Sorry, Massachusetts: You can't dodge the 'tax shark' on NH Lottery winnings, after all
The scene: A living room “somewhere in Massachusetts.”
Our protagonist: A woman wearing a “Boston” hoodie, who holds up a winning lottery ticket.
Enter stage left, our villain: The “tax shark” who knocks on her door to chomp its share of her jackpot.
“You are that no good Massachusetts tax shark that’s been swimming around stealing all our lottery winnings,” the woman yells before the shark clamps down on her head – and her winnings.
This 30-second drama, now being broadcast on WMUR-TV, as well as New Hampshire radio stations and social media platforms, comes courtesy of the New Hampshire Lottery Commission. On Thursday, Gov. Chris Sununu shared it with thousands of followers online, urging them to “save yourself millions and remember to purchase and play here in the 603!”
The ad was uploaded to YouTube earlier this week, just in time for this Saturday’s Powerball drawing with an estimated jackpot of $1.4 billion.
The comedic spot reminds lottery players “how good they have it” in New Hampshire, the commission said in a press release announcing the ad, “while poking a little friendly fun at its neighbor to the south.”
But the ad also implies that Massachusetts residents can avoid paying taxes on lottery winnings by purchasing their tickets in New Hampshire – which isn’t the case.
The commercial’s narrator warns viewers that the new Massachusetts “millionaire’s tax,” technically called the Fair Share Amendment, means sizable lottery winnings above the million-dollar threshold will be taxed at 9%, which is accurate. But the narrator’s next sentence is misleading.
“Instead, live free and play in New Hampshire, where your income and lottery winnings are always free of state taxes,” the narrator says, while the shark continues to bite the woman’s head in the background.
A spokesperson for the Massachusetts Department of Revenue told NHPR that state’s residents “are subject to Massachusetts tax on all of their taxable income, regardless of the amount and where it’s earned.”
“This would apply to all lottery winnings in New Hampshire by a Massachusetts resident, regardless of jackpot size,” they said.
While a winner who resides in New Hampshire wouldn’t pay income tax to New Hampshire’s tax authorities, a Massachusetts resident who purchased their tickets in Nashua or Manchester would still pay a state tax, to their home state.
In Massachusetts, any lottery prize over $600 is taxed at 5%. If someone reports an income over $1 million, that triggers the additional 4% “fair share” tax, according to the Massachusetts tax officials.
“So if someone hit the jackpot for $1.4 million, they would pay 5% on the first $1 million and 9% on the remaining $400,000,” the Department of Revenue said.
In a statement, New Hampshire Lottery officials said the ad is “part of a larger advertising package the NH Lottery dedicates to promoting the responsible purchase of our products and games.” The agency didn’t dispute that its message could mislead Massachusetts residents, but did note it is only paying to air it on New Hampshire media outlets.
“If Massachusetts players win the lottery, they have to pay Massachusetts taxes,” a New Hampshire Lottery spokesperson said.
Earlier this week, in a Boston Globe articleabout the ad’s veiled swipe at New Hampshire’s neighbors to the south, as well as in social media posts, Sununu claims that purchasing a ticket “in the 603” would “save yourself millions.” The governor’s office didn’t respond to a request for comment on the misleading premise of the ad.
In the closing scene of the ad, the woman being devoured by a shark threatens to send the fish “back to Martha’s Vineyard.” Gamblers should note there’s good luck on that island: In January, a $100,000 ticket was purchased at a Cumberland Farms in Vineyard Haven. They were the 10th person to win a jackpot of that size on Martha’s Vineyard, according to the MV Times.