2003 Minnesota Statutes

     297E.02 Tax imposed. 

    Subdivision 1.    Imposition.  A tax is imposed on all 
 lawful gambling other than (1) pull-tab deals or games; (2) 
 tipboard deals or games; and (3) items listed in section 
 297E.01, subdivision 8, clauses (4) and (5), at the rate of 8.5 
 percent on the gross receipts as defined in section 297E.01, 
 subdivision 8, less prizes actually paid.  The tax imposed by 
 this subdivision is in lieu of the tax imposed by section 
 297A.62 and all local taxes and license fees except a fee 
 authorized under section 349.16, subdivision 8, or a tax 
 authorized under subdivision 5.  

    The tax imposed under this subdivision is payable by the 
 organization or party conducting, directly or indirectly, the 
 gambling.  

    Subd. 2.    Tax-exempt gambling.  An organization's 
 receipts from lawful gambling that are excluded or exempt from 
 licensing under section 349.166, are not subject to the tax 
 imposed by this section or section 297A.62.  This exclusion from 
 tax is only valid if at the time of the event giving rise to the 
 tax the organization either has an exclusion under section 
 349.166, subdivision 1, or has applied for and received a valid 
 exemption from the lawful gambling control board.  

    Subd. 2a.    Tax credit for certain raffles.  An 
 organization may claim a credit equal to the tax reported under 
 subdivision 1 resulting from a raffle the net proceeds of which 
 have been used exclusively for the purposes of section 349.12, 
 subdivision 25, paragraph (a), clause (2).  The organization 
 claiming the credit must do so on the monthly gambling tax 
 return on which the raffle activity is reported under 
 subdivision 1. 

    Subd. 3.    Collection; disposition.  Taxes imposed by 
 this section other than in subdivision 4 are due and payable to 
 the commissioner when the gambling tax return is required to be 
 filed.  Taxes imposed by subdivision 4 are due and payable to 
 the commissioner on or before the last business day of the month 
 following the month in which the taxable sale was made.  Returns 
 covering the taxes imposed under this section must be filed with 
 the commissioner on or before the 20th day of the month 
 following the close of the previous calendar month.  The 
 commissioner may require that the returns be filed via magnetic 
 media or electronic data transfer.  The proceeds, along with the 
 revenue received from all license fees and other fees under 
 sections 349.11 to 349.191, 349.211, and 349.213, must be paid 
 to the commissioner of finance for deposit in the general fund. 

    Subd. 4.    Pull-tab and tipboard tax.  (a) A tax is 
 imposed on the sale of each deal of pull-tabs and tipboards sold 
 by a distributor.  The rate of the tax is 1.7 percent of the 
 ideal gross of the pull-tab or tipboard deal.  The sales tax 
 imposed by chapter 297A on the sale of the pull-tabs and 
 tipboards by the distributor is imposed on the retail sales 
 price less the tax imposed by this subdivision.  The retail sale 
 of pull-tabs or tipboards by the organization is exempt from 
 taxes imposed by chapter 297A and is exempt from all local taxes 
 and license fees except a fee authorized under section 349.16, 
 subdivision 8.  

    (b) The liability for the tax imposed by this section is 
 incurred when the pull-tabs and tipboards are delivered by the 
 distributor to the customer or to a common or contract carrier 
 for delivery to the customer, or when received by the customer's 
 authorized representative at the distributor's place of 
 business, regardless of the distributor's method of accounting 
 or the terms of the sale.  

    The tax imposed by this subdivision is imposed on all sales 
 of pull-tabs and tipboards, except the following:  

    (1) sales to the governing body of an Indian tribal 
 organization for use on an Indian reservation; 

    (2) sales to distributors licensed under the laws of 
 another state or of a province of Canada, as long as all 
 statutory and regulatory requirements are met in the other state 
 or province; 

    (3) sales of promotional tickets as defined in section 
 349.12; and 

    (4) pull-tabs and tipboards sold to an organization that 
 sells pull-tabs and tipboards under the exemption from licensing 
 in section 349.166, subdivision 2.  A distributor shall require 
 an organization conducting exempt gambling to show proof of its 
 exempt status before making a tax-exempt sale of pull-tabs or 
 tipboards to the organization.  A distributor shall identify, on 
 all reports submitted to the commissioner, all sales of 
 pull-tabs and tipboards that are exempt from tax under this 
 subdivision.  

    (c) A distributor having a liability of $120,000 or more 
 during a fiscal year ending June 30 must remit all liabilities 
 in the subsequent calendar year by electronic means. 

    (d) Any customer who purchases deals of pull-tabs or 
 tipboards from a distributor may file an annual claim for a 
 refund or credit of taxes paid pursuant to this subdivision for 
 unsold pull-tab and tipboard tickets.  The claim must be filed 
 with the commissioner on a form prescribed by the commissioner 
 by March 20 of the year following the calendar year for which 
 the refund is claimed.  The refund must be filed as part of the 
 customer's February monthly return.  The refund or credit is 
 equal to 1.7 percent of the face value of the unsold pull-tab or 
 tipboard tickets, provided that the refund or credit will be 
 1.75 percent of the face value of the unsold pull-tab or 
 tipboard tickets for claims for a refund or credit of taxes 
 filed on the February 2001 monthly return.  The refund claimed 
 will be applied as a credit against tax owing under this chapter 
 on the February monthly return.  If the refund claimed exceeds 
 the tax owing on the February monthly return, that amount will 
 be refunded.  The amount refunded will bear interest pursuant to 
 section 270.76 from 90 days after the claim is filed.  

    Subd. 5. Renumbered 349.213, subd 3 

    Subd. 6.    Combined receipts tax.  In addition to the 
 taxes imposed under subdivisions 1 and 4, a tax is imposed on 
 the combined receipts of the organization.  As used in this 
 section, "combined receipts" is the sum of the organization's 
 gross receipts from lawful gambling less gross receipts directly 
 derived from the conduct of bingo, raffles, and paddlewheels, as 
 defined in section 297E.01, subdivision 8, for the fiscal year.  
 The combined receipts of an organization are subject to a tax 
 computed according to the following schedule: 

    If the combined receipts for the          The tax is:
    fiscal year are:
    Not over $500,000                   zero
    Over $500,000, but not over
    $700,000                            1.7 percent of the 
                                        amount over $500,000, but 
                                        not over $700,000
    Over $700,000, but not over
    $900,000                            $3,400 plus 3.4 
                                        percent of the amount 
                                        over $700,000, but 
                                        not over $900,000

    Over $900,000                       $10,200 plus 5.1 
                                        percent of the amount 
                                        over $900,000

    Subd. 7.    Untaxed gambling product.  (a) In addition 
 to penalties or criminal sanctions imposed by this chapter, a 
 person, organization, or business entity possessing or selling a 
 pull-tab or tipboard upon which the tax imposed by subdivision 4 
 has not been paid is liable for a tax of six percent of the 
 ideal gross of each pull-tab or tipboard.  The tax on a partial 
 deal must be assessed as if it were a full deal.  

    (b) In addition to penalties and criminal sanctions imposed 
 by this chapter, a person not licensed by the board who conducts 
 bingo, raffles, or paddlewheel games is liable for a tax of six 
 percent of the gross receipts from that activity.  

    (c) The tax must be assessed by the commissioner.  An 
 assessment must be considered a jeopardy assessment or jeopardy 
 collection as provided in section 270.70.  The commissioner 
 shall assess the tax based on personal knowledge or information 
 available to the commissioner.  The commissioner shall mail to 
 the taxpayer at the taxpayer's last known address, or serve in 
 person, a written notice of the amount of tax, demand its 
 immediate payment, and, if payment is not immediately made, 
 collect the tax by any method described in chapter 270, except 
 that the commissioner need not await the expiration of the times 
 specified in chapter 270.  The tax assessed by the commissioner 
 is presumed to be valid and correctly determined and assessed.  
 The burden is upon the taxpayer to show its incorrectness or 
 invalidity.  The tax imposed under this subdivision does not 
 apply to gambling that is exempt from taxation under subdivision 
 2.  

    Subd. 8.    Personal debt.  The tax imposed by this 
 section, and interest and penalties imposed with respect to it, 
 are a personal debt of the person required to file a return from 
 the time the liability for it arises, irrespective of when the 
 time for payment of the liability occurs.  The debt must, in the 
 case of the executor or administrator of the estate of a 
 decedent and in the case of a fiduciary, be that of the person 
 in the person's official or fiduciary capacity only unless the 
 person has voluntarily distributed the assets held in that 
 capacity without reserving sufficient assets to pay the tax, 
 interest, and penalties, in which event the person is personally 
 liable for any deficiency.  

    Subd. 9.    Public information.  All records concerning 
 the administration of the taxes under this chapter are 
 classified as public information.  

    Subd. 10.    Refunds; appropriation.  A person who has, 
 under this chapter, paid to the commissioner an amount of tax 
 for a period in excess of the amount legally due for that 
 period, may file with the commissioner a claim for a refund of 
 the excess.  The amount necessary to pay the refunds under this 
 subdivision and subdivision 4, paragraph (d), is appropriated 
 from the general fund to the commissioner. 

    Subd. 11.    Unplayed or defective pull-tabs or tipboards. 
  If a deal of pull-tabs or tipboards registered with the board 
 or bar coded in accordance with this chapter and chapter 349 and 
 upon which the tax imposed by subdivision 4 has been paid is 
 returned unplayed to the distributor, the commissioner shall 
 allow a refund of the tax paid.  

    If a defective deal registered with the board or bar coded 
 in accordance with this chapter and chapter 349 and upon which 
 the taxes have been paid is returned to the manufacturer, the 
 distributor shall submit to the commissioner of revenue 
 certification from the manufacturer that the deal was returned 
 and in what respect it was defective.  The certification must be 
 on a form prescribed by the commissioner and must contain 
 additional information the commissioner requires.  

    The commissioner may require that no refund under this 
 subdivision be made unless the returned pull-tabs or tipboards 
 have been set aside for inspection by the commissioner's 
 employee.  

    Reductions in previously paid taxes authorized by this 
 subdivision must be made when and in the manner prescribed by 
 the commissioner.  

    HIST: 1994 c 633 art 2 s 2; 1995 c 264 art 17 s 3-5,11; 1996 c 
 471 art 13 s 12,13; 1998 c 389 art 13 s 3-5; 1999 c 243 art 7 s 
 5-8; 2000 c 418 art 1 s 44; 2000 c 490 art 10 s 3-6; 1Sp2001 c 5 
 art 17 s 16; 2003 c 112 art 2 s 50