIFFS AND TRADE\n(GATT)\nScheduled for Consideration\nby the\nSenate Committee on Finance\non July .28, 1994\nPrepared by the Staff\nof the\nJOINT COMMITTEE ON TAXATION\nJuly 28, 1994\nJCX-11-94\n08/03/94 10:02\n2025461755\nNIGA\n$\n003\nCONTENTS\nPage\nINTRODUCTION\n1\nI. OFFSETTING THE COSTS OF THE URUGUAY ROUND OF THE GENERAL\nAGREEMENT ON TARIFFS AND TRADE\n2\nII. DESCRIPTION OF FINANCING OPTIONS\n3\nA. Estimated Tax Treatment of Subpart F Inclusions\nand Inclusions of Certain Amounts Under Section\n936\n3\nB.\nModify Inventory Accounting Rules\n6\nC. Partnership Distributions of Marketable Securities 11\nD.\nWithholding on Distributions of Indian Casino\nProfits to Tribal Members\n13\nE.\nAcceleration of Deposits of Payments for Certain\nExcise Taxes\n15\nF.\nRequire Taxpayer Identification Numbers for All\nChildren Regardless of Age\n17\nG. Voluntary Withholding on Taxable Federal Government\nPayments\n18\nH.\nRepeal of Same Condition Substitution Drawback\n:\n19\nI. Decrease Rate of Interest Paid on Overpayments of\nTax\n20\nJ.\nRounding Rules for Cost-of-Living Adjustments\n21\nK.\nExtend IRS User Fees\n22\nL.\nIncrease in Inclusion of Social Security and\nRailroad Retirement Tier 1 Benefits Paid to\nNonresident Alien Individuals\n23\nM. Denial of the Earned Income Tax Credit to\nCertain Nonresident Aliens\n26\n08/03/94 10:02\n2025461755\nNIGA\n5\n004\nN.\nExtension of the Earned Income Tax Credit to\nMilitary Personnel Stationed Overseas\n29\nO. Use of Excess Pension Assets for Retiree Health\nBenefits\n32\n08/03/94\n10:03\n2025461755\nNIGA\n005\nINTRODUCTION\nThis document, 2 prepared by the staff of the Joint Committee\non Taxation, provides a description of the Chairman's mark for\nfinancing the implementation of the Uruguay Round Agreement of\nthe General Agreement on Tariffs and Trade (GATT), based on\nrecommendations made by the Administration. The Senate Committee\non Finance is scheduled to consider these financing options on\nJuly 28, 1994.\nPart I of the document provides a brief discussion of the\nmajor components for offsetting the costs of the Uruguay Round\nAgreement of the General Agreement on Tariffs and Trade. Part II\ncontains detailed descriptions of the items in the revenue\ncomponent of the mark.\n1\nThis document may be cited as follows: Joint Committee on\nTaxation, Description of Chairman's Mark Relating to Financing\nOptions for Implementing the Uruguay Round Agreement of the\nGeneral Agreement on Tariffs and Trade (GATT) (JCX-11-94), July\n28, 1994.\n08/03/94\n10:03\n2025461755\nNIGA\n006\n13\nD.\nWithholding on Distributions of Indian Casino Profits to\nTribal Members\nPresent Law\nIn ordinary matters not governed by treaties or remedial\nlegislation, Indians are subject to the payment of Federal income\ntax as are other citizens. Income received by Indian tríbal\ngovernments, and by tribal corporations established under Federal\nlaw, from activities conducted on or off reservations generally\nis exempt from Federal income tax (Rev. Rul. 94-16, IRB No. 1994-\n12).\nGaming activities conducted by Indian tribes are classified\nin 25 U.S.C. 2703. Class I gaming activities are social games\nsolely for prizes of minimal value or traditional forms of Indian\ngaming-engaged in as part of tribal ceremonies. Class II gaming\nactivities generally are bingo, games similar to bingo (e.g.,\npull tabs, punchboards, tip jars, and instant bingo) and card\ngames either (1) explicitly authorized by the State or (2) not\nexplicitly prohibited by the State, played at any location in the\nState, and conducted in conformity with any State regulations\nregarding periods of operation or wagering limitations. Class II\ngaming activities do not include any banking card games (e.g.,\nbaccarat, chemin de fer, or blackjack), slot machines or any\nelectronic or electromagnetical facsimiles of games of chance.\nClass III gaming activities are all forms of gaming that are not\nclassified as Class I or Class II.\nNet revenues from certain gaming activities conducted or\nlicensed by an Indian tribe may be used to make taxable\ndistributions to members of the Indian tribe. The tribe must\nnotify its members of the tax liability at the time the payments\nare made. 25 U.S.C. 2710 (b) (3) and (d) (1). The tribe is not\nrequired to withhold on such payments except to the extent backup\nwithholding rules apply under Code section 3406.\nDescription of Chairman's Mark\nAn Indian tribe that uses net revenues from gaming\nactivities (except for class I gaming activities as defined in 25\nU.S.C. 2703 (6) as in effect on July 28, 1994) to make taxable\ndistributions to its members would be required to withhold on\nsuch payments in accordance with the following schedule:\n(1) The withholding rate would be zero to the extent the\npayment, when annualized, does not exceed the sum of one\npersonal exemption and the standard deduction for a single\nperson for the calendar year in which the payment is made.\n(2) The withholding rate would be 15 percent to the extent\nthe payment, when annualized, exceeds the highest amount to\n08/03/94\n10:04\n2025461755\nNIGA\n007\n14\nwhich the zero percent withholding rate applies under (1)\nbut does not exceed the sum of that amount and the amount of\ntaxable income to which, in the case of a single person, the\n15 percent tax rate would apply for the calendar year in\nwhich the payment is made.\n(3) The withholding rate would be 28 percent to the extent\nthe payment, when annualized, exceeds the highest amount to\nwhich the 15 percent withholding rate applies under (2) but\ndoes not exceed the sum of that amount and the amount of\ntaxable income to which, in the case of a single person, the\n28 percent tax rate would apply for the calendar year in\nwhich the payment is made.\n(4) The withholding rate would be 31 percent to the extent\nthe payment, when annualized, exceeds the highest amount to\nwhich the 28 percent withholding rate applies under (3).\nAlternatively, the tribe would be allowed to withhold on\nsuch payments in accordance with such tables or computational\nprocedures as the Secretary may prescribe.\nEffective Date\nThe proposal would be effective for payments made after\nDecember 31, 1994.\n7-27-94\n:10:58AM\n;\n2023956899-\n202 456 7028:# 2\nSENT\n7-18-94\n(DTR)\nreport\nTAXATION, BUDGET AND ACCOUNTING TEXT\n(No. 135)\nL-8\nDESCRIPTION OF CLINTON ADMINISTRATION REVENUE OFFSET PROPOSALS\nFOR IMPLEMENTING LEGISLATION FOR URUGUAY ROUND ACCORD\nUNDER GENERAL AGREEMENT ON TARIFFS AND TRADE,\nOBTAINED BY bna JULY 15, 1994\n(TEXT)\nPARTNERSHIP DISTRIBUTION OF\nThe proposal would be effective for estimated tax payments\nmarketable SECURITIES\nrelated to taxable years beginning after December 31, 1994.\nThis proposal would equalize the treatment of distribu-\ntions of cash and marketable securities by a partnership to\nPARKING CASH-OUT\nits partner by requiring a distributee partner to recognize\ngain on a distribution of marketable securities to the extent\nThe cash-out proposal would allow all employers to offer\nthat the fair market value of the securities exceeded the\nemployees the option to receive a cash allowance in lieu of\nbasis in his partnership interest. The proposal would contain\nemployer-subsidized parking without subjecting to tax em-\ncertain exceptions (e.g., securities distributed to the partner\nployees who elect to take parking. Employers with 25 or\nwho contributed them, securities distributed pro rata, and\nmore employees would be required to offer a cash-out option\nsecurities distributed by an investment partnership).\nunder limited circumstances: only a parking space leased by\nThe proposal would be effective for distributions after the\nthe employer would be subject to the cash-out mandate and,\ndate of enactment, with certain transition rules.\nthen, only if the cost of the space were more than $80 per\nmonth. Parking spaces offered under an existing lease would\nnot be subject to the cash-out proposal until the lease expires.\nINVENTORY ACCOUNTING SIMPLIFICATION\nThe purpose of the proposal is to help reduce greenhouse\nAND REFORM PROPOSAL\ngas emissions by offering employees with employer-\nThis proposal would repeal the lower-of-cost-or-market\nprovided parking an incentive not to drive to work. Under\n(LCM) and the components-of-cost LIFO indexing method on\ncurrent law, if an employer offers an employee a choice\na prospective basis. The package also includes a uniform\nbetween parking and cash, the amount of cash the employee\nsimplified LIFO indexing method that would provide tax\ncould have received is taxable to the employee even if be or\nrelief to companies. The repeal of LCM would not apply to\nshe elects to receive parking. Thus, employers do not gener-\nbusinesses with gross receipts of less than $5 million a year.\nally provide this option. By enabling them to do so without\nThe proposal would simplify tax inventory accounting by\nadversely affecting employees who choose parking, a sig-\neliminating these complex inventory accounting methods\nnificant number of employees will choose cash - and will\nnot drive their own cars to work.\nand by providing a uniform simplified LIFO indexing meth-\nod that will be attractive to taxpayers.\nThe proposal would generally be effective as of January\nThis proposal would be effective for taxable years begin-\n1, 1995.\nning after December 31, 1994.\nWITHHOLDING ON DISTRIBUTIONS OF\nREQUIRE TINS AT BIRTH\nINDIAN CASINO PROFITS\nUnder current law, to claim an exemption for a dependent\nAD Indian tribe that uses net revenues from gaming\n8 taxpayer is required to provide a taxpayer identification\nactivities to make currently taxable per capita payments to\nnumber (TIN) with respect to any dependent who has at-\nits members would be required to withhold tax on the\ntained the age of 1 as of the close of the taxpayer's taxable\npayments at a 28-percent withholding rate.\nyear. For earned income tax credit (EITC) purposes, taxpay-\nThe withholding requirement would apply to per capita\ners are required to provide a TIN for each qualifying child\npayments made on or after January 1, 1995.\nwho has attained the age of 1. The proposal would require a\nTIN, notwithstanding the age of the dependent or child, in\nVOLUNTARY WITHHOLDING ON SOCIAL\norder to claim an exemption or the EITC. Therefore, all\nSECURITY BENEFITS AND OTHER\ndependents or qualifying children would need a TIN even if\nTAXABLE FEDERAL PAYMENTS\nunder 1 year of age.\nThis proposal would be phased-in over three years. For\nThis proposal would allow taxpayers to elect on a purely\ntax year 1996, taxpayers would be required to provide TINs\nvoluntary basis to have income taxes withheld from Social\nfor all dependents and qualifying children born through\nSecurity payments, Trade Adjustment Assistance, crop di-\nOctober 1995. In 1996 it would apply to children born\nsaster payments, Commodity Credit Corporation loans, and\nthrough November and in 1997 it would apply to all children\nagricultural price supports.\nnotwithstanding age.\nThis proposal would be effective for payments received in\ntax years beginning after December 31, 1994.\nESTIMATED TAX REFORM\nACCELERATION OF EXCISE TAX DEPOSITS\nThe proposal would require taxpayers that pay estimated\nAND PAYMENTS\ntaxes on the annualization method to determine the amount\nof estimated taxes due with respect to (I) their Subpart F\nThe proposal would conform the deposit and payment rules\ninclusions from controlled foreign corporations and (ii) in-\nfor alcohol, tobacco and telephone excise taxes to the OBRA\ncome from section 936 corporations on the same basis as\n'89 change in the deposit rules for the gasoline tax and the\nother types of income. These two types of income currently\nOBRA 'DS change in the deposit rules for the diesel fuel tax.\nare deamed to be received by the U.S. shareholder at the end\nOne week of September excise tax liability would be\nof the taxable year. Under the proposal, these types of\npayable in the fiscal year that the liability is incurred\nincome would be treated as accrued during the year, and thus\n(instead of at the beginning of the next fiscal year). These\nwould be reflected in quarterly estimated tax payments.\nrules would apply to alcohol, tobacco, and telephone excise\nCopyright © 1994 by THE BUREAU OF NATIONAL AFFAIRS, INC., Washington, D.C. 20037\n0092-6884/94/50+$1.00"
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