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Why no tax on lottery sales?

Topic closed. 8 replies. Last post 2 years ago by Ron5995.

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geerod2001's avatar - DiscoBallGlowing
canton,georgia
United States
Member #67345
November 23, 2008
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Posted: March 8, 2015, 11:12 pm - IP Logged

I am Just curious as to every thing we seem to purchase these days there is always a sales tax added to the item.

 

Why not on lottery ticket purchases?  Anyone know why that is?

    MaximumMillions's avatar - Lottery-013.jpg

    Germany
    Member #164603
    March 8, 2015
    614 Posts
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    Posted: March 8, 2015, 11:55 pm - IP Logged

    I guess because you are already buying it with taxed money and then the government taxes your winning and your capital gains from the winning.

    They are probably afraid people would burn them down if they were as bold to tax the wager/ticket sale.

      RJOh's avatar - chipmunk
      mid-Ohio
      United States
      Member #9
      March 24, 2001
      19831 Posts
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      Posted: March 9, 2015, 12:05 am - IP Logged

      Lottery is a tax, next thing someone will be asking is why isn't sale taxes added to your property tax bill.

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

        geerod2001's avatar - DiscoBallGlowing
        canton,georgia
        United States
        Member #67345
        November 23, 2008
        28 Posts
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        Posted: March 9, 2015, 12:18 am - IP Logged

        Yes I agree about our earnings being initially taxed on both the federal and state levels and being taxed again on our item purchases.

        All state lottery's are corporations,and just like any corporation producing a product to sell, it has a sales tax attached to it at the end (use/sale).

        Except in no sales tax states of course,which are few in the U.S.

        Any tax experts or CPA's out there to shed light on this subject?

        I am very curious about this topic!

          Coin Toss's avatar - shape barbed.jpg
          Zeta Reticuli Star System
          United States
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          January 17, 2006
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          Posted: March 9, 2015, 12:21 am - IP Logged

          One of the Aussies here ( I think it was savagegoose) once posted that in Australia a ticket is $1.03 AUSD, all the .03s has already paid the 'tax' for the winner (hence there is no tax).

          Also the play slips have a NP box you can check, No Publicity. So no tax and anonymous, what more could you ask? The US needs to copy this.

          Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

          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.

            Scratch$'s avatar - sm lottery.jpg

            United States
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            September 5, 2014
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            Posted: March 9, 2015, 1:00 am - IP Logged

            Lottery is a tax, next thing someone will be asking is why isn't sale taxes added to your property tax bill.

            Playing the lottery is completely voluntary, whereas property taxes are mandatory.

            Scratchers ~ Cash 5 ~ Powerball ~ Mega Millions

              maringoman's avatar - images q=tbn:ANd9GcTbRxpKQmOfcCoUqF2FyqIOAwDo7rg9G-lfJLAALPGWJWwiz19eRw
              Massachusetts
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              April 14, 2006
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              Posted: March 9, 2015, 10:41 am - IP Logged

              It wouldn't make sense for the government to tax itselfWhat?

              That money's gone fo ever

                lejardin's avatar - Lottery-014.jpg

                United States
                Member #118609
                November 4, 2011
                939 Posts
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                Posted: March 9, 2015, 1:28 pm - IP Logged

                It wouldn't make sense for the government to tax itselfWhat?

                Oh?  Since when does this government need to make sense on anything, especially taxes.

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                  Wyomissing, PA
                  United States
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                  November 15, 2014
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                  Posted: March 9, 2015, 9:31 pm - IP Logged

                  Never thought of the sales tax angle. Many jurisdictions are desperate to generate revenue any way possible. If states get too carried away with taxes on lotteries, more players will turn to the illicit numbers rackets and/or other alternatives, such as casinos.

                  On an aside, Pennsylvania's governor has recently proposed numerous tax increases, including levying PA state income tax, which itself could increase, on lottery winnings, which are currently tax exempt at the state level. Wouldn't be a huge impact, but that's another few extra percent less for winners.

                  Sales tax on lottery purchases would significantly reduce the payback percentage. Seems to me that sales tax would tank lottery sales unless casinos also were forced to collect sales tax too for wagers and/or tax rate for casino winnings was increased to exceed that of lottery winnings.