State Lottery Taxes: Every Rate, Every Rule
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State tax is applied by the state that sold the winning ticket, not the winner's home state. Nine states do not tax Powerball winnings at all. New York has the highest rate at 10.9%, and New York City residents add another 3.876% on top.
The nine states with zero lottery tax
- California — exempts in-state lottery winnings from state tax
- Florida — no state income tax
- Nevada — no state income tax
- New Hampshire — no state income tax on lottery
- South Dakota — no state income tax
- Tennessee — no state income tax on lottery
- Texas — no state income tax
- Washington — no state income tax
- Wyoming — no state income tax
The top-rate states
| State | Rate | Note |
|---|---|---|
| New York | 10.90% | NYC adds 3.876% |
| New Jersey | 10.75% | |
| Oregon | 9.90% | |
| Minnesota | 9.85% | |
| Maryland | 8.75% | Local surtax for non-residents |
Cross-state winners
When a resident of a taxing state buys a ticket in a zero-tax state, their home state still collects tax at filing — but generally credits any withholding paid to the ticket-selling state. Timing, residency, and domicile matter; consult a CPA before claiming.