Youngblood to revive effort to ensure tax fairness with Pa. lottery winnings

Believes it’s time to end tax exemption on lottery winnings, join other states

PHILADELPHIA, May 12 – Seeking to end Pennsylvania’s status as one of only two states that fail to tax state lottery winnings, state Rep. Rosita C. Youngblood, D-Phila., plans to introduce bills to close that loophole and start generating millions of dollars in new revenue.


Youngblood’s two-bill package will mirror H.B. 1969 and H.B. 1970 from last legislative session, with the former removing the State Lottery Law tax exemption for winnings and the latter striking the exemption from the state Tax Reform Code.


California is the only other state that doesn’t tax its state lottery winnings, said Youngblood, noting that Pennsylvania’s 3.07 percent personal income tax already applies to winnings from casino gambling, pari-mutuel thoroughbred horse racing and harness horse racing, games of chance and bingo.


“These proposals have the potential to raise significant revenue for the commonwealth, without negatively impacting consumers, the poor, small businesses, working families or anyone relying on a fixed income,” Youngblood said. “Plus, my initiatives would end a double standard, whereby all gambling proceeds are subject to the state personal income tax except those doled out by the Pennsylvania lottery.”


Youngblood, who serves as secretary of the House Democratic Caucus and has launched a legislative agenda called People 1st, said obtaining needed state revenue by closing loopholes fits squarely under that banner, as it spares existing taxpayers from shouldering additional burdens.


“This new revenue stream is not regressive in any manner, and would have no impact on the day-to-day lives of Pennsylvania residents,” Youngblood said. “More importantly, Pennsylvania needs to stop losing out on a source of funding utilized by nearly every other state in the country that operates a lottery.”