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No sales tax on Mississippi lottery tickets, but winnings will still be taxed

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MississippiMississippi: No sales tax on Mississippi lottery tickets, but winnings will still be taxed
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The Mississippi Legislature is expected to pass a measure clarifying that tickets for state's soon to be rolling lottery are exempt from sales taxes.

But the state tax man will still get his cut on lottery winnings in Mississippi: They will be taxed as income, at the same scaled rate of 3 percent to 5 percent as any other income.

This is a blow to Jackson, where Mayor Chokwe Antar Lumumba had been counting on lottery ticket revenue from a 1-cent sales tax in the city tacked on to the 7-cent state sales tax. Lumumba late last year had estimated the city would receive about $4 million a year from it's share of state sales taxes plus the 1-cent sales tax on tickets beyond money the city expects to receive from state lottery proceeds earmarked for local infrastructure by the Legislature.

House Bill 1576, pending in the Legislature and expected to pass, makes clear lottery tickets are exempt from sales taxes in Mississippi — as they are in all other states in the U.S. that have a lottery.

But state Revenue Commissioner Herb Frierson said lottery tickets wouldn't be subject to sales taxes under current laws and regulations.

"I don't think you need a bill," Frierson said. "It's considered a service, not tangible personal property. It's evidence of a bet is all it is. Why would you tax evidence of a bet?"

Frierson said a lottery ticket is itself a form of tax — "a tax on stupidity." [Editor: I guess Herb is not on board with a lottery yet.]

City of Jackson lobbyist Quincy Mukoro said he still hopes for a change in the bill to funnel additional money to Jackson.

"Our understanding when we passed the bill last year was that the sales tax component of the bill was critical to get the bill passed," Mukoro said.

While no states charge sales taxes on lottery tickets, there are a wide variety of tax rates on winnings. Ten states, including neighbor Tennessee, charge no state tax on lottery winnings. New York has the highest rate at nearly 9 percent. 

Lottery winnings are subject to a 25 percent federal tax withholding.

After decades of debate, lawmakers in a summer special session last year approved a state lottery, which is expected to be up and running in 2019, as early as this summer. It's expected to net the state about $40 million the first year, then $80 million to $100 million a year thereafter.

For the next decade, up to $80 million a year from lottery proceeds will go toward working on state roads and bridges or to match federal infrastructure money. Any revenue above $80 million would go to public education, the Education Enhancement Fund.

Clarion Ledger

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13 comments. Last comment 21 days ago by Stack47.
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Fresno, California
United States
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August 2, 2014
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Posted: February 28, 2019, 12:02 pm - IP Logged

Like the Beatles song, The Taxman. Uncle Sam is everywhere. Why can't the States give us players a break. I get a break here in California. The highest tax rate here is 13%. I do not have to pay that. It feels good.

 Thank You Voters, Legislature, and Governor for not taxing any lottery winnings.

 I noticed that the Icons are down. Is Todd improving them or is it my computer?

  "May You Live Long and Prosper" Spock on Star Trek. A Vulcan.

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    Simpsonville
    United States
    Member #163184
    January 22, 2015
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    Posted: February 28, 2019, 1:09 pm - IP Logged

    Glad somebody has some common sense there.  Never paid a 'sales tax' on a lottery anywhere I've played and that's a lot of states.  Imagine paying 7% of a $3 ticket?  Ridiculous.

      Coin Toss's avatar - shape barbed.jpg
      100
      Zeta Reticuli Star System
      United States
      Member #30469
      January 17, 2006
      11233 Posts
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      Posted: February 28, 2019, 1:53 pm - IP Logged

      From the OP;

      This is a blow to Jackson, where Mayor Chokwe Antar Lumumba had been counting on lottery ticket revenue from a 1-cent sales tax in the city tacked on to the 7-cent state sales tax.

      Anyone this ignorant about lotteries shouldn't ba allowed to have anything to do with them.

      Yo there, Mr. Mayor........If your state gets a lottery they will get lotto machines, have you ever seen a lotto machine that takes paper currency and coins?

      Bang Head

      Despite Mississippi's efforts to get their residents to play in Mississippi the mayor of Jackson had found a very unique way to encourage people from Mississippi to continue to play other state's lotteries.

      Those who run the lotteries love it when players look for consistency in something that's designed not to have any. So many systems, so many theories, so few jackpot winners. 

      Lep

      There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

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        Louisiana
        United States
        Member #191980
        August 27, 2018
        223 Posts
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        Posted: February 28, 2019, 3:15 pm - IP Logged

        From the OP;

        This is a blow to Jackson, where Mayor Chokwe Antar Lumumba had been counting on lottery ticket revenue from a 1-cent sales tax in the city tacked on to the 7-cent state sales tax.

        Anyone this ignorant about lotteries shouldn't ba allowed to have anything to do with them.

        Yo there, Mr. Mayor........If your state gets a lottery they will get lotto machines, have you ever seen a lotto machine that takes paper currency and coins?

        Bang Head

        Despite Mississippi's efforts to get their residents to play in Mississippi the mayor of Jackson had found a very unique way to encourage people from Mississippi to continue to play other state's lotteries.

         A lottery ticket is not merchandise, and cannot be taxed.

        All number sets are contenders until the drawing occurs.

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          Maryland
          United States
          Member #162429
          January 2, 2015
          1757 Posts
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          Posted: February 28, 2019, 3:16 pm - IP Logged

          From the OP;

          This is a blow to Jackson, where Mayor Chokwe Antar Lumumba had been counting on lottery ticket revenue from a 1-cent sales tax in the city tacked on to the 7-cent state sales tax.

          Anyone this ignorant about lotteries shouldn't ba allowed to have anything to do with them.

          Yo there, Mr. Mayor........If your state gets a lottery they will get lotto machines, have you ever seen a lotto machine that takes paper currency and coins?

          Bang Head

          Despite Mississippi's efforts to get their residents to play in Mississippi the mayor of Jackson had found a very unique way to encourage people from Mississippi to continue to play other state's lotteries.

          I bet he was thinking this - player buys a $1 ticket, has to put $2 in, gets a voucher from machine for .99cents that they have to take to the cashier to get the change....Green laugh

          STUPID politicians Bash

            noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
            Chasing the Dream.
            White Shores- California
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            December 12, 2012
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            Posted: February 28, 2019, 3:25 pm - IP Logged

            Miss legislature's are not idiots. They not setting up a lottery without some reward coming to the State. Sure their citizens have been crossing State lines to play the lottery, and they hope to stem that tide. But thinking that only the convenient stores & the lottery itself would reap the benefits is being shortsighted to say the least. The question is, do neighboring States have State taxes on lottery winnings or not, if not, the border crossing may continue. 

             * Voice of Reason *   

             

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

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              Louisiana
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              Posted: February 28, 2019, 3:54 pm - IP Logged

              Miss legislature's are not idiots. They not setting up a lottery without some reward coming to the State. Sure their citizens have been crossing State lines to play the lottery, and they hope to stem that tide. But thinking that only the convenient stores & the lottery itself would reap the benefits is being shortsighted to say the least. The question is, do neighboring States have State taxes on lottery winnings or not, if not, the border crossing may continue. 

              Louisiana, & Texas lottery claim winners have to pay taxes over anything over $1,200.00

              I got $840.00 from a $1,200.00 win once. And, I won $1,000.00 once and didn't have to pay taxes.

              All number sets are contenders until the drawing occurs.

                Tucker Black's avatar - Kleber Vieira.jpg
                Reno, NV
                United States
                Member #173299
                February 25, 2016
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                Posted: February 28, 2019, 4:56 pm - IP Logged

                What kind of idiot thinks that lottery tickets would be subject to sales tax? ROFL

                  sully16's avatar - sharan
                  25
                  Ringleader
                  Michigan
                  United States
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                  October 28, 2009
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                  Posted: February 28, 2019, 7:01 pm - IP Logged

                  Catch up to the rest of us Mississippi.

                  WWG1WGA- Q

                    Technut's avatar - moon
                    3rd Rock from Sun
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                    September 13, 2014
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                    Posted: March 3, 2019, 11:18 am - IP Logged

                    Louisiana, & Texas lottery claim winners have to pay taxes over anything over $1,200.00

                    I got $840.00 from a $1,200.00 win once. And, I won $1,000.00 once and didn't have to pay taxes.

                    Big Joey, In Texas the only taxes collected on lottery winnings is federal. Texas has no state income tax.

                    Yesterday is History, Tomorrow is a Mystery, Today is a gift that's why it's called the PRESENT! (c8

                      Avatar
                      Louisiana
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                      223 Posts
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                      Posted: March 3, 2019, 1:36 pm - IP Logged

                      Big Joey, In Texas the only taxes collected on lottery winnings is federal. Texas has no state income tax.

                      Yes, that's paying taxes on wins starting at $1,200.00 But, not a double whammy of federal, & state.

                      All number sets are contenders until the drawing occurs.

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                        Kentucky
                        United States
                        Member #32651
                        February 14, 2006
                        8190 Posts
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                        Posted: March 3, 2019, 8:25 pm - IP Logged

                        Miss legislature's are not idiots. They not setting up a lottery without some reward coming to the State. Sure their citizens have been crossing State lines to play the lottery, and they hope to stem that tide. But thinking that only the convenient stores & the lottery itself would reap the benefits is being shortsighted to say the least. The question is, do neighboring States have State taxes on lottery winnings or not, if not, the border crossing may continue. 

                        There is a problem with crossing the Mississippi border to play lottery games because the western border is the Mississippi River and it borders Alabama in the east. The people living in the northern part of the state can play in Tennessee or cross the bridge into West Memphis and those in the south can play in Louisiana and Florida. 

                        It's pretty amazing how much money lotteries can generate so it's not unheard of that some municipalities and small time politicians to try to get a piece of the pie. I bought lottery tickets in several states but never paid sales tax in any of they. If a clerk added "city sales tax" to my lottery purchase, I'd tell them to keep it.

                        It doesn't look like the Mississippi Lottery is off to a good start. Wait until they find out how little of the money they will generate they actually keep,

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                          Kentucky
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                          Posted: March 3, 2019, 8:42 pm - IP Logged

                          Louisiana, & Texas lottery claim winners have to pay taxes over anything over $1,200.00

                          I got $840.00 from a $1,200.00 win once. And, I won $1,000.00 once and didn't have to pay taxes.

                          Federal Taxes are on lottery winnings over $600 in every state. Winners are issued a W-2G, taxes are not deducted, and state taxes if any are from the individual state tax form.