(The Center Square) – Tennessee collected $7.1 million in privilege taxes on mobile sports betting in May, which is nearly $2 million more than the state would have collected under a new tax structure set to begin on July 1.
Tennessee taxes sportsbooks 20% on adjusted gross income for now but will shift to a 1.85% tax on gross wagers starting in July. Over the past two years, most of the state’s sportsbooks were not hitting a 10% profit mark required by the state.
But since a change in accounting regulations of AGI last July, that has shifted and in May the sportsbooks made 12.8% in AGI.
Tennessee’s Sports Wagering Advisory Council is scheduled to meet at 9 a.m. Thursday to discuss the specifics of rules for the new laws going into effect on July 1. Those rules involve the specifics of registration fees for new operators in the state.
Since July 1, 2022, Tennessee has collected $82.6 million in taxes and, under the new taxing system, that would have been $69 million.
Tennessee is the only state that will tax sportsbooks based on gross wagers.
