SB 461 — Relating generally to lottery prizes

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Red = new code to be enacted WEST virginia legislature regular session IntroducedEnrolled Senate Bill 461 By Senator Blair [Introduced[Passed JanuaryMarch 29,8, 2019;

Referredin toeffect thefrom Committeepassage] onAN Finance]ACT A BILL to amend and reenact §11-21-77 of the Code of West Virginia, 1931, as amended;

— Proceeds Gross prizes, as defined in §29-22-15a of this code, of more than $5,000 from any lottery prize awarded by the West Virginia State Lottery Commission is are subject to withholding under §11-21-1 et seq.

The commission West Virginia State Lottery Commission in making any lump sum payment, annuity payment or installment payment of a lottery prize subject to withholding shall deduct and withhold from the payment a tax in an amount equal to six and one-half percent of the payment.

— Every person who is to receive payment of winnings which are subject a lottery prize subject to withholding shall furnish to the person making the payment, a statement made under the penalties of perjury, containing the name, address, and taxpayer identification number of the person receiving the payment and each person entitled to any portion of the payment.

— For the purposes of determining liability for payment of taxes and filing of returns, payments of winnings which are subject to withholding a lottery prize subject to withholding shall be treated as if they were wages paid by an employer to an employee, but shall not be treated as compensation for personal services performed within this state for purposes of sections forty and forty-one of this article §11-21-40 and §11-21-41 of this code.

(d) BackupSource withholding.Income.

-- Beginning July 1, 2012, every person who is required to file Internal Revenue Service form W-2G, and who is subject to backup withholding under federal law, is subject to West Virginia backup withholding.

The payor in making any payment of a gambling prize subject to backup withholding shall deduct and withhold from the payment a tax in an amount equal to six and one-half percent of the payment Source Income.

(a) A person entitled to collect proceeds a gross prize equal to or exceeding one million dollars $1 million from a winning West Virginia State Lottery draw game ticket may remain anonymous:

(b) If the person entitled to collect proceeds a gross prize equal to or exceeding exceeding $1 million from a winning draw game ticket desires to remain anonymous, he or she shall contact the State Lottery Director in writing or appear at the state lottery headquarters in person, concerning his or her desire to remain anonymous:

Provided, That such a request only permits that the person’s name, personal contact information, and likeness to remain anonymous.

(e) If a person elects to remain anonymous pursuant to this section, he or she shall remit 5 percent of his or her winnings to the State Lottery Fund (f) (e)The requirements of this section enacted in 2018 are effective on January 1, 2019.

— The term “annuity” means periodic payments of a lottery prize which are payable over a period greater than one year and which are treated under §72Section 72 of the Internal Revenue Code, as defined in §11-21-9 of this code, as amounts received as an annuity, whether or not the periodic payments are variable in amount.

–— The term “lottery pool” means a group of lottery players who pool their money to buy lottery tickets, and who purchase tickets for a single drawing.

NOTE:

The purpose of this bill is to provide for personal income tax withholding on certain lottery winnings, to designate lottery winnings as source income, to provide a gross prize threshold for the election of lottery winners to remain anonymous, to eliminate the fee for anonymity election, to specify limitations and exceptions to anonymity, to authorize rulemaking authority, and to establish an effective date.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.