The 8th Annual Climate XChange EV Raffle — Legal Details

Nothing on this page is intended to constitute legal or tax advice. All readers should consult their own legal and/or tax advisors.

The Eighth Annual Climate XChange EV Raffle (the Raffle) is held in the State of Massachusetts. It is governed by the General Laws of Massachusetts, Part IV, Title I, Chapter 271, Section 7A. These laws have been interpreted into regulations by the Attorney General of Massachusetts. These regulations are known as “940 CMR 12.00” and may be found here.

These are not the only laws and regulations that govern raffles, and your state or the federal government may have different laws and regulations with which you are obligated to comply. For example, for further information about raffles and federal taxation, consult IRS Notice 1340 Tax-Exempt Organizations and Raffle Prizes.

Climate XChange Education and Research, Inc. (CXC), 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 CXC 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. Climate XChange Education and Research, Inc., 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 Authorized for The Eighth Annual Climate XChange EV Raffle

The Massachusetts Attorney General’s regulations, 940 CMR 12.04, “Record Keeping, Financial Control” section (3)(b), states that the organization sponsoring a raffle shall maintain “a list of members authorized to sell raffle tickets or participating in any way in the promotion or operation of the raffle”. That list is:

Irene Anastasiou
Wandra Ashley-Williams
Cathy Carruthers
Greg Casto
Kalman Gacs
Paola Ferreira Miani
Destiny Gonzalez
Michael Herchenroder
Peter Kirby
Jonah Kurman-Faber
Amanda Pontillo
Kristen Soares
Katrina Sousounis
Julianna Stoll
Laura Teicher
Ruby Wincele
Quinton Zondervan

The General Laws of Massachusetts, Part IV, Title 1, Chapter 271, Section 7A, state in part: “…no such member shall receive remuneration in any form for time or effort devoted to the promotion or operation of such raffle or bazaar.”

None of the members listed above, nor any other member, Board Member, volunteer, intern, or staff member of CXC is receiving or shall receive any remuneration of any kind for promoting or operating this raffle.

Persons Allowed to Purchase The Eighth Annual Climate XChange EV Raffle Tickets

You must be 18 years old to purchase a raffle ticket. People under age 18 can’t purchase raffle tickets. Nor may persons under 18 years of age be the beneficiary of a ticket purchase.

Void where prohibited. The raffle is not available for purchase while located in Alabama, Arkansas, California, Hawaii, and Utah.

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 and meet eligibility requirements outlined in 940 CMR 12.03(3), which states:

(3) No member or employee, or immediate family member of a member or employee, of a sponsoring organization who has been directly involved in the promotion or operation of a raffle shall be permitted to purchase tickets to the raffle or win the prize. The sale of tickets alone shall not constitute the promotion and sale of a raffle for purposes of 940 12.03.

For purposes of this Raffle, “Immediate family” is defined as the member/employee and his/her spouse, and their parents, children, brothers, and sisters. We also apply this rule to our Board Members, interns and volunteers. We also apply this rule to our vendors and partners and their Board Members, employees, interns and volunteers. We also apply this rule to anyone who specifically donates to CXC as part of underwriting the Eighth Annual Climate XChange Electric Vehicle Raffle prize pool.

The intent of this rule is to avoid the creation of a conflict of interest or even the appearance of a conflict of interest.

Climate XChange Filings, Certificate & Permit

Climate XChange Education and Research (CXC), Inc., is a Massachusetts nonprofit. It is compliant in its filings with the Massachusetts Attorney General’s office. To find our filings, go to the Attorney General’s Non-Profit & Charities Document Search page, then for Charity Name type in “Climate XChange” and hit return. The search will return all organizations containing that name (of which there is just one at this time), but to be certain you have the correct organization you can verify that the AG Account Number is 056277 and the FEIN is 47-3976138. Click on the link to see our filings.

Climate XChange Education and Research, Inc. is also registered with the Massachusetts Secretary of State.

Climate XChange Education and Research, Inc. has received its 501(c)(3) approval letter from the US Internal Revenue Service.

Climate XChange Education and Research, Inc. possesses a Certificate for Solicitation, issued by the State of Massachusetts.

Climate XChange Education and Research, Inc. has obtained the necessary permit for conducting a raffle in the City of Boston, MA.

Climate XChange Education and Research, Inc. has received a 4-star 100% rating from Charity Navigator.

Climate XChange Education and Research, Inc. has received a Silver transparency rating from Guidestar.

You may contact Climate XChange Education and Research, Inc. as follows:

Paola Ferreira Miani

Executive Director

Climate XChange Education and Research, Inc.

One Beacon St., Fl. 15

Boston, MA 02108

(617) 624-0919

info@climate-xchange.org

Raffle Ticket Tax-Deductibility

Raffle tickets are NOT tax-deductible, even when the Raffle is being held by a tax-deductible organization. That is because a raffle ticket is regarded as a “thing of value”, i.e., you have a chance to win a prize. It is not treated as a tax-deductible donation. See Internal Revenue Service Publication 526, page 6.

Disclosures Required by Massachusetts Attorney General Regulations 940 CMR 12.00

The simplest way to perform the disclosures required of us by these regulations is to list each requirement of the regulations followed by our disclosure. Each piece of the regulation is quoted here in italics. You may find these regulations for yourself here. These mandated disclosures are listed in the specific section, 940 CMR 12.02: Disclosure.

For convenience, throughout this section we will refer to the Eighth Annual Climate XChange Tesla Raffle as the Raffle.

(1) In any raffle conducted pursuant to M.G.L. c. 271, § 7A, the sponsoring organization must disclose the following information either on the raffle ticket itself or in a written notice given to the purchaser prior to the sale:

We provide our disclosures here, where they may be reviewed prior to purchasing a ticket. We also provide appropriate disclosures on the ticket itself.

(a) a full and fair description of the prize;

There are Six Prizes in the Raffle : One Grand Prize, a Second Prize, a Third Prize, a Fourth Prize, a Fifth Prize, and the Early Bird Prize

The Grand Prize includes four components: (1) a payment made by Climate XChange directly to Tesla, Inc., Rivian Automotive, Inc, or selected other electric vehicle dealers on behalf of the Winner, to be used for the purchase of a Tesla, Rivian, or selected other electric vehicle for the Prize Winner; (2) the sales tax and registration fee payments required to purchase the vehicle on behalf of the Winner in MA (or the same amount paid to another state); (3) a Charging Support payment of $5,000 to be used for installation of a home charger and/or payments to electric vehicle charging networks; and (4) backup withholding tax payments made on behalf of the Prize Winner so that the Prize Winner does not have to provide that money. The backup withholding tax payments are specifically (a) a payment made to the United States Internal Revenue Service (IRS) and (b) a payment made to the Commonwealth of Massachusetts (MA) Department of Revenue (DOR).

Second, Third, Fourth, Fifth, and Early Bird Prize award amounts are listed in the Prize Descriptions. The Second, Third, Fourth, Fifth, and Early Bird Prize Winners, if applicable, will pay all backup withholding taxes required by law before receiving these money prizes. Climate XChange believes all five cash prize winners will be subject to payment of some withholding taxes.

In particular, as described in IRS Instructions for Forms W-2G and 5754 (01/2021), immediate federal backup withholding is required in the amount of 24% for winnings over $5,000. The Commonwealth of Massachusetts requires 5% withholding for winnings above $600. The Prize Winner must first send this money to Climate XChange, which will in turn forward these amounts to these tax authorities. Then, Climate XChange will issue a payment check to the Prize Winner in the full amount described in the Prize Description. For example, in the Raffle the Grand Prize has an Alternate All-Cash Prize value of $100,000. Of that amount, $24,000 must be sent to the IRS and another $5,000 must be sent to the DOR.

Selected Tax Payments are Part of the Eighth Annual Climate XChange EV Raffle Prizes

The requirement for a DOR backup withholding tax payment is as follows:

Climate XChange Education and Research, Inc., is a nonprofit incorporated in Massachusetts with its headquarters located in the Commonwealth.
Raffles are a type of wagering. See MA Technical Information Release TIR 13-4: Withholding on Wagering Winnings and MA TIR 15-14: Income Tax, Withholding and Reporting Rules for Certain Gambling Income.
Residents of Massachusetts are subject to Massachusetts tax on income from a Massachusetts source; see Massachusetts General Laws (MGL) Title IX Chapter 62: Taxation of Incomes.
A nonresident of Massachusetts is also subject to Massachusetts tax on income from an MA source; see Massachusetts General Laws (MGL) Title IX Chapter 62 Section 5A: Taxation of income earned by non-residents; regulations; certain military personnel.
Withholding is required on wagering income in Massachusetts if it is required under IRS Section 3402; see MA TIR 13-4, section B.
Withholding for the Commonwealth of Massachusetts shall apply to winnings of $600 or greater; see MA TIR 13-4, section B.
Withholding of wagering income is required under IRS Internal Revenue Code Section 3402.
Nonresidents of the Commonwealth of Massachusetts are also subject to Massachusetts income tax on income from a Massachusetts source; see Massachusetts General Laws (MGL) Title IX Chapter 62 Section 5A.
Therefore, a Raffle Prize is subject to withholding by the Commonwealth of Massachusetts.
Additionally, a Raffle Prize Winner who does not reside in Massachusetts may be required to file an income tax return in the Commonwealth, if the Winner’s gross income exceeds $8,000; see Mass.gov Personal Income Tax for Nonresidents. Note that the Raffle Grand and Second Place Prizes have values in excess of $8,000.

The Commonwealth of Massachusetts withholding rate is 5%; see Mass.gov to learn about gambling and the lottery in Massachusetts.

The IRS federal backup tax withholding payment is described by IRS Instructions for Forms W-2G and 5754 (01/2021).

Furthermore, because Climate XChange pays these withholding taxes on behalf of the Grand Prize Winner, the payments themselves are treated as income to the Prize Winner. Therefore, Climate XChange “grosses up” each payment to account for the taxes required on the payment itself. Further, from the perspective of the Internal Revenue Service, the payment that CXC makes to the Commonwealth of Massachusetts is itself additional taxable income; while from the perspective of the Commonwealth of Massachusetts, the payment that CXC makes to the Internal Revenue Service is also additional taxable income. CXC “grosses up” both payments until the calculations yield zero additional required dollars.

Grand Prize Description

The Raffle’s Grand Prize consists of (a) a payment of up to US$112,835 called the Prize Vehicle Payout, by Climate XChange directly to Tesla, Inc., on behalf of the Winner, to be used for purchase of a Model X Plaid Luxury SUV, Tesla Model S Luxury Sedan, Model Y Midsize SUV, or Model 3 Midsize Sedan with any options, accessories, and/or fee(s) as will fit within the Prize Vehicle Payout; (b) a payment of the sales tax and registration fee for the Prize Vehicle, up to $7,052 and $300, respectively; (c) a Charging Support payment of $5,000 to be used for installation of a home charger and/or payments to electric vehicle charging networks; (d) a payment of 33.33% of the total prize value to the Internal Revenue Service for the backup tax withholding required for this Prize; and (e) a payment of 5% of the total prize value to the Massachusetts Department of Revenue for the backup withholding tax required for this Prize. All prize options and costs shown in marketing material are set as of October 4, 2023 and reflect Tesla’s then-available options and pricing.

Alternate Grand Prize Description

The Raffle’s Alternate Grand Prize consists of (a) a payment of up to US$112,835 called the Prize Vehicle Payout, by Climate XChange directly to Rivian Automotive, Inc., on behalf of the Winner, to be used for purchase of a Rivian R1S Luxury SUV or R1T Truck with any options, accessories, and/or fee(s) as will fit within the Prize Vehicle Payout; (b) a payment of the sales tax and registration fee for the Prize Vehicle, up to $7,052 and $300, respectively; (c) a Charging Support payment of $,5000 to be used for installation of a home charger and/or payments to charging networks; (d) a payment of 33.33% of the total prize value to the Internal Revenue Service for the backup tax withholding required for this Prize; and (e) a payment of 5% of the total prize value to the Massachusetts Department of Revenue for the backup withholding tax required for this Prize. All prize options and costs shown in marketing material are set as of October 4, 2023 and reflect Rivian’s available options and pricing.

Your Choice Grand Prize Description

Climate XChange recognizes that there are an increasing variety of types and models of electric vehicles on the US market, and that some potential EV Raffle participants may prefer other EVs beyond the selection available from Tesla and Rivian. To date, Climate XChange has only offered vehicles from companies that sell direct to consumers, to guarantee fixed pricing and flexibility of delivery location. In our Eighth EV Raffle we are prepared to offer the option of a custom-selected EV from another brand’s direct-to-consumer or authorized dealer sales channel. If this option is selected, our Raffle Director will work with the Grand Prize winner to identify, locate and purchase such a custom-selected EV with the following conditions:

The vehicle must be a fully battery-powered electric vehicle, not a hybrid or plug-in hybrid.
It must be a new vehicle offered for sale direct from the manufacturer or by a brand-authorized dealer.
Its price must fit within the Prize Vehicle Payout, or the winner must pay any overage; in no case will Climate XChange pay above the Prize Vehicle Payout.
It must be readily available for delivery, so that the transaction can take place and payment from Climate XChange can be completed by June 30, 2024. If it is apparent on June 15, 2024 that this deadline cannot be met, the prize will default to the Alternate All-Cash Prize of $100,000.

If the winner cannot make a selection in a timely manner, they should order from Tesla or choose the Rivian R1T for fastest delivery, or opt for the Alternate All-Cash Prize of $100,000.

The Raffle’s Your Choice Grand Prize consists of (a) a payment of up to US$112,835 called the Prize Vehicle Payout, by Climate XChange directly to a selected brand’s authorized EV dealer on behalf of the Winner, to be used for purchase of an available EV with any options, accessories, and/or fee(s) as will fit within the Prize Vehicle Payout; (b) a payment of the sales tax and registration fee for the Prize Vehicle, up to $7,052 and $300, respectively; (c) a Charging Support payment of $5,000 to be used for installation of a home charger and/or payments to charging networks; (d) a payment of 33.33% of the total prize value to the Internal Revenue Service for the backup tax withholding required for this Prize; and (e) a payment of 5% of the total prize value to the Massachusetts Department of Revenue for the backup withholding tax required for this Prize.

The total expenditure by the Raffle on the Grand Prize is the sum of the Prize Payout, including sales tax and registration fee payments, the Charging Support payment, plus the two withholding tax payments: up to US$176,320. We call this sum the Total Prize Payout.

The Alternate All-Cash Prize for the Grand Prize is $100,000.