How to Legally Raffle Off a Car

By Contributor - Updated December 09, 2018
young african woman showing her new car key

State and county laws vary when it comes to car raffles. In some jurisdictions, raffles are treated like lotteries and considered a form of gambling. It is advisable that you contact your city, county and state governments to ensure adherence to appropriate law. Many locations require registration or that an application be filed.

Check with your Local Government

Check with your local government to ensure that raffles are legal. Places where raffles are illegal include Hawaii and Kansas.

Verify Who Can Hold a Raffle

Verify whether individuals can hold a raffle; or, if you are establishing a raffle for an organization, that the type of organization (e.g. for-profit business or non-profit charitable organization) is allowed to host them. Raffles are often limited to educational or charitable organizations, fraternal orders, churches or volunteer organizations (like volunteer fire departments). Occasionally there is a requirement that a charitable organization be in operation for more than 5 years (e.g. Indiana and Tennessee).

Determine if There is a Permit Process

Determine whether there is a permit, application or registration process. For example, in California, raffles register with the California Attorney General. In Maryland, charitable organizations must submit a disclosure statement to the Charitable Organizations Division (a branch of the Secretary of State) that includes details of the date, location and time of the raffle; information about the charity; and any costs attributable to the winner. In Georgia, a license is obtained from the Sheriff.

Check for Application Deadlines

Check the application for deadlines. In Tennessee, applications are accepted by the Secretary of State, Division of Charitable Solicitations between July 1 and December 31.

File Application

Fill out the application and pay any applicable fees. Fee structures are often dependent upon the value of the items being raffled.

Note any Additional Requirements

Take note of any additional requirements the state may have. It is common for a financial report to be required after the event; and for extremely high-value items ($50,000 or more), an audited financial statement may be required. Some states limit the number of raffles an organization can hold in a year.

Check the Tax and Fee Rules

Make certain the entry rules mention whether winner of a raffle is responsible for local, state and federal taxes; insurance; fees; delivery costs; or incidentals like title transfers or registration. An organization is responsible for filing an IRS Form 990 for any prizes valued at $600 or more.

Consider Other Provisions

Consider including common provisions that raffles typically include, like a minimum age to enter (18 or 21), proof of driver's license, and the use of a certified public accountant or accounting firm to verify the raffle results.

About the Author

This article was created by a professional writer and edited by experienced copy editors, both qualified members of the Demand Media Studios community. All articles go through an editorial process that includes subject matter guidelines, plagiarism review, fact-checking, and other steps in an effort to provide reliable information.

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