{"id":126740,"date":"2020-02-12T15:02:26","date_gmt":"2020-02-12T23:02:26","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=126740"},"modified":"2020-02-12T16:34:05","modified_gmt":"2020-02-13T00:34:05","slug":"canada-casino-workers-must-pay-tax-on-tips-court-rules","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/","title":{"rendered":"Canada Casino Workers Must Pay Tax on Tips, Court Rules"},"content":{"rendered":"

In Canada, gambling winnings may be tax-free, but the tips patrons give<\/a> casino workers from their winnings certainly are not.<\/p>\n

\"Casino
Cheng Xia argued that because the source of casino tips — player winnings — were nontaxable, then so were the tips themselves. No dice, says judge. (Image: Business NH)<\/figcaption><\/figure>\n

That\u2019s the opinion of Canada\u2019s Federal Court of Appeal, which ruled this week that these gratuities are not \u201cgifts,\u201d but taxable income that workers receive for their professional services.<\/p>\n

The ruling upheld a 2018 judgment against Cheng Xia, a slot attendant at the Grand Villa Casino<\/a> in Burnaby, British Columbia.<\/p>\n

The Canada Revenue Agency went after Xia after he failed to declare his tips as income in 2011 and 2012. This was a considerable sum of money — he earned more in 2012 from gratuities, some $39,219, than he did from his regular base salary of $29,327.<\/p>\n

Tax-Free Gambling <\/strong><\/h2>\n

Canada does not tax gambling winnings because they are not considered a constant source of income, although \u201can individual may be subject to tax on income derived from gambling itself, if the gambling activities constitute carrying on the business of gambling,\u201d as in the case of poker players and other professional gamblers.<\/p>\n

But Xia argued that the money he received from customers was part of the \u201csource or category of jackpot winnings,\u201d which are tax free by law.<\/p>\n

Before he became a slot attendant, Xia held positions providing investment, tax, and financial advice as an insurance agent and mutual funds agent, according to court records.<\/p>\n

\n

But unfortunately for Xia, the federal Income Tax Act defines taxable income from employment as a worker\u2019s salary plus \u201cother remuneration, including gratuities.\u201d<\/p>\n<\/div>\n

This includes \u201cbenefits of any kind whatsoever received or enjoyed by the taxpayer\u2026 in respect of, in the course of, or by virtue of the taxpayer\u2019s office or employment.\u201d<\/p>\n

The Taxman Cometh<\/strong><\/h2>\n

\u201cTo the casino patron who wins a jackpot, his or her winnings will not be taxable,\u201d wrote the Judge Diane Campbell in the initial ruling. \u201cHowever, when part of those winnings are paid over to an employee of a casino as a thank-you or in appreciation of the services the patron receives, the nature of that amount changes from being non-taxable to a taxable amount in the hands of the employee.\u201d<\/p>\n

She added that while Xia came across as \u201ca highly intelligent and well-educated individual,\u201d he had \u201cdisplayed a dismissive and indifferent attitude toward the reporting of these tip amounts without regard to the potential consequences.\u201d<\/p>\n

Xia was fined $8,411 for \u201cgross negligence.\u201d<\/p>\n

The appeals court agreed, opining that the tax-free source of the tip money was irrelevant, and that it became taxable the moment it crossed Xia\u2019s palm.<\/p>\n

\u201cIt is clear that the evidence supports a finding that the appellant was liable for willful blindness and gross negligence,\u201d concluded Justice Yves de Montigny.<\/p>\n","protected":false},"excerpt":{"rendered":"

In Canada, gambling winnings may be tax-free, but the tips patrons give casino workers from their winnings certainly are not. That\u2019s the opinion of Canada\u2019s Federal Court of Appeal, which ruled this week that these gratuities are not \u201cgifts,\u201d but taxable income that workers receive for their professional services. The ruling upheld a 2018 judgment […]<\/p>\n","protected":false},"author":36,"featured_media":126741,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[60,18],"tags":[],"acf":[],"yoast_head":"\nCanada Casino Workers Must Pay Tax on Tips, Court Rules<\/title>\n<meta name=\"description\" content=\"Canada Federal Court of Appeal upholds ruling against Grand Villa Casino slot attendant Cheng Xia that tips are taxable income, regardless of source.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Canada Casino Workers Must Pay Tax on Tips, Court Rules\" \/>\n<meta property=\"og:description\" content=\"Canada Federal Court of Appeal upholds ruling against Grand Villa Casino slot attendant Cheng Xia that tips are taxable income, regardless of source.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-02-12T23:02:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-02-13T00:34:05+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/02\/casino-guy.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2508\" \/>\n\t<meta property=\"og:image:height\" content=\"1672\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Philip Conneller\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@casinoorgphilc\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Philip Conneller\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/\",\"url\":\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/\",\"name\":\"Canada Casino Workers Must Pay Tax on Tips, Court Rules\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/02\/casino-guy.jpg\",\"datePublished\":\"2020-02-12T23:02:26+00:00\",\"dateModified\":\"2020-02-13T00:34:05+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/58769b72851c8cf117fb58ca150ebf8b\"},\"description\":\"Canada Federal Court of Appeal upholds ruling against Grand Villa Casino slot attendant Cheng Xia that tips are taxable income, regardless of source.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/canada-casino-workers-must-pay-tax-on-tips-court-rules\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/02\/casino-guy.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/02\/casino-guy.jpg\",\"width\":2508,\"height\":1672,\"caption\":\"Cheng Xia argued that because the source of casino tips \u2013 player winnings -- were untaxable then so were the tips themselves. 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