230-07-055 - Prorating expenses when gambling funds are not kept separate

230-07-055. Prorating expenses when gambling funds are not kept separate

When charitable or nonprofit organizations do not keep gambling income separate from all other income of the organization, the amount of net gambling income required to provide functional expenses in the fiscal year under review must be the pro rata portion of net gambling income compared to the total net revenue from all sources. (Example: In the chart below, Organization X has revenue of five thousand dollars. They must calculate the pro rata reduction by adjusting the total by the percentages of support services, program services, and functional expenses.)

Revenue

Fees paid by public

$5,000

  

Calculation:

Expenses

Unadjusted Amount

% of Total

Pro Rata Reduction Fees Paid by Public ($5,000)

% of Total

Adjusted Amount

Support Service Expense

$35,000

  

32%

  

($1,591)

  

32%

  

$33,409

  

Program Service Expense

$75,000

  

68%

  

($3,409)

  

68%

  

$71,591

  

Functional Expenses

$110,000

  

100%

  

($5,000)

  

100%

  

$105,000

  

Statutory Authority: RCW 9.46.070. 07-10-032 (Order 609), § 230-07-055, filed 4/24/07, effective 1/1/08.

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