Committee Approves Lottery Winners’ Tax

A bill to make lottery winners pay state income taxes has limped out of a House committee, headed toward possible amendment.

But to say support on the Revenue and Taxation Committee was lukewarm in a Monday hearing would be an understatement.

The legislation, which its sponsor said has the potential to add $1 million to state tax revenue, barely scraped out of committee on a 10-8 vote. It faces five possible amendments, some making substantial changes.

At one point, Rep. Dave Bivens, R-Meridian, suggested killing the bill, starting over with legislation incorporating committee-approved amendments and sending the measure directly to the full House.

“That way we could vote it up or down,” he said.

But his was the only vote for the motion. Then the panel voted 10-8 against a motion to kill the bill and the same way to put it out for amendment.

If the legislation becomes law, amended the way the tax panel voted Monday, lottery winnings would be subject to the state income tax for the first time.

Restrictions:

Only winnings over $600 would be taxed.

Taxes would be withheld only when the federal government requires it, which a tax attorney said starts at $5,000.

The tax would commence next January. Previous winners would not have to pay taxes.

Sponsoring Rep. Mark Stubbs, R-Twin Falls, estimated it would bring in $1 million per year. His original bill earmarked the money for drug education and rehabilitation programs and for county probation services.