Is it allowed to mention contest on app description?

[Joachim]

I want to arrange a contest where the first player to reach level 40 in my game wins an iPad2.

Is it allowed according to apple guidelines to mention this contest on my app's description?

[Sinecure Industries]

Sure, so long as you don't require anything weird to enter

[lgehrig1]

Section 20. In general, though, yes, you can run a contest or sweepstake.

I'd suggest you run your contest rules past legal first. There are considerations that vary state-to-state, considerations at the federal level (like you probably need to send the winner a W2-G or something), and considerations internationally (Canada has some strange rules - and they aren't the only ones). No point talking to humorless taxmen unnecessarily.

[Joachim]

I didn't even think of the legal aspect. Can I put a note in the contest rule that say the winner is responsible for filing taxes on the prize?

[lgehrig1]

Originally Posted by Joachim

I didn't even think of the legal aspect. Can I put a note in the contest rule that say the winner is responsible for filing taxes on the prize?

Winners usually are responsible for ponying up the taxes. That does not, however, remove your obligation to report the winner to the US Govt (other nations may vary, but probably not) if the total winnings is over a threshold value. I'm gonna guess the cheapest iPad 2 is over that threshold, but IANAL.

On the plus side, contests really are the "kinds of things done everyday". A certified public accountant, a civil lawyer, a business tax preparer - any or all these folks should be able to ensure you're properly dotting the i's and crossing the t's. Pick up a phone book and call around!

[Appency]

Just be careful when performing contests and sweepstakes - there are rather specific laws when it comes to running them. That being said - most contests and sweepstakes by small app developers run under the radar, but all it takes is one overzealous entrant with a lawyer to take down your whole company if you do it wrong.

[Joachim]

Okay, I'm going to limit the contest to just the US. I've read this article: HowStuffWorks "Why are some national contests invalid in certain states and other countries?"

Here it states that Rhode Island is the only state that require me to file a legal statement if the reward is in excess of 500$. However the cheapest iPad2 is only 499$ so I believe I'm in the clear on that point.

Also read instructions #2 on this article: How Do I Report Contest Winnings on My Taxes? | eHow.com

It says the payee (me) only need to send a 1099-MISC form if the winnings is in excess of 600$, and again the iPad2 is only 499$, so I'm in the clear on this point aswell.

With this in mind I believe I am below all of the thresholds, do I need to file or report anything at all?

[Appency]

Other states require "bonding" if your prize is over the $500 limit. I believe that includes NY and FL if not more.

Originally Posted by Joachim

Okay, I'm going to limit the contest to just the US. I've read this article: HowStuffWorks "Why are some national contests invalid in certain states and other countries?"

Here it states that Rhode Island is the only state that require me to file a legal statement if the reward is in excess of 500$. However the cheapest iPad2 is only 499$ so I believe I'm in the clear on that point.

Also read instructions #2 on this article: How Do I Report Contest Winnings on My Taxes? | eHow.com

It says the payee (me) only need to send a 1099-MISC form if the winnings is in excess of 600$, and again the iPad2 is only 499$, so I'm in the clear on this point aswell.

With this in mind I believe I am below all of the thresholds, do I need to file or report anything at all?

[Joachim]

Okay, but the iPad 2 is only 499$ so it shouldn't be an issue.