Posts Tagged: Taxes

The Year in Lawsuits

2018 brought us the type of lawsuits you would expect in the world of sweepstakes, contests and giveaways.  From “The Annoyance Lawyer” to Bobbleheads to “You’re Probably Never Going to Be A Winner.”  The most depressing thing is the lawsuits themselves, often filled with either corrupt sponsors or litigious plaintiffs.  But if you read far enough, you might just learn a few takeaways to help you or your client stay out of court (or find some arguments to get the case dismissed).  Enjoy. (more…)

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Don’t Tax My Bobblehead! Sales Tax on Promotional Items

Bobblehead: “A figurine with a disproportionately large head mounted on a spring so that it bobs up and down, often made as a caricature of a famous person.”

Giveaway: “A thing that is given free, especially for promotional purposes.”

Sales tax: “The portion of the purchase price typically forgotten about.  Generally seen in price advertising as ‘+ tax’.”

On June 13, 2018, the Ohio Supreme Court heard oral arguments in the case, Cincinnati Reds, LLC v. Testa, Ohio, No. 2017-854.  The issue: Should the Reds incur sales tax on the bobbleheads they give away at a ballgame?  Two things are certain in life: baseball and taxes.  While the bobblehead may be particular to sports figures, the implications of this Ohio case could affect the budgeting figures for any company that gives away trinkets for promotional purposes. (more…)

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Vacation Sweepstakes Edition (The More You Give, The Less You May Get)

It’s summer vacation time and what better way to spend it then basking in the sun after winning that all-expense-paid prize trip.  Or is it?

Sponsors want to create buzz for their sweepstakes.  And vacation prizes over the summer months may do just that.  In my unofficial count, there are about 150 vacation sweepstakes currently running by major brands for trips to Hawaii, Lake Tahoe, Disney World, Miami, Las Vegas, NYC and even Cincinnati.  But Caveat Sponsus, awarding a dream vacation could be a nightmare.

Issues and solutions when offering vacation prizes: (more…)

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Commercial Co-Ventures What a Charity Needs to Know

Yay!  Big brand wants to team up and donate part of the purchase price of its sales to your charity.  Do you just have to sit back and watch the money come pouring in?

Procedurally, no; substantively, (mostly) yes.  Even though the “work” in a commercial co-venture may be done primarily by the commercial company in terms of registrations and actual product selling, a charity has a number of its own obligations that cannot be ignored.

A short primer:  Buy this + we donate that = commercial co-venture.  Simple. (more…)

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Giving Tuesday: An Opportunity to Market for a Cause

I’ll admit that I’ve been part of the people lining up in the wee hours of the morning waiting for the doors to open on Black Friday. I even (temporarily) lost my young son once even though I specifically instructed him to run toward the tv’s. Luckily, my wife chose to chase him as he ran to the video games, and it ended up a win-win when I got myself a huge flat screen at a great price. But I digress.

As you may or may not know, in 2012, to compete with the commercialism of Black Friday, Small Business Saturday and Cyber Monday, the NY 92nd Street Y teamed up with the United Nations Foundation to create #Giving Tuesday.

During the first year more than $10 million in online donations were processed and by 2015 this number increased to approximately $116 million. These numbers are pretty impressive given that according to a 2015 survey, only 18% of consumers were familiar with Giving Tuesday. While this new holiday has been specifically geared toward the charity’s online solicitation efforts, it appears to be an ideal vehicle for corporate giving through cause marketing campaigns. The statistics bear this out: (more…)

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U.S.A! U.S.A.! – House Votes to Eliminate the “Victory Tax” on Olympic Prizes

Olympic prize awards are generally taxed like other prizes. Some lawmakers have seen this practice of taxing our Olympians as a “victory tax.” On Thursday (Sept. 22, 2016), the House of Representatives overwhelmingly passed a bill exempting U.S. medal winners from paying taxes on the money they receive from the U.S. Olympic Committee when they earn a medal. U.S. Olympians are paid $25,000 for gold, $15,000 for silver and $10,000 for bronze. A similar bill passed the Senate in July, and President Obama is expected to sign the bill into law. (Just so the bill doesn’t sound too favorable to big-time athletes, winners who earn more than $1 million per year can’t take advantage of the tax break.)

Where does this leave the average Joe or Jane prize winner? “Win a New Car” and you could end up paying a hefty tax before you get behind the wheel. (And no, it’s not a “gift” exempt from taxes.) There are plenty of instances where prize winners simply decline a valuable prize or donate it to charity to avoid paying taxes. “Taxes are responsibility of winners” is rightly in Official Rules, but who really thinks of that when they enter a sweepstakes for a trip of a lifetime? (more…)

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