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Kansas Could Gain Millions If Powerball Winner Sold Here

Saul Loeb
AFP/Getty Images (via NPR)

Kansas could be a big winner if someone buys the winning ticket to the $1.3 billion Powerball drawing in the state.

The Kansas Lottery said a Kansas winner of Wednesday's jackpot would have to pay at least $40 million to the state.

The Topeka Capital-Journal reports that is far more than the state's current budget shortfall, which is more than $10 million.

Lottery spokeswoman Sally Lunsford said if the winner took the one-time payout of $806 million, the state's tax of 5 percent would generate a bit more than $40 million. After federal taxes, the winner would still get $564 million.

If the winner took the annuity payments, the state would withhold 5 percent every year. The state would reap millions but it would be spread over several years.

A one-time injection of $40 million into state coffers could dramatically alter the legislative session, which kicks off Monday.

Senate Minority Leader Anthony Hensley, D-Topeka, said a windfall "would certainly help the state general fund, which obviously we need."

Lawmakers still would face the task of dealing with the shortfall currently estimated for the next fiscal year, however. Projections have placed the shortfall at about $190 million.

The climbing jackpot also has sparked speculation over whether Kansas' tax laws create a path to securing winnings free of state taxes. Some on social media have asked if a winner could funnel their payout into a limited liability corporation to avoid the 5 percent taken by the state.

Now so fast, Lunsford notes that tickets "must be claimed by one 'real' person, not a trust or LLC or anything like that. A winner cannot avoid paying tax. We know who they are, and we withhold the tax before they receive their prize."

The next drawing is Wednesday.

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