SF937

Purpose

• The bill changes how charitable gambling profits are taxed in Minnesota. It creates a tax on the “combined net receipts” from charitable gambling, lowers the tax rates, and adjusts the bracket levels used to calculate the tax. It also updates related definitions and exemptions.

Main Provisions

• Combined net receipts defined: For each fiscal year, combined net receipts are the organization’s gross receipts from lawful gambling minus:
  • gross receipts directly from paper bingo raffles and paddlewheels (as defined in the law),
  • and the net prizes actually paid (except for prizes actually paid for paper bingo raffles and paddlewheels).
• Tax on combined net receipts: The bill imposes a four-bracket tax schedule on the combined net receipts, with rates progressing as the amount increases.
  • Up to $87,500: 8.7% tax.
  • Over $87,500 up to $122,500: a base amount plus 15% of the amount over $87,500.
  • Over $122,500 up to $157,500: a base amount plus 22% of the amount over $122,500.
  • Over $157,500: a base amount plus 30% of the amount over $157,500.
• Exemption for sportsthemed tipboards: Gross receipts from sportsthemed tipboards are excluded from taxation under this section.
  • A sportsthemed tipboard is defined as a tipboard where winning numbers are determined by the outcome of a professional sporting event.

Significant Changes to Existing Law

• New tax framework: Replaces or modifies the existing combined net receipts tax on charitable gambling with a revised bracket structure and lower rates.
• Specific accounting rules: Clarifies what counts toward combined net receipts by detailing what to subtract (certain bingo raffle and paddlewheel receipts and prizes paid).
• New exemptions: Adds an exemption for sportsthemed tipboards, meaning their receipts aren’t taxed under this section.

Note on Terms from the Bill (key concepts)

• combined net receipts
• charitable gambling
• lawful gambling
• paper bingo raffles
• paddlewheels
• net prizes actually paid
• sportsthemed tipboard
• tipboard
• professional sporting event
• Minnesota Statutes 2024 section 297E.02 subdivision 6

Relevant Terms - combined net receipts - charitable gambling - lawful gambling - sportsthemed tipboard - tipboard - paper bingo raffles - paddlewheels - net prizes actually paid - tax brackets - tax rates - Minnesota Statutes 297E.02 subdivision 6