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Pennsylvania lottery winners now subject to state tax on prizes

Pennsylvania LotteryPennsylvania Lottery: Pennsylvania lottery winners now subject to state tax on prizes
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By Todd Northrop

The small number of states that don't tax lottery prizes has just shrunk by one state.

Pennsylvania lawmakers approved levying new taxes Wednesday on a variety of different things — including lottery prizes — to help support the $31.5 billion state budget that went into effect earlier this week.

The tax bill was approved by a 116-75 vote in the House and 28-22 vote in the Senate. Democrat Gov. Tom Wolf quickly signed the tax bill and related bills to complete the budget process into law. Lawmakers went home for the summer.

The action marks the resolution of nearly two weeks of behind-the-scenes haggling to come up with needed revenue sources after lawmakers approved the budget bill for fiscal 2016-17 on June 30.

As a result of the legislation, Pennsylvania lottery winnings will be subject to the state's 3.07 percent state personal income tax. It is unknown at this time how much of that tax will be withheld at the time of prize payout.

In addition to the new lottery taxes, the bill adds other revenue-generating measures, including:

  • Increases the state cigarette tax by $1 to $2.60 a pack effective Aug. 1
  • Imposes a 55-cents-an-ounce tax on roll-your-own and smokeless tobacco
  • Adds a 40 percent wholesale tax on electronic cigarettes and other vaping devices
  • Increases a state bank shares tax
  • Extends the state's 6 percent sales tax to digital downloads, including video, streaming video, books, games, music apps and satellite radio effective Aug. 1
  • Closes a loophole that allowed retailers to keep 1 percent of tax for themselves
  • Allows consumers to buy wine in supermarkets
  • Increases the state tax on casinos' gross revenue from table games by 2 percent

The budget is also being shored up by a number of one-time transfers among state funds and a $200 million five-year loan from a state malpractice liability fund for doctors. A tax amnesty program is also being instituted in order to bring in additional past due taxes.

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67 comments. Last comment 4 months ago by chuckieray.
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rcbbuckeye's avatar - Lottery-043.jpg
Texas
United States
Member #55889
October 23, 2007
5615 Posts
Offline
Posted: July 20, 2016, 10:48 am - IP Logged

Well, well.

The Gov and lawmakers took a poop on their citizens and hightailed it on home.

CAN'T WIN IF YOU'RE NOT IN

A DOLLAR AND A DREAM (OR $2)

    noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
    Bay Area - California
    United States
    Member #136477
    December 12, 2012
    4111 Posts
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    Posted: July 20, 2016, 10:54 am - IP Logged

    Well, well.

    The Gov and lawmakers took a poop on their citizens and hightailed it on home.

    l just hope that California does not follow suit.

    People who say it cannot be done should not interrupt those who are doing it- George Bernard Shaw.

      music*'s avatar - nw bookeep.jpg
      Happy California
      United States
      Member #157856
      August 2, 2014
      1522 Posts
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      Posted: July 20, 2016, 11:20 am - IP Logged

       The power to tax is the power to destroy. 

       The legislature may be up for re-election in November. They will see if the voters notice these taxes.

       Noise-gate, I agree with you about our California. Lotteries are a way to increase the States income. Why hinder that mission?

       I've been rich and I've been poor. Believe me, rich is better. 

       Attributed to Joe E. Lewis and others

        Raven62's avatar - binary
        New Jersey
        United States
        Member #17843
        June 28, 2005
        49835 Posts
        Offline
        Posted: July 20, 2016, 11:32 am - IP Logged

        Are the Lawmakers Exempt from the Lottery Winnings Income Tax?

        A mind once stretched by a new idea never returns to its original dimensions!

          Avatar

          United States
          Member #173496
          March 5, 2016
          93 Posts
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          Posted: July 20, 2016, 11:37 am - IP Logged

          If i could be anonymous....I would not really care. But like always, they take without giving

            dpoly1's avatar - driver
            PA
            United States
            Member #66141
            October 16, 2008
            1672 Posts
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            Posted: July 20, 2016, 11:54 am - IP Logged

            Puke

            Pennsylvania is The State Of Corruption!

            dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

             

            Eschew Poverty ........... Vote Conservative!

              Avatar
              New Member

              United States
              Member #171659
              January 10, 2016
              11 Posts
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              Posted: July 20, 2016, 12:24 pm - IP Logged

              Hey... look if you took the annuity out as a PA resident, it's time to move to a new state or end up with less.

               

              One of the reasons the cash option is usually better. You know the tax situation now, and you can arrange the future income streams to minimize your taxes.

                dpoly1's avatar - driver
                PA
                United States
                Member #66141
                October 16, 2008
                1672 Posts
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                Posted: July 20, 2016, 12:53 pm - IP Logged

                Hey... look if you took the annuity out as a PA resident, it's time to move to a new state or end up with less.

                 

                One of the reasons the cash option is usually better. You know the tax situation now, and you can arrange the future income streams to minimize your taxes.

                I Agree!

                 with these words of wisdom!

                I'll bet they still try to tax you if you move!

                This was passed with the help of RINO Dave Reed!

                dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

                 

                Eschew Poverty ........... Vote Conservative!

                  TheMeatman2005's avatar - lightening
                  Brooklyn, NY
                  United States
                  Member #169723
                  October 29, 2015
                  879 Posts
                  Offline
                  Posted: July 20, 2016, 1:16 pm - IP Logged

                  This says it all

                  The Meatman

                  “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

                  Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

                    TheGameGrl's avatar - character catafly.jpg
                    A long and winding road
                    United States
                    Member #17084
                    June 10, 2005
                    4533 Posts
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                    Posted: July 20, 2016, 1:39 pm - IP Logged

                    Our townhall meeting had this as a topic of discussion back in November. Signatures were presented to thwart off this tax. Guess our representatives paid no mind to it. 

                    Can someone advise if this is retroactive to payouts commencing from january 2016? 

                    I recall New Jersey pulling this stunt and each year the taxes increased .....

                    Thank you PA for yet another tax to dig out the mismanaged budget projection. !

                    Now ya gotta PAY to win. !

                    ~~Is it true, Is it kind,Is it necessary. ~~~

                    christmas holly jolly numbers: 255,303,6911, 474,477 silver:47,gold:79.

                      sully16's avatar - sharan
                      Ringleader
                      Michigan
                      United States
                      Member #81740
                      October 28, 2009
                      40610 Posts
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                      Posted: July 20, 2016, 1:58 pm - IP Logged

                      The Wolf is knocking at the door.

                      This is wholesale greed if I ever saw it.

                      Many of these lawmakers are pulling in 6 figures, the people who will pay for this are pulling in 5.

                      And right around the corner, the 2017 Obamacare Employer Mandates, the new tax structure and the changes in Health care insurance costs, oh , and the increase for not having insurance.

                      Hope there is a special place in hell for all these people who believe they can take from us to fund their opulent lifestyles.

                      Did you exchange a walk on part in the war ?

                      For a lead role in a cage?

                       

                                                                  From Pink Floyd's " Wish you were here"

                        Kingofearth's avatar - Kinnak
                        Upstate NY
                        United States
                        Member #174656
                        May 5, 2016
                        778 Posts
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                        Posted: July 20, 2016, 2:19 pm - IP Logged

                        Puke

                        Pennsylvania is The State Of Corruption!

                        You really gonna complain about a 3% tax increase? Taxes are absurdly low, we need real increases. 

                          Drenick1's avatar - villiarna
                          USA
                          United States
                          Member #152799
                          February 25, 2014
                          1094 Posts
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                          Posted: July 20, 2016, 2:20 pm - IP Logged

                          l just hope that California does not follow suit.

                          I am fairly certain that California is looking at that possibility especially after the Chino Hills PB winner turned in their ticket. 13.3% is tough to overlook especially with the financial hardship the state is experiencing.

                            TheGameGrl's avatar - character catafly.jpg
                            A long and winding road
                            United States
                            Member #17084
                            June 10, 2005
                            4533 Posts
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                            Posted: July 20, 2016, 2:29 pm - IP Logged

                            You really gonna complain about a 3% tax increase? Taxes are absurdly low, we need real increases. 

                            yes and its completely acceptable to complain and bring to the attention of the public. 

                            today 3% , next year another 1%. Inch by inch more proceeds will go to the state. 

                            Do you get a 3% raise each year? Some of us do not. 

                            pandoras' box has been opened.

                            ~~Is it true, Is it kind,Is it necessary. ~~~

                            christmas holly jolly numbers: 255,303,6911, 474,477 silver:47,gold:79.