Taxes on winnings question

[tommycharles]

[quote name=\'Brandon Brooks\' date=\'Dec 26 2003, 06:20 PM\'] [quote name=\'gameshowsteve\' date=\'Dec 26 2003, 01:02 AM\'] Of course you have to pay taxes---the point of the question is what kind. The differences between paying sales tax, paying income tax, and paying both are certainly not insignificant. [/quote]
And point, which has been made excellently by Ben, Scully, and Randy, is that you have to pay sales tax, because by accepting it, you essentially did buy it.  I had to pay Tennessee (not California) sales tax on the car I won on Hollywood Squares (even though I was driving it before I payed it; I hope no one wants to arrest me).  

Like I said in my example, if you get a coupon for a free 2-Liter soda, many stores will make you pay for the tax on that soda that you bought for free.  It's unfortunate, but that's the way it is.

Brandon Brooks [/quote]
 You know, someone should collect all these GS Taxes posts and stick them in the archives...it's good info to have around.

[HYHYBT]

Sales tax varies locally. I don't know about free cars, but someone mentioned coupons. Some places tax is charged on the original price, and some places it's charged only on the price paid (which is a LOT more logical) and it depends on local law.

[gameshowguy2000]

Of course, who could forget the line on the old Wheel episodes, where after the "The prices of the prizes were furnished to the contestants before the show and have been rounded off to the nearest dollar." part, you'll hear "Gift certificates DO NOT include sales tax."

BTW, this marks post number 200 for me. Wow! What a way to end 2003!

[vtown7]

And if you're lucky... you're a wheel contestant from Canada and you get dinged 30% by Uncle Sam

Cheers,

Ryan