TX - Charitable Raffles

From TaxAlmanac

What Does Texas Law Permit For Charitable Raffles?

The Charitable Raffle Enabling Act, effective January 1, 1990, permits "qualified organizations" to hold up to two raffles per calendar year, with certain specified restrictions.

What is a "qualified organization"?

In general, a qualified organization is:

• An association organized primarily for religious purposes that has been in existence in Texas for at least 10 years;
• A volunteer emergency medical service that does not pay its members other than nominal compensation;
• A volunteer fire department that operates fire fighting equipment and does not pay its members other than nominal compensation; or
• A nonprofit organization that has existed for at least three preceding years, during which it has had a governing body duly elected by its members and is exempt from federal income tax under Section 501(c), Internal Revenue Code; does not distribute any of its income to its members, officers or governing body; does not devote a substantial part of its activities to attempting to influence legislation; and does not participate in any political campaign.

What prizes may be offered?

An organization may offer any prize except money. If the raffle organizers offer a prize, which they have purchased or have given other consideration for, the value of the prize may not exceed $50,000. There is no value limit on prizes donated to the organization.

Is an organization required to register with the State before conducting a raffle? No.

What are the restrictions on how the raffle may be conducted?

• A qualified organization may hold only two raffles per year and only one raffle at a time.
• Raffle tickets may not be advertised state wide or through paid advertisements. Each raffle ticket must state the name or address of the organization holding the raffle, the name of an officer of the organization, the price of the ticket, and a general description of each prize to be awarded that has a value of over $10.
• A prize may not be money.
• Only members of the organization, or student organizations recognized by institutions of higher education selling on behalf of the institution, may sell tickets.
• No one may be compensated directly or indirectly for organizing or conducting a raffle, or for selling raffle tickets. The organization may not permit a non-member or other unauthorized person to sell or offer to sell raffle tickets.