Here's A Place In The USA Where You Won't Pay Any Tax On Your Lottery Wins - Yet

Many players outside the area probably don’t know if Pennsylvania taxes lottery winnings. PHOTO: ABC27

If you win Powerball or Mega Millions in Pennsylvania, you won't be paying state taxes - yet. Here's what happened when Dennis Owens of ABC27 asked five lawmakers about whether they knew that Pennsylvania doesn't tax winnings.

All five were unaware, including speaker of the House Mike Turzai.

The Pennsylvania Lottery headquarters. PHOTO: ABC27

“I have to be honest,” Turzai (R-Allegheny) said with a smile. “I did not know lottery winnings were not subject to personal income tax.”

Neither did Representative Tom Murt (R-Montgomery/Philadelphia) when it was mentioned it to him at 11 a.m.

By noon, Murt said he was in the initial stages of crafting a bill to tax lottery proceeds.

Powerball jackpot winner Steven Lloyd won $37 million, tax-free. PHOTO: ABC27

“I was already in touch with Research in the Finance Committee,” Murt said less than an hour after the initial conversation. “I explained the concept as you [Dennis Owens] and I discussed and they’re already working on draft legislation.”

Pennsylvannia's Governor Wolf’s budget plan is a proposal to tax lottery winnings over $600. Wolf’s spokesman says that California and Pennsylvania are the only states with income taxes that exempt lottery proceeds.

Camilla Brown doesn't mind paying tax on her winnings. PHOTO: ABC27

But Camilla Brown has a different thought. ABC27 caught up with Camilla at the lottery self-serve machine in the Capitol cafeteria. She had a fistful of tickets, a pleasant smile and a generous outlook.

She said if she could just win, she’d happily pay Pennsylvania.

“I think that’s fair,” Brown said. “If I win $75 million, I wouldn’t mind paying 3-percent state taxes.”

Lottery winnings are still subject to federal withholdings.

Watch the full story and interviews on the Pennsylvannia lottery tax here.


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