Opinion letter to The Honorable Karen McCarthy

WILLIAM L . WEBSTER ATTORNEY OENERAl. ATTORNEY GENERAL OF MISSOURI JEFFERSON CITY 65102 June 24, 1986 P. 0 . Box 899 ( 314) 7:>1· 3321 OPINION LETTER NO. 30-86 The Honorable Karen McCarthy Representative, District 40 1111 Valentine Road Kansas City , Missouri 64111 Dear Representative McCarthy: F l LED 30 This letter is in respor.se to your questions asking: 1. Are periodic payments of Missouri lottery prize winnings subject to state income and local earnings taxes after July 1 , 1988 if the original prizes were won prior to July 1 , 1988? 2 . Are periodic payments of Missouri lottery prize winnings subject to state income tax withholding after July 1 , 1988 if the original prizes were won prior to July 1, 1988? Section 313 . 320 . 3 , RSMo Supp. 1985 , states in part : No state income tax or local earnings tax shall be imposed upon any lottery game prizes which accumulate to an amount of less than six hundred dollars during a prize winner ' s tax year. Beginning July 1, 1988 , all winnings or periodic payments ~ade because of winr.ing six hundred dollars or more shall be subjec~ to state income and local earnings taxes. Beginning July 1, 1988, the state of Missouri shall withhold for state income tax purposes from a lottery game prize or periodic paymen~ of six hundred dollars or more an amount equal to four percent of the prize. - The Honorable Karen McCarthy We hQve carefully studied the above language and, frankly , we find it confusing and difficult to interpret . It is clear , however , that periodic payments made after July 1, 1988 , because of Missouri lottery winnings of six hundred dollars ($600.00) or more prior to July 1, 1988, are subject to state income and local earnings taxes. The answers to other questions regarding_ the effect of this language are not so clear . Therefore, we recommend that the General Assembly consider enacting legislation more definitely expressing its intent with respect to the taxation of lottery winnings. Very truly yours , ~Zdl~ WILLIAM L. WEBSTER Attorne y General - 2 -