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07/23/2024 07:59 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20150&cosponId=18332
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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2015 - 2016 Regular Session

MEMORANDUM

Posted: May 12, 2015 09:54 AM
From: Representative Rosita C. Youngblood
To: All House members
Subject: Removing the income tax exemption for State Lottery winnings
 
In the near future, I plan to reintroduce a package of bills (former HBs 1969 and 1970) that I introduced last session that would generate millions of dollars in new revenue to help Pennsylvania address its current financial situation.

The proposals would allow Pennsylvania to remove the income tax exemption for State Lottery winnings. Pennsylvania is one of only two states in the nation that operates a state lottery and does not require winnings to be taxed at the state level (California is the other). This includes an exemption of lottery winnings to the state's Personal Income Tax. All other forms of gambling winnings, including winnings from casino gambling, pari-mutuel thoroughbred horse racing and harness horse racing, games of chance and Bingo, are subject to the state's 3.07 percent PIT.

As a result, Pennsylvania is losing out on a source of funding that is utilized by nearly every other state in the country that operates a lottery.

I believe the proposals could raise significant revenue for the Commonwealth’s budget. As you know, the General Assembly is always looking for new revenue, and these proposals would not be a burden to consumers, the poor, small businesses, corporations, working families, or anyone relying on fixed incomes. They are not regressive in any manner, and would have no impact on the day-to-day lives of Pennsylvania's residents. Yet, they have the potential to raise enough money to provide a significant positive impact to our Commonwealth.



Document #1

Introduced as HB1245

Description:
This proposal, former HB 1969, would remove the tax exemption in the State Lottery Law relating to lottery winnings. Current law specifies that lottery prizes must be exempt from any and all state and local taxes.

As a result of this provision, Pennsylvania is losing out on a source of funding that is utilized by nearly every other state in the nation that operates a lottery and has a personal income tax.

 
  View Attachment
 

Document #2

Introduced as HB1246

Description:
This proposal, former HB 1970, would remove the tax exemption in the Tax Reform Code relating to Pennsylvania lottery winnings. Currently, the Tax Code also specifies that Pennsylvania lottery prizes are exempt from the state's Personal Income Tax. All other forms of gambling winnings, however, are still subject to the 3.07 percent PIT.
 
Once again, as a result of this provision, coupled with the provision contained in the State Lottery Law, Pennsylvania is losing out on a source of funding that is utilized by nearly every other state in the country that operates a lottery and has a personal income tax.

 
  View Attachment