Monday, December 21, 2009

Answer to Lottery Trivia Question 12: What Mega Millions State Just Started Taxing Lottery Winnings?

Last week's Lottery Trivia Question #12 was:
  • Which Mega Millions State recently enacted a retroactive Tax on Lottery Winnings?
The Correct Answers is:
  • New Jersey enacted legislation ot retroactively Tax Lottery Winnings above $10,000.
  • Why? Because New Jersey was strapped for cash, the Governor proposed selling Powerball in addition to Mega Millions last Spring. The intention was that adding this new lottery could boost State revenue. However, the MUSL initially rejected the concept of selling both lotteries within a state (May 2009). So, taxation legislation was introduced and passed in June 2009 in the Bills: A-4102/S-2015 (Watson Coleman/Buono) which: Temporarily increases income tax rates for taxpayers with income exceeding $400,000, temporarily adjusts property tax deduction for certain taxpayers with income exceeding $150,000 and taxes New Jersey Lottery Prizes exceeding $10,000 (Governor Corzine Signs $29 Billion State Budget That Reflects Ethic of Shared Responsibility) Ironically, the MUSL and Mega Millions have reached an agreement allowing states to sell both lotteries. Thus, NJ comes out as a big winner by receiving both additional tax revenue and a percentage of lottery sales.( Note that, by wording, lottery taxation is not temporary )
Remember to check-in tomorrow to read our 13th Lottery Trivia Question posting!



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