1.1                          A bill for an act 
  1.2             relating to taxation; reducing the rates of the taxes 
  1.3             on lawful gambling; amending Minnesota Statutes 1998, 
  1.4             section 297E.02, subdivisions 1, 4, and 6. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 1998, section 297E.02, 
  1.7   subdivision 1, is amended to read: 
  1.8      Subdivision 1.  [IMPOSITION.] A tax is imposed on all 
  1.9   lawful gambling other than (1) pull-tabs purchased and placed 
  1.10  into inventory after January 1, 1987, and (2) tipboards 
  1.11  purchased and placed into inventory after June 30, 1988, at the 
  1.12  rate of 9.5 4.75 percent on the gross receipts as defined in 
  1.13  section 297E.01, subdivision 8, less prizes actually paid.  The 
  1.14  tax imposed by this subdivision is in lieu of the tax imposed by 
  1.15  section 297A.02 and all local taxes and license fees except a 
  1.16  fee authorized under section 349.16, subdivision 8, or a tax 
  1.17  authorized under subdivision 5.  
  1.18     The tax imposed under this subdivision is payable by the 
  1.19  organization or party conducting, directly or indirectly, the 
  1.20  gambling.  
  1.21     Sec. 2.  Minnesota Statutes 1998, section 297E.02, 
  1.22  subdivision 4, is amended to read: 
  1.23     Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 
  1.24  on the sale of each deal of pull-tabs and tipboards sold by a 
  1.25  distributor.  The rate of the tax is 1.9 .95 percent of the 
  2.1   ideal gross of the pull-tab or tipboard deal.  The sales tax 
  2.2   imposed by chapter 297A on the sale of the pull-tabs and 
  2.3   tipboards by the distributor is imposed on the retail sales 
  2.4   price less the tax imposed by this subdivision.  The retail sale 
  2.5   of pull-tabs or tipboards by the organization is exempt from 
  2.6   taxes imposed by chapter 297A and is exempt from all local taxes 
  2.7   and license fees except a fee authorized under section 349.16, 
  2.8   subdivision 8.  
  2.9      (b) The liability for the tax imposed by this section is 
  2.10  incurred when the pull-tabs and tipboards are delivered by the 
  2.11  distributor to the customer or to a common or contract carrier 
  2.12  for delivery to the customer, or when received by the customer's 
  2.13  authorized representative at the distributor's place of 
  2.14  business, regardless of the distributor's method of accounting 
  2.15  or the terms of the sale.  
  2.16     The tax imposed by this subdivision is imposed on all sales 
  2.17  of pull-tabs and tipboards, except the following:  
  2.18     (1) sales to the governing body of an Indian tribal 
  2.19  organization for use on an Indian reservation; 
  2.20     (2) sales to distributors licensed under the laws of 
  2.21  another state or of a province of Canada, as long as all 
  2.22  statutory and regulatory requirements are met in the other state 
  2.23  or province; 
  2.24     (3) sales of promotional tickets as defined in section 
  2.25  349.12; and 
  2.26     (4) pull-tabs and tipboards sold to an organization that 
  2.27  sells pull-tabs and tipboards under the exemption from licensing 
  2.28  in section 349.166, subdivision 2.  A distributor shall require 
  2.29  an organization conducting exempt gambling to show proof of its 
  2.30  exempt status before making a tax-exempt sale of pull-tabs or 
  2.31  tipboards to the organization.  A distributor shall identify, on 
  2.32  all reports submitted to the commissioner, all sales of 
  2.33  pull-tabs and tipboards that are exempt from tax under this 
  2.34  subdivision.  
  2.35     (c) A distributor having a liability of $120,000 or more 
  2.36  during a fiscal year ending June 30 must remit all liabilities 
  3.1   in the subsequent calendar year by a funds transfer as defined 
  3.2   in section 336.4A-104, paragraph (a).  The funds transfer 
  3.3   payment date, as defined in section 336.4A-401, must be on or 
  3.4   before the date the tax is due.  If the date the tax is due is 
  3.5   not a funds transfer business day, as defined in section 
  3.6   336.4A-105, paragraph (a), clause (4), the payment date must be 
  3.7   on or before the funds transfer business day next following the 
  3.8   date the tax is due. 
  3.9      (d) Any customer who purchases deals of pull-tabs or 
  3.10  tipboards from a distributor may file an annual claim for a 
  3.11  refund or credit of taxes paid pursuant to this subdivision for 
  3.12  unsold pull-tab and tipboard tickets.  The claim must be filed 
  3.13  with the commissioner on a form prescribed by the commissioner 
  3.14  by March 20 of the year following the calendar year for which 
  3.15  the refund is claimed.  The refund must be filed as part of the 
  3.16  customer's February monthly return.  The refund or credit is 
  3.17  equal to 1.9 .95 percent of the face value of the unsold 
  3.18  pull-tab or tipboard tickets, provided that the refund or credit 
  3.19  will be 1.95 1.425 percent of the face value of the unsold 
  3.20  pull-tab or tipboard tickets for claims for a refund or credit 
  3.21  of taxes filed on the February 1999 2000 monthly return.  The 
  3.22  refund claimed will be applied as a credit against tax owing 
  3.23  under this chapter on the February monthly return.  If the 
  3.24  refund claimed exceeds the tax owing on the February monthly 
  3.25  return, that amount will be refunded.  The amount refunded will 
  3.26  bear interest pursuant to section 270.76 from 90 days after the 
  3.27  claim is filed.  
  3.28     Sec. 3.  Minnesota Statutes 1998, section 297E.02, 
  3.29  subdivision 6, is amended to read: 
  3.30     Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
  3.31  imposed under subdivisions 1 and 4, a tax is imposed on the 
  3.32  combined receipts of the organization.  As used in this section, 
  3.33  "combined receipts" is the sum of the organization's gross 
  3.34  receipts from lawful gambling less gross receipts directly 
  3.35  derived from the conduct of bingo, raffles, and paddlewheels, as 
  3.36  defined in section 297E.01, subdivision 8, for the fiscal year.  
  4.1   The combined receipts of an organization are subject to a tax 
  4.2   computed according to the following schedule: 
  4.3      If the combined receipts for the          The tax is:
  4.4      fiscal year are:
  4.5      Not over $500,000                   zero
  4.6      Over $500,000, but not over
  4.7      $700,000                            1.9 .95 percent of the 
  4.8                                          amount over $500,000, but 
  4.9                                          not over $700,000
  4.10     Over $700,000, but not over
  4.11     $900,000                            $3,800 $1,900 plus 3.8 
  4.12                                         1.9 percent of the amount 
  4.13                                         over $700,000, but 
  4.14                                         not over $900,000
  4.15     Over $900,000                       $11,400 $5,700 plus 5.7 
  4.16                                         2.85 percent of the
  4.17                                         amount over $900,000
  4.18     Sec. 4.  [EFFECTIVE DATE.] 
  4.19     Sections 1 to 3 are effective July 1, 1999.