Current through Register Vol. XLI, No. 38, September 20, 2024
14.1. The licensee
may pay reasonable, necessary and actual expenses incurred in connection with
the conduct of raffle occasions from the proceeds of the conduct of raffle.
Payments for the expenses may not exceed twenty-five percent (25%) of
the gross proceeds collected during a license period, and are to be measured at
the end of the license period and not at the end of any single raffle occasion
or at the end of any quarterly reporting period. These payments may be made
for:
14.1.1. rent paid for the use of any
premises that does not exceed the fair market value rent for the
premises; Provided, That the rent shall be prorated for the days on which
raffle occasions are held. A copy of the rental agreement shall be filed with
the application and any changes to that agreement shall be filed within ten
(10) days of being made;
14.1.2.
custodial services;
14.1.3. costs
to the licensee for equipment and supplies used to hold the raffle
occasion;
14.1.4. costs to
the licensee for advertising the raffle occasion, but only to the
extent the advertising is authorized in W. Va. Code '47-21-17 and Section
16 of this rule;
14.1.5. hiring
security personnel but only if the personnel are licensed in accordance with W.
Va. Code '30-18-1 et
seq;
14.1.6. the cost of providing
child care services to raffle patrons: Provided, That any proceeds received
from the provision of child care services shall be handled in the same manner
as raffle proceeds;
14.1.7. the
actual cost to the licensee for the purchase of the prizes awarded at the
raffle occasions; and
14.1.8. other
reasonable, necessary and actual expenses such as the reasonable legal fees
incurred to obtain raffle licensing, accounting fees incurred to provide
reports required by virtue of holding raffle occasions, license fees,
authorized salaries paid to raffle operators and the prorata cost of
utilities.
14.2. The
cost of refreshments, souvenirs or any other items sold or provided through any
concession may not be paid out of the raffle proceeds.
14.3. The net raffle proceeds, including any
interest earned on those proceeds, shall be expended for the charitable
or public service purposes stated in the raffle license application within one
(1) year after the expiration of the license.
14.4. None of the raffle proceeds may be used
for construction, acquisition or improvement of real or personal property
unless the property is used exclusively for charitable or public service
purposes. The Tax Commissioner, where appropriate, may disapprove
contracts affecting real or personal property used exclusively for charitable
or public service purposes when the contracts are not reflective of the fair
market value of the services provided under the contacts.
14.4.1. Example 1 - Raffle proceeds may not
be used to build a barbecue pit for a charitable organization.
14.4.2. Example 2 - Raffle proceeds may be
used to build a playground for the underprivileged.
14.4.3. Example 3 - Raffle proceeds may not
be used to finance major structural improvements or additions to
premises owned by a charitable or public service organization, when the
premises are used for activities outside of the charitable or public service
purposes of the charitable organization.
14.4.3.1. The term "major structural
improvements or additions" means activities such as installing extensive
plumbing, electrical, electronic, heating or cooling systems. It may also
include, but not be limited to, replacing a roof, building a recreational deck,
paving a parking lot or building a boat dock.
14.5. The Tax Commissioner may
disapprove any contract for the sale of goods or services to any raffle
licensee to be used in or to be related to any raffle occasion or operation if
the contract is unreasonable or is not representative of fair market value. The
Tax Commissioner may also disapprove any lease of real or personal property to
a raffle licensee to be used in or to be related to any raffle occasion or
operation if the lease is unreasonable or is not representative of fair market
value.
14.5.1. Disapproved contracts and
leases are void in accordance with W. Va. Code '47-21-15(e).
14.5.2. The Tax commissioner may suspend a
raffle license or refuse to renew a raffle license if a raffle licensee engages
in transactions under a disapproved lease or contract.
14.6. If a licensee, in good faith, finds
that it cannot meet or comply with any of the requirements set forth in
this Section or wishes to use the proceeds of raffle occasions for a long range
charitable or public service purpose, then the licensee shall apply to the Tax
Commissioner for permission to:
14.6.1. spend
the net proceeds for charitable or public service purpose not listed in
the raffle license application; or
14.6.2. spend the net proceeds later than the
one (1) year time period. If The Tax Commissioner grants permission to
the licensee to spend the net proceeds after the expiration of the one (1) year
time period, the licensee shall file periodic reports with the Tax Commissioner
until the proceeds are spent. The licensee shall apply for permission no later
than sixty (60) days prior to the end of the one (1) year time
period.
