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HF169 (Legislative Session 94 (2025-2026))

All lawful gambling receipts subjected to a flat rate tax, and combined net receipts tax repealed.

Related bill: SF1941

AI Generated Summary

Purpose

  • The bill changes how Minnesota taxes lawful gambling. It would replace the current tax system with a single flat tax on gross receipts from most lawful gambling and repeal the combined net receipts tax.

Main Provisions

  • Tax imposition
    • A tax at 8.5% of gross receipts (gross receipts minus prizes actually paid) is imposed on all lawful gambling, with specific exceptions.
    • The tax base is defined as gross receipts as defined in 297E.01 subdivision 8, minus prizes actually paid.
    • This tax applies to gambling operations conducted directly or indirectly by the organization or party running the gambling.
  • In lieu of other taxes
    • The new tax would be in lieu of the tax under section 297A.62 and all local taxes and license fees, with exceptions: a fee under section 349.16 subdivision 8 or a tax under section 349.213 subdivision 3 may still apply.
  • Exempted categories
    • The tax would not apply to:
    • paper or electronic pulltab deals or games
    • tipboard deals or games
    • electronic linked bingo
    • items listed in section 297E.01 subdivision 8 clauses 4 and 5
  • Repeals
    • Repeals Minnesota Statutes 2024 section 297E.02 subdivision 6 (the combined net receipts tax).

Significant Changes to Existing Law

  • Shifts from a combined net receipts tax to a single flat gross receipts tax across most lawful gambling activities.
  • Centralizes tax collection at the state level by preempting local taxes and license fees (with specified exceptions).
  • Specified operators (the organizations or parties conducting the gambling) are responsible for paying the tax.

Summary of Effects

  • Tax burden moves from a previous mixed structure (including local taxes) to a uniform 8.5% tax on gross receipts for most gambling activities.
  • Some gambling formats remain exempt from this tax, while others continue to be subject to different fees or taxes under existing law.

Relevant Terms - lawful gambling - gross receipts - prizes actually paid - flat rate tax - 8.5% (eight and a half percent) - combined net receipts tax - 297E.02 - 297A.62 - 349.16 subdivision 8 - 349.213 subdivision 3 - organization or party conducting gambling - paper pulltab - electronic pulltab - tipboard - electronic linked bingo - 297E.01 subdivision 8 - clauses 4 and 5 (of 297E.01 subdivision 8)

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 10, 2025HouseActionIntroduction and first reading, referred toTaxes
February 13, 2025HouseActionAuthor added
March 10, 2025HouseActionAuthor added
March 11, 2025HouseActionAuthor added
March 13, 2025HouseActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Amends Minnesota Statutes 2024, section 297E.02 subdivision 1 to impose a tax on all lawful gambling (excluding certain games and deals) at a specified rate and in lieu of certain other taxes.",
      "modified": []
    },
    "citation": "297E.02",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Repeals Minnesota Statutes 2024 section 297E.02 subdivision 6.",
      "modified": []
    },
    "citation": "297E.02",
    "subdivision": "subdivision 6"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References a fee authorized under Minnesota Statutes section 349.16 subdivision 8 in relation to the tax structure for lawful gambling.",
      "modified": []
    },
    "citation": "349.16",
    "subdivision": "subdivision 8"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References Minnesota Statutes section 349.213 subdivision 3 in relation to the tax framework for lawful gambling.",
      "modified": []
    },
    "citation": "349.213",
    "subdivision": "subdivision 3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References Minnesota Statutes section 297E.01 subdivision 8 (definition of prizes actually paid) as used in section 297E.02.",
      "modified": []
    },
    "citation": "297E.01",
    "subdivision": "subdivision 8"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to Minnesota Statutes 2024 section 297A.62, which is affected by the new tax structure for gambling.",
      "modified": []
    },
    "citation": "297A.62",
    "subdivision": ""
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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