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:
Mike Tidwell
Executive Director
Chesapeake Climate Action Network Action Fund
6930 Carroll Avenue, Suite 720
Takoma Park, MD 20912
mtidwell@chesapeakeclimate.org
Raffle Ticket Tax-Deductibility
Raffle tickets are NOT tax-deductible.
Disclosures
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 four prizes: a Lucid Air Grand Touring; a Rivian R1S or R1T plus $10,000 for charging; or a Tesla Model X Plaid plus $10,000 for charging. The winner will receive one of these four prizes.
CCAN Action Fund does not hold title to any of the vehicles. Instead, CCAN Action Fund will make a payment directly to the manufacturer of the vehicle selected on behalf of the Prize Winner, to be used for the purchase of a 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 four prizes: a Lucid Air Grand Touring; a Rivian R1S or R1T plus $10,000 for charging; or a Tesla Model X Plaid plus $10,000 for charging.
Lucid Option
The Prize Winner may choose the Lucid Air Grand Touring, valued at $138,000 (excludes tax, title, license, options and destination fees).
If the winner chooses the Lucid Air Grand Touring, CCAN Action Fund’s Prize would consist of (a) a payment of up to $138,000 to Lucid Motors on behalf of the winner to be used for purchase of a Lucid Air Grand Touring; (b) a payment to the State of Maryland of up to either $16,081.26 (if Prize Winner is a MD resident) or $12,856.74 (if Prize Winner lives out of state); and (c) a payment of up to $45,928.74 to the Internal Revenue Service for the backup tax withholding required for this Prize.
The maximum total expenditure by CCAN Action Fund on the Lucid Option is US$200,010.00 or $196,785.48, depending on the residency of the Prize Winner. We call this sum the Total Prize Payout for the Lucid Option.
Rivian Options
The Prize Winner may choose one of two build-your-own Rivian vehicles, the R1S or R1T. Payments to Rivian do not include tax, order fee, destination fee, or other fees.
R1S
If the winner chooses the R1S, CCAN Action Fund’s Prize would consist of (a) a payment of up to $103,350.00 by CCAN Action Fund directly to Rivian on behalf of the winner, to be used for purchase of the Rivian R1S; (b) a payment of $10,000 to the Prize Winner for charging; (c) a payment to the State of Maryland of up to either $12,037.61 (if Prize Winner is a MD resident) or $9,623.90 (if Prize Winner lives out of state); and (d) a payment of up to $37,712.90 to the Internal Revenue Service for the backup tax withholding required for this Prize.
The maximum total expenditure by CCAN Action Fund on the Rivian R1S Option is either US$153,100.50 or $150,686.79, depending on the residency of the Prize Winner. We call this sum the Total Prize Payout for the Rivian R1S Option.
R1T
If the winner chooses the R1T, CCAN Action Fund’s Prize would consist of (a) a payment of up to $106,650.00 by CCAN Action Fund directly to Rivian on behalf of the winner, to be used for purchase of the Rivian R1T; (b) a payment of $10,000 to the Prize Winner for charging; (c) a payment to the State of Maryland of up to either $12,422.72 (if Prize Winner is a MD resident) or $9,931.79 (if Prize Winner lives out of state); and (d) a payment of up to $38,812.79 to the Internal Revenue Service for the backup tax withholding required for this Prize.
The maximum total expenditure by CCAN Action Fund on the Rivian R1T Option is either US$157,885.50 or $155,394.57, depending on the residency of the Prize Winner. We call this sum the Total Prize Payout for the Rivian R1T Option.
Tesla Option
The Prize Winner may choose a build-your-own Tesla Model X Plaid up to $124,990.00 (excludes tax, order fee, destination fee, and other fees).
CCAN Action Fund’s Prize would consist of (a) a payment of up to $124,990 by CCAN Action Fund directly to Tesla, Inc. on behalf of the winner, to be used for purchase of a Tesla Model X Plaid; (b) a payment of $10,000 to the Prize Winner for charging; (c) a payment to the State of Maryland of up to either $14,562.99 (if Prize Winner is a MD resident) or $11,642.91 (if Prize Winner lives out of state); and (d) a payment of up to $44,925.51 to the Internal Revenue Service for the backup tax withholding required for this Prize.
The maximum total expenditure by CCAN Action Fund on the Tesla Option is either US$184,478.50 or $181,558.41, depending on the residency of the Prize Winner. We call this sum the Total Prize Payout for the Tesla Option.
Cash-out and Vehicle Choice
Cash-out is not an option.
The Prize Winner may select a manufacturer-supplied vehicle that has a total purchase price of less than the maximum vehicle price listed in the prize descriptions. 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 manufacturer-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 the manufacturer. 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 the manufacturer. The Prize Vehicle Payout may not be used to buy a privately-sold 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 furnishing CCAN Action Fund with all the information necessary to complete federal and state tax documents, including Prize Winner’s social security number, address, and signatures. Winner is advised to consult with a tax adviser upon winning the prize.
Delivery
It is CCAN Action Fund’s intent that the Prize Winner places the order for the vehicle of their choice in the 2023 tax year.
The Prize Winner is invited to initiate configuration of their vehicle as soon as 10 business days following the Drawing. CCAN Action Fund will make the required order confirmation deposit available to the manufacturer 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 the manufacturer when it is ready for final payment, in its customary process. Delivery of the vehicle is to be worked out between the manufacturer and Prize Winner. Delivery times vary. Due to demand, delivery for the Rivian R1S Option would not take place until spring/summer 2024.
Incentives
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
Lucid Option
The maximum value of the Lucid vehicle is $138,000. CCAN Action Fund will make payments to MD State of up to either $16,081.26 for a MD Prize Winner or $12,856.74 for an out-of-state Prize Winner. CCAN Action Fund will make withholding tax payments to the Internal Revenue Service of up to 45,928.74. The maximum total value of the Lucid Option is either US$200,010.00 or $196,785.48, depending on the residency of the Prize Winner.
Rivian Options
The maximum value of the Rivian R1S is 103,350. CCAN Action Fund will make a payment of $10,000 to the Prize Winner to offset the cost of charging the vehicle over its lifetime. CCAN Action Fund will also make a payment to MD State of either $12,037.61 for a MD Prize Winner or $9,623.90 for an out-of-state Prize Winner. CCAN Action Fund will make withholding tax payments to the Internal Revenue Service of up to 37,712.90. The maximum total value of the Rivian Option – R1S is a either US$153,100.50 or $150,686.79, depending on the residency of the Prize Winner.
The maximum value of the Rivian R1T is 106,650. CCAN Action Fund will make a payment of $10,000 to the Prize Winner to offset the cost of charging the vehicle over its lifetime. CCAN Action Fund will also make a payment to MD State of either $12,422.72 for a MD Prize Winner or $9,931.79 for an out-of-state Prize Winner. CCAN Action Fund will make withholding tax payments to the Internal Revenue Service of up to 38,812.79. The maximum total value of the Rivian Option – R1T is either US$157,885.50 or $155,394.57, depending on the residency of the Prize Winner.
Tesla Option
The maximum value of the Tesla vehicle is $124,990. CCAN Action Fund will make a payment of $10,000 to the Prize Winner to offset the cost of charging the vehicle over its lifetime. CCAN Action Fund will also make a payment to MD State of up to either $14,562.99 for a MD Prize Winner or $11,642.91 for an out-of-state Prize Winner. CCAN Action Fund will make withholding tax payments to the Internal Revenue Service of up to 44,925.51. The maximum total value of the Tesla Option is either US$184,478.50 or $181,558.41, 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 August 24, 2023 at 6 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 August 24, 2023 at 7 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.
Record-keeping
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.
