Dave started an interesting discussion thread on my blog post; Taxes on Winnings.
I recently won a trip contest in Canada. I only learned after I have to pay the taxes, which are pretty hefty. Over $600. I am thinking of declining the prize.
I replied: You have to always read the full official rules. Many Canadian trip contests expect you to pay the travel taxes as the sponsor is only donating the vacation, not paying any of the government fees. (NOTE: This is different from the American income tax on prizes. These taxes are HST, airport taxes, etc.) If you had to buy the trip you would have had to pay for the trip and all the same taxes. Remember ALL travel wins are cheap vacations, not free vacations, as you would also need spending money for sightseeing, souvenirs, many times meals, tips, excursions, etc. I would take it!!
Yes I just got confirmation that my Canadian vacation trip win with Canjet does not include taxes and they will be about $600 to $700. I will still take the trip because it’s a cheap trip. I was hoping the tax would be much less of course, but oh well.
I thought this was an important topic to blog about as many people expect everything to be free when they win a prize. That is not the case. It’s a matter of knowing how to read the Official Rules to know what the sponsor is responsible for and what you are responsible for.
I couldn’t get a cached version of the Canjet contest rules as they were embedded in the original contest page. However, this clause is in almost every set of vacation contest rules I read:
Ground transfers to and from the winner and/or travelling companion’s residence and designated airport and all other expenses not specified herein or listed within the travel brochure, including but not limited to telephone or fax, gratuities, optional tours, taxes and fees, insurance, medical travel documents, personal expenses, and any other costs not specifically stated herein as being included, are the sole responsibility of the winner and his/her travelling companion.
We have had to pay the taxes on several of the trips we have won. Sometimes, even if the clause is in the rules, the sponsor will not request payment of any kind. I always let them ask me and if they do I happily pay it.
Dave also commented: I forgot to ask if I could take the cash value of the prize but I suspect the answer is no in any case.
You are right Dave. The answer would have been no, because this clause is also in most rules.
No extensions will be permitted and the Prize cannot be exchanged, transferred or substituted for cash except that travel company/sponsor reserves the right to offer a comparable product in the event of a vacation package cancellation, Act of God or other unforeseen circumstances. The Prize winners shall not be entitled to receive, in cash, certificate or otherwise, the balance of any amount representing the difference of the Prize retail value and actual cost. No frequent flyer miles will be available.
How I read rules is: I skim them when entering and read in full when I win. (NOTE: Skimming the rules can sometimes be a problem. Once I ended up in sumo wrestling suit!)
Have you ever been surprised or disappointed by something that was in the official rules?
Carolyn Wilman (aka @ContestQueen) is a Digital Marketing Strategist and Sweepstakes Specialist. Carolyn teaches others how to Find, Organize, Enter and Win giveaways along with working with companies to create, and viral market, winning promotions maximizing ROI and loyal customers.