HF 1474

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to gambling; reducing rate of tax on lawful gambling; amending
Minnesota Statutes 2006, section 297E.02, subdivisions 1, 4, 6.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 297E.02, subdivision 1, is amended to read:

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 deleted text begin 8.5 deleted text end new text begin 4.25 new text end 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.

Sec. 2.

Minnesota Statutes 2006, section 297E.02, subdivision 4, is amended to read:

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 deleted text begin 1.7 deleted text end new text begin .85 new text end 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 deleted text begin 1.7 deleted text end new text begin .85 new text end percent of the face
value of the unsold pull-tab or tipboard tickets, provided that the refund or credit will be
deleted text begin 1.75 deleted text end new text begin .90 new text end 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 deleted text begin 2001 deleted text end new text begin 2006 new text end 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 270C.405 from 90 days after the claim is filed.

Sec. 3.

Minnesota Statutes 2006, section 297E.02, subdivision 6, is amended to read:

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 fiscal year are:		The tax is:
	Not over $500,000		zero
	Over $500,000, but not
	over $700,000		deleted text begin 1.7 deleted text end new text begin .85 new text end percent of the amount over $500,000, but not over $700,000
	Over $700,000, but not
	over $900,000		deleted text begin $3,400 deleted text end new text begin $1,700 new text end plus deleted text begin 3.4 deleted text end new text begin 1.7 new text end percent of the amount over $700,000, but not over $900,000
	Over $900,000		deleted text begin $10,200 deleted text end new text begin $5,100 new text end plus deleted text begin 5.1 deleted text end new text begin 2.55 new text end percent of the amount over $900,000