10 states with no tax on lottery winnings
These 10 states do not impose their own state income tax on lottery winnings. Another state may still tax the prize depending on where the ticket was purchased and where the winner lives. Federal lottery tax applies in every state.
Current $786M Powerball, single filer, using a 0% state-rate estimate:
$215.3M
27.4% of the advertised jackpot, after federal tax only.
Current $70M Mega Millions, single filer, using a 0% state-rate estimate:
$18.8M
26.8% 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 participating jurisdiction.
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 participating jurisdiction.
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 lottery 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 California law exempts California Lottery winnings, including both games. Among these 10 states, Alaska and Nevada do not sell Powerball or Mega Millions. Alabama, Hawaii, and Utah also do not participate, but they are not no-tax states. Residents of all five must buy in a participating jurisdiction. Both the purchase state and your home state can matter: the purchase state may tax the win or withhold tax from the payout, and your home state may tax it too, usually with a credit for tax already paid to the purchase state. A Texas resident who buys a ticket in Arkansas owes Arkansas tax on the win, and since Texas has no income tax there is nothing further owed at home. The reverse does not help, though: buying in a no-tax state does not spare a resident of a high-tax state from their own state's tax at filing.
How much more a no-tax state keeps versus a high-tax state
At the current $786M Powerball jackpot, a single filer in a no-tax state keeps $215.3M 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 | $215.25M |
| Hawaii | 11% | $37.6M | $177.68M |
| New York | 10.9% | $37.2M | $178.02M |
| New Jersey | 10.75% | $36.7M | $178.53M |
All rows assume single filer and lump sum cash option. Tap any state name for the full breakdown.
How much more a no-tax state keeps versus a high-tax state
At the current $70M Mega Millions jackpot, a single filer in a no-tax state keeps $18.8M 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 | $18.76M |
| Hawaii | 11% | $3.3M | $15.49M |
| New York | 10.9% | $3.2M | $15.52M |
| New Jersey | 10.75% | $3.2M | $15.56M |
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 California law exempts California Lottery winnings, including both games. 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?
Usually not. A no-tax purchase state may impose no tax or withholding, but your state of residence may still tax the winnings as ordinary income at filing time. Credits generally apply only when tax was actually paid to another 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.
Which states do not sell Powerball or Mega Millions?
Alabama, Alaska, Hawaii, Nevada, and Utah do not sell either game. Residents must buy tickets in a participating jurisdiction. State-tax treatment can then involve both the purchase state and the winner's state of residence.