W. Va. Code R. § 110-37-14

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-37-14 - Payment of Reasonable Expenses from Proceeds: Net Proceeds Disbursements

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.

W. Va. Code R. § 110-37-14