The 10th Annual Climate XChange Mini Electric Vehicle (EV) Raffle — Legal Details

The 10th Annual Climate XChange EV Raffle, which now includes the Mini Raffle (defined below) (the “Raffle”) is held in the State of Massachusetts. It is governed by the General Laws of Massachusetts, Part IV, Title I, Chapter 271, Section 7A. These laws have been interpreted into regulations by the Attorney General of Massachusetts. These regulations are known as “940 CMR 12.00”.

These are not the only laws and regulations that govern raffles, and your state or the federal government may have different laws and regulations with which you are obligated to comply. For example, for further information about raffles and federal taxation, consult IRS Notice 1340 Tax-Exempt Organizations and Raffle Prizes.

Climate XChange Education and Research, Inc. (CXC), its members, officers, directors, agents, and representatives and their parent organizations, affiliates, subsidiaries, vendors, and advertising and legal advisors are not responsible for and shall not be liable for: (i) late, lost, delayed, damaged, misdirected, incomplete, illegible or unintelligible entries; (ii) failed, returned, or misdirected notifications based on inaccurate information provided by the entrants or winner; (iii) telephone, electronic, hardware, or software program, network, internet, or computer malfunctions, failures, or difficulties resulting from participation in this Raffle or otherwise; (iv) any condition caused by events beyond the control of CXC that may cause the Raffle to be disrupted or corrupted; or (v) any injuries, losses or damages of any kind caused by a prize or resulting from acceptance, possession, or use of a prize, or from participation in the Raffle. Climate XChange Education and Research, Inc., reserves the right, at its sole discretion, to cancel, terminate, modify or suspend the use of the software version of the raffle and instead conduct a non-electronic raffle.

Other local, state and federal laws and regulations may apply.

Persons Authorized for The 10th Annual Climate XChange EV Raffle

The Massachusetts Attorney General’s regulations, 940 CMR 12.04, “Record Keeping, Financial Control” section (3)(b), states that the organization sponsoring a raffle shall maintain “a list of members authorized to sell raffle tickets or participating in any way in the promotion or operation of the raffle”. That list is:

• Jacqueline Adams
• Sukia Akiba
• Irene Anastasiou
• Greg Casto
• Shiladitya DasSarma
• Kalman Gacs
• Jordan Gerow
• Paola Ferreira Miani
• Michael Herchenroder
• Peter Kirby
• Jack Kutner
• Brynn Madore
• Amanda Pontillo
• Kristen Soares
• Julianna Stoll
• Laura Teicher
• Mary Wambui
• Ruby Wincele
• Quinton Zondervan

The General Laws of Massachusetts, Part IV, Title 1, Chapter 271, Section 7A, state in part: “…no such member shall receive remuneration in any form for time or effort devoted to the promotion or operation of such raffle or bazaar.”

None of the members listed above, nor any other member, Board Member, volunteer, intern, or staff member of CXC is receiving or shall receive any remuneration of any kind for promoting or operating this raffle.

Persons Allowed to Purchase The 10th Annual Climate XChange EV Raffle Tickets

You must be 18 years old to purchase a raffle ticket. People under age 18 can’t purchase raffle tickets. Nor may persons under 18 years of age be the beneficiary of a ticket purchase.

Void where prohibited. The raffle is not available for purchase in Alabama, Arkansas, California, Hawaii, New York, Utah, and Washington.

Ticket purchaser — and beneficiary, if the beneficiary is not the same as the purchaser — must also be citizens of the United States or legal residents thereof and meet eligibility requirements outlined in 940 CMR 12.03(3), which states:

(3) No member or employee, or immediate family member of a member or employee, of a sponsoring organization who has been directly involved in the promotion or operation of a raffle shall be permitted to purchase tickets to the raffle or win the prize. The sale of tickets alone shall not constitute the promotion and sale of a raffle for purposes of 940 12.03.

For purposes of this Raffle, “Immediate family” is defined as the member/employee and his/her spouse, and their parents, children, brothers, and sisters. We also apply this rule to our Board Members, interns and volunteers. We also apply this rule to our vendors and partners and their Board Members, employees, interns and volunteers. We also apply this rule to anyone who specifically donates to CXC as part of underwriting the 10th Annual Climate XChange Electric Vehicle Raffle prize pool.

The intent of this rule is to avoid the creation of a conflict of interest or even the appearance of a conflict of interest.

Climate XChange Filings, Certificate & Permit

Climate XChange Education and Research (CXC), Inc., is a Massachusetts nonprofit. It is compliant in its filings with the Massachusetts Attorney General’s office.  To find our filings, go to the Attorney General’s Non-Profit & Charities Document Search page, then for Charity Name type in “Climate XChange” and hit return.  The search will return all organizations containing that name (of which there is just one at this time), but to be certain you have the correct organization you can verify that the AG Account Number is 056277 and the FEIN is 47-3976138.  Click on the link to see our filings.

Climate XChange Education and Research, Inc. is also registered with the Massachusetts Secretary of State.

Climate XChange Education and Research, Inc. has received its 501(c)(3) approval letter from the US Internal Revenue Service.

Climate XChange Education and Research, Inc. possesses a Certificate of Solicitation, issued by the State of Massachusetts. 

Climate XChange Education and Research, Inc. has obtained the necessary permit for conducting a raffle in the City of Boston, MA.

Climate XChange Education and Research, Inc. has received a 4-star 100% rating from Charity Navigator.

Climate XChange Education and Research, Inc. has received a Gold transparency rating from Guidestar.

You may contact Climate XChange Education and Research, Inc. as follows:

Paola Ferreira Miani

Executive Director

Climate XChange Education and Research, Inc.

One Beacon St., Fl. 15

Boston, MA 02108

(617) 624-0919

info@climate-xchange.org

Raffle Ticket Tax-Deductibility

Raffle tickets are NOT tax-deductible, even when the Raffle is being held by a charitable or non-profit organization. That is because a raffle ticket is regarded as a “thing of value”, i.e., you have a chance to win a prize. It is not treated as a tax-deductible donation. See Internal Revenue Service Publication 526, page 6.

Disclosures Required by Massachusetts Attorney General Regulations 940 CMR 12.00

The simplest way to perform the disclosures required of us by these regulations is to list each requirement of the regulations followed by our disclosure. Each piece of the regulation is quoted here in italics. You may find these regulations for yourself by reading 940 CMR 12.00. These mandated disclosures are listed in the specific section, 940 CMR 12.02: Disclosure.

For convenience, throughout this section we will refer to the 10th Annual Climate XChange EV Raffle as the Raffle.

(1) In any raffle conducted pursuant to M.G.L. c. 271, § 7A, the sponsoring organization must disclose the following information either on the raffle ticket itself or in a written notice given to the purchaser prior to the sale:

We provide our disclosures here, where they may be reviewed prior to purchasing a ticket. We also provide appropriate disclosures on the ticket itself.

(a) a full and fair description of the prize;

The Mini Raffle (the “Mini Raffle”) offers a prize of one fully electric vehicle from any manufacturer. The Mini Raffle has a maximum car value of $45,000 and up to $22,750 for taxes and fees. The total prize value is $67,750. Or the winner may elect the Alternate All-Cash Prize.

The Mini Raffle Prize includes four components:  (1) a payment made by Climate XChange directly to an electric vehicle manufacturer or dealer on behalf of the Winner, to be used for the purchase of a new fully electric vehicle for the Prize Winner; (2) the sales tax and registration fee payments required to purchase the vehicle on behalf of the Winner in MA (or the same amount paid to another state); and (3) backup withholding tax payments made on behalf of the Prize Winner so that the Prize Winner does not have to provide that money. The backup withholding tax payments are specifically (a) a payment made to the United States Internal Revenue Service (IRS) and (b) a payment made to the Commonwealth of Massachusetts (MA) Department of Revenue (DOR).

In particular, as described in IRS Instructions for Forms W-2G and 5754 (01/2021), immediate federal backup withholding is required in the amount of 24% for winnings over $5,000. The Commonwealth of Massachusetts requires 5% withholding for winnings above $600. The Prize Winner must first send this money to Climate XChange, which will in turn forward these amounts to these tax authorities. Then, Climate XChange will issue a payment check to the Prize Winner in the full amount described in the Prize Description. For example, in the Raffle the Mini Raffle Prize has an Alternate All-Cash Prize value of $37,500. Of that amount, $9,000 must be sent to the IRS and another $1,875 must be sent to the DOR.

Selected Tax Payments are Part of the 10th Annual Climate XChange Mini EV Raffle Prizes

The requirement for a DOR backup withholding tax payment is as follows:

1. Climate XChange Education and Research, Inc., is a nonprofit incorporated in Massachusetts with its headquarters located in the Commonwealth.
2. Raffles are a type of wagering. See MA Technical Information Release TIR 13-4: Withholding on Wagering Winnings and MA TIR 15-14: Income Tax, Withholding and Reporting Rules for Certain Gambling Income.
3. Residents of Massachusetts are subject to Massachusetts tax on income from a Massachusetts source; see Massachusetts General Laws (MGL) Title IX Chapter 62:  Taxation of Incomes.
4. A nonresident of Massachusetts is also subject to Massachusetts tax on income from an MA source; see Massachusetts General Laws (MGL) Title IX Chapter 62 Section 5A:  Taxation of income earned by non-residents; regulations; certain military personnel.
5. Withholding is required on wagering income in Massachusetts if it is required under IRS Section 3402; see MA TIR 13-4, section B.
6. Withholding for the Commonwealth of Massachusetts shall apply to winnings of $600 or greater; see MA TIR 13-4, section B.
7. Withholding of wagering income is required under IRS Internal Revenue Code Section 3402.
8. Nonresidents of the Commonwealth of Massachusetts are also subject to Massachusetts income tax on income from a Massachusetts source; see Massachusetts General Laws (MGL) Title IX Chapter 62 Section 5A.
9. Therefore, a Raffle Prize is subject to withholding by the Commonwealth of Massachusetts.
10. Additionally, a Raffle Prize Winner who does not reside in Massachusetts may be required to file an income tax return in the Commonwealth, if the Winner’s gross income exceeds $8,000; see Mass.gov Personal Income Tax for Nonresidents. Note that the Raffle Grand and Second Place Prizes have values in excess of $8,000.

The Commonwealth of Massachusetts withholding rate is 5%; see Mass.gov to learn about gambling and the lottery in Massachusetts.

The IRS federal backup tax withholding payment is described by IRS Instructions for Forms W-2G and 5754 (01/2021).

Furthermore, because Climate XChange pays these withholding taxes on behalf of the Mini Raffle Grand Prize Winner, the payments themselves are treated as income to the Prize Winner. Therefore, Climate XChange “grosses up” each payment to account for the taxes required on the payment itself. Further, from the perspective of the Internal Revenue Service, the payment that CXC makes to the Commonwealth of Massachusetts is itself additional taxable income; while from the perspective of the Commonwealth of Massachusetts, the payment that CXC makes to the Internal Revenue Service is also additional taxable income. CXC “grosses up” both payments until the calculations yield zero additional required dollars.

Mini Raffle Prize Description

Climate XChange recognizes that there are an increasing variety of types and models of electric vehicles on the U.S. market. In the past, we only offered vehicles from companies that sell direct to consumers to guarantee fixed pricing and flexibility of delivery location. Our Raffle Director will work with the Mini Raffle Prize Winner to identify, locate and purchase their desired EV with the following conditions:

1. The vehicle must be fully electric, battery powered, not a hybrid or plug-in hybrid.
2. It must be a new vehicle offered for sale in the United States direct from the manufacturer or by a brand-authorized dealer.
3. Its price) must fit within the Prize Vehicle Payout of $45,000, or the winner must pay any overage; in no case will Climate XChange pay above the Prize Vehicle Payout.
4. It must be readily available for delivery, so that the transaction can take place and payment from Climate XChange can be completed by June 30, 2026. If it is apparent on June 15, 2026 that this deadline cannot be met, the prize will default to the Alternate All-Cash Prize. 

If the winner cannot make a selection in a timely manner, they should order an inventory vehicle for fastest delivery, or opt for the Alternate All-Cash Prize of $37,500.

The Mini Raffle’s Prize consists of (a) a payment of up to US$45,000 called the Prize Vehicle Payout, by Climate XChange directly to a selected brand’s authorized EV dealer on behalf of the Winner, to be used for purchase of one available EV with any options, accessories, and/or fee(s) as will fit within the Prize Vehicle Payout; (b) a payment of the sales tax and registration fee for the Prize Vehicle(s), up to, respectively; (c) a payment of 33.33% of the total prize value to the Internal Revenue Service for the backup tax withholding required for this Prize; and (d) a payment of 5% of the total prize value to the Massachusetts Department of Revenue for the backup withholding tax required for this Prize.

The total expenditure by the Raffle on the Mini Raffle Prize is the sum of the Prize Payout, including sales tax and registration fee payments, plus the two withholding tax payments: up to US$67,750. We call this sum the Total Prize Payout.

The Alternate All-Cash Prize for the Mini Raffle Prize is $37,500.

 

Additional Description for Prize

Any and all additional taxes, fees, assessments or payments of any kind to any organization whatsoever, including but not limited to the IRS, DOR, the Prize Winner’s state or local authorities, beyond the amounts listed in this section are the sole responsibility of the Prize Winner.

The electric vehicle chosen by the Prize Winner may be built to order, i.e., customized; or may be an Inventory Vehicle offered by a manufacturer; or may be a new electric vehicle offered by an authorized dealer for that brand.

Under no circumstance shall CXC pay a manufacturer or dealer more than the maximum Prize Vehicle Payout, state sales taxes, and vehicle registration on behalf of the Prize Winner.

The Raffle allows the Prize Winner to select one electric vehicle which has  a combined total price less than the maximum Prize Vehicle Payout. The difference between the maximum Prize Vehicle Payout and the actual Prize Vehicle Payout shall be retained by CXC. The Raffle will make the withholding payments to the IRS and the DOR based on the actual Prize Vehicle Payout.

The Raffle allows the Prize Winner to select one  electric vehicle which has a combined total price greater than the maximum Prize Vehicle Payout. However, the Raffle will only send the maximum Prize Vehicle Payout amount to the manufacturer or authorized dealer. Any additional money required to purchase the vehicle is the sole responsibility of the Prize Winner. In this case, the Raffle will still make the withholding payments to the IRS and the DOR as described in each Prize Description.

The Prize Vehicle Payout may not be used to buy a privately-sold or second-hand vehicle.

CXC’s Prize payment to the manufacturer or authorized dealer should be completed no later than June 30, 2026 and the Prize Winner should take delivery of the Prize vehicle no later than December 31, 2026. The Prize Winner should note that vehicle delivery dates are the sole responsibility of the manufacturer and/or dealer. Climate XChange has no control over them, so the Prize Winner should plan accordingly. We will however work with the Prize Winner and manufacturer/dealer to accelerate delivery to the extent possible.

It is Climate XChange’s intent that the Prize will be purchased within Climate XChange’s 2026 tax year (7/1/25– 6/30/26) and will be accounted for as a fiscal 2026 transaction. That said, the Mini Raffle Prize Winner is encouraged to initiate selection and configuration of their electric vehicle as soon as 10 business days following the Drawing. CXC will make the required order confirmation deposit to the manufacturer or authorized dealer as soon as the Mini Raffle Prize Winner has concluded configuration or selection and is ready to initiate purchase of the vehicle. CXC will pay the remainder of the Prize Payout to the manufacturer or dealer when they are ready for final payment, in the customary process.

Description of Alternate All-Cash Prize

The Raffle also offers the Mini Raffle Prize Winner the option of selecting an Alternate All-Cash Prize. Amounts are listed in the Prize Description, above. In this case, the Mini Raffle Prize Winner may choose to receive only money as a prize, with no electric vehicle component whatsoever. Should the Mini Raffle Prize Winner choose this option, the Mini Raffle Prize Winner must be prepared to pay all backup withholding taxes required by law before receiving the money prize.

In particular, as described in IRS Instructions for Forms W-2G and 5754 (01/2021), immediate backup withholding is required in the amount of 24%. The Commonwealth of Massachusetts requires 5%. The Prize Winner must first send this money to Climate XChange, which will in turn forward these amounts to these tax authorities. Then, Climate XChange will issue a payment check to the Mini Raffle Winner in the full amount described in the Prize Description. 

The Prize Winner may instead choose to allow Climate XChange to perform withholding from the Prize itself, in which case Climate XChange will send the winner a payment check of the net proceeds of the Prize after accounting for the withholding deductions.

Incentives

The Mini Raffle Prize vehicle may be eligible for additional benefits, depending on the winner’s location and income, and the vehicle’s price and U.S. manufacturing content. In some locations, the purchaser of an electric vehicle is eligible for an incentive from their state, local government or electric utility. In some states, Electric Vehicle incentives may include reimbursement for charging infrastructure or non-cash incentives such as access to HOV lanes.

All Other Payouts Disclaimed

The Mini Prize Winner may also be responsible for any and all other expenses related to the Prize, including but not limited to, additional taxes subject to the individual’s particular circumstances, local taxes, title and registration fees, attorney and tax preparation fees, and so on.

(b) the appraised value of the prize;

The Prize Vehicle Payout to a manufacturer or authorized dealer is up to US $45,000. CXC will make state sales tax and registration fee payments up to $2,813 and $300, respectively, as well as withholding tax payments to the Internal Revenue Service of 33% of the total prize value and to the Commonwealth of Massachusetts Department of Revenue of 5% of the total prize value. The total of these items is US$67,750. The Alternate All-Cash Prize is US$37,500. No further analysis or appraisal is required.

(c) date or dates when the prize will be available for inspection; 

The Mini Raffle Prize consists of a payment to an electric vehicle manufacturer or selected authorized dealer (including state sales tax and registration fee payments), a federal withholding tax payment and a Massachusetts withholding tax payment. The vehicle the Prize Winner might select from a manufacturer or authorized dealer may be (a) built to order, or (b) from existing manufacturer or dealer inventory. A potential or actual ticket purchaser may consider and learn about electric vehicles by visiting manufacturer and dealer websites, and visiting authorized dealers.

(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.

Prize availability shall be as follows:

The Mini Raffle Prize, as described above and elsewhere, will be available once the minimum number of tickets have been sold.

No refunds are planned due to failure to meet ticket sale minimums, as the minimum number of tickets to be sold is 1. If the entire raffle is canceled, CXC will issue refunds to all ticket holders.

(e) the maximum number of tickets to be sold if any;

The maximum number of tickets that will be sold is 3,500.

(f) the fact that the value of the prize will be treated as ordinary income to the winner for federal and state income tax purposes and that the winner may be required to pre-pay a portion of the tax liability prior to receiving the prize;

The Prize in this raffle will be treated as ordinary income for federal and state income tax purposes.

CXC will prepay the federal and Massachusetts withholding tax liability for the Mini Raffle Prize to the extent as described above and elsewhere. CXC will not pay any portion of any additional taxes, fees or costs for any Prize beyond what has explicitly been provided elsewhere in the Raffle Rules.

Mini Raffle Prize offers an Alternate All-Cash Prize, as described above and elsewhere. An Alternate All-Cash Prize may be subject to withholding as described above and elsewhere. CXC does not add any tax payments to the Alternate All-Cash Prize.

(g) the fact that the Internal Revenue Service takes the position that no portion of the ticket price will qualify as a charitable contribution for federal income tax purposes;

Sad but true. Even though the Raffle ticket is being sold by Climate XChange Education and Research, Inc., a Massachusetts non-profit that has 501(c)(3) tax-exempt status, the purchase of a raffle ticket is regarded as acquiring a “thing of value.” The Raffle ticket gives the purchaser a chance to win a prize. Therefore, the purchase of a ticket is not a charitable contribution for federal income tax purposes.

(h) the drawing date for the Mini Raffle;

The Raffle drawing will be December 12, 2025. The drawing will be held at One Beacon Street, Fl. 15, Boston, MA 02108. 

(i) the estimated percentage of the ticket price which will be used for charitable purposes in the event that only the minimum number of tickets are sold;

The Mini Raffle itself is used as part of CXC’s educational mission. The Raffle raises awareness of (1) Climate change; (2) Climate XChange’s climate policy efforts across the country, including the State Climate Policy Network and State Climate Policy Dashboard; and (3) Climate XChange Education and Research, Inc. The Raffle has an additional desirable benefit of raising awareness of zero emission automobiles which demonstrate the practical replacement of traditional internal combustion engine vehicles.

In the event the Mini Raffle sells only the minimum number of tickets (1), 100% of the proceeds will be used to cover Mini Raffle expenses and none will be available to be used for charitable purposes.

In the event the Mini Raffle sells at least (approximately) 675 tickets, CXC will have net proceeds greater than the sum of the Mini Raffle’s Expenses plus the Prizes. From that point onwards, CXC’s net proceeds will be used to fund its charitable and educational purposes, which are focused on research and education for the enactment of climate policy legislation in all 50 states. 100% of the net will go to this purpose.

At 3,500 tickets, CXC will net an estimated 81% of the gross proceeds of the Mini Raffle, all of which will be used to fund CXC’s mission. (Note that by far the largest portion of the Mini Raffle expenses is the Prize Pool.) This percentage is lower than CXC would otherwise prefer, which is the result of (a) implementing a generous Prize and (b) not having a donated vehicle for the Mini Raffle Prize. However, CXC views the Mini Raffle as simultaneously providing education about Climate XChange and its climate policy efforts while fundraising. Thus, CXC views most raffle expenditures — such as on advertising — as expenditures that further its educational mission as well as its fundraising.

(j) the exact nature of the charitable purpose for which the proceeds will be used;

Climate XChange Education and Research, Inc. advances state climate policy to achieve a rapid and equitable transition towards a zero-emissions economy. The Mini Raffle’s net proceeds will be used for 501(c)(3)-compliant activities in support of this mission.

(k) any other facts the disclosure of which may have influenced the purchaser or prospective purchaser not to enter into the transaction.

The Mini Raffle has a high proportion of funds spent on the Prize. We believe the Prize attracts attention to the issue of climate change and to CXC.  An EV is particularly suited in and of itself to the organization’s mission. Therefore, CXC accepts a lower proportion of net proceeds from the Mini Raffle in return for higher visibility and a prize that befits the ultimate goal of lowering greenhouse gas emissions.

(2) Each ticket must bear a clear and conspicuous warning to the effect that depositing the ticket or any other material in connection with the raffle in the federal mails is a violation of federal law and may lead to criminal penalties.

This is the warning on the Raffle ticket:

Mailing a raffle ticket is illegal and may result in criminal penalties.