Pennsylvania hikes lottery tax by 3.07%

To help balance its financial sheets, the State of Pennsylvania will dig deeper into the pockets of lottery winners.

The Times-Tribune reported that the State of Pennsylvania will be imposing a 3.07 percent state personal income tax on lottery winnings over $5,000 before the winners collect their prizes under the new state budget for fiscal 2016-17.

This is the first time that winning lottery players are required to pay the state income tax since the game made its debut in 1972. Other lottery prizes, such as gift cards and merchandise, are exempt from the tax.

According to the report, the imposition of new state tax revenue is the viable solution that the government has come up to address Pennsylvania’s chronic fiscal problems. The lottery tax, which covers lottery winnings since Jan 1, is expected to generate nearly $16 million in revenue this fiscal year.