A North Carolina tax revenue bill that would allow the state to request information about bettors, including annual winnings, passed out of the House Wednesday, and will now head to Gov. Josh Stein’s desk. The bill was a conference report that passed out of the Senate Tuesday. SB 595 is a sweeping proposal that includes some tax exemptions and some tax tightening.
It touches on myriad situations from S Corps to sales tax paid by retailers to ride-share to entities that make vapor products and certain wine shippers.
The language in the bill mirrors that of the federal Internal Revenue Service, which already requires gamblers and gambling companies to report winnings of $2,000 or more. But according to Steve Ruddock in his Straight to the Point Substack, should the bill pass and be enforced, the situation in North Carolina could mimic the new federal 90% gambling winnings tax cap and cause bettors to have to pay a tax on winnings without considering losses.
However, according to a 2024 NC State Poole Thought Leadership paper, the situation Ruddock points to already exists for some — North Carolinians currently must report gambling income, but can not itemize losses. This means that any taxpayer taking the standard deduction loses the opportunity to claim losses and ultimately is already paying taxes on gambling wins without writing off losses.
Here’s what the bill says
The bill was first filed in March 2025, but didn’t get out of a conference committee before the end of the 2025 session. New conferees were appointed in April 2026, and at least one conference committee report was withdrawn before the final consensus bill was approved by the House Tuesday and the Senate Wednesday. North Carolina’s session runs until Aug. 31, and bills from 2026 do not carry over into the 2027 session.
From the text of the bill:
SECTION 5.4. G.S. 105-251.2 reads as rewritten:
Ҥ 105-251.2. Compliance informational returns.
(c1) Interactive Sports Wagering Operator. – An interactive sports wagering operator licensed by the North Carolina State Lottery Commission to engage in sports wagering in this State must give information to the Secretary when the Secretary requests the information. The Secretary may not request the information more than once per month. For purposes of this subsection, the term “interactive sports wagering operator” has the same meaning as defined in General Assembly Of North Carolina Session 2025 Senate Bill 595-Third Edition Page 17
1 G.S. 18C-901. The Secretary may request an interactive sports wagering operator provide the
2 following information on a return or a report:
3 (1) A registered player’s name, tax identification number, address, and any other
4 information that identifies a registered player.
5 (2) The amount of wagers placed by the registered player.
6 (3) The outcome of wagers placed by the registered player.
7 (4) The amount of winnings paid to the registered player.
8 (5) Any other information pertaining to the registered player in possession of the
9 interactive sports wagering operator that the Secretary deems necessary to
10 determine the registered player’s compliance with this Chapter.
The same language is then repeated and applies to the North Carolina State Lottery Commission, which regulates sports betting. The language regarding sports betting was not in the original bill, but was added by the House Finance Committee, which in June 2025 offered a substitute that more than doubled the scope of the original bill.
Of note in the language is that the law would require operators to report the number of wagers, the outcome (wins/losses/pushes), and how much was won. This could indicate that while gambling losses cannot be written off, the state could ultimately consider only actual net winnings as taxable.
Proposal would also wipe promo deductions
In another section of the bill, operators would lose the ability to deduct promotions and bonuses from their adjusted gross revenue. When lawmakers first legalized sports betting, operators were able to deduct 100% of promotions and bonuses, but the law called for those deductions to phase out.
About one-third of legal sports betting states allow operators to write off all or some percentage of promotions and bonuses, though some states, including Maryland, have considered reducing or eliminating the break.
The latest proposed changes to the sports betting tax structure come as the legislature continues to struggle to agree on and pass a budget. According to local media reports, the latest budget proposal includes an increase in the sports betting tax from 18% to 23%. North Carolina lawmakers have until June 30 to pass a budget — and have not passed a new one since 2023.
