People who are lining up to purchase tickets for the Mega Millions Jackpot are not the only ones who are dreaming of the astronomical $540 million lottery prize that someone might win on Friday. Several state governments are also hoping to get lucky because the win would result in a big tax bonus for them.
A single winner of the Mega Millions Jackpot could generate taxes of tens of millions of dollars to some lucky state if the lump-sum payout is chosen. This could mean funding some important social service programs that are currently scheduled to be chopped. This kind of tax money coming in to a state could pay for low income housing, more state troopers, or it
could keep keep taxes lower for everybody.
The prize for the Mega Millions Jackpot is now the largest in the history of the country. A single winner who chose the lump-sum payout could get nearly $390 million.
If the winner is from Rhode Island and chooses the single payout, the state would collect more than $23 million in taxes on the win.
Each state sets its own individual tax rate on lottery wins. For example, in New York, the state charges 8.82 percent. There are some states such as California that do not tax lottery wins.
Joe Testa, the tax commissioner of Ohio, says he is not holding his breath, but he is rooting for an Ohioan to win.
State Senator David Lewis in Montana said he would use a tax windfall from the Mega Millions Jackpot to pay for spending on infrastructure.
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