States Hoping for a Mega Millions Winner

Mega Millions is played in 42 states and currently has the largest jackpot in U.S. lottery history at $540 million. Those buying the lottery tickets are not the only ones hoping for a winning ticket; state governments are just as interested in finding a winner because the jackpot will bring a tax bonanza to the state where the winner resides. A single winner, choosing a lump-sum payment option, could bring in over tens of millions of tax dollars to the state—money that could help restore social service-programs, hire more state troopers, forestall new tax laws, or pay for low-income housing units.

Each state sets its own tax rate on lottery winnings for an in-state Mega Millions win. For example, New York charges 8.82 percent, Rhode Island charges 5.99 percent, and California charges nothing at all. If an Ohio resident were to win the jackpot, the state would receive an estimated $23 million in a single payment. If a Rhode Island resident were to win, the state would receive $23.3 million in taxes. At around $50 million, Montana would witness one of the largest tax cuts if one its residents were to win the jackpot.

See Eric Niedowski, Mega Million Win Could be Tax Windfall for State, The Columbus Dispatch, Mar. 30, 2012.