Iowa Administrative Code › Agency 481 - Inspections and Appeals Department › Games of Skill, Chance, Bingo and Raffles › Chapter 100 - General Provisions for Social and Charitable Gambling › Rule 481-100.34 - Nature and Dedication of Net Receipts

Current through Register Vol. 47, No. 3, July 24, 2024
At least 75 percent of net receipts shall be dedicated and
				  distributed to educational, civic, public, charitable, patriotic or religious
				  uses in this state.
(1) The following
				examples illustrate methods to determine net receipts, allowable expense, and
				the amount required to be dedicated and distributed.
Example 1
When sales tax is not included in gross receipts, it need not
				  be deducted to arrive at net receipts.
Gross receipts for quarter (excluding sales tax)
$100,000
Amount awarded as prizes
$ 20,000
Net receipts
$ 80,000
Minimum dedicated and distributed (75 percent of net
						  receipts)
$ 60,000
Maximum expenses (25 percent of net receipts)
$ 20,000
Example 2
When sales tax is included in gross receipts, it is deducted
				  to arrive at net receipts.
Gross receipts for quarter (including sales tax)
$105,000
Amount awarded as prizes
$ 20,000
Sales tax
$ 5,000
Net receipts
$ 80,000
Minimum dedicated and distributed (75 percent of net
						  receipts)
$ 60,000
Maximum expenses (25 percent of net receipts)
$ 20,000
At least 75 percent of the net receipts received during the
				  quarter shall be distributed no later than 30 days following the end of each
				  calendar quarter unless permission to do otherwise is requested in writing and
				  granted by the department.
(2) If a licensee receives at least 90
				percent of its total income in a calendar year from charitable gambling
				activities, at least 75 percent of the licensee's net receipts must be
				distributed to an unrelated entity by March 31 of the following year for
				educational, civic, public, charitable, patriotic, or religious uses. An
				unrelated entity is one having a separate state charter and tax identification
				number The following examples illustrate methods to determine if at least 75
				percent of a licensee's income must be distributed to an unrelated entity.
Example 3
Charitable gambling income:
Gross income from raffles
$ 20,000
Gross income from bingo
$ 60,000
Gross income from other games of skill or chance
$ 5,000
Total charitable gambling income
$ 85,000
Other income:
Donations
$ 13,000
Interest income
$ 1,000
Membership dues
$ 1,000
Total other income
$ 15,000
Total income:
$100,000
Percentage of total income derived from charitable
						  gambling
85%
This licensee is required to distribute at least 75 percent
				  of its net receipts to either a related or unrelated entity.
Example 4
Charitable gambling income:
Gross income from raffles
$ 30,000
Gross income from bingo
$ 60,000
Gross income from other games of skill or chance
$ 5,000
Total charitable gambling income
$ 95,000
Other income:
Donations
$ 3,000
Interest income
$ 1,000
Membership dues
$ 1,000
Total other income
$ 5,000
Total income:
$100,000
Percentage of total income derived from charitable
						  gambling
95%
This licensee is required to distribute at least 75 percent
				  of its net receipts only to an unrelated entity.
This rule is intended to implement Iowa Code sections
				  99B.1(16), 99B.1(18), 99B.1(24), 99B.7(3), and 99B.7(4).