10 states with no tax on lottery winnings
A Powerball or Mega Millions winner in any of these 10 states pays zero state income tax on the prize. The federal lottery tax still applies, but skipping the state line means you keep more of the lump sum than winners in any other state.
Current $302M Powerball, single filer, lump sum in any no-tax state:
$86.6M
28.7% of the advertised jackpot, after federal tax only.
The 10 no-tax states
Alaska
0% state lottery tax
Does not sell Powerball or Mega Millions. Tickets must be purchased in a neighboring state.
California
0% state lottery tax
Florida
0% state lottery tax
Nevada
0% state lottery tax
Does not sell Powerball or Mega Millions. Tickets must be purchased in a neighboring state.
New Hampshire
0% state lottery tax
South Dakota
0% state lottery tax
Tennessee
0% state lottery tax
Texas
0% state lottery tax
Washington
0% state lottery tax
Wyoming
0% state lottery tax
What no-tax actually means for a Powerball winner
These 10 states impose no state income tax on lottery winnings, but federal tax still applies. The IRS withholds 24% of any lottery prize above $5,000 at the moment of payout, and the remaining federal balance up to the 37% top bracket comes due in April. The math advantage of a no-tax state is the missing state line. In New York, New Jersey, or Washington DC, the state pulls another 10% or more on top of the federal hit. In a no-tax state, that line is zero.
No-tax states ranked by lottery friendliness
On the pure state tax math, all 10 states are tied at zero. The practical ranking depends on whether the state actually sells Powerball and Mega Millions tickets. California, Florida, Texas, Tennessee, Washington, South Dakota, Wyoming, and New Hampshire all sell both games and tax winnings at zero. California is a special case: the state has a 13.3% top income tax rate, but the state constitution exempts lottery winnings entirely. Alaska, Nevada, Hawaii, and Utah do not sell Powerball or Mega Millions, which means residents have to drive across the state line to buy a ticket. The state where the ticket was bought, not residency, is what the tax line follows. A Texas resident who buys a Powerball ticket in Arkansas owes Arkansas state tax on the win, not Texas zero.
How much more a no-tax state keeps versus a high-tax state
At the current $302M Powerball jackpot, a single filer in a no-tax state keeps $86.6M after federal tax. The same winner in the three highest-tax states loses an additional state tax line on top of the same federal hit:
| State | State tax rate | State tax owed | Take home |
|---|---|---|---|
| Any no-tax state | 0% | $0 | $86.61M |
| Hawaii | 11% | $15.1M | $71.50M |
| New York | 10.9% | $15.0M | $71.63M |
| New Jersey | 10.75% | $14.8M | $71.84M |
All rows assume single filer and lump sum cash option. Tap any state name for the full breakdown.
No-tax state FAQs
Which states do not tax lottery winnings?
Alaska, California, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. None of these 10 states impose state income tax on a Powerball or Mega Millions prize. California is the outlier in the group: it has a 13.3% top income tax rate, but its state constitution exempts lottery winnings entirely. The federal lottery tax of up to 37% still applies in all 10.
If I live in a high-tax state but buy the ticket in a no-tax state, do I avoid state tax?
Partly. The state where the ticket was bought withholds at its own rate, which is zero in a no-tax state. But your state of residence may still tax the winnings as ordinary income at filing time, usually with a credit for any state tax paid to the purchase state. This is complex. Talk to a tax attorney before relocating or routing a purchase for tax planning purposes.
Do I still owe federal tax in a no-tax state?
Yes. The federal lottery tax applies in every state. The IRS withholds 24% upfront on any prize above $5,000, and the remaining federal balance up to the 37% top bracket comes due in April. A no-tax state simply removes the state tax line. It does not change the federal one.
Why do Alaska and Nevada not sell Powerball or Mega Millions?
Alaska has no state lottery, for legislative and cultural reasons shared by Hawaii and Utah. Nevada explicitly prohibits state lotteries to protect its commercial casino industry. Residents of either state who want to play Powerball or Mega Millions buy tickets across the state line, most often in Washington, Oregon, Idaho, Arizona, or California.