The Chesapeake Climate Action Network (CCAN) Action Fund’s Electric Vehicle (EV) Raffle is held in Montgomery County, Maryland and governed by the Code of Maryland, Criminal Law, §13-1810 et seq. and Montgomery County regulations.
These are not the only laws and regulations that govern raffles. For example, for further information about raffles and federal taxation, consult IRS Notice 1340 Tax-Exempt Organizations and Raffle Prizes.
CCAN Action Fund, its members, officers, directors, agents, and representatives and their parent organizations, affiliates, subsidiaries, vendors, and advertising and legal advisors are not responsible for and shall not be liable for: (i) late, lost, delayed, damaged, misdirected, incomplete, illegible or unintelligible entries; (ii) failed, returned, or misdirected notifications based on inaccurate information provided by the entrants or winner; (iii) telephone, electronic, hardware, or software program, network, internet, or computer malfunctions, failures, or difficulties resulting from participation in this Raffle or otherwise; (iv) any condition caused by events beyond the control of CCAN Action Fund that may cause the Raffle to be disrupted or corrupted; or (v) any injuries, losses or damages of any kind caused by a prize or resulting from acceptance, possession, or use of a prize, or from participation in the Raffle. CCAN Action Fund reserves the right, at its sole discretion, to cancel, terminate, modify or suspend the use of the software version of the raffle and instead conduct a non-electronic raffle.Other local, state and federal laws and regulations may apply.
Persons Allowed to Participate in CCAN Action Fund’s EV Raffle
You must be 18 years old to purchase a raffle ticket. Persons under 18 years of age may not be the beneficiary of a ticket purchase.
Ticket purchaser — and beneficiary, if the beneficiary is not the same as the purchaser — must also be citizens of the United States or legal residents thereof.
Void where prohibited. The raffle is not available to purchasers in Alabama, Utah, Hawaii, Arkansas and California.
Ticket purchaser — and beneficiary, if the beneficiary is not the same as the purchaser — must meet the following eligibility requirements:
No board member or employee, or immediate family member of a board member or employee, of the Chesapeake Climate Action Network Action Fund or its sister organization Chesapeake Climate Action Network shall be permitted to win the prize. For purposes of this Raffle, “immediate family” is defined as the board member/employee and their spouse or partner, and their parents, children, brothers, and sisters.
Our intent in creating and enforcing this rule is to avoid the creation of a conflict of interest or even the appearance of a conflict of interest.
CCAN Action Fund Filings, Certificate, & Permit
Chesapeake Climate Action Network Action Fund, Inc., is a Maryland nonprofit based in Montgomery County, Maryland. It is in good standing with the Maryland Department of Assessments & Taxation.
CCAN Action Fund has received its 501(c)(4) approval letter from the US Internal Revenue Service. (CCAN Action Fund also has a 501(c)(3) status affiliate, Chesapeake Climate Action Network, but this has no relevance for this raffle. Please contact us if you would like to donate funds to our 501(c)(3).)
CCAN Action Fund possesses Certificates for Solicitation in all states in which CCAN Action Fund is required to register. Those certificates are available upon request.
CCAN Action Fund has obtained the necessary permit for conducting a raffle in Montgomery County, MD.
You may contact CCAN Action Fund as follows:
Chesapeake Climate Action Network Action Fund
6930 Carroll Avenue, Suite 720
Takoma Park, MD 20912
Raffle Ticket Tax-Deductibility
Raffle tickets are NOT tax-deductible.
We are providing the following disclosures in order to give people relevant information about the EV Raffle.
A full description of the prize
The winner of CCAN Action Fund’s EV Raffle (Prize Winner) will have the choice between two prizes: a used Rivian R1T 2022 Launch Edition EV pickup truck in excellent condition with 64 miles on it (Rivian Option) or a build-your-own Tesla (Tesla Option). The winner will receive one of these two prizes.
CCAN Action Fund holds title to the Rivian pickup truck, which is insured and stored in a secure location in Virginia. If the winner chooses the Rivian Option, they will receive this car.
If the winner chooses the Tesla Option, CCAN Action Fund will make a payment directly to Tesla, Inc., on behalf of the Prize Winner, to be used for the purchase of a Tesla vehicle for the Prize Winner.
CCAN Action Fund will pay backup withholding federal and state tax payments on behalf of the Prize Winner so that the Prize Winner does not have to provide that money, which is normally required in advance of receiving the Prize.
Federal and State Tax Payments are Part of Prize
- Chesapeake Climate Action Network Action Fund, Inc., is a nonprofit incorporated in Maryland with its headquarters located in Maryland. The Raffle takes place in Montgomery County, Maryland.
- According to Maryland law, prize winnings of more than $5,000 are subject to withholding for both federal and state income tax purposes.
- Both residents and nonresidents of Maryland are subject to Maryland income tax on their winnings.
- Maryland taxes will be withheld at a rate of 8.75% on a resident’s winnings. For a nonresident, the withholding rate is 7%. Personal tax tip #59: Gambling Winnings and Your Maryland Tax Obligations.
- The IRS federal tax rate is 25%. See IRS Notice 1340 Tax-Exempt Organizations and Raffle Prizes.
Furthermore, CCAN Action Fund’s payment of these withholding taxes on behalf of the Prize Winner are treated as income to the Prize Winner. Therefore, CCAN Action Fund will “gross up” each payment to account for the taxes required on the payment itself. Further, from the perspective of the State of Maryland, the payment that CCAN Action Fund makes to the Internal Revenue Service is additional taxable income. CCAN Action Fund “grosses up” both payments until the calculations yield zero additional required dollars.
EV Raffle Prize Description
The Prize Winner will have the choice between two prizes: a Rivian R1T 2022 Launch Edition EV pickup truck or a build-your-own Tesla.
The Rivian R1T 2022 Launch Edition EV pickup truck is used with 64 miles on it and in excellent condition. It is a limited edition vehicle that is no longer available to purchase. It has the following specifications:
- Large battery pack with a 314-mile range (EPA est.)
- Launch green exterior paint color
- 20” all-terrain wheels.
- Black Mountain interior color
The estimated fair market value of a used Rivian pickup truck with 64 miles in excellent condition is $149,900.
If the winner chooses the Rivian pickup truck, CCAN Action Fund’s Prize would consist of (a) a used Rivian pickup truck in excellent condition with an estimated value of $149,900; (b) a payment to the State of Maryland of either $17,469.99 (if Prize Winner is a MD resident) or $13,967.01 (if Prize Winner lives out of state); and (c) a payment of $49,895.01 to the Internal Revenue Service for the backup tax withholding required for this Prize.
The total expenditure by CCAN Action Fund on the EV Raffle – Rivian Option is worth either US$217,065 or $213,562, depending on the residency of the Prize Winner. We call this sum the Total Prize Payout for the Rivian Option.
Alternatively, the Prize Winner may choose to build their own Tesla up to a maximum expenditure of $135,990.
CCAN Action Fund’s Prize would consist of (a) a payment of up to $135,990 by CCAN Action Fund directly to Tesla, Inc. on behalf of the winner, to be used for purchase of a Tesla vehicle; (b) a payment of up to either $15,846.69 (if Prize Winner is a MD resident) or $12,669.21 (if Prize Winner lives out of state) and (c) a payment of up to $45,258.81 to the Internal Revenue Service for the backup tax withholding required for this Prize.
The total expenditure by CCAN Action Fund on the EV Raffle – Tesla Option is worth up to either US$196,895.50 or $193,718.01, depending on the residency of the Prize Winner. We call this sum the Total Prize Payout for the Tesla Option.
Cash-out is not an option.
The Prize Winner may select a Tesla-supplied vehicle that has a total purchase price of less than $135,990. CCAN Action Fund will only pay the price of the vehicle purchased and will adjust its tax payments accordingly.
CCAN Action Fund allows the Prize Winner to select a Tesla-supplied vehicle that has a total price greater than the Prize Vehicle Payout. However, CCAN Action Fund will only send the Prize Vehicle Payout amount to Tesla. Any additional money required to purchase the vehicle is the sole responsibility of the Prize Winner. In this case, CCAN Action Fund will still make the withholding payment to the IRS and State of Maryland as described in the Prize Description.
CCAN Action Fund will only send the Prize Vehicle Payout to Tesla, Inc. The Prize Vehicle Payout may not be used to buy a privately-sold vehicle or a non-Tesla dealer vehicle.
Any and all additional taxes, fees, assessments or payments of any kind to any organization whatsoever, including but not limited to the IRS and/or the Prize Winner’s state or local authorities, beyond the amounts listed in this section are the sole responsibility of the Prize Winner.
Prize Winner is responsible for promptly submitting Form W-2G and MD State tax documents to CCAN Action Fund. Winner is advised to consult with a tax adviser upon winning the prize.
It is CCAN Action Fund’s intent that each Prize will be delivered within the 2022 tax year and will be accounted for as a 2022 transaction. If the Prize Winner chooses the Rivian Option, the Prize Winner will be responsible for picking up the truck at its secure location in Virginia within 15 days of the Drawing (i.e., in September 2022).
If the Prize Winner chooses the Tesla Option, the Prize Winner is invited to initiate configuration of their Tesla vehicle as soon as 10 business days following the Drawing. CCAN Action Fund will make the required order confirmation deposit available to Tesla as soon as the Prize Winner has concluded configuration and is ready to initiate production and purchase of the vehicle. CCAN Action Fund will pay the remainder of the Prize Payout to Tesla when Tesla is ready for final payment, in its customary process. Delivery of the vehicle is to be worked out between Tesla and Prize Winner.
Several states offer electric vehicle incentives for customers, often taking the form of a rebate. Most rebates can either be claimed after purchase while tax credits are claimed when filing income taxes.
Many states also offer non-cash incentives for electric vehicles, such as carpool lane access in California and free municipal parking.
You can learn more about incentives by visiting this website, https://www.tesla.com/support/incentives and consulting with your tax professional.
All Other Payouts Disclaimed
The Prize Winner is responsible for any and all other expenses related to the Prize, including but not limited to, additional taxes subject to the individual’s particular circumstances, local taxes, title and registration fees, attorney and tax preparation fees, and so on.
The appraised value of the prize
The estimated value of the Rivian RT1 Launch Edition Pickup Truck is $149,900. CCAN Action Fund will make payments to MD State of either $17,469.99 for a MD Prize Winner or $13,967.01 for an out-of-state Prize Winner. CCAN Action Fund will make withholding tax payments to the Internal Revenue Service of $49,895.01. The total of the Prize is either US$217,065 or $213,562, depending on the residency of the Prize Winner.
The maximum value of the Tesla vehicle is $135,990. CCAN Action Fund will make payments to MD State of up to either $15,846.69 for a MD Prize Winner or $12,669.21 for an out-of-state Prize Winner. CCAN Action Fund will make withholding tax payments to the Internal Revenue Service of up to 45,258.81. The total value of the Prize is either US$196,895.50 or $193,718.01, depending on the residency of the Prize Winner.
No further analysis or appraisal is required.
If there is a minimum number of tickets to be sold; what the minimum is and the procedure to be employed to secure a refund in the event the minimum is not reached
The minimum number of tickets to be sold is 1.
The Prize, as described above and elsewhere, will be available once the minimum number of tickets has been sold.
No refunds are planned due to failure to meet ticket sale minimums, as the minimum number of tickets to be sold is 1. If the entire raffle is canceled, CCAN Action Fund will issue refunds to all ticket holders.
The maximum number of tickets to be sold
The maximum number of tickets that will be sold is 5,500.
Odds of winning depend on the number of tickets sold. If the maximum number of tickets are sold, the odds of an individual ticket winning the Prize will be 5,500:1.
The value of the prize will be treated as ordinary income to the winner for federal and state income tax purposes
All of the Prizes in this raffle will be treated as ordinary income for federal and state income tax purposes.
No portion of the ticket price will qualify as a charitable contribution for federal income tax purposes
The purchase of a ticket is not a charitable contribution for federal income tax purposes for two reasons. First, the purchase of a raffle ticket is regarded as acquiring a “thing of value.” The raffle ticket gives the purchaser a chance to win a prize and is therefore not tax deductible. Separately, the raffle ticket is being sold by CCAN Action Fund, a Maryland non-profit that has 501(c)(4) tax-exempt status. Donations to 501(c)(4)s are not tax deductible.
The drawing date for the raffle
CCAN Action Fund’s EV Raffle Drawing will occur automatically at the close of the raffle on September 9, 2022 at 9 pm ET.
The Drawing will be conducted electronically using the Lottery for WooCommerce plugin. At the time of entry, all entries are assigned a ticket number. Ticket generation is completed automatically and 10-digit ticket numbers are generated at random. Participants are sent their ticket number via email after purchase.
The Winner will be announced on livestream on September 9, 2022 starting at 9:15 pm ET. All participants will be sent instructions on how to join the livestream via email a few days before the winner is announced. The winner need not be present to win.
Depositing a ticket or any other material in connection with the raffle in the federal mails is a violation of federal law and may lead to criminal penalties.
CCAN Action Fund’s EV Raffle will take place online and will not involve printed tickets. Mailing a raffle ticket and matters related to the raffle (including checks) is illegal under federal law and may result in criminal penalties.
CCAN Action Fund will keep accurate records of all transactions that occur on behalf of the raffle. We will keep these records for two years after the raffle. Upon request, we will make these records available to the following entities:
(i) the State’s Attorney for Montgomery County;
(ii) the Montgomery County sheriff
(iii) the Montgomery County Department of Health and Human Services;
(iv) the attorney for Montgomery County;
(v) the Department of State Police; or
(vi) a designated officer or agent of any of those units.