| Lotto tax raises objections Plan would prove costly, experts say Gov. Mark Sanford's proposal to end the 5-cent sales tax exemption for lottery tickets to raise $30 million for his tax reform and economic stimulus plan would make South Carolina the only lottery state with such a tax,, lottery experts and administrators say. AIKEN - If South Carolina slaps a 5-cent sales tax on lottery tickets, as Gov. Mark Sanford has proposed, it would no longer be eligible to participate in the lucrative multistate Powerball game, lottery and gambling experts said Monday. By lifting its current sales-tax exemption, South Carolina would become the only state among the 40 that have lotteries to place a levy on lottery ticket sales, running the risk of angering players by cutting into prize money, said William Thompson, a professor of public administration at the University of Nevada-Las Vegas, one of the nation's top gaming experts. This could result in a potentially steep sales decline in a game of chance that brought in $726.9 million last year, Dr. Thompson said. "It's certainly double taxing," said Dr. Thompson, the author of Gambling In America: An Encyclopedia. "It's absurd to tax these tickets. (Players) already pay a tax. ... It's just bad policy." David Gale, the executive director of the North American Association of State and Provincial Lotteries, said no state currently taxes lottery ticket sales. He also said governments that have considered such a move have been scared off by the experience of the Canadian province of Saskatchewan, which saw a 13 percent decline in sales after putting a 10 percent hospital tax on tickets. That tax was repealed after less than six months. Gubernatorial spokesman Will Folks disputed the assertion that South Carolina would be the nation's only lottery state with a sales tax on ticket purchases. He said only five states, including Georgia, don't have such levies. "I don't know about Saskatchewan," he said. Mr. Folks also downplayed the potential impact of the tax on ticket sales and the conflict with Powerball rules. "If you look nationwide, what you see is a decline in lottery sales, whether they're taxed or not," he said. "People are going to play the Powerball jackpot regardless of a sales tax." By tacking on a nickel tax on a $1 lottery ticket, however, South Carolina would violate the price limit set by the organization that runs the popular 22-state Powerball game, said Carol Robertson, a spokeswoman for the South Carolina Education Lottery. "You don't want to be out of Powerball," said Gary Gonder, a spokesman for the Missouri Lottery, where 18 percent of the state's $120 million in sales came from Powerball. "Sounds to me like your lottery's doing well and you don't want to mess with it." Mr. Sanford's proposal, part of a $222 million cigarette- and lottery-tax package, would be used to offset a cut in South Carolina's income tax from 7 percent to 5.9 percent. Reach Jim Nesbitt at (803) 648-1395 or jim.nesbitt@augustachronicle.com.
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