In the specific case of lottery winners I'm pretty sure most states have closed any loopholes about moving out-of-state and avoiding taxes. Of course, if you were actually a winner, you could pay an actual tax strategist to advise you.
My general understanding is that you pay state taxes to the state where that money is earned. That money is likely considered "earned" whenever your ticket matches the winning numbers. I'm not an accountant or attorney. If you move to a state w/out income taxes, whatever you earned in your prior state is still subject to your former state income taxes (or...it may be a % of your overall earnings...i don't remember the specifics when I moved). I know people who traveled a lot for work would sometimes have to file in multiple states if they spent more than 2-3 weeks working in any individual state other than their state-of-residence.
Tax avoidance & tax evasion gets blurry. I'm lucky (?) I don't have enough money to care about tax strategies. A friend of mine was audited and had to go to go in front of some sort of examiner panel for a hearing and answer questions. Luckily his accountant was a friend and was really skilled at both developing an aggressive strategy and defending it in court. Frankly, the risk/hassle just isn't worth it. If you had to pay a tax attorney to defend you it would have been an awful and expensive adventure.
I work to hard to earn my money to play the lottery. Every once in a while I'll buy a ticket and enjoy the few minutes thinking about how many clapped out cars I'd buy if I won.
I seem to remember someone - not sure I remember who at this point, said something like, “That makes me smart", regarding not paying taxes.
I'm not sure I agree...
My dad likes to hand out lotto tickets to random people he encounters.
He's given me fourteen of them over the course of many months for whatever reason.
I never scratched them because it makes a mess and I just don't care about gambling but
this post inspired me to go for it...at least the amount of junk in my laptop bag got reduced.
Results: Two winners totaling $5.
SVreX (Forum Supporter) said:
So, you want other people to pay for the government services you enjoy?
Yeah, that's not a thing.
Government has a cost. We all pay for it. My experience with "non income tax states" is that they still extract the taxes through other means, such as high property or sales taxes.
There are no free rides.
Free rides are real for the 1%. All over the news lately. They pay no taxes.
In reply to Sine_Qua_Non :
"Lately"
CJ (FS) said:
I seem to remember someone - not sure I remember who at this point, said something like, “That makes me smart", regarding not paying taxes.
I'm not sure I agree...
Paying what you legally owe is smart.
Paying what you don't legally owe is not smart.
Not paying what you legally owe is risky and likely not smart.
(Financially, some may have different motives)
In reply to Sine_Qua_Non :
They may not "pay their fair share" but have they broken any laws? I'm sure some do but most are exploiting loopholes. Again, these people own the politicians and have paid well to have loopholes written into the tax code. The problem is career politicians. You know, the ones who retire with 100s of millions in the bank despite only earning $170k/year
Curtis73 (Forum Supporter) said:
My grandfather said it best. "Gambling is a tax on people who are bad at math."
(although I sometimes buy a Powerball ticket just in case)
The only lottery worth winning is a really berkeleying big one. Few mil would just make me temporarily stupid. A few hundred mil would make me permanently stupid.
barefootskater (Shaun) said:
In reply to Sine_Qua_Non :
They may not "pay their fair share" but have they broken any laws? I'm sure some do but most are exploiting loopholes. Again, these people own the politicians and have paid well to have loopholes written into the tax code. The problem is career politicians. You know, the ones who retire with 100s of millions in the bank despite only earning $170k/year
You have hit the nail on the head. Perhaps we should think of ways to overturn the status quo?
The parliamentary system of government seems to offer fewer opportunities for established power bases. They are still democracies. But often smaller parties
How? Intelligent, articulate, people investigate where the citizens are happiest and respect for the government is high. Then discuss with others if that's the sort of government they can support
THOMAS Jefferson was wrong about needing to shed blood changing the government. In spite of the many great things he gave us about this and slavery he was wrong .
barefootskater (Shaun) said:
In reply to Sine_Qua_Non :
They may not "pay their fair share" but have they broken any laws? I'm sure some do but most are exploiting loopholes. Again, these people own the politicians and have paid well to have loopholes written into the tax code. The problem is career politicians. You know, the ones who retire with 100s of millions in the bank despite only earning $170k/year
This is why CEO's take most of their compensation in stock, it's taxed at a lower rate than income. But it's also part of why companies now focus on quarterly gains vs sustainable growth.
The rich folks make the rules to help keep them rich.
SVreX (Forum Supporter) said:
So, you want other people to pay for the government services you enjoy?
Yeah, that's not a thing.
Government has a cost. We all pay for it. My experience with "non income tax states" is that they still extract the taxes through other means, such as high property or sales taxes.
There are no free rides.
Exactly, for example. Oklahoma has a 5.25% state income tax, Texas has no income tax, but their property taxes are more than double compared to Oklahoma.
The government is going to get the money.
Although it would be nice to see the same politicians that argue against more federal taxes do the same for their home state.
z31maniac said:
SVreX (Forum Supporter) said:
Government has a cost. We all pay for it. My experience with "non income tax states" is that they still extract the taxes through other means, such as high property or sales taxes.
Exactly, for example. Oklahoma has a 5.25% state income tax, Texas has no income tax, but their property taxes are more than double compared to Oklahoma.
The government is going to get the money.
Alternatively, they don't get the same amount of money, but they offer reduced services, have E36 M3ty schools, crappy parks, etc.
ProDarwin said:
z31maniac said:
SVreX (Forum Supporter) said:
Government has a cost. We all pay for it. My experience with "non income tax states" is that they still extract the taxes through other means, such as high property or sales taxes.
Exactly, for example. Oklahoma has a 5.25% state income tax, Texas has no income tax, but their property taxes are more than double compared to Oklahoma.
The government is going to get the money.
Alternatively, they don't get the same amount of money, but they offer reduced services, have E36 M3ty schools, crappy parks, etc.
Yeah, we have relatively high taxes and insurance costs (thanks to our weather), yet people don't seem to care as long as...........well I don't want to flounder this thread. But Oklahoma is considered the "buckle of the bible belt" for a reason. So I'll leave it at that.
OK. But what would happen if I didn't pay that taxes?
I'd go to jail. For how long? In jail I couldn't spend any money and thus the state would have a motivation to let me out so I spend those hundreds of millions of dollars and they'd collect sales tax on those hundreds of millions.
Instead the state would be spending something like $65,000 a year keeping me fed and warm. Taking care of my medical needs and providing me security. I'm sure a couple of hundred dollars into prison accounts a month would ensure I was safe and well fed.
Out of curiosity would I still collect my Social security? I know the retirement fund would be deposited regularly.
Not really planning on doing this because the chance of me winning. $660 million dollars tonight is too slim. But I might spend $2 just for the dream.
I wouldn't worry about it frenchyd, your chances of winning are about the same a finding someone who has successfully raced Jag V12's...
...on second thought... buy a ticket.
(then pay all your taxes and spend as much as you want on V12's, I would suggest looking into Merlins and Griffons 
)
A state lottery win has to be the hardest thing possible to dodge taxes on, as in completely impossible. The government knows damn well you're getting it and necessarily takes their share before you get your hands on any of it. There are no outs or exceptions, not even for tourists, so jurisdiction-shopping is right out. Dodging taxes generally involves having the amount that will be taxed in your hands first.
