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SF2947 (Legislative Session 94 (2025-2026))

Charitable gambling combined net receipts tax rates and brackets modifications

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to amend the tax rates and brackets related to charitable gambling activities in Minnesota. It aims to modify how the combined net receipts from organizations conducting lawful gambling are taxed.

Main Provisions

  • The bill adjusts the tax rates and income brackets for the combined net receipts tax on charitable gambling organizations.
  • Combined net receipts refer to an organization's total earnings from lawful gambling, minus receipts from paper bingo, raffles, and paddlewheels, and the net prizes paid, with exceptions for certain games.
  • The tax schedules are updated with new brackets and reduced rates:
    • For receipts not over $100,000, the rate decreases from eight to seven percent.
    • For amounts over $100,000 but not over $200,000, the tax is $7,000 plus a decrease from 17% to 15% on amounts over $100,000.
    • For amounts over $200,000 but not over $300,000, the tax is $22,000, reducing from previous tiers, plus 20% from a prior rate of 25% on additional receipts.
    • For amounts over $300,000, the tax is $42,000 plus a new reduced rate of 25% on the surplus.
  • The bill grants tax exemptions for gross receipts derived from sports-themed tipboards, where winnings depend on the outcome of professional sporting events.

Significant Changes

  • The bill reduces the percentage of tax on all existing tax brackets, effectively lowering the amount of tax charitable gambling organizations in Minnesota need to pay.
  • It increases the thresholds for tax brackets, meaning organizations could now pay less tax than before if their earnings fall within the adjusted brackets.
  • Exempts gross receipts from sports-themed tipboards from the combined net receipts tax.

Relevant Terms

charitable gambling, combined net receipts tax, tax rates, tax brackets, paper bingo, raffles, paddlewheels, sports-themed tipboards, gross receipts, professional sporting event.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 23, 2025SenateFloorActionIntroduction and first reading
March 23, 2025SenateFloorActionIntroduction and first reading
March 23, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "No new elements added."
      ],
      "removed": [],
      "summary": "This bill amends the tax rates and brackets for combined net receipts in charitable gambling under section 297E.02.",
      "modified": [
        "Reduces tax percentages across various income brackets.",
        "Increases thresholds for tax brackets."
      ]
    },
    "citation": "297E.02"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines gross receipts for charitable gambling purposes under section 297E.01.",
      "modified": []
    },
    "citation": "297E.01"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines sportsthemed tipboards for tax exemption purposes under section 349.12.",
      "modified": []
    },
    "citation": "349.12"
  }
]

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