Are the proceeds received from raffles subject to taxes?
The proceeds received from your raffles do constitute revenues for your club and these should be reported on the Federal IRS Form 990-N. So long as you remain compliant with the requirements of tax-exempt entities, you will not be taxed at the federal level on the income received. A raffle is simply buying a chance to win, and buying that chance is not tax deductible to the person buying the chance. Your statement that you are limiting your raffles to 2 times each calendar year will enable you to refrain from complying with numerous rules and regulations on raffles otherwise. There is no sales tax on the raffle since you are not selling an item, merchandise or goods, but instead a chance to win something, you would not owe sales tax and therefore you would not collect sales tax from the person buying the raffle ticket.
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