Section 316-35-214 - BINGO EXPENSES214.01 A licensed organization may spend no more than 14 percent of its bingo gross receipts for reasonable and necessary expenses relating to the conduct of bingo. The following bingo expenses are exempt from the 14 percent expense limitation: 214.01A Bingo license fees paid to the Department;214.01B Bingo taxes paid to the Department;214.01C Bingo prizes and promotional prizes awarded at the bingo occasions;214.01D The cost of purchasing, renting, or leasing bingo equipment including the purchase of disposable paper bingo cards; and214.01E The cost of the rental or lease of a premises for the conduct of bingo and the purchase, rental, or lease of personal property necessary for the conduct of bingo such as tables, chairs, video monitors, public address systems, etc.214.01F All other expenses are subject to the 14 percent expense limitation.214.02 Bingo supplies such as daubers, chips, tape, and glue sticks must be purchased by a check written on the licensed organization's bingo checking account. The organization's cost of these items are subject to the following restrictions: 214.02A If a licensed organization awards a bingo supply as a prize for a bingo game, the organization's cost of the bingo supplies are not subject to the 14 percent expense limitation;214.02B If a licensed organization awards bingo supplies as promotional game prizes, the organization's cost of the supplies is considered an advertising/promotional game expense that is subject to the expense limitation. For purposes of complying with the promotional game prize limitations contained in Regulation 35 - 212, the supplies must be valued at their fair market value;214.02C If a licensed organization provides bingo supplies at no charge to players, the organization's cost of the supplies is an advertising/promotional expense that is subject to the expense limitation;214.02D If a licensed organization resells the bingo supplies at a price less than its cost, the difference between the organization's cost and the proceeds received through the resale of such items is considered an advertising/promotional expense that is subject to the expense limitation;214.02E If a licensed organization resells the bingo supplies and recovers its cost or makes a profit from the sales, the organization's cost of the supplies is not subject to the expense limitation.214.02F All revenues received by a licensed organization from the sale of bingo supplies must be deposited in the organization's bingo checking account; however, the revenues shall not be considered part of the organization's bingo gross receipts for purposes of determining the bingo tax due.214.03 For purposes of determining a licensed organization's compliance with the statutory limitation on expenses, the 14 percent limitation is calculated using the organization's bingo gross receipts on an annual basis, based upon the time period which coincides with the annual reporting requirements contained in Regulation 35 - 217.214.04 A licensed organization which is also licensed to sell pickle cards at its bingo occasions may transfer a portion of its pickle card proceeds to its bingo checking account to pay bingo expenses. The portion of the pickle card proceeds which may be transferred to pay bingo expenses is calculated using the bingo gross receipts and pickle card gross proceeds from the annual reporting period as prescribed in Regulation 35 - 217, based upon the percent that the gross proceeds from the sale of pickle cards at the bingo occasions represents to the total of bingo gross receipts and pickle card gross proceeds at the bingo occasions for the same period. For example: If annual bingo gross receipts are: $ 500,000; and annual pickle card gross proceeds at bingo are: $ 750,000; Then total annual bingo/pickle activity is: $1,250,000.
In this example, the annual pickle card gross proceeds at bingo represent 60 percent of the total of the bingo and pickle card activity at the bingo occasions ($750,000 divided by $1,250,000 equals 60 percent). Therefore, up to 60 percent of the bingo expenses, excluding prizes and taxes, may be transferred from the licensed organization's pickle card checking account to its bingo checking account to pay bingo expenses. If the annual bingo expenses were $120,000, 60 percent of $120,000 would be $72,000. Thus the licensed organization may transfer up to $72,000 from its pickle card checking account to its bingo checking account to pay the bingo expenses.
214.05 A licensed organization that uses pickle card proceeds to pay bingo expenses is required to maintain records of pickle card sales at its bingo occasions as provided in Regulation 35 - 216, and to report such sales as provided in Regulation 35 - 217.214.06 Any amount which a licensed organization transfers from the pickle card checking account to the bingo checking account which is not used for the payment of bingo expenses must be used by the organization for a lawful purpose.214.07 Related organizations, as defined in Regulation 35 - 201.03A, which are corsponsoring a bingo occasion where only one of the organizations is licensed to sell pickle cards at the bingo occasions, may also allocate bingo expenses as provided in Regulation 35 - 214.04.214.08 All bingo expenses must be paid by checks written on the licensed organization's bingo checking account. The checks must be made payable directly to the parties with whom the expenses were incurred. No bingo expenses may be paid directly from the licensed organization's pickle card checking account. Any proceeds from the sale of pickle cards at the bingo occasions which are used to pay bingo expenses must be transferred to the bingo checking account in order to pay the bingo expenses.316 Neb. Admin. Code, 35, § 214
Sections 9 - 202, 9 - 210, 9 - 226, 9 - 241.10, 9 - 255.02, 9 - 255.03, 9 - 255.05, 9 - 302, 9 - 308, 9 - 312, and 9 - 347, R.R.S. 2007, and section 9 - 255.04, R.S. Supp., 2009. November 6, 2010.