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The Perfect Tesla Raffle

S'toon

Knows where his towel is
Apr 23, 2015
3,702
3,748
AB
Climate XChange.org is raffling off a brand new Tesla Model S or Model X. That news all by itself might be enough to get lots of people reaching for their wallets. But most new car raffles aren’t perfect; after you win the car, you have to sell it or take out a loan to pay the taxes on your winnings.


When Alan Langerman’s wife, Jessica, asked him to design a raffle to raise money for Climate XChange, he decided he wanted the winner to be able to just get in and drive without a lot of hassles or aggravation. That meant he had to create the perfect Tesla raffle. What does that mean? It means the winner gets $110,450 to put toward the purchase of either a Model S or Model X built just the way he or she wants it — right color, right equipment, and right interior options. But that’s not all.


The winner will also receive an additional $36,370 to pay any liability owed to the IRS, state income taxes, excise taxes, and registration fees. That would make the raffle almost perfect. What would it take to put it over the top on the perfection scale? The winner will also receive a Tesla wall charger and $500 to pay an electrician to install it. Now it’s perfect. Some would say it’s pluperfect!

<snip>
http://gas2.org/2015/09/27/the-perfect-tesla-raffle-will-benefit-climate-xchange/

The tickets are $250, but as stated, taxes are paid, and there's only 2000 tickets available.

http://climate-xchange.org/tesla-raffle/




 
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wdolson

Supporting Member
Supporting Member
Jul 24, 2015
7,822
10,945
Clark Co, WA
I searched for raffles for Teslas a few months ago and came up with about half a dozen. This one is the best deal though.

Currently Washington State Special Olympics is running a Tesla raffle too.

Bill
 

essaunders

Member
Jun 6, 2012
152
58
Nashua NH area
looks reasonable. Their website indicates the raffle was put together by a member here: Pollux

I appreciated the detail given on the costs of the raffle. I do wonder exactly how much they'll raise - I'm guessing 200-300k if they are lucky.

edit to add: they disclosed all this: I was about right:
At 2000 tickets, CXC will net an estimated 51% of the gross proceeds of the Raffle, all of which will be used to fund CXC’s mission. This percentage is lower than CXC would ordinarily prefer, which is the result of implementing an extremely generous set of Prizes.
 
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boofagle

Member
Aug 14, 2015
230
180
York, PA
There also needs to be at least 867 tickets sold in order to give away the Tesla grand prize:
(d) if there is a minimum number of tickets to be sold; what the minimum is and the procedure to be employed to secure a refund in the event the minimum is not reached;The minimum number of tickets to be sold is 1.
From 1 ticket sold – 299 tickets sold, this raffle is a <XXX REF 50/50 cash raffle/[Prize Details:Alternate Cash Prizes & Raffle]>, with a guaranteed minimum prize pool of $20,000.
From 300 tickets sold to 866 tickets sold, this raffle is a <XXX REF 50/50 cash raffle/[Prize Details:Alternate Cash Prizes & Raffle]>, with the prize pool exceeding $20,000.
From 867 tickets to 2000 tickets, CXC will make available the Grand Prize and the 5 Special Prizes.
The minimum number of tickets to be sold at which the Grand Prize and the 5 Special Prizes will be made available is 867.
No refunds are planned due to failure to meet ticket sale minimums. If the entire raffle is canceled, CXC will issue refunds to all ticket holders.
 

wdolson

Supporting Member
Supporting Member
Jul 24, 2015
7,822
10,945
Clark Co, WA
Not quiet...

That's probably because of legal restrictions. There are lots of laws on contests and such and I don't think there are any legal international contests. I'm sure they would have liked to make it international, the organization putting it on has branches in many countries, but the laws were probably prohibitive.
 

ItsNotAboutTheMoney

Well-Known Member
Jul 12, 2012
10,924
8,620
Maine
Hey, I'd buy a ticket if I could, but alas, I'm not American.

Don't need to be American (which I'm not), you just need to be a legal resident of the USA (which I am).

Bought.

I don't normally play the lottery, but I liked this one. Due to Maine's high taxes, winning the Tesla would _not_ be a cheap car:
5.5% sales tax
9.15% vehicle excise tax over first 10 years (2.4%, 1.75%, 1.35%, 1%, 0.65%, 0.4% thereafter)
7.95% state income tax.
That's 15.85% up front plus 6.75% over the next 9 years for a total of 22.6%.
For $110,450 value, that's $24961.7. About the same as my Prius, which, ironically, I'd sell.
(Personally, I'll settle for the e-bikes. I'm not greedy.)

Now If I had to pay the Federal tax on it, well, it would clearly be the most expensive car I'd ever bought.
 
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Pollux

Supporting Member
Supporting Member
Jul 16, 2013
1,560
1,176
Merry land / District of Confusion
Don't need to be American (which I'm not), you just need to be a legal resident of the USA (which I am).

Bought.

I don't normally play the lottery, but I liked this one. Due to Maine's high taxes, winning the Tesla would _not_ be a cheap car:
5.5% sales tax
9.15% vehicle excise tax over first 10 years (2.4%, 1.75%, 1.35%, 1%, 0.65%, 0.4% thereafter)
7.95% state income tax.
That's 15.85% up front plus 6.75% over the next 9 years for a total of 22.6%.
For $110,450 value, that's $24961.7. About the same as my Prius, which, ironically, I'd sell.
(Personally, I'll settle for the e-bikes. I'm not greedy.)

Now If I had to pay the Federal tax on it, well, it would clearly be the most expensive car I'd ever bought.

Yeah, I'm involved. I'm blown away to discover this thread... thought I'd have to be the one to kick it off, but I was just plain exhausted since the big Tesla party / Climate XChange (CXC) fundraiser this past weekend here in Boston.

I'm really grateful to whomever started this thread and the various subsequent observations and kind words.

I'd just like to make sure that one point is clear: CXC will pay a ton o' taxes but isn't guaranteeing to pay ALL taxes. So in @ItsNotAboutTheMoney's example, a winner who happened to reside in Maine would receive $5000 towards State taxes -- excise/vehicle tax, income tax that results from winning this prize, what have you. THEN, CXC ALSO pays the federal withholding tax on the prize that you are winning. That *includes* paying federal taxes on the $5000 in state taxes! (It's insane.) Oh, and grossing up the taxes to account for the taxes themselves counting as income to a winner. The IRS has a formula for all this. So if CXC didn't pay a dime, the winner would have to cough up 25% of the fair market value of the Prize, up front. The rule for CXC is that it has to cough up 33.33%.

Because there's so much variation in state taxes, we gave up on trying to match the prize to the Winner's state of residence. (I've had an attorney looking into this since the summer.)

The basic components for the Winner are: $103K towards an S or X (derived by optioning out an S85D with a bunch of goodies), the destination & doc fee ($1200), an HPWC ($750), an electrician to install the HPWC ($500), State taxes ($5000), total value to winner of $110,450. CXC kicks in $36,730 to the feds. Total CXC outlay: $147,180.

And then of course, as first owner of the car, the winner will get the $7500 federal tax credit and any applicable local tax credits -- e.g., $2500 in MA.

So I am hopeful that (a) the winner can plop into the car without writing horrendous checks up front or even worrying too much about the electrician or wall charger, that's the "No Pain" part of the raffle, and (b) that the taxes pretty much net out the following filing season and the winner walks away pretty much with a wash on the taxes. Obviously, I can't (and DON'T) PROMISE that because there are just too many variables with individual tax positions and state laws and whatnot.

Oh, and this raffle is NOT legal in any jurisdiction where such a thing is prohibited!

Some of you have already been digging through the legal language: yes, it's true, CXC is accepting what amounts to a lower return on this raffle. I was very motivated by other examples I saw, including a thread on this forum, where people were shocked by the burden imposed by winning. In fact, I was pissed when I realized that if I won one of these raffles, I'd have to cough up a ton of money up front. What the heck kind of win is that. So we want an ordinary person who doesn't make a zillion dollars to be able to win this extraordinary car and drive away in it. The key design criterion for this raffle was, "would I want to win this?"(*) The CXC board bought in.

At the same time, I hope to get enough money for CXC that we can continue to do some pretty amazing work for carbon pricing in Massachusetts, and hopefully set an example that folks in other states will want to implement there.(**)

Alan/Pollux

(*)But I'm not allowed to enter or win. Nor my family.
(**)Laboratories of democracy!
 
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Reactions: ThisIsTrue

ItsNotAboutTheMoney

Well-Known Member
Jul 12, 2012
10,924
8,620
Maine
Ah, thanks Alan, didn't see the $5k in state taxes, and forgot about the $7.5k Federal credit, so it'd be less of a "burden" than I thought. I remember doing a tax calculation for a previous raffle and figuring out that to play and win would make it the most expensive car I'd ever bought.

Aside: in the UK, there are no taxes on prize winnings, including gambling, including the lottery. Used to have taxes at bookmakers, of 10%, but not at racecourses, but because Internet gambling is totally legal, they saw money flooding out to tax havens, so they cut their losses and made it tax free. (And bookmakers are everywhere.) Boy, does that make things simple.
 
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SW2Fiddler

We Are Cognitive Dissidents
Mar 19, 2014
2,362
3,270
Houston TX
I should do the math myself, but... If someone wanted to get themselves to the Factory to pick up, does it take care of the CA tax I have heard applies?
(I am in a "6.25% sales tax, no state income tax" state)
 

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