Ohio woman decides to drop appeal over lottery tax

Jan 19, 2006, 9:30 am (29 comments)

Ohio Lottery

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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RJOh's avatarRJOh

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.

tg636

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.

CASH Only

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.

libra926

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'.....??????

DoubleDown

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 avatarDoctorEw220

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.

HiYoSilver

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. 

DoubleDown

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 !

Chewie

So much for the annuity arguement.

justxploring's avatarjustxploring

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. 

KY Floyd's avatarKY Floyd

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.

KY Floyd's avatarKY Floyd

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.

KY Floyd's avatarKY Floyd

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 avatarCoin Toss

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.  

libra926

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

HAPPY FRIDAY......."DD"...1/20/2006

I started to reply to you yesterday.....but was too upset.....Personally...I smell a "stinking rip off". That's all this is.... how can they be held accountable????......I have often said, that when we win these prizes we are never alone...."the tax man cometh, everytime".

Furthermore, if this can occurr in Ohio, what next....'NEVADA'??????

libra926

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. 

HAPPY FRIDAY.....1/20/2006......."JUST"See Ya!

However, the issue here is that in this Town in Ohio, at the time of their win, there was absolutely no"income tax"..which is simliar to the Laws of Las Vegas, Nevada. These winners should not be affected by the new 'income tax laws' as they won prior to the change....That's why this whole issue 'stinks so much'.....it's just too bad she had to go into Court, losing additional money to fight this issue...she is clearly right, but in AMERICA...TAX IS KING...

Thud

DoubleDown

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. 

HAPPY FRIDAY.....1/20/2006......."JUST"See Ya!

However, the issue here is that in this Town in Ohio, at the time of their win, there was absolutely no"income tax"..which is simliar to the Laws of Las Vegas, Nevada. These winners should not be affected by the new 'income tax laws' as they won prior to the change....That's why this whole issue 'stinks so much'.....it's just too bad she had to go into Court, losing additional money to fight this issue...she is clearly right, but in AMERICA...TAX IS KING...

Thud

Happy Friday to you too Libra !!!

 One thing will never change- the real winner in every lottery payout is the tax man. The tax man loves the lottery and rightly so.....

DD

libra926

HAPPY FRIDAY EVERYONE....1/20/2006

This story is certainly a 'real lesson' for me...even though I always understood 'CASH ONLY' and his position for the LUMP SUM PAYOUT.....this will altimately hurt the Annuity side of the game. More people will become savvy about the down side of Annuities, and take the "Cash Options" or simply stop playing if it's not offered.  It means more money payouts for those of us taking the Lump Sum, because we won't have to worry about 'tax law changes'.  We will take the prize and get the 'HELL OUT OF DODGE'....then the 'tax change rip offs' can do whatever they want, without any of us being affected........

Badger's avatarBadger

I think it's a screw-job by government once again. It's almost a retro-active tax. When she won the lottery, it was 4 years before the govt decided there would be a city tax.  She should be exempt. This is govt once again changing the rules in the middle of the game just to suit themselves.

Chewie

If they have the same concept as New Jersey, it doesn't matter what the state where you win does about taxes.  You win in Powerball, say in Pennsyvania, and live in New Jersey, you are screwed.  If you are taking annuity, the state of New Jersey will tax you every single year you receive a check from the state of Pennsyvania. (If you win in NYC, on any lotto, it is even worse.  New York State tax, New York City Tax, and New Jersey state tax.)  You only get free lottery winnings in New Jersey if you win IN New Jersey.  If you win in New Jersey, with a lottery played in New Jersey, and choose annuiity, you are bending over and declaring yourself a target.  The new Governor has repeatidly stated the state is broke - broke with a capital B!  Taxes are going up every where.  You think they are not going to look at the New Jersey Lottery some time in the near future?  Keep dreaming.

Remember the Clinton Death Tax?  The Givernment made it retroactive for a year.  Dead and year and they came after the survivors!  A state should do less? Hehehehehehe!

KY Floyd's avatarKY Floyd

I think it's a screw-job by government once again. It's almost a retro-active tax. When she won the lottery, it was 4 years before the govt decided there would be a city tax.  She should be exempt. This is govt once again changing the rules in the middle of the game just to suit themselves.

Maybe I'm just stupid, but there are some things I don't understand about everybody's whining. How is a tax that only applies to your current income retroactive? If your city enacts an income tax this year should your income be exempt just because you still have the same job and your source of income hasn't changed? If the tax rate goes up this year should the higher rate only apply to any raise you might get this year, or should it apply to all of oyur taxable income? If you won the lottery 5 years ago and  your next door neighbor wins today, should he have to pay more tax than you on the same income? What is the rational basis for thinking that a source of income should always be exempt from income tax just because that source wasn't taxed in the first year that somebody received it?

If I've been driving for 20 years and the speed limit goes down this year should it apply to me, or am I grandfathered? If I was dropping acid with Timothy Leary when it was legal back in the 60's, do I have to stop or am I exempt because I'm grandfathered? I'm curious just how much should be grandfathered when the laws change, and what's the rational basis for grandfathering something.

 

 

libra926

I think it's a screw-job by government once again. It's almost a retro-active tax. When she won the lottery, it was 4 years before the govt decided there would be a city tax.  She should be exempt. This is govt once again changing the rules in the middle of the game just to suit themselves.

Maybe I'm just stupid, but there are some things I don't understand about everybody's whining. How is a tax that only applies to your current income retroactive? If your city enacts an income tax this year should your income be exempt just because you still have the same job and your source of income hasn't changed? If the tax rate goes up this year should the higher rate only apply to any raise you might get this year, or should it apply to all of oyur taxable income? If you won the lottery 5 years ago and  your next door neighbor wins today, should he have to pay more tax than you on the same income? What is the rational basis for thinking that a source of income should always be exempt from income tax just because that source wasn't taxed in the first year that somebody received it?

If I've been driving for 20 years and the speed limit goes down this year should it apply to me, or am I grandfathered? If I was dropping acid with Timothy Leary when it was legal back in the 60's, do I have to stop or am I exempt because I'm grandfathered? I'm curious just how much should be grandfathered when the laws change, and what's the rational basis for grandfathering something.

 

 

See Ya!HAPPY SATURDAY..."KY"....1/21/2006

Some parts of your argument are totally extreme and melodramatic...The tax Laws in each State pertain to 'residency'.....I know here in Maryland that as a resident, I must pay income tax, as it's already factored on the books, and has been so for at least 50 years prior to my birth. It will come as no surprise to me, that should I have the good fortune of winning anything, The 'Comptroller of the Treasury' will be looking for a check in the mail, as soon as they Electronically deposit my good fortune. And that applies to all residents of all the Counties in MD.

However, if a winner has lived in a Town, or County in a State where income tax, was never an issue on the books, then one day the State Legislature notices residents winning 'fat prizes' thru the Lotto or Lottery, and decides to enact the Law, it's obvious that they want a'piece of the pie' to simply add more money to the State coffers. It's not money desperately needed for anything. They didn't enact this law because the State or Town where she was living was going bankrupt, or was in grave debt. They simply wanted to 'Cash In' on the prize winnings, that's all. If  the Town in which she resides was severely in need of 'money'  to build Hospitals, Schools, or Libraries.....the Law would have gone into effect long, long ago, before she ever won a dime.

justxploring's avatarjustxploring

Well, I guess there's another thing to be happy about besides the weather, since we have no state tax. I guess for now I don't need to think about it because someone else just won the $50 million jackpot and I didn't get a single number.  Still..$3 million on Wed will be okay too, but $50 would have been a lot nicer.

I agree with libra926 and it doesn't seem fair that a new tax can be applied to prior earnings. 

KY Floyd's avatarKY Floyd

I think it's a screw-job by government once again. It's almost a retro-active tax. When she won the lottery, it was 4 years before the govt decided there would be a city tax.  She should be exempt. This is govt once again changing the rules in the middle of the game just to suit themselves.

Maybe I'm just stupid, but there are some things I don't understand about everybody's whining. How is a tax that only applies to your current income retroactive? If your city enacts an income tax this year should your income be exempt just because you still have the same job and your source of income hasn't changed? If the tax rate goes up this year should the higher rate only apply to any raise you might get this year, or should it apply to all of oyur taxable income? If you won the lottery 5 years ago and  your next door neighbor wins today, should he have to pay more tax than you on the same income? What is the rational basis for thinking that a source of income should always be exempt from income tax just because that source wasn't taxed in the first year that somebody received it?

If I've been driving for 20 years and the speed limit goes down this year should it apply to me, or am I grandfathered? If I was dropping acid with Timothy Leary when it was legal back in the 60's, do I have to stop or am I exempt because I'm grandfathered? I'm curious just how much should be grandfathered when the laws change, and what's the rational basis for grandfathering something.

 

 

See Ya!HAPPY SATURDAY..."KY"....1/21/2006

Some parts of your argument are totally extreme and melodramatic...The tax Laws in each State pertain to 'residency'.....I know here in Maryland that as a resident, I must pay income tax, as it's already factored on the books, and has been so for at least 50 years prior to my birth. It will come as no surprise to me, that should I have the good fortune of winning anything, The 'Comptroller of the Treasury' will be looking for a check in the mail, as soon as they Electronically deposit my good fortune. And that applies to all residents of all the Counties in MD.

However, if a winner has lived in a Town, or County in a State where income tax, was never an issue on the books, then one day the State Legislature notices residents winning 'fat prizes' thru the Lotto or Lottery, and decides to enact the Law, it's obvious that they want a'piece of the pie' to simply add more money to the State coffers. It's not money desperately needed for anything. They didn't enact this law because the State or Town where she was living was going bankrupt, or was in grave debt. They simply wanted to 'Cash In' on the prize winnings, that's all. If  the Town in which she resides was severely in need of 'money'  to build Hospitals, Schools, or Libraries.....the Law would have gone into effect long, long ago, before she ever won a dime.

Melodramatic? You need to check your dictionary. Extreme? It got your atttention, but it sounds like you still haven't figured it out, since it's a reasonable analogy to the tax situation. Laws about all sorts of things change all the time, and with only a few limited exceptions the new laws apply to everybody.

You apparently think the idea of being able to continue an activity after it becomes illegal  is extreme, but that's absolutley no different than the tax situation. She used to be able to keep all of certain types of income, but now it's illegal to do so because that type of income is no longer exempt. Sure, it would be nice if your taxes never went up, but that's not realistic. As for why the exemtion changed, it sounds like you're completely out of touch with how governments finance themselves. If they were simply looking for a cash cow they'd make far more money by simply increasing the rate on all income, and/or increasing the sales tax. There's not a chance that city residents win enough in lotteries to bring in more revenue by adding a tax on the winnings.
 

KY Floyd's avatarKY Floyd

Well, I guess there's another thing to be happy about besides the weather, since we have no state tax. I guess for now I don't need to think about it because someone else just won the $50 million jackpot and I didn't get a single number.  Still..$3 million on Wed will be okay too, but $50 would have been a lot nicer.

I agree with libra926 and it doesn't seem fair that a new tax can be applied to prior earnings. 

Your last line and other poster's references to a "retroactive tax" indicate some confusion. The tax isn't applied to prior earnings. It's a new tax that's applies to current income. It isn't any different than making interest income from a bank account taxable when it hadn't been previously been taxable. Why would you think you'd be exempt just because you had the bank account before the exemption was eliminated? If the rate on capital gains is reduced, are you going to volunteer to pay the old, higher rate if you sell a stock that you bought before the rate was reduced?  Do you think the lower exemption for  children that was in place when they were born should aply unti they turn 18 even if the exemption is raised in the meantime? Tax laws change every single year. Some rates ad exemptions go down, some rates and exemptions go up, and every single change applies only to income earned in the year(s) for which those rates are in effect.

It may not suit your sense of fair play, but everybody should know that life isn't fair. 

RJOh's avatarRJOh

Well, I guess there's another thing to be happy about besides the weather, since we have no state tax. I guess for now I don't need to think about it because someone else just won the $50 million jackpot and I didn't get a single number.  Still..$3 million on Wed will be okay too, but $50 would have been a lot nicer.

I agree with libra926 and it doesn't seem fair that a new tax can be applied to prior earnings. 

That's the problem with taking an annuity, you pay taxes on the money when you get it at the tax rate that exist when you receive it, not when you won it, kinda like a IRA with a deferred tax obligation.

libra926

I think it's a screw-job by government once again. It's almost a retro-active tax. When she won the lottery, it was 4 years before the govt decided there would be a city tax.  She should be exempt. This is govt once again changing the rules in the middle of the game just to suit themselves.

Maybe I'm just stupid, but there are some things I don't understand about everybody's whining. How is a tax that only applies to your current income retroactive? If your city enacts an income tax this year should your income be exempt just because you still have the same job and your source of income hasn't changed? If the tax rate goes up this year should the higher rate only apply to any raise you might get this year, or should it apply to all of oyur taxable income? If you won the lottery 5 years ago and  your next door neighbor wins today, should he have to pay more tax than you on the same income? What is the rational basis for thinking that a source of income should always be exempt from income tax just because that source wasn't taxed in the first year that somebody received it?

If I've been driving for 20 years and the speed limit goes down this year should it apply to me, or am I grandfathered? If I was dropping acid with Timothy Leary when it was legal back in the 60's, do I have to stop or am I exempt because I'm grandfathered? I'm curious just how much should be grandfathered when the laws change, and what's the rational basis for grandfathering something.

 

 

See Ya!HAPPY SATURDAY..."KY"....1/21/2006

Some parts of your argument are totally extreme and melodramatic...The tax Laws in each State pertain to 'residency'.....I know here in Maryland that as a resident, I must pay income tax, as it's already factored on the books, and has been so for at least 50 years prior to my birth. It will come as no surprise to me, that should I have the good fortune of winning anything, The 'Comptroller of the Treasury' will be looking for a check in the mail, as soon as they Electronically deposit my good fortune. And that applies to all residents of all the Counties in MD.

However, if a winner has lived in a Town, or County in a State where income tax, was never an issue on the books, then one day the State Legislature notices residents winning 'fat prizes' thru the Lotto or Lottery, and decides to enact the Law, it's obvious that they want a'piece of the pie' to simply add more money to the State coffers. It's not money desperately needed for anything. They didn't enact this law because the State or Town where she was living was going bankrupt, or was in grave debt. They simply wanted to 'Cash In' on the prize winnings, that's all. If  the Town in which she resides was severely in need of 'money'  to build Hospitals, Schools, or Libraries.....the Law would have gone into effect long, long ago, before she ever won a dime.

Melodramatic? You need to check your dictionary. Extreme? It got your atttention, but it sounds like you still haven't figured it out, since it's a reasonable analogy to the tax situation. Laws about all sorts of things change all the time, and with only a few limited exceptions the new laws apply to everybody.

You apparently think the idea of being able to continue an activity after it becomes illegal  is extreme, but that's absolutley no different than the tax situation. She used to be able to keep all of certain types of income, but now it's illegal to do so because that type of income is no longer exempt. Sure, it would be nice if your taxes never went up, but that's not realistic. As for why the exemtion changed, it sounds like you're completely out of touch with how governments finance themselves. If they were simply looking for a cash cow they'd make far more money by simply increasing the rate on all income, and/or increasing the sales tax. There's not a chance that city residents win enough in lotteries to bring in more revenue by adding a tax on the winnings.
 

See Ya!1/22/2006....PLEEEZZEE BRONCOS..BEAT THE STEELERS/ PLEEZZEE PANTHERS..RIP APART THE SEAHAWKS...& SPIT OUT THE FEATHERS.......

aahhh...that said...

1st.....everything 'Melodramatic & Extreme' gets my attention....

2nd...I, wasn't discussing anything 'illegal'.....I am speaking strictly of winning the Lotto/Lottery  and I am staying on subject..I'm not the one out of touch here.

3rd....We know that taxes go up & down, and even that rich people, who don't need the money, get tax rebates...just look at the last 5 years under this current Dictatorship....

4th....It would be naive to think or believe that the States don't take advantage of any opportunity if they can do so,  to gain monetarily from Lotto-Lottery prize winnings...everytime we win, they win....and Uncle Sam (Fed Taxes) isn't pretending he isn't happy to see us Play & Win....No one on the Boards is saying that taxing our prizes, is the main source of governmental finance, however I stand by my last posting, completely. Technically Speaking, the prize winner, should not be held accountable to her township for income tax, on this prize, as it was never a law, until recently,nor for that matter, should anyone else, who won a cash annuity or lump sum playing the games '"before"  or "in lieu" of this law taking affect.....The operative terms here  are "before"/"in lieu".And since as you say, State and Local Governments don't Finance themselves completely w/prize winnings, no matter how large or small, then why should her annuity prize now be taxed ?   I prefer  to stay on topic because, I could use your analogy against you by showing examples of how Americans are being "fleeced under taxation" where millions are being wasted on "pork barrel junk" monies going to nothing which benefits us. I could also turn your analogy against you by illustrating how rules and regulations, enacted today in the work place, and in society today, which were not  in affect  5 or 10 years ago, affect only "those people who are coming along today"  while the rest of us are unaffected by the new rules and regulations. This includes certain tax laws....

libra926

Well, I guess there's another thing to be happy about besides the weather, since we have no state tax. I guess for now I don't need to think about it because someone else just won the $50 million jackpot and I didn't get a single number.  Still..$3 million on Wed will be okay too, but $50 would have been a lot nicer.

I agree with libra926 and it doesn't seem fair that a new tax can be applied to prior earnings. 

Your last line and other poster's references to a "retroactive tax" indicate some confusion. The tax isn't applied to prior earnings. It's a new tax that's applies to current income. It isn't any different than making interest income from a bank account taxable when it hadn't been previously been taxable. Why would you think you'd be exempt just because you had the bank account before the exemption was eliminated? If the rate on capital gains is reduced, are you going to volunteer to pay the old, higher rate if you sell a stock that you bought before the rate was reduced?  Do you think the lower exemption for  children that was in place when they were born should aply unti they turn 18 even if the exemption is raised in the meantime? Tax laws change every single year. Some rates ad exemptions go down, some rates and exemptions go up, and every single change applies only to income earned in the year(s) for which those rates are in effect.

It may not suit your sense of fair play, but everybody should know that life isn't fair. 

It doesn't escape me that in some of your Postings, you are simply playing the 'Devil's Advocate' I don't think even you take everything you are saying, seriously.....

"It may not suit your sense of fair play, but everybody should know that life isn't fair. "

Now, Will the real George Walker Bush please stand up???loolololololololololololThud

KY Floyd's avatarKY Floyd

libra926 wrote:

      << It doesn't escape me that in some of your Postings, you are simply
        playing the 'Devil's Advocate' I don't think even you take everything
        you are saying, seriously..... >>

Maybe it looks like I'm playing Devil's Advocate because I'm taking the minority opinion. I'm not taking it because it's the minority opinion, but because it's the legally correct opinion. Why wouldn't I be serious about it?

      << Technically Speaking, the prize winner, should not be held accountable
        to her township for income tax, on this prize, as it was never a law,
        until recently,nor for that matter, should anyone else, who won a cash
        annuity or lump sum playing the games '"before" or "in lieu" of this
        law taking affect >>

What does "technically speaking" mean? It's a legal issue, and legally speaking there is absolutely no reason that lottery winnings should continue to be exempt just because they were exempt in the past. The law changed and the new law applies to her just as it applies to other people. Legally it's no different than my examples that you think are extreme. If you go back and read the article you'll see that her own lawyers apparently thought that arguing that her lottery winnings should continue to be exempt was such a weak argument that they instead opted to try and claim her lottery winnings aren't lottery winnings.

      << since as you say, State and Local Governments don't Finance
           themselves completely w/prize winnings, no matter how large
           or small, then why should her annuity prize now be taxed ? >>

Because they can tax it, and they did. It's the law. If you've got a legitimate reason why the law is invalid I'm sure her lawyers would be more than happy to pay you a consulting fee for informing them what it is. You're presumably aware that governments don't finance themselves completely with income taxes, sales taxes, gasoline taxes, or anything else, either. Why should income or sales be taxed? Again the legal answer is because they can and they do.

      << I prefer to stay on topic because, I could use your analogy against
        you by showing examples of how Americans are being "fleeced under
        taxation" where millions are being wasted on "pork barrel junk" monies
        going to nothing which benefits us >>

Since this is a discussion about a tax on lottery winnings that's not exactly on topic, except that the taxes used to raise the revenue are all legal, just like the one we're discussing. What the government spends the money on is a completely different topic. Since I'm not an elected official and don't get to make any decisions on what the money should be spent on I don't see how you''re going to use it against me.

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