New Hampshire gamblers are feeling a lot luckier nowadays. The state no longer collects tax on winnings.
That's right, jackpots pocketed from state lottery drawings, as well as winnings from bingo, slot machines, keno, poker tournaments and any other games of chance are no longer subject to New Hampshire tax.
Maybe the Granite State should change its motto to "Win tax free or die."
The state's gambling tax ended on May 23. That day marked the end of the 10 percent withholding tax that had been collected since 2009 on lottery payouts greater than $600.
When the withholding was implemented, New Hampshire officials had hoped it would boost the state's bottom line since it does not collect a general sales tax or an income tax on wages.
But the tax apparently backfired, hurting racetrack revenues and affecting lottery ticket sales.
N.H. lottery officials reported that purchases of lottery tickets dropped 5.82 percent since 2009, while similar sales in neighboring Massachusetts, Maine and Vermont were all up. State racetracks saw an 8 percent reduction in overall betting and revenue.
"It was definitely a losing proposition," said New Hampshire House Majority Leader D.J. Bettencourt. "This was hurting our cross border advantage."
To celebrate the gambling tax repeal, the New Hampshire lottery commission introduced a new $10 instant game, the $250,000 Tax Free ticket. The scratch-off card went on sale statewide today.
Repeal isn't retroactive: While the end of the gambling tax is good news for new lottery winners in New Hampshire, the law isn't retroactive.
The New Hampshire Department of Revenue is careful to points out that folks who pocketed gambling winnings between July 1, 2009, and May 22, 2011, are not entitled to a refund for taxes withheld from those winnings.
State tax officials also want to make sure that folks who won earlier this year know that they still must report and pay state tax on the gambling winnings they received from any source on or before May 22. The required state tax form is DP-300, due by at least April 15, 2012.
In addition residents of other states or countries also must report to the state any winnings they received from a New Hampshire entity.
Federal tax still in place: And don't forget about your federal gambling tax obligations.
The New Hampshire law change doesn't affect Uncle Sam's interests at all. The U.S. Treasury still wants its cut of your New Hampshire gambling winnings, both before and after May 22, when you file your 2011 IRS Form 1040.
- Bet on it, gambling winnings are taxable income
- Atlantic City casino's bad blackjack luck is good news
for lone card player, IRS
- Federal court halts Delaware betting plan
- $27.197 billion in gambling winnings
declared on 2008 returns (By the Numbers)
- State tax departments
Want to tell your friends about this blog post? Check out the buttons -- Tweet This, Reblog, Like, Digg This and more -- at the bottom of this post. Or you can use the Share This icon to spread the word via e-mail and online avenues. Thanks!