Nothing on this page is intended to constitute legal or tax advice. All readers should consult their own legal and/or tax advisors.
Once a winner is randomly selected on July 13, 2024, EAC will initiate contact with the winner to obtain personal information for the purposes of ordering the winner’s preferred R1 model and trim. The winner, upon ordering their Rivian, will work with Rivian to determine location of pickup or delivery.
EAC 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 the Prize
- The Environmental Action Community (EAC) of WNC is a nonprofit incorporated in North Carolina, with its headquarters located in Waynesville, NC. The Raffle takes place in Haywood County, NC, where Waynesville is the county seat.
- According to North Carolina law, state tax withholding is not required to be withheld from the reportable winnings.
- Both residents and nonresidents of North Carolina are subject to federal income tax on their winnings.
- The IRS federal tax rate is 33%. See IRS Notice 1340 Tax-Exempt Organizations and Raffle Prizes.
Moreover, EAC’s payment of these withholding taxes on behalf of the Prize Winner is treated as income to the Prize Winner. Therefore, EAC will “gross up” each payment to account for the taxes required on the payment itself.
The Prize is valued at $125,000, which is the limit allowed in the state of North Carolina for raffles. Since the “gross up” is included in the $125,000 limit, the Winner will be able to custom build a Rivian R1 series vehicle with a value, including delivery, not to exceed $94,000. If, however, the Winner wishes to add additional money to the build at their own expense for a Rivian R1 series with additional options, then the Winner must specify that preference prior to ordering with Rivian.
IRS Reporting Requirements
Form W-2G:
The IRS has specific rules for reporting raffle winnings. Winnings are required to be reported on Form W2-G as gambling winnings if the value of the winnings is:
- $600 or more
- At least 300 times the amount of the wager
Form W-2G will be provided to the winner and the IRS by January 31st of the following year.
Withholding taxes:
Since the prize exceeds $5,000 in fair market value, the EAC must withhold and remit income tax to the IRS:
- Withholdings are typically provided by the taxpayer at a rate of 28%. Since the EAC is paying the withholdings instead, a rate of 33% must be used.
- North Carolina state tax withholding is not required to be withheld from the reportable winnings.
- The raffle winner will complete Form W-9 immediately after winning to ensure the EAC has all the details needed for completing required filings.
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.
Not tax deductible:
- The purchase of a ticket is NOT a charitable contribution for federal income tax purposes for the following reason: 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.
Details on the specified minimum and the process for obtaining a refund should the minimum not be met:
- The minimum number of tickets to be sold is 675.
- If the 675 number is not reached, then EAC will refund the cost of the ticket to the purchaser using the original form of payment (e.g. credit card, debit card). If the raffle should be canceled for any reason, the EAC will issue refunds to all ticket purchasers not to exceed the value of the ticket (i.e., $200/ticket).
- The Prize, as described above and elsewhere, will be available once the minimum number of tickets has been sold.
Odds of winning:
The maximum number of tickets to be sold is 5,000.Odds of winning depend on the number of tickets sold. If the maximum number of tickets is sold, the odds of an individual ticket winning the prize will be 5,000:1.
North Carolina Statute
- The Electric Vehicle (EV) Raffle conducted by the Environmental Action Community (EAC) of WNC takes place in Haywood County, North Carolina, and is subject to the regulations outlined in North Carolina statute 14-309.15, found here: https://law.justia.com/codes/north-carolina/2022/chapter-14/article-37/section-14-309-15/
- It is important to note that these are not the sole governing laws and regulations for raffles. For comprehensive information on raffles and federal taxation, it is advised to refer to IRS Notice 1340 Tax-Exempt Organizations and Raffle Prizes.
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.
EAC’s Rivian Raffle will take place online and will not involve printed tickets. Mailing a raffle ticket and/or any matters related to the raffle (including checks) is illegal under federal law and may result in criminal penalties.
Delivery
The Prize Winner places the order for the vehicle of their choice in the 2024 tax year.
The Prize Winner is invited to initiate configuration of their vehicle as soon as 10 business days following the Drawing on July 13, 2024. EAC will make the order confirmation deposit available as soon as the Prize Winner has concluded configuration and is ready to initiate production and purchase of the vehicle. EAC will make available the rest of the Prize Payout to the manufacturer when it is ready for final payment, in its usual process. Delivery of the vehicle is to be worked out between the manufacturer and Prize Winner. Delivery times vary.
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.
EAC’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.
Disclaimer
Environmental Action Community of Western North Carolina, including its members, officers, directors, agents, and representatives, as well as their advertising and legal advisors, cannot be held responsible for, and are not liable for: (i) entries that are late, lost, delayed, damaged, misdirected, incomplete, ineligible, or unintelligible; (ii) notifications that fail, are returned, or misdirected due to inaccurate information provided by entrants or winners; (iii) malfunctions, failures, or difficulties related to telephone, electronic, hardware, or software programs, networks, internet, or computers arising from participation in this Raffle or otherwise; (iv) any condition beyond the control of EAC WNC that may disrupt or corrupt the Raffle; or (v) any injuries, losses, or damages arising from a prize or resulting from the acceptance, possession, or use of a prize or participation in the Raffle.
EAC WNC 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. Additionally, other local, state, and federal laws and regulations may apply.
Eligibility
To enter EAC’s EV Raffle, participants must meet the following eligibility criteria:
- Age Limit: Participants must be 18 years or older to buy a raffle ticket. Those under 18 are not eligible to benefit from ticket purchases.
- Citizenship/Residency: Both the ticket purchaser and, if different, the beneficiary must be U.S. citizens or legal residents.
- Restricted Areas: Participation in the raffle is prohibited by law to residents of Alabama, Utah, Hawaii, Arkansas, and California. Also, unless prohibited above, entry is limited to those residing in the lower 48 states of the United States. Environmental Action Community (EAC) of WNC does not make this offer in any state or territory where is its prohibited by law. Each participant should make such inquiry as they desire to determine whether their state prohibits participation.
- Additional Criteria: Ticket purchasers and beneficiaries must adhere to the following conditions:
- Individuals serving as board members/employees of the Environmental Action Community (EAC) of WNC, and their immediate family members are not eligible to win.
- For purposes of this raffle, “immediate family” includes the board member/employee, their spouse or partner, and any parent or adult children living in the board member’s house.
Our objective in establishing and enforcing these eligibility rules is to prevent conflicts of interest or their perceived existence, ensuring a fair and transparent raffle process.
