Local Politics

Bill would increase state's lottery tax

Posted May 28, 2008 7:19 p.m. EDT
Updated May 28, 2008 8:23 p.m. EDT

New legislation in the North Carolina Senate would increase the state tax on lottery winnings in an effort to help more teachers cover classroom expenses.

Sen. Neal Hunt, R-Wake, co-sponsored Bill 2086. which would increase state taxes to 8.25 percent.

The games, officially called the North Carolina Education Lottery,  are intended to provide support for education, and that money goes to school districts.

As the tax structure is now, 7 percent of winnings go toward state taxes; 25 percent go toward federal taxes. On a $10,000 prize, for example, $700 would go to the state; $2,325 would go to the U.S. government.

Under the proposed increase, $125 more would go to the state.

"This is just an effort to make sure that the proceeds of the lottery, some of the proceeds of the lottery, go to teachers to enable the best teachers to be rewarded to help them cover classroom expenses and other expenses associated with being a teacher," Hunt said.

The money would go into a Public School Teacher Expense Stipend Fund and be distributed on a quarterly basis.

Next year, the Lottery expects to transfer nearly $385 million to the state to support education.