1.1 	A bill for an act
1.2 	relating to gambling; reducing rate of tax on lawful gambling;amending 
1.3 	Minnesota Statutes 2006, section 297E.02, subdivisions 1, 4, 6.
1.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5 	Section 1. Minnesota Statutes 2006, section 297E.02, subdivision 1, is amended to read:
1.6 		Subdivision 1.Imposition. A tax is imposed on all lawful gambling other than 
1.7 	(1) pull-tab deals or games; (2) tipboard deals or games; and (3) items listed in section  
1.8 	297E.01, subdivision 8, clauses (4) and (5), at the rate of 8.54.25 percent on the gross 
1.9 	receipts as defined in section  297E.01, subdivision 8, less prizes actually paid. The tax 
1.10 	imposed by this subdivision is in lieu of the tax imposed by section  297A.62 and all 
1.11 	local taxes and license fees except a fee authorized under section  349.16, subdivision 8, 
1.12 	or a tax authorized under subdivision 5. 
1.13 	The tax imposed under this subdivision is payable by the organization or party 
1.14 	conducting, directly or indirectly, the gambling.

1.15 	Sec. 2. Minnesota Statutes 2006, section 297E.02, subdivision 4, is amended to read:
1.16 		Subd. 4.Pull-tab and tipboard tax. (a) A tax is imposed on the sale of each deal of 
1.17 	pull-tabs and tipboards sold by a distributor. The rate of the tax is 1.7.85 percent of the 
1.18 	ideal gross of the pull-tab or tipboard deal. The sales tax imposed by chapter 297A on the 
1.19 	sale of the pull-tabs and tipboards by the distributor is imposed on the retail sales price 
1.20 	less the tax imposed by this subdivision. The retail sale of pull-tabs or tipboards by the 
1.21 	organization is exempt from taxes imposed by chapter 297A and is exempt from all local 
1.22 	taxes and license fees except a fee authorized under section 349.16, subdivision 8.
2.1 	(b) The liability for the tax imposed by this section is incurred when the pull-tabs 
2.2 	and tipboards are delivered by the distributor to the customer or to a common or contract 
2.3 	carrier for delivery to the customer, or when received by the customer's authorized 
2.4 	representative at the distributor's place of business, regardless of the distributor's method 
2.5 	of accounting or the terms of the sale.
2.6 	The tax imposed by this subdivision is imposed on all sales of pull-tabs and 
2.7 	tipboards, except the following:
2.8 	(1) sales to the governing body of an Indian tribal organization for use on an Indian 
2.9 	reservation;
2.10 	(2) sales to distributors licensed under the laws of another state or of a province of 
2.11 	Canada, as long as all statutory and regulatory requirements are met in the other state or 
2.12 	province;
2.13 	(3) sales of promotional tickets as defined in section 349.12; and
2.14 	(4) pull-tabs and tipboards sold to an organization that sells pull-tabs and tipboards 
2.15 	under the exemption from licensing in section 349.166, subdivision 2. A distributor shall 
2.16 	require an organization conducting exempt gambling to show proof of its exempt status 
2.17 	before making a tax-exempt sale of pull-tabs or tipboards to the organization. A distributor 
2.18 	shall identify, on all reports submitted to the commissioner, all sales of pull-tabs and 
2.19 	tipboards that are exempt from tax under this subdivision.
2.20 	(c) A distributor having a liability of $120,000 or more during a fiscal year ending 
2.21 	June 30 must remit all liabilities in the subsequent calendar year by electronic means.
2.22 	(d) Any customer who purchases deals of pull-tabs or tipboards from a distributor 
2.23 	may file an annual claim for a refund or credit of taxes paid pursuant to this subdivision 
2.24 	for unsold pull-tab and tipboard tickets. The claim must be filed with the commissioner on 
2.25 	a form prescribed by the commissioner by March 20 of the year following the calendar 
2.26 	year for which the refund is claimed. The refund must be filed as part of the customer's 
2.27 	February monthly return. The refund or credit is equal to 1.7.85 percent of the face 
2.28 	value of the unsold pull-tab or tipboard tickets, provided that the refund or credit will be 
2.29 	1.75.90 percent of the face value of the unsold pull-tab or tipboard tickets for claims for 
2.30 	a refund or credit of taxes filed on the February 20012006 monthly return. The refund 
2.31 	claimed will be applied as a credit against tax owing under this chapter on the February 
2.32 	monthly return. If the refund claimed exceeds the tax owing on the February monthly 
2.33 	return, that amount will be refunded. The amount refunded will bear interest pursuant 
2.34 	to section 270C.405 from 90 days after the claim is filed.

2.35 	Sec. 3. Minnesota Statutes 2006, section 297E.02, subdivision 6, is amended to read:
3.1 		Subd. 6.Combined receipts tax. In addition to the taxes imposed under 
3.2 	subdivisions 1 and 4, a tax is imposed on the combined receipts of the organization. As 
3.3 	used in this section, "combined receipts" is the sum of the organization's gross receipts 
3.4 	from lawful gambling less gross receipts directly derived from the conduct of bingo, 
3.5 	raffles, and paddlewheels, as defined in section  297E.01, subdivision 8, for the fiscal year. 
3.6 	The combined receipts of an organization are subject to a tax computed according to 
3.7 	the following schedule: 

3.8
3.9		If the combined receipts 
for the fiscal year are:
		The tax is:
	
3.10		Not over $500,000
		zero
	
3.11		Over $500,000, but not
			
3.12
3.13
3.14		over $700,000
		1.7.85 percent of the 
amount over $500,000, 
but not over $700,000
	
3.15		Over $700,000, but not
			
3.16
3.17
3.18
3.19		over $900,000
		$3,400$1,700 plus 3.4
1.7 percent of the amount 
over $700,000, but not 
over $900,000
	
3.20
3.21
3.22		Over $900,000
		$10,200$5,100 plus 
5.12.55 percent of the 
amount over $900,000