This bill amends New Jersey tax law to exclude all winnings from the New Jersey Lottery from gross income tax, effectively eliminating the tax liability for lottery winners. Specifically, it removes the previous requirement that winnings exceeding $10,000 be included in gross income, thereby allowing all lottery winnings to be tax-free. Additionally, the bill eliminates the withholding requirements that previously mandated the New Jersey State Lottery to withhold a percentage of winnings for gross income tax purposes.

Under current law, lottery winnings over $10,000 are subject to gross income tax, and the New Jersey State Lottery is responsible for withholding a portion of these winnings for tax purposes. The proposed changes mean that not only will lottery winners no longer face taxation on their winnings, but the State Lottery will also no longer have the authority to withhold any amount for tax purposes. This bill is set to take effect immediately and will apply to taxable years beginning on or after January 1 following its enactment.