Tax on Winnings in Horse Races and Jai-Alai

Section 260-A imposes a tax on every person who wins in horse races or Jai-Alai.
The taxable base is the winner’s “winnings” or “dividends.”
The tax is computed as two and one-half per centum (2.5%) of the winnings or dividends.

Section 260-A requires the tax to be based on the actual amount paid to the winner for every winning ticket.
The computation is made after deducting the cost of the ticket.
The tax is treated as being taken from the dividends tied to each winning ticket.

Section 260-A requires the operator, manager, or person in charge of horse races or Jai-Alai to deduct the tax from the dividends corresponding to each winning ticket.
Section 260-A requires the tax to be withheld before paying the dividends to the person entitled to them.

Section 260-A requires the operator, manager, or person in charge to file a true and correct return with the Collector of Internal Revenue.
Section 260-A sets the filing and remittance period as within ten (10) days from the date the tax was deducted and withheld.
Section 260-A requires the operator, manager, or person in charge to pay the total amount of tax deducted and withheld within the same ten (10)-day period.

Section 260-A adds that if the tax is not paid within the prescribed time, surcharges are imposed under Section 260 of the National Internal Revenue Code.
Section 260-A applies the same surcharge rule if there is willful neglect to file the return within the period prescribed.
Section 260-A applies the surcharge rule where a false or fraudulent return is willfully made.
Section 260-A provides that when any payment has already been made based on such return before the falsity or fraud is discovered, the surcharge is applied on the corresponding surplarges provided in Section 260 as to the deficiency tax.

Section 261 (as amended by Republic Act No. 586) governs amusement tax payable by charitable institutions.
Section 261 states that where admission fees or charges are collected by or for and in behalf of a duly registered charitable institution or association, the tax on such admission fees or charges is fifty per centum (50%) of the rates provided in Section 260 of the National Internal Revenue Code.