WAC 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 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