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SF3130 (Legislative Session 94 (2025-2026))

Combined net receipts tax rates reduction and brackets expansion

Related bill: HF797

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to modify the taxation rates on the combined net receipts from lawful gambling activities in Minnesota. This includes a reduction in tax rates and an expansion of the tax brackets for gambling organizations.

Main Provisions

  • Reduction in Tax Rates: The proposed changes lower the tax percentage assessed on combined net receipts from lawful gambling.

    • Up to $100,000, the tax rate is reduced from 8% to 3%.
    • From $100,000 to $200,000, the tax is a flat $3,000 plus 10% of the excess over $100,000, down from $7,000 plus 17%.
    • From $200,000 to $300,000, the tax is a flat $13,000 plus 18% of excess over $200,000, down from $12,950 plus 25%.
    • Over $300,000, the tax is a flat $31,000 plus 26% of excess over $300,000, down from $21,700 plus 33.5%.

  • Expansion of Brackets: Each tax bracket has been expanded to accommodate higher levels of combined net receipts.

    • The threshold for the lowest bracket has increased from $87,500 to $100,000.
    • The next bracket now starts at $100,000 and ends at $200,000, previously ending at $122,500.
    • Another bracket now covers receipts from $200,000 to $300,000, previously ending at $157,500.
    • The top bracket starts at $300,000, previously initiated at $157,500.

Significant Changes to Existing Law

  • The bill updates Minnesota Statutes 2024 section 297E.02 subdivision 6 to reduce tax burdens for gambling organizations by altering both the tax rates and the amounts of net receipts subject to different tax percentages.

  • Exemption: Receipts from sports-themed tipboards are entirely exempt from this tax. A sports-themed tipboard involves gambling based on the outcomes of professional sports events.

Relevant Terms

lawful gambling, combined net receipts, tax reduction, tax brackets, paper bingo, raffles, paddlewheels, sports-themed tipboards, professional sports events, Minnesota tax law.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 31, 2025SenateFloorActionIntroduction and first reading
March 31, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Introduces reduced tax rates for combined net receipts."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill modifies the tax rates and brackets for combined net receipts from lawful gambling under section 297E.02.",
      "modified": [
        "Expands the tax brackets for combined net receipts taxation."
      ]
    },
    "citation": "297E.02",
    "subdivision": "subdivision 6"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Refers to legal definitions related to lawful gambling activities in reference to the types of gross receipts considered under section 297E.02.",
      "modified": [
        "References adjustment to definitions related to gross receipts."
      ]
    },
    "citation": "297E.01",
    "subdivision": "subdivision 8"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Defines 'sportsthemed tipboards' in context of exemptions from taxation under section 297E.02.",
      "modified": [
        "Clarifies the definition of sportsthemed tipboards for tax exemption purposes."
      ]
    },
    "citation": "349.12",
    "subdivision": "subdivision 34"
  }
]

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