Tax-free New Hampshire attempts to lure Massachusetts lottery players
METHUEN - With the big Powerball drawing Saturday night, the lottery fever is contagious.
But states like New Hampshire are trying to get lotto players to come to their state and taking a dig at a new Massachusetts "millionaires tax."
When all eyes are on the $1.4 billion Powerball jackpot, there is one Methuen convenience store those hoping to cash in flock to. It's Ted's Stateline Mobile, famous for its lucky streak.
In fact, lottery player Bob Terrio came in for Powerball and scratch off tickets, then won $50 on the spot. "It's all just luck," said Terrio. "Hey, I'll go buy some more tickets."
But now if you get to be a millionaire, the State of New Hampshire is taking a bite at Massachusetts in a new 'tax shark' commercial poking fun at the taxes winners must pay in Massachusetts, highlighting the "no good Massachusetts tax shark that's been swimming around stealing our lottery winnings."
In the commercial, a woman opens her apartment door only to be greeted by a "shark" that chomps down on her.
"Why play the lottery in Massachusetts where taxes, including the new 'millionaires tax,' cost you an extra 9%?" the narrator says. "Instead, live free and play in New Hampshire where your income and winnings are always state tax free."
The commercial concludes with the woman telling the shark in a thick Massachusetts accent, "I'm gonna send you back to Martha's Vineyard."
The commercial urges customers to try their luck in a tax-free New Hampshire.
But here's the thing: lottery officials say even if you live in the Bay State, and you win the lottery in another state, like New Hampshire, you still must pay taxes.
Experts say if it's over a million dollars, you're slapped with the "millionaires tax" of 4% which is on top the 5% state income tax--making it 9%.
"With lottery winnings, that is considered ordinary income, so lottery winners are still subject to that state income tax of 9% on all earnings over a million. It's important to note that even if a lottery winner from Massachusetts bought the Powerball ticket in another state, they would still be subject to the state income tax," said Paul Karger Co-founder of TwinFocus, a financial planning firm. "So other than moving your residence which you have a couple of hours to get that done, it's pretty hard to escape the long arms of the tax."
"The state has to get their money too, but I wouldn't do the cash option and give all the money back," said past lottery winner Laura Wanty.
And if you happen to beat the 1 in 292.2 million odds of winning the Powerball, take this other advice from lucky lady Laura, who's already banked a grand from the lucky store.
"And not let people know for a while because then they hound you," said Wanty.
Experts say if you win, some things you can do is talk to professionals about producing a plan, and learn about finances, especially those taxes.
