State To Take Back Taxes From Lottery Winnings In New Year

A new law enacted from legislation (HB6270) introduced by State Rep. Gerald Fox III (D-Stamford) that requires the state’s lottery agency to deduct delinquent taxes and penalties before distributing lottery prizes takes effect New Year’s Eve, according to a press release.   

Lottery prizes of $5,000 or more from tickets redeemed after December 30, 2011 are affected. With about $400 million in state taxes currently delinquent, Fox said the law will serve as an avenue to garner uncollected past due revenue.

“If someone is lucky enough to win a lottery prize and they also owe back taxes it is reasonable to collect those taxes at that time,” said Fox, who serves as House Chair of the Judiciary Committee. “This is not just about revenue owed the state, but also about fairness and improving confidence in our tax system.”

Fox noted in the press release that the lottery has received added attention recently when a $254 million Powerball jackpot was won from a ticket purchased in Stamford. “With this new law, winners will need to be accurately identified and up to date on their taxes before collecting their prize,” he said.

Fox said Stamford resident Anthony Martino suggested the idea and testified at a public hearing on the bill before the legislature’s Public Safety Committee earlier this year. “Winners are checked against a database of obligors owing child support, so I suggested the state could apply the same process to those owing delinquent taxes,” Martino testified.

The lottery child support collection program, begun in 2004, has brought in about $1.5 million in delinquent payments.