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Ohio woman decides to drop appeal over lottery tax

Ohio LotteryOhio Lottery: Ohio woman decides to drop appeal over lottery tax

An Ohio woman who thought she didn't owe city income tax on lottery money she and her ex-husband received has given up her appeals court case.

Tina Marie Rodepouch, of Parkman Road Southwest, had filed an appeal with the 11th District Court of Appeals challenging a Warren Municipal Court decision Sept. 20, 2005, saying she had to pay city taxes on the money.

But she has dropped that case and will continue to pay the taxes, said Gregory V. Hicks, Warren's law director.

"She didn't want to spend any more money fighting it," Hicks said of Rodepouch.

According to court documents, Steve Rodepouch won a yearly prize payout in 1987 from the Ohio Lottery for life with the stipulation that a minimum amount was guaranteed.

In 2001, his marriage to Tina Marie Rodepouch was dissolved, and the two agreed to split the $52,000 annual amount evenly.

What changed

In 1987 when the Rodepouchs won the lottery, the city of Warren did not tax lottery winnings, Hicks said.

But in 2002, the city's tax ordinance was changed so that effective Jan. 1, 2003, all proceeds from the Ohio Lottery and other types of wagering received by residents of the city would be taxable by the city, documents in the case state.

Hicks said Tina Marie Rodepouch has been paying the 2 percent taxes on her part of the lottery winnings since 2003 despite challenging the city's ordinance.

In August 2005, Magistrate Dan Gerin ruled that Tina Rodepouch owed the taxes despite her argument that the money was hers only because of the dissolution of her marriage, which was a property settlement not taxable by the city.

The state and federal governments also take taxes from lottery winnings, Gerin noted in his ruling.

Youngstown Vindicator

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29 comments. Last comment 11 years ago by KY Floyd.
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RJOh's avatar - chipmunk
mid-Ohio
United States
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March 24, 2001
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Posted: January 19, 2006, 12:24 pm - IP Logged

She should move to my town, it right there on the city tax form, no city taxes on lottery winnings, pensions or interests from savings.  I think the people who wrote the code were retired.

 * you don't need to buy more tickets, just buy a winning ticket * 
   
             Evil Looking       

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    United States
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    Posted: January 19, 2006, 3:33 pm - IP Logged

    Time to pay up and then move, so not only will the city lose the city income tax it will lose sales tax, excise tax and whatever else she was paying.  Although 26K a year is not a lot of money. It would be more fun to give the city the finger making a million a year, so they could really smart from the loss.


      United States
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      Posted: January 19, 2006, 4:03 pm - IP Logged

      She should move to my town, it right there on the city tax form, no city taxes on lottery winnings, pensions or interests from savings.  I think the people who wrote the code were retired.

      She also should have never played that game, since it's a lifetime prize. There was no such thing as a cash option in 1987.

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        Bethesda, Maryland
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        Posted: January 19, 2006, 5:41 pm - IP Logged

        She should move to my town, it right there on the city tax form, no city taxes on lottery winnings, pensions or interests from savings.  I think the people who wrote the code were retired.

        HAPPY THURSDAY....."RJ"

        Excuse me, but  I don't understand....acccording to the story and the tax law:

        In 1987 when the Rodepouchs won the lottery, the city of Warren did not tax lottery winnings, Hicks said.

        Therefore, why wouldn't she and her ex-husband still be exempt from paying income tax on their Lottery Annuity winnings????....Why are they affected by the 'new law'.....??????

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          Coastal Georgia
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          Member #2653
          October 30, 2003
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          Posted: January 19, 2006, 6:07 pm - IP Logged

          She should move to my town, it right there on the city tax form, no city taxes on lottery winnings, pensions or interests from savings.  I think the people who wrote the code were retired.

          HAPPY THURSDAY....."RJ"

          Excuse me, but  I don't understand....acccording to the story and the tax law:

          In 1987 when the Rodepouchs won the lottery, the city of Warren did not tax lottery winnings, Hicks said.

          Therefore, why wouldn't she and her ex-husband still be exempt from paying income tax on their Lottery Annuity winnings????....Why are they affected by the 'new law'.....??????

          I agree Libra....

          Why wouldn't their annuity be grandfathered in and all lottery winners AFTER the new tax went into effect be subject to the ridiculous "city" tax ?

          Ya gotta love taxation- it can in essence be retroactive.Thud

           

                                         

                        

           

           

            DoctorEw220's avatar - alien helmet.jpg
            Yinzer Country, PA
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            Posted: January 19, 2006, 6:29 pm - IP Logged

            Why didn't they just make the "Ex Post Facto" argument.  In this case, it would mean that because they won the money back before the law was in effect, they shouldn't have to pay city taxes.

            I've redone my website.  Go to www.dr-ew.com.  I kept a lot of the old stuff, and I've added some new stuff.  Look for more new stuff in the coming weeks.

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              MI
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              August 14, 2005
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              Posted: January 19, 2006, 7:50 pm - IP Logged

              The same thing was done to the early winners in the Michigan Lottery. 10 years after it was started the state changed the law and started taxing the winners. Even those that won in the prior 10 years and were getting annuities.

              This is my biggest argument against taking an annuity. You never know what the government will do long after you've won. The federal tax could be hiked to 50% and the state could do the same. 

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                Coastal Georgia
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                Posted: January 19, 2006, 8:47 pm - IP Logged

                The same thing was done to the early winners in the Michigan Lottery. 10 years after it was started the state changed the law and started taxing the winners. Even those that won in the prior 10 years and were getting annuities.

                This is my biggest argument against taking an annuity. You never know what the government will do long after you've won. The federal tax could be hiked to 50% and the state could do the same. 

                Always choose cash option if you have the choice.

                Get the taxes out of the way and go have some fun !

                 

                                               

                              

                 

                 

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                  Sparta, NJ
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                  July 9, 2005
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                  Posted: January 19, 2006, 9:13 pm - IP Logged

                  So much for the annuity arguement.

                  Cheers

                  |||::> *'`*:-.,_,.-:*''*:--->>> Chewie  <<<---.*''*:-.,_,.-:*''* <:::|||

                  I only trust myself - and that's a questionable choice

                    justxploring's avatar - villiarna
                    Wandering Aimlessly
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                    Posted: January 19, 2006, 10:26 pm - IP Logged

                    Time to pay up and then move, so not only will the city lose the city income tax it will lose sales tax, excise tax and whatever else she was paying.  Although 26K a year is not a lot of money. It would be more fun to give the city the finger making a million a year, so they could really smart from the loss.

                    Maybe I'm misunderstanding your comments, but I'm pretty sure that taxes are based on where you win the money, not where you live.  In other words, I live in FL where we have no state income tax. Still, if I drove to GA to buy a MM ticket and won, I'd owe Federal tax and then GA State tax.  If someone has another educated opinion on this matter, I'd like to hear it. I am assuming if you buy a ticket in a city with city tax, you might also have to pay that too. When I lived in NH (no state tax) and earned money in another state, I had to pay tax to the state where the income was generated. Sometimes it was prorated..don't want to get into detail, but that's the way it usually works. So there's another reason not to take an annuity if you can avoid it. You are stuck with the rules of the State Lottery and the ever-changing laws of the Federal Government.  I'd rather get the whole tax issue out of the way, plus as long as someone else has control of your money, you never know what will pop up the next year.

                    Still, as much as I agree with CASH ONLY, I still would take an annuity if that was my only choice...after all, it's still money. However, I avoid games without lump sum options. 

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                      NY
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                      Posted: January 20, 2006, 1:29 am - IP Logged

                      Why didn't they just make the "Ex Post Facto" argument.  In this case, it would mean that because they won the money back before the law was in effect, they shouldn't have to pay city taxes.

                      Because  ex post facto only applies to criminal charges. Tax laws change every single year, and it doesn't matter whether or not the source of your income changed from previous years. Your income in any given year is taxed based on the rules in effect for that year. If lottery winnings had been exempt from state taxes and the state later eliminated the exemption it might be possible to argue that the tax-free status had been part of the inducement to play the lottery and that adding a tax effectively reduced your winnings to less than what you were owed.  How well that would work, I don't know, but since the city had nothing to do with any offers or promises made by the lottery the city is free to change  their rules on which income is taxable.

                      I can't believe she was stupid enough to waste money going to court in the first place. If the agreement was that they would split the lottery winnings then there's absolutely no question that the income is from the lottery. Her only other option would be to claim that the income is alimony, in which case it's presumably taxable and her ex would have a decent chance of reducing the alimomny payments based on his income being decreased by th eamount of the taxes.

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                        NY
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                        Posted: January 20, 2006, 1:33 am - IP Logged

                        She should move to my town, it right there on the city tax form, no city taxes on lottery winnings, pensions or interests from savings.  I think the people who wrote the code were retired.

                        Do you think it would make much sense to sell a house and pay a commision to a realtor, and then pay moving expenses to save a maximum of $520 a year? Does it make much sense to move out of a city because they have a city income tax and relocate to another city that has a city income tax, as yours apparently does?

                        If her income from the lottery is $26,000 a year before taxes, and it probably stops when her ex-husband dies, I'm guessing she has another source of income, and it's likely to be a job. Unless she wants to change jobs, that limits her options for moving. All that other income is presumably taxable, so if she didn't move years ago there's not much reason to do it now.

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                          Posted: January 20, 2006, 1:45 am - IP Logged

                          justxploring wrote:

                          << Maybe I'm misunderstanding your comments, but I'm pretty sure that taxes are based on where you win the money, not where you live.  In other words, I live in FL where we have no state income tax. Still, if I drove to GA to buy a MM ticket and won, I'd owe Federal tax and then GA State tax. >>

                          That's almost right. Depending on the applicable laws income may be taxable based on the where the income is generated, and it's definitely taxable based on where you live. For a Florida resident winning  a Georgia lottery game, Georgia might collect income taxes because the money came from Georgia, and it might be at a lower non-resident rate . Florida would also collect, because it's income for a Florida resident (unless there's a specific exemption, which is unlikely). If you win an annuity prize and then move out of state you may have to continue paying an income tax to that state since they're the ones providing the income.In the case of a city  that charges income tax, the income comes from the state, not the city. I don't think the city would have a valid claim against a non-resident based on where the ticket was purchased. Of course if I lived in a city with a tax I'd either check with an accountant or buy my tickets out of the city if it was convenient.

                            Coin Toss's avatar - shape barbed.jpg
                            Zeta Reticuli Star System
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                            Posted: January 20, 2006, 1:57 am - IP Logged

                            It seems she should have been "grandfathered in" and lottery winnings after, and only after, the city started taxing them would be collected.

                            The U.S. is the only place where gambling winnings are taxed as far as I know - other places, whatevetr you win is yours.

                            It's illegal to buy an Irish Sweepstakes ticket, but if you win, you have to pay taxes on it.