Earlier quoted context omitted.
Some of these promotion companies pay a lot of money just to have their cars as part of promotions (and the sweepstakes companies can get into big trouble if their systems are not setup to give away x cars. Most of them are time seeded so someone is guaranteed to win one a week). If your already investing that much money, can't the company also cover the taxes, or do most states have laws forbidding that? It seems li…
You're paying income tax, not sales tax, because winnings are income. (Think about professional gamblers...) Income taxes are progressive, of course, and then there are a mess of deductions. But they could still make an estimate by just assuming the person is in the $37K to $92K bracket. So that's 25% [1]. > It seems like bad publicity if your "winners" have to pay several thousand in sales tax to get their "prize ca…
Think about them why? Gambling income is in a completely different category from a prize you won for free. There's no reason they have to be taxed the same.