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Can I offer contests that involve non-cash prizes in Louisiana? What are the requirements?
Yes, you can offer contests that involve non-cash prizes in Louisiana. The value of the prize will be determined by the fair market value of any such prize, which will be the amount reported to the state and the IRS for tax purposes. The corporation may pay withholding taxes on behalf of the winner in accordance with federal and state rules. The corporation will not be responsible for any state taxes or other fees associated with the prize [§731, 42 LAAC Part XV Chapter 7 Section 731][2.1].
If you offer non-cash prizes, you need to determine the fair market value of the prize and report it to the state and the IRS for tax purposes. You may also need to pay withholding taxes on behalf of the winner. The Louisiana Lottery Corporation shall adopt rules to establish a system of verifying the validity of tickets claimed to win prizes and to effect payment of such prizes [LARS § 47.9025(B)][3.1].
In summary, you can offer contests that involve non-cash prizes in Louisiana, but you need to determine the fair market value of the prize, report it to the state and the IRS for tax purposes, and comply with the rules established by the Louisiana Lottery Corporation.
Source(s):
- [2.1] Merchandise Prizes
- [3.1] Prizes taxable; withholdings from prize; verification and payment; exceptions; unclaimed prize money; corporation liability; eligibility to purchase ticket and receive prize
Jurisdiction
Louisiana