MA: Mideast Contest Winnings Taxation Act (Statute)

[For Oklahoma]

Mideast Contest Winnings Taxation Act

Section 1

1. A Mideast Regional Lottery is hereby established.

2. Any citizen of the Mideast Region who wins the regional lottery/any radio contest or any similar contest within the region is hereby subjected to taxation on their winnings.

3. The taxation shall be:

• On any prize that totals less than $100,000 in value: 15%
• On any prize that totals more than $100,001 in value: 25%

4. Any prize that totals less than $500 shall be exempt from taxation.

Sponsor: 20RP12

How about this?

[ZuWo]

Well, it's not me who made the original claim that a portion of the ticket price is an "implicit lottery tax" but it's in the link. I guess the reasoning behind this assumption is that as soon as the state makes a profit with the lottery, we are dealing with a tax.

[Oldiesfreak1854]

I didn't know there wasn't a regional lottery.  Maybe I should have paid closer attention to that.  Is it too late to change my amendment to "a state lottery"?

[shua]

An alternative to taxing the winnings would be to reduce the winnings and advertise it as tax free.  You might consider if you are setting up a lottery, determining what percentage of the sale goes to funding the government, and what percent will go to the prizes.

[Is JCL in mushy sappy love]

Take out radio contest and this has my support.

[For Oklahoma]

With all amendments:

Mideast Contest Winnings Taxation Act

Section 1

1. A Mideast Regional Lottery is hereby established.

2. Any citizen of the Mideast Region who wins the regional lottery/any radio contestor any similar contest within the region is hereby subjected to taxation on their winnings.

3. The taxation shall be:

• On any prize that totals less than $100,000 in value: 15%
  
• On any prize that totals more than $100,001 in value: 25%
  
  4. Any prize that totals less than $500 shall be exempt from taxation.
  

Sponsor: 20RP12

[Oldiesfreak1854]

This bill is confusing and I'm not sure I would support it anyway.

[Is JCL in mushy sappy love]

With all amendments:

Mideast Contest Winnings Taxation Act

Section 1

1. A Mideast Regional Lottery is hereby established.

2. Any citizen of the Mideast Region who wins the regional lottery/any radio contestor any similar contest within the region is hereby subjected to taxation on their winnings.

3. The taxation shall be:

• On any prize that totals less than $100,000 in value: 15%
  
• On any prize that totals more than $100,001 in value: 25%
  
  4. Any prize that totals less than $500 shall be exempt from taxation.
  

Sponsor: 20RP12

Though I oppose lotteries personally, I support the amendment.

[For Oklahoma]

This bill is confusing

How so?

[ZuWo]

Sorry for making the mess even bigger but I would propose an amendment to the amendment. Concretely, Section 1 should be amended to read:

1. A Mideast Regional Lottery is hereby established. The revenue from the lottery must be used primarily for the funding of the lottery. The Mideast Government is permitted to use any additional revenue from the lottery at its own discretion.

This clause clarifies how the regional government can spend the revenue should we decide to establish a regional lottery. Firstly, we have to make sure that all costs of the lottery are covered (i.e. the operating costs). Secondly, the rest of the money we collect from the lottery can be used to fund certain government programs or cut the deficit.

[Inks.LWC Supports Chuck Hagel]

What's wrong with taxing radio contests/

[shua]

Sorry for making the mess even bigger but I would propose an amendment to the amendment. Concretely, Section 1 should be amended to read:

1. A Mideast Regional Lottery is hereby established. The revenue from the lottery must be used primarily for the funding of the lottery. The Mideast Government is permitted to use any additional revenue from the lottery at its own discretion.

This clause clarifies how the regional government can spend the revenue should we decide to establish a regional lottery. Firstly, we have to make sure that all costs of the lottery are covered (i.e. the operating costs). Secondly, the rest of the money we collect from the lottery can be used to fund certain government programs or cut the deficit.

What do you mean by "primarily"?  Typically, the largest part of the revenue is used for prizes, the second largest is for government programs, and the third largest is for operational costs.
http://www.ncsl.org/issues-research/econ/lottery-payouts-and-state-revenue.aspx

[ZuWo]

By "primarily" I mean that the operating costs have to be covered by all means with the revenue from the lottery - this should be the primary use of the money we get. So in the unlikely case that there is very little revenue in a particular year we should at least make sure that the operating costs are covered by the money we collect from the sale of lottery tickets before we spend the money on other projects. Maybe this clause seems a bit redundant but I want to ensure that the operating costs are covered before the money is used for something else.

EDIT: I see the problem in the wording I chose. I therefore suggest to alter my amendment in the following way:

1. A Mideast Regional Lottery is hereby established. A part of the revenue from the lottery must be used for the funding of the lottery. The Mideast Government is permitted to use any additional revenue from the lottery at its own discretion.

[Oldiesfreak1854]

I support this amendment.

[Jayhawker]

"A part" can be open to a lot of interpretation, which is my only concern. Should we dedicate a certain % instead?

[Inks.LWC Supports Chuck Hagel]

I'll sponsor the Governor's amendment and bring it to a vote.  Members will vote AYE, NAY, or ABSTAIN.  This will be a 24-hour vote.

1. A Mideast Regional Lottery is hereby established. A part of the revenue from the lottery must be used for the funding of the lottery. The Mideast Government is permitted to use any additional revenue from the lottery at its own discretion.

[Jayhawker]

I still remain skeptical that "a part" can be very loosely interpreted.

[ZuWo]

"A part" seems better to me than a certain percentage because the costs for funding the lottery and the revenue from the lottery vary from year to year. All the bill must guarantee is that the lottery is completely funded by the revenue the lottery generates, which I think this bill does.

[For Oklahoma]

Aye

[Inks.LWC Supports Chuck Hagel]

AYE

[Inks.LWC Supports Chuck Hagel]

Voting is now closed.  The AYEs are 2, and the NAYs are 0, with 3 not voting.  The AYEs have it, and the amendment is adopted.

[ZuWo]

Now we need to figure out how much revenue we can expect from the lottery. In the best case, we can reduce the budget deficit considerably if we get this bill passed.

[Inks.LWC Supports Chuck Hagel]

From what I can tell, 20RP12 accepted all but the last amendment as friendly, so what we have is as  follows:

Mideast Contest Winnings Taxation Act

Section 1

1. A Mideast Regional Lottery is hereby established.  A part of the revenue from the lottery must be used for the funding of the lottery. The Mideast Government is permitted to use any additional revenue from the lottery at its own discretion.

2. Any citizen of the Mideast Region who wins the regional lottery or any similar contest within the region is hereby subjected to taxation on their winnings.

3. The taxation shall be:

• On any prize that totals less than $100,000 in value: 15%
• On any prize that totals more than $100,001 in value: 25%

4. Any prize that totals less than $500 shall be exempt from taxation.

[Inks.LWC Supports Chuck Hagel]

I think radio contest should be added back in.  What was the rationale for excluding it?

[For Oklahoma]

I think radio contest should be added back in.  What was the rationale for excluding it?

It's not regionally-sponsored.