{"data":{"id":"us-ky/krs-238.536","jurisdiction":"us-ky","citation":"KRS 238.536","heading":"Amount and use of net receipts retained by charitable organization --","body":"Penalties imposed upon charitable organization failing to retain certain\npercentage of adjusted gross receipts -- Submission of financial plan.\n(1) The net receip ts from charitable gaming retained by a charitable organization for\nthe previous calendar year, provided the charitable organization was licensed at the\nstart of the calendar year, shall be equal to or greater than forty percent (40%) of the\nadjusted gross  receipts of the charitable organization for the same period. A\nlicensed charitable organization shall expend net receipts exclusively for purposes\nconsistent with the charitable, religious, educational, literary, civic, fraternal, or\npatriotic functions o r objectives for which the licensed charitable organization\nreceived and maintains federal tax -exempt status, or consistent with its status as a\nlocal school district, a common school, an institution of higher education, or a state\ncollege or university. N o net receipts shall inure to the benefits or financial gain of\nan individual. Any charitable organization which permits its license to expire or\notherwise lapse shall still be subject to the retention requirement. The following\nfees and taxes shall be exc luded from the calculation of the percentage retained,\nretroactive to calculations made for calendar year 1999:\n(a) All fees paid to the office during the calendar year;\n(b) Any sales or use taxes levied under KRS Chapter 139 on charitable gaming\nsupplies and equipment that are paid by a licensed charitable organization\nduring the calendar year; and\n(c) Any federal excise taxes levied under 26 U.S.C. secs. 4401 and 4411 and paid\nby a licensed charitable organization during the calendar year.\n(2) The following actions shall be imposed on a licensed charitable organization that\nfails to retain the requisite percentage of adjusted gross receipts required in\nsubsection (1) of this section. The calculation of percentages shall be rounded to the\nnearest tenth of a percent:\n(a) If the percentage retained is between thirty -five percent (35%) and thirty -nine\nand nine-tenths percent (39.9%), the licensee shall be placed on probation for\na period of six (6) months and shall be required to submit to the office an\nacceptable financial plan detailing corrective actions to be taken by the\nlicensee to achieve the forty percent (40%) threshold by the end of the\ncalendar year in which the probation is imposed;\n(b) If the percentage retained is between thirty percent (30%) and t hirty-four and\nnine-tenths percent (34.9%), the licensee shall be placed on probation for a\nperiod of one (1) year and shall be required to submit to the office a financial\nplan as described in paragraph (a) of this subsection. The office shall conduct\na six (6) month review of the charitable gaming activities of a licensee placed\non probation pursuant to this subsection to evaluate the licensee's compliance\nwith its financial plan;\n(c) If the percentage retained falls between twenty -nine and nine -tenths pe rcent\n(29.9%) and twenty -five percent (25%), the licensee shall be placed on\nprobation for a period of one (1) year, shall submit to the office an acceptable\nfinancial plan as described in paragraph (a) of this subsection, and shall\nparticipate in a mandatory training program designed by the office. The office\nshall conduct a quarterly review of the licensee's activities to evaluate the\nlicensee's compliance with its financial plan and its progress toward\nachievement of the forty percent (40%) threshold dur ing the probationary\nperiod;\n(d) If the percentage falls below twenty -five percent (25%) or if the licensee fails\nto attain the forty percent (40%) threshold for a second consecutive calendar\nyear, the licensee shall have its license suspended for a period  of one (1) year;\nand\n(e) For purposes of paragraphs (a), (b), (c), and (d) of this subsection, periods of\nprobation and suspension shall commence, unless appealed, from the date the\noffice notifies the licensee of its failure to satisfy the retention requirement for\nthe previous calendar year. If a probation or suspension is appealed, the action\nshall commence on the date final adjudication of the matter is complete.\n(3) Any licensee that has had its license suspended under the provisions of subsection\n(2)(d) of this section shall be required to submit to the office an acceptable financial\nplan as described in subsection (2)(a) of this section, upon applying for\nreinstatement of its license. As a condition of reinstatement, the licensee shall be on\nprobation for a period of one (1) year and shall be subject to quarterly review by the\noffice in accordance with subsection (2)(c) of this section.","path":["KRS Chapter 238"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=56641","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:52:51Z","sha256":"33706714edb14961be72dfdd901306ba4f71af9c163b7fe5613809897f0b5da2","source_id":"us-ky","stale":false,"prev":"us-ky/krs-238.535","next":"us-ky/krs-238.538"},"notice":"GroundRules: Original legal text. Not legal advice."}