LOTTERY PRIZES; WITHHOLD CITY INCOME TAX S.B. 324:
SUMMARY OF INTRODUCED BILL
IN COMMITTEE
Senate Bill 324 (as introduced 5-16-19)
CONTENT
The bill would amend the Lottery Act to require the Bureau of State Lottery to withhold from a prize an amount equal to the city income tax rate (if the winner of the prize resided in a city that had adopted an ordinance imposing a tax on the income of residents), and transfer that amount withheld to the city.
Specifically, under the bill, if the Bureau were required to withhold Federal or State income taxes from a prize and if the winner of the prized resided in a city that had adopted an ordinance imposing a tax on the income of residents under the City Income Tax Act, the Bureau would have to withhold from the prize an amount computed by applying the rate set by the city ordinance to be levied on the income of residents at the time the prize was won. The Bureau would have to transfer the amount withheld to the city immediately.
Proposed MCL 432.32b Legislative Analyst: Drew Krogulecki
FISCAL IMPACT
The bill should have no fiscal impact on local government, as lottery winnings already are supposed to be included as taxable income for city income taxes. However, if withholding city income tax from lottery winnings increased compliance, cities that impose a city income tax would see a positive fiscal impact.
Cory Savino
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.