Tuesday, October 28, 2014

Proposed Tax increase on New Jersey Lottery Winnings Not Wholly Supported

New Jersey lottery players who were worried about the proposed extra taxes on lottery winnings can breathe a little easier—for a while at least—because the bill did not have enough votes to get it approved by the state Senate panel.

If it was approved, Bill S1767 would impose and extra 0.5% tax on all New Jersey lottery prizes over $600.

According to data collected from the Tax Foundation in 2012, New Jersey's top rate (10.8%) for lottery winners is already higher than that of any other state. This is in addition to the federal taxes which treat the prize as if it were regular income. In the case of a single person, the federal rate for income over $406,750 is 39.6%.

If the bill is pushed through at a later date the extra money gathered from the increased tax has been earmarked to fund after-school activities run by non-profit groups based in municipalities where 40% or more of the students are considered to be "at risk".

Bill S1767 was approved by the Senate's state government committee in May this year. The next step was to get bill endorsed by the budget committee, but the votes were not there.

Senate Budget Committee Chairman Paul Sarlo declined to comment on whether he was for or against the bill, but confirmed it had not been fully supported.

"It didn’t have the votes," he said.

New Jersey State Senator Ronald Rice, who sponsored the bill, believes he will be able to persuade the other members to back the new bill.

"I'm confident it will pass. With this bill, it makes good sense," he said.