$2.04B Powerball Winner Won't Pay State Tax on Jackpot

Unlike 36 other states, California doesn't tax lottery winnings
By Rob Quinn,  Newser Staff
Posted Nov 14, 2022 5:55 PM CST
Why the $2.04B Powerball Winner Gets a $123M 'Bonus'
Business owner Joe Chahayed holds a $1 million check outside Joe's Service Center in Altadena, northeast of Los Angeles, Tuesday, Nov. 8, 2022.   (AP Photo/Damian Dovarganes)

California is one of the highest-taxed states but whoever won the $2.04 billion Powerball jackpot last week is probably glad they don't live elsewhere. Unlike 36 other states, California doesn't charge state income tax on lottery winnings, which is "like winning a second $123 million jackpot" for the Powerball winner, the San Jose Mercury News reports. California is one of nine states, including Florida and Texas, not to tax lottery winnings. Five others don't have lotteries, including Nevada and Utah. In California, voters approved a state lottery system in a 1984 ballot measure that included a state tax exemption.

California would have hundreds of millions more dollars in its coffers every year if it taxed lottery winnings, though it did bring in $156.3 million for public schools in lottery ticket sales over the Powerball run, the Mercury News notes. The winning ticket was sold at Joe's Service Center in Altadena, an unincorporated community north of Los Angeles—and if nobody comes forward to claim it, Powerball states and territories will get their share of the prize money back. California's $265 million share will go to public schools in the unlikely event the biggest lottery jackpot in history isn't claimed.

Another winner was Joe Chahayed, owner of the outlet where the winning ticket was sold. Chahayed, father-in-law of former NFL player Domata Peko Sr., received a $1 million check, KTLA reports. He said he believes—and hopes—the winner is somebody who lives locally. "This is a very poor neighborhood," he said, per the Orange County Register. "The poor people deserve it." The holder of the winning ticket has a year to claim their prize. (Read more Powerball stories.)

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