I received a direct message from a potential contest winner concerned the sponsor was asking her to pay the sales taxes to claim her prize. It wasn’t so much the sales tax per se, but the amount. It was $15,000.
What did she potentially win? An RV worth over $100,000!
My first thought was, “This is a scam.“, but I asked her for further details. After a bit of online research I discovered, not only was the sweepstakes legitimate, but there was clearly a clause in the official rules stating what the winner was responsible for. I also wasn’t the only contest with a clause like that.
Winner of recreational vehicle is responsible for sales tax, title, transfer, license, registration, dealer preparation costs, auto insurance and other fees associated with prizes. (FULL RULES)
My advice to her was to see what the resale market for new RVs was. If it was good, she could pay the sales tax, (borrow from savings or friends) she could claim the prize, sell it below market value, (repay the loan), pay the income tax and still make a profit.
In the end, I am not sure what she decided to do. I am pretty sure she turned down the prize as she couldn’t come up with the sales tax, plus income tax.
Again, this is why my #1 tip is to always read the rules. Not just looking for eligibility, closing date and number of entries allowed. There very well may be additional clauses in the rules you may not wish to adhere to. Save the sponsor time and yourself heartache, from having to turn down a win, by FULLY reading the rules.
What would you have done?