Minnesota House Bill HF163

Minnesota 2023-2024 Regular Session

• Introduced: 1/9/23
• Refer: 1/9/23

Caption

Lawful gambling provisions modified, all lawful gambling receipts subjected to flat rate tax, and combined net receipts tax repealed.

Impact

The bill also repeals the existing combined net receipts tax, which applied a tiered tax structure based on the gross receipts from lawful gambling. By replacing this with a flat tax, supporters believe it will reduce administrative burdens for charitable organizations that rely on gambling receipts for funding. Furthermore, transitioning to a flat tax may provide more predictable revenue for state and local governments, which can help in budget planning.

Summary

House File 163 (HF163) proposes significant changes to the taxation of lawful gambling activities in Minnesota by implementing a flat rate tax on all lawful gambling receipts. Specifically, the bill imposes an 8.5% tax on various gambling activities, excluding certain games such as paper or electronic pull-tab deals and tipboard deals. The introduction of this flat rate tax is aimed at simplifying the tax structure imposed on lawful gambling entities in the state, potentially increasing compliance and understanding among organizations conducting such activities.

Contention

While the bill seeks to streamline taxation, it may face opposition from groups that depend on the tiered state tax structure. Critics could argue that the repeal of the combined net receipts tax limits funding for local initiatives that support community programs through charitable gambling. Additionally, there may be concerns regarding how this new tax structure can impact organizations differently, potentially leading to a disproportionate effect on smaller gambling operations or those with varying earnings from gambling activities.