Mississippi withholds 3% of all jackpot payouts of $1,200 or more as state gambling tax. Unlike federal tax, the Mississippi tax is involuntary and non-refundable. Other states withhold different percentages and have different refunding laws. In any case, having the payouts for some hands reduced by taxes obviously reduces the overall game return. Games with large jackpot hands (Aces with a kicker in Double Double Bonus, for example) are much more heavily taxed than those without them, so prudent players calculate real after-tax returns when considering whether to play a particular game.

To determine the post-tax return, the post-tax payout for each taxable hand is entered into WinPoker or Frugal Video Poker and the game return is recalculated. This calculation has been done at 3% for all the pay tables in the TVP pay table section, but if you need to do the calculation for another table or state, the 5-coin post-tax payouts for 3%, 4% (Missouri) and 6% (Louisiana) taxes are below.

A much more complex problem in post-tax returns occurs with multi-line machines, where even nickel play can produce a W2-G. These games have a huge number of possible taxable results depending on the actual draw. While taxes on occasional lucky draws can't be systematically analyzed, one can at least account for taxes on dealt hands, which occur with fixed frequencies. See N-Play Taxes for that procedure.
  

 Payout Adjustments for 3% Tax at $1200

 Payout Adjustments for 4% Tax at $1200

 Payout Adjustments for 6% Tax at $1200

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