Questions & Answers

Does the sale of assets by gaming licensees surcharge apply to me?

If you incurred a tax liability on income from the sale of assets by a gaming licensee, you may owe a surcharge.

The surcharge doesn't apply if any of the following are true:

  • The gaming license, organization license, or racetrack property is transferred due to any of the following:
    • bankruptcy or debt adjustment;
    • cancellation or termination of the license by the Illinois Gaming Board or the Illinois Racing Board;
    • a determination by the Illinois Gaming Board that transfer of the license is in the best interests of Illinois gaming;
    • the death of an owner of the equity interest in a licensee;
    • the acquisition of a controlling interest in the stock or substantially all the assets of a publicly traded company;
    • a transfer by a parent company to a wholly owned subsidiary; or
    • the transfer or sale to or by one person to another person where both persons were initial owners of the license when it was issued.
  • The controlling interest in the license or racetrack property is transferred to lineal descendents or as a result of a transaction in accordance with I.R.C. Section 351; and no gain or loss is recognized.
  • Live horse racing was not conducted in 2010 at a racetrack located within 3 miles of the Mississippi River under a license issued under the Illinois Horse Racing Act of 1975.
  • the transfer of a gaming license, organization license, or racetrack property is carried out by a person other than the initial licensee to receive the license.

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