Aggie Mom University
Best Practices about Raffles
Presented by:
Roxanne Forrest
Former Federation President 2024-2025
FUNDRAISING WITH RAFFLES
•In the following slides we will go over rules regarding raffles set by the State of Texas
•Make sure your Fundraising/Development Officer knows the fundraising guidelines you are interested.)
RAFFLE RULES SET BY THE STATE OF TEXAS
• A club must be in existence for 3 year in order to hold raffles.
• 4 Raffles per calendar year are permitted BUT cannot be concurrently run. Only 2 of those 4 annual raffles may offer prizes valued over $10,000
• Ticket sales are not subject to sales tax
• Raffle tickets may not be sold or offered for sale statewide. Since a website is a finite place on the web, tickets could be sold from the Club’s website. (This is based on statements from the State of Texas Comptroller’s office, August 2016.)
RULES continued…
• Clubs may not promote or advertise a raffle statewide, other than on the organization’s website or through a publication or solicitation, including a newsletter, social media, or email, provided only to previously identified supporters of the organization. Selling or offering to sell tickets statewide is prohibited
• Posting on your club’s closed Facebook page is acceptable and is not considered state-wide advertising.
It is acceptable to send notices of raffles to residents of the State of Texas that are listed in the database of a Club. Clubs outside of the State of Texas must check with the guidelines for conducting a raffle within their individual states.
RULES continued…
•No cash/money prizes can be awarded. “Money” is defined as coins, paper currency, or a negotiable instrument that represents and is readily convertible to coins or paper currency. No certificates of deposits are allowed.
•A U.S. savings bond and a prepaid or "stored-value" gift card are allowed.
See Texas Attorney Gen. Op. No. GA-0341 (2005) The question of the prohibition of a gift certificate has not been addressed in an AG Opinion, but it has been suggested that as long as it is not readily convertible to cash, it would likely not be prohibited.
RULES cont…
•Is there a limit on the value of prizes?
If a club purchases prizes, the value of each prize may not exceed $75,000. For a purchased residential dwelling, the value may not exceed $250,000.
There is no limit on the value of donated prizes.
•You must set a fair market value for your Club’s raffle prize. “Priceless” is not acceptable to the IRS.
•Raffle winner has potential income tax liability
(Treasurer may have to file IRS Paperwork)
RULES cont…
•What if a raffle cannot be hold on the date scheduled?
The organization may set another date not later than 30 days from the original date. If the prizes are not awarded within 30 days of the original date, the organization must refund the ticket money to the purchasers.
•You may not compensate a person directly or indirectly for organizing or conducting a raffle or for selling or offering to sell tickets to a raffle.
RULES cont…
What must be printed on the tickets?
-The name of the organization conducting the raffle
-The address of the organization or of a named officer of the organization
-The ticket price
-A general description of each prize having a value of more than $10 to be awarded in the raffle
-The date on which the raffle prize or prizes will be awarded
RULES cont…
•If the value of the raffle prize is $600 or more AND 300 or more times the cost of the raffle ticket, there are forms that your Club must fill out for the IRS. For example, the value of your raffle prize is $1,000 and the raffle ticket price is $1. Your Club must report the winner to the IRS using forms W-2G since the raffle prize is more than $600 and 1,000 times the cost of the ticket. If the winner refuses to supply a correct taxpayer identification number (usually a social security number), withholding is required. Refer to IRS Information Sheet 1340 from the IRS for more details.
FAQ’s��https://www.texasattorneygeneral.gov/divisions/charitable-trusts/charitable-raffles-and-casinopoker-nights
RULES cont…
Firearm Raffles: For a gun raffle, the winner must be a Texas resident, at least 21 years old, and must pass a federal background check (Form 4473) prior to receiving the prize. State and federal laws apply.
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