Charitable Gaming: Nebraska
SEE ALSO: SALES & USE TAX: NEBRASKA
Contents
Lottery vs. Raffle
LOTTERY | RAFFLE |
---|---|
Participants pay something of value for an opportunity to win | Participants pay something of value for an opportunity to win |
Sequentially numbered tickets are sold | Sequentially numbered tickets are sold |
Winners are determined by a random drawing of tickets or by a race of inanimate buoyant objects | Winners are determined by a random drawing of tickets or by a race of inanimate buoyant objects |
At least 80% of the value of the prizes are merchandise which is not directly or indirectly redeemable for cash | |
License required if gross proceeds greater than $1,000 | License required if gross proceeds greater than $5,000 |
Lottery = Cash Prizes | Raffle = Merchandise Prizes |
Lottery & Raffle Eligibility, Requirements, Limitations
LICENSED LOTTERY OR RAFFLE | UNLICENSED LOTTERY OR RAFFLE |
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Nebraska nonprofit organization or nonprofit corporation exempt under section 501 of the Internal Revenue Code or a volunteer fire company, or volunteer first- aid, rescue, ambulance, or emergency squad | Nebraska nonprofit organization or nonprofit corporation exempt under section 501 of the Internal Revenue Code
OR Whose major activities, exclusive of conducting any lottery or raffle, are conducted for charitable or community betterment purposes |
Must be organized or incorporated in Nebraska, and conduct activities other than lotteries and raffles | Must have its principal office located in Nebraska, and conduct a majority of its activities in Nebraska |
Have at least 10 members in good standing | |
Prize payout of at least 65%* | No minimum prize payout requirement |
10% expenses limitation* | No expense limitations |
Must be 18 to participate* | No age restrictions |
Separate bank account used only for lottery/raffle proceeds | No separate bank account necessary |
2% tax on gross proceeds | No Taxes |
Quarterly and Annual Reports required | No reporting requirements |
Sell sequentially-numbered tickets which also contain the organization’s name, state ID, cost per ticket, and date of drawing | Sell sequentially-numbered tickets |
Determine winners by random drawing or race of inanimate buoyant objects | Determine winners by random drawing or race of inanimate buoyant objects |
*Can be waived with a special permit | Other Limitations
|
Lottery/Raffle Licenses & Fees
Organization Lottery/Raffle License | $30 | Biennial |
Utilization of Funds Member
|
$40 | Biennial |
Optional Special Permit
|
$10 | One per year, valid for up to 90 days |
Local Licensing Requirements | Authorization by ordinance or resolution can be required in City of Lincoln/Lancaster County and City of Omaha/Douglas County only |
Silent Auctions
Gross Proceeds
- Total receipts from the conduct of the lottery or raffle, without any reduction for prizes, discounts, taxes, or expenses
- Includes receipts from required purchase or admission costs to the extent that the purchase or admission includes a chance in the lottery or raffle
- Includes the value of any free tickets
Use of Gross Proceeds
- Prizes
- Expenses
- Taxes (if applicable)
- License fees (if applicable)
- Lawful purpose
- Charitable or community betterment purposes
- Includes charitable, benevolent, humane, religious, philanthropic, recreational, social, educational, civic or fraternal activities conducted by the organization for the benefit of its members
- Not Permitted: Lobbying and political campaigns expenses or contributions
State & Federal Lottery/Raffle Tax Requirements
State Tax (2% of Gross) | Form 51 | Due quarterly |
State Annual Report | Due August 15 annually | |
Federal Form W-2G, Certain Gambling Winnings | Refer to IRS Publication 3079 | If the amount paid reduced by the amount of the wager is $600 or more and at least 300 times the amount of the wager |
Federal/State Withholding Tax |
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Resources & Further Reading
IRS Publication 3079: Tax Exempt Organizations & Gaming
NE Department of Revenue: Obtain a Gaming License
NE Department of Revenue: Revenue Rulings
Lottery/Raffle
NE Department of Revenue: Overview of Nebraska Raffle Lottery & Raffle Laws
NE Department of Revenue: Nebraska Lottery & Raffle Act
Bingo
NE Department of Revenue: Bingo Home Page
NE Department of Revenue: Bingo Information Guide
NE Department of Revenue: Bingo Regulations
NE Department of Revenue: Nebraska Bingo Act
Keno
NE Department of Revenue: Keno Home Page
NE Department of Revenue: County/City Lottery (Keno) Guides
Pickle Cards
NE Department of Revenue: Pickle Cards Home Page
Auctions
NE Department of Revenue: Nebraska Sales & Use Tax for Auction Sales
Planned Giving Design Center: Tax Considerations for Charitable Auctions
Nebraska Department of Revenue Contact
Nebraska Department of Revenue
Charitable Gaming Division
1800 “O” Street, Suite 101
402-471-5937
Toll Free 877-564-1315
Fax 402-471-5600