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Can I offer contests that involve merchandise prizes in Iowa? What are the requirements?

Here are the requirements for offering contests that involve merchandise prizes in Iowa:

Authorization of Drawings and Contests

To offer contests that involve merchandise prizes in Iowa, you must obtain authorization from the lottery authority board [1.3].

Prize Limits

The value of any prize shall not exceed $950 [2.3][2.4][2.5]. Cash or merchandise prizes awarded for each game shall not exceed $250 in value, except for jackpot games [2.1]. The maximum prize limit for games of skill, games of chance, and bingo is $950 in merchandise [2.4].

Claiming Prizes

The specific drawing rules or contest description shall set forth the manner in which prizes won shall be claimed [1.2].

Animal Prizes

An animal shall not be awarded as a prize for persons participating in a game or fair event [2.1].

Withholding Taxes

Prizes of more than $600 require the deduction of 5 percent withholding taxes. This tax is to be withheld by the organization conducting the game. The amount deducted shall be remitted to the Iowa department of revenue on behalf of the prize winner [2.1].

Manufacturers and Distributors of Bingo Equipment and Supplies and Electronic Raffle Systems

A manufacturer or distributor of bingo equipment and supplies and electronic raffle systems, as defined in Iowa Code section 99B.32, shall obtain a license prior to conducting business within the State of Iowa [2.6].

Therefore, you can offer contests that involve merchandise prizes in Iowa, but you must obtain authorization from the lottery authority board, follow prize limits, set forth the manner in which prizes won shall be claimed, not award animals as prizes, withhold taxes for prizes over $600, and obtain a license if you are a manufacturer or distributor of bingo equipment and supplies and electronic raffle systems.

Source(s):
Jurisdiction

Iowa