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SF937 (Legislative Session 94 (2025-2026))

Rates reduction and corresponding changes enactment to brackets for the combined net receipts tax

Related bill: HF172

AI Generated Summary

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

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 03, 2025SenateActionIntroduction and first reading
February 03, 2025SenateActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Imposes a combined net receipts tax on organizations' gambling activities.",
        "Introduces a bracketed tax schedule (rates/brackets).",
        "Exempts sportsthemed tipboard receipts from taxation under this section.",
        "Defines 'combined net receipts' as described."
      ],
      "removed": [
        "Replaces the prior combined net receipts tax rate/bracket structure with a new one."
      ],
      "summary": "Section 1 of the bill amends Minnesota Statutes 2024, section 297E.02, subdivision 6, to impose a combined net receipts tax on organizations' combined net receipts from lawful gambling, with a revised bracket/rate structure. The combined net receipts are defined as gross receipts from lawful gambling minus gross receipts directly derived from the conduct of paper bingo raffles and paddlewheels (as defined in section 297E.01 subdivision 8) and minus the net prizes actually paid (other than prizes actually paid for paper bingo raffles and paddlewheels) for the fiscal year. The bill also provides an exemption for gross receipts derived from sportsthemed tipboards and cross-references the definition of sportsthemed tipboard in section 349.12, subdivision 34.",
      "modified": [
        "Alters how the tax is computed and the applicable rates/brackets for the combined net receipts tax.",
        "Incorporates sportsthemed tipboard receipts exemption."
      ]
    },
    "citation": "297E.02",
    "subdivision": "6"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references Minnesota Statutes 2024 section 349.12, subdivision 34, to define 'sportsthemed tipboard' for purposes of the tax treatment discussed in the bill. It does not modify section 349.12 itself.",
      "modified": [
        "Cross-references an existing definition from Minn. Stat. 349.12, subd. 34."
      ]
    },
    "citation": "349.12",
    "subdivision": "34"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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