The Associated Press

COLUMBUS - Winnings from a lottery prize cannot be taxed under current city law in Euclid in suburban Cleveland, the Ohio Supreme Court ruled Wednesday.

The court ruled unanimously in favor of a Euclid couple ordered to pay $102,000 in city income tax after winning a $3.5 million Ohio Lottery prize in 1998.

The Supreme Court said the winnings aren't taxable because they don't fit the definition of taxable income under Euclid city law.

Euclid defines taxable income as "wages, salaries and other compensation paid by an employer and/or the net profits from the operation of a business."

The ruling said cities clearly have the right to pass laws allowing them to tax lottery winnings.

However, Justice Francis Sweeney said that the court agreed with William and Ruby Bosher's argument that Euclid's current law did not allow it to tax their lottery prize.