HF 2261

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to charitable organizations; exempting 
  1.3             certain sales to benefit certain charitable 
  1.4             organizations from the sales and use tax; providing 
  1.5             that certain employer distributions to persons who 
  1.6             have made payroll or retirement deductions for 
  1.7             combined charitable organizations are not lotteries; 
  1.8             amending Minnesota Statutes 2000, sections 297A.70, 
  1.9             subdivision 13; 609.75, subdivision 1. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 2000, section 297A.70, 
  1.12  subdivision 13, is amended to read: 
  1.13     Subd. 13.  [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 
  1.14  (a) The following sales by the specified organizations for 
  1.15  fundraising purposes are exempt, subject to the limitations 
  1.16  listed in paragraph (b): 
  1.17     (1) all sales made by an organization that exists solely 
  1.18  for the purpose of providing educational or social activities 
  1.19  for young people primarily age 18 and under; 
  1.20     (2) all sales made by an organization that is a senior 
  1.21  citizen group or association of groups if (i) in general it 
  1.22  limits membership to persons age 55 or older; (ii) it is 
  1.23  organized and operated exclusively for pleasure, recreation, and 
  1.24  other nonprofit purposes; and (iii) no part of its net earnings 
  1.25  inures to the benefit of any private shareholders; 
  1.26     (3) the sale or use of tickets or admissions to a golf 
  1.27  tournament held in Minnesota if the beneficiary of the 
  2.1   tournament's net proceeds qualifies as a tax-exempt organization 
  2.2   under section 501(c)(3) of the Internal Revenue Code; and 
  2.3      (4) sales of gum, candy, and candy products sold for 
  2.4   fundraising purposes by a nonprofit organization that provides 
  2.5   educational and social activities primarily for young people 18 
  2.6   years of age and under. 
  2.7      (b) The exemptions listed in paragraph (a) are limited in 
  2.8   the following manner: 
  2.9      (1) the exemption under paragraph (a), clauses (1) and (2), 
  2.10  applies only if the gross annual receipts of the organization 
  2.11  from fundraising do not exceed $10,000; and 
  2.12     (2) the exemption under paragraph (a), clause (1), does not 
  2.13  apply if the sales are derived from admission charges or from 
  2.14  activities for which the money must be deposited with the school 
  2.15  district treasurer under section 123B.49, subdivision 2, or be 
  2.16  recorded in the same manner as other revenues or expenditures of 
  2.17  the school district under section 123B.49, subdivision 4. 
  2.18     (c) Sales of tangible personal property are exempt if the 
  2.19  entire proceeds, less the necessary expenses for obtaining the 
  2.20  property, will be contributed to a registered combined 
  2.21  charitable organization described in section 309.501, to be used 
  2.22  exclusively for charitable, religious, or educational purposes, 
  2.23  and the registered combined charitable organization has given 
  2.24  its written permission for the sale.  Sales that occur over a 
  2.25  period of more than 24 days per year are not exempt under this 
  2.26  paragraph. 
  2.27     (d) For purposes of this subdivision, a club, association, 
  2.28  or other organization of elementary or secondary school students 
  2.29  organized for the purpose of carrying on sports, educational, or 
  2.30  other extracurricular activities is a separate organization from 
  2.31  the school district or school for purposes of applying the 
  2.32  $10,000 limit. 
  2.33     [EFFECTIVE DATE.] This section is effective for sales and 
  2.34  purchases made after June 30, 2001. 
  2.35     Sec. 2.  Minnesota Statutes 2000, section 609.75, 
  2.36  subdivision 1, is amended to read: 
  3.1      Subdivision 1.  [LOTTERY.] (a) A lottery is a plan which 
  3.2   provides for the distribution of money, property or other reward 
  3.3   or benefit to persons selected by chance from among participants 
  3.4   some or all of whom have given a consideration for the chance of 
  3.5   being selected.  A participant's payment for use of a 900 
  3.6   telephone number or another means of communication that results 
  3.7   in payment to the sponsor of the plan constitutes consideration 
  3.8   under this paragraph. 
  3.9      (b) An in-package chance promotion is not a lottery if all 
  3.10  of the following are met:  
  3.11     (1) participation is available, free and without purchase 
  3.12  of the package, from the retailer or by mail or toll-free 
  3.13  telephone request to the sponsor for entry or for a game piece; 
  3.14     (2) the label of the promotional package and any related 
  3.15  advertising clearly states any method of participation and the 
  3.16  scheduled termination date of the promotion; 
  3.17     (3) the sponsor on request provides a retailer with a 
  3.18  supply of entry forms or game pieces adequate to permit free 
  3.19  participation in the promotion by the retailer's customers; 
  3.20     (4) the sponsor does not misrepresent a participant's 
  3.21  chances of winning any prize; 
  3.22     (5) the sponsor randomly distributes all game pieces and 
  3.23  maintains records of random distribution for at least one year 
  3.24  after the termination date of the promotion; 
  3.25     (6) all prizes are randomly awarded if game pieces are not 
  3.26  used in the promotion; and 
  3.27     (7) the sponsor provides on request of a state agency a 
  3.28  record of the names and addresses of all winners of prizes 
  3.29  valued at $100 or more, if the request is made within one year 
  3.30  after the termination date of the promotion.  
  3.31     (c) Except as provided by section 349.40, acts in this 
  3.32  state in furtherance of a lottery conducted outside of this 
  3.33  state are included notwithstanding its validity where conducted. 
  3.34     (d) The distribution of property, or other reward or 
  3.35  benefit by an employer to persons selected by chance from among 
  3.36  participants who have made a contribution through a payroll or 
  4.1   pension deduction campaign to a registered combined charitable 
  4.2   organization, within the meaning of section 309.501, as a 
  4.3   precondition to the chance of being selected, is not a lottery 
  4.4   if: 
  4.5      (1) all of the persons eligible to be selected are employed 
  4.6   by or retirees of the employer; and 
  4.7      (2) the cost of the property or other reward or benefit 
  4.8   distributed and all costs associated with the distribution are 
  4.9   borne by the employer; and 
  4.10     (3) the total amount actually expended by the employer to 
  4.11  obtain the property or other rewards or benefits distributed by 
  4.12  the employer during the calendar year does not exceed $500.