The ClubGRANTS scheme provides registered clubs in NSW with tax rebates of up to 1.85% of their gaming machine profits over $1 million when they spend an equivalent amount on community development and support.
The Gaming Machine Tax Act 2001 outlines the legislative arrangements for the granting of a rebate of gaming machine tax levied on registered clubs. Under the Act, a tax rebate is made available to registered clubs provided the Independent Liquor & Gaming Authority is satisfied that an equivalent amount has been applied to expenditure on community development and support.
In the Act, a distinction is made between three classes of expenditure:
- Category 1 - expenditure on specific community welfare and social services, community development, community health services and employment assistance activities;
- Category 2 - expenditure on other community development and support services;
- Category 3 - contributions made to the ClubGRANTS Fund which are used to fund Category 3 projects and services.
To qualify for the gaming machine tax rebate of 1.85%, clubs must contribute at least 0.75% to Category 1 purposes, with the remainder allocated to Category 2 purposes. Category 1 expenditure in excess of 0.75% may be used to cover shortfalls in Category 2, but the reverse does not apply.
In addition to the above expenditure, a minimum of 0.4% of a club's gaming machine profits in excess of $1 million is automatically allocated to the ClubGRANTS Fund each tax year. These amounts are automatically taken from the tax paid by clubs and transferred by the Government on behalf of clubs into the fund at the end of each taxation year.
NOTE – Clubs are not required to make separate funding payments into the new Category 3 "ClubGRANTS Fund".
The ClubGRANTS Fund is a Statewide funding pool for large scale projects associated with sport, health and community infrastructure.
Schedule 1 to the Act outlines matters that must be provided for in the guidelines for the ClubGRANTS scheme. Those mandatory matters are:
- the minimum proportion of profits to be expended on Category 1 projects and services;
- the community priorities identified by ClubGRANTS Local Committees in relation to Category 1 projects and services;
- the advertising in newspapers across the State by ClubsNSW indicating that registered clubs are seeking applications for ClubGRANTS projects; and
- the accountability steps to be taken by registered clubs when claiming gaming machine tax reduction on the basis of ClubGRANTS funding.