Party Finance Laws


Any business that wishes to be recognized as a political party should always remember certain restrictions. First, state party committees cannot accept or contribute any funds from outside the boundaries and restrictions of federal law. Second, there are certain federal activities by local, state and district parties, also known as FEA, which are uniquely regulated. These activities include; fund raising for federal candidates and the party’s political action committee (PAC), contributions to the party from the state legislature and local authorities, contributions by corporations, associations, unions, partnerships, limited liability companies and banks and loans to the party by banks, insurance companies and brokerage firms.

Every state has different restrictions with regard to the use of funds by each political party. Each state has its own set of election laws and election rules, as well as different party filing procedures and requirements. Therefore, a candidate should only accept donations from those registered members of a state party if he or she is a member of that state party.

The use of funds by a candidate is also restricted by the use of the state party’s election laws. In most states, state parties are allowed to spend only so much on advertisements in their respective media and for the candidate itself. For example, a candidate in one state may be allowed to spend five dollars for each radio and television advertisement during the campaign cycle, whereas in another state, a candidate may use ten-thousand dollar worth of advertisements in an effort to gain favor with voters.

Even after the candidate becomes a member of a state party, the party is not allowed to spend more than the candidate’s personal expenses for the party’s political activities. Thus, a candidate who is a member of a national party may still accept contributions and take part in party activities, but may only spend those funds that are permitted to the national committee.

A national party is a separate entity from the state party, although both are usually associated with a national party in one way or another. State and national parties often share funds with their local parties through joint fundraising plans. When these funds are used to support different political candidates, the candidates are required to pay a small percentage to the party for each contribution.

All parties have different rules and regulations about the use of funds for the running of their parties, including special restrictions in regard to parties’ elections and general elections. When parties are holding elections, the candidates and party have different obligations with regard to their contributions and expenditure. Parties are required to pay for various costs associated with their state elections, such as office space, postage and printing. While state laws provide special assistance to state and local parties, there are some additional issues regarding party elections.

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