Justia New Hampshire Supreme Court Opinion Summaries

Articles Posted in Gaming Law
Effective July 1, 2009, the New Hampshire Legislature imposed a ten percent tax on gambling winnings (Gambling Winnings Tax). The Gambling Winnings Tax was repealed effective May 23, 2011. The repeal was not retroactive, meaning that the tax was assessed on gambling winnings between July 1, 2009, and May 22, 2011. Petitioner Leonard Willey was a New Hampshire resident who, for the three years preceding the filing of this action, derived almost all of his earned income from gambling. For the 2009 tax year, he owed no federal income tax because his gambling losses exceeded his winnings. Petitioner David Eby was not an original party to this action, but was added as a substitute party later in the case. He was a New Hampshire resident who, in May 2011, purchased a scratch ticket and won ten dollars on the ticket, and was required to pay one dollar under the Gambling Winnings Tax as a result. This class action was filed in 2010, by putative class representatives Dean Leighton and Leighton Family Enterprises, LLC and Willey. Petitioners sought a declaratory judgment that the Gambling Winnings Tax was illegal and unconstitutional on its face, as applied to pre-enactment lottery winners receiving their winnings through annuities, and as applied to professional gamblers, as well as a refund of all such taxes collected or withheld. The Superior Court granted summary judgment to the State and dismissed petitioners' motion for summary judgment and remaining claims challenging the constitutionality of the state's tax on gambling winnings. The Supreme Court affirmed the superior court: the Court disagreed with petitioners that a tax on gross gambling winnings was inherently “unfair, unreasonable, and disproportional” under the New Hampshire constitution. Because petitioners could not show that they suffered harm under the Commerce Clause, were professional gamblers, or were gambling winnings annuity recipients, they did not suffer the same injury as the members of the subclasses they claimed to represent, and thus they did not demonstrate their entitlement to act as class representatives for the members of those subclasses. The Gambling Winnings Tax neither lacked uniformity nor was disproportional and unreasonable; and petitioners lacked standing to bring their remaining challenges to the tax. View "Eby v. New Hampshire" on Justia Law