Do You Pay Taxes on Giveaway Winnings?
Sweepstakes prizes are taxable income in the United States. That is true of cash, gift cards and physical goods alike, and it surprises people most when the prize is an object rather than money. This is general information rather than tax advice.
The $600 threshold
A company issues a Form 1099-MISC when a prize is valued at $600 or more, and reports it to the IRS. Below that figure no form is issued, but the income is still reportable by you.
Prizes that are not cash
A physical prize is taxed on its fair market value, which the company running it declares. This is why winning a car creates a real bill: tax is owed on the value even though no cash arrived to pay it with.
Refusing a prize
You may decline a prize, and declining before accepting it means no income to report. This is occasionally the rational choice on a high-value physical prize you would have to sell anyway.