Non-profit Reporting Requirements
Chief Skyler Genest
Office of Compliance and Enforcement
FOR IMMEDIATE RELEASE:
VT Liquor Division Defines Non-profit Reporting Requirements
MONTPELIER, VT – July 15, 2019
In 2015 the Vermont legislature directed the Department of Liquor Control (DLC) to develop and implement a reporting mechanism to track the manufacture and distribution of break open tickets in the State. This requested reporting feature addressed the fact that there had been no pre-existing system to quantify the number of break open tickets that were being sold in Vermont. The DLC, with the assistance of the Vermont Information Consortium, created and implemented a reporting system at that time.
During the 2018 legislative session the Department of Liquor and Lottery was tasked with creating a reporting format for non-profits to provide the State with documentation attesting to the funding levels to non-profits generated through the sale of break open tickets. This request was compelled by the perception that this essentially unregulated gambling activity was resulting in a significant amount of mis-appropriated funding resulting from these sales. In other words, the perception was that in many cases the non-profits were only receiving a fraction of the proceeds being generated by this break open ticket sales. From the viewpoint of the legislature the break open ticket activity required greater levels of oversight to minimize the amount of fraudulent misappropriation of funds.
The build out of the reporting mechanism for non-profit reporting has been concluded and the feature is now operational. The DLC now has a reporting form on its website to provide the necessary tool for the reporting. The following is a link to the form; https://secure.vermont.gov/DLC/botix.
Effective immediately, non-profit organizations (except for clubs*) that are involved in generating funding through the sales of break open tickets are required to submit quarterly reports to the DLC to document how many tickets the non-profit purchased from a licensed distributor, the serial numbers of those tickets, and the net proceeds received by the organization through the sale of these tickets. The goal of this quarterly reporting process is to ensure that qualified non-profits receiving the proceeds of these sales. Detailed video instructions can be found here https://www.youtube.com/watch?v=D6Bzw9Jq7rw&feature=youtu.be
Failure to file quarterly reports will result in immediate suspension of the non-profit's privilege to purchase break open tickets from a license distributor. The DLC will notify all licensed distributors of non-complying non-profits and they will be forbidden to sell additional break open tickets to the non-profit until the reporting has been brought up to date. Selling break open tickets by a non-qualifying non-profit or purchasing them from anyone other than a licensed distributor is illegal under statute and will fully be prosecuted.
Use the link of the statutes included in Title 7 of the Vermont Statutes Annotated for your review and familiarization, https://legislature.vermont.gov/Documents/2020/Docs/ACTS/ACT073/ACT073%20As%20Enacted.pdf
*Clubs are defined by Title 7 VSA § 2(7) as an unincorporated association or a corporation authorized to do business in this State that has been in existence for at least two consecutive years prior to the date of application for a license under this title and owns, hires, or leases a building or space in a building that is suitable and adequate for the reasonable and comfortable use and accommodation of its members and their guests and contains suitable and adequate kitchen and dining room space and equipment implements and facilities. A bona fide unincorporated association or corporation whose officers and members consist solely of veterans of the U.S. Armed Forces, or a subordinate lodge or local chapter of any national fraternal order, that fulfills all requirements of section 229 of this title except that it has not been in existence for at least two years shall come within the terms of this definition six months after the completion of its organization.
About the Vermont Department of Liquor and Lottery, Division of Liquor Control
The mission of the Vermont Department of Liquor and Lottery, Division of Liquor Control is to serve the public by encouraging responsible consumption and preventing the misuse of beverage alcohol and tobacco through the controlled distribution, education and licensing of sellers, as well as the wise use of enforcement. The Department works to provide excellent customer service in conjunction with our Agency Partners to operate efficient, convenient, and profitable liquor stores. All profits from the Department’s operations are contributed to the State of Vermont’s General Fund with over $300,000,000 being contributed since 2000.