Below you will find three clear examples of what is wrong with the current tax structure for charities that are licensed to conduct charitable gaming. Those seeking to keep the status quo will tell you that the current system is working perfectly, FOR THE STATE. Those seeking to keep the status quo say that it is only a handful of charities that are paying the big taxes. Below are the stories of three of those so called “MEGA CHARITIES”.
This week I received an e-mail from Craig Kittelson, Gambling Manager of the St. Paul Park American Legion Post 98. Post 98 has been in existence for 98 years. Craig has been the GM at his Post for the past 2 ½ years. Craig tells me that in February his post had $300 to donate while paying the state $9100 in taxes. He predicts that if there is no change in the current tax structure that they will be out of business in 2 to 3 years. I looked back at charitable gaming at their post (they only have the one site) the past three fiscal years (2016 – 2018). Their sales volume grew from $1.5 million to $2.4 million, their taxes grew from $43,000 to $91,000 and their funds to donate grew from $60,000 to $63,000. In other words the increase in sales volume of $900,000 in the past three fiscal years has netted them $3,000 or one third of one penny per dollar wagered, while netting the state a nickel on every dollar wagered. In the past three fiscal years the state has profited from the work of Post 98 SIXTEEN TIMES more than Post 98 has. In the past three fiscal years Post 98’s overall profit per dollar wagered has gone from 4 cents to 2.6 cents.
See the attached article from the February 21, 2019 Waterville Lake Region Life paper. It details the plight of the Waterville Lions Club. In FY2018 the Lions had just under $40,000 for community and missions while paying the state $98,000. Thanks to the Waterville Lake Region Life paper for calling attention to this issue.
Matt Balmer, President of the Northern Lakes Lightning Youth Hockey Association in a letter (attached) sent to hockey groups across the state, speaks to the importance of communicating with legislators about relief for charities. In FY2018 his organization had $114,000 for missions while paying the state $236,000. In FY2019 they are on pace to have $113,000 for missions and pay the state $265,000. This is a net loss of $1,000 to the charity and a net gain to the state of $29,000.
See the link to an editorial from the February 22, 2019 Brainerd Dispatch https://www.brainerddispatch.com/opinion/editorials/4574654-our-opinion-reduce-taxes-charitable-gambling The Brainerd Dispatch is a long time advocate for tax relief for charities and we thank them for their support.
The issue of relief for charities is boiling up. Your work with your state legislators is making a difference. The current confiscatory tax structure for charities that conduct charitable gaming cannot continue much longer. Having equal or less amounts each fiscal year for our communities and missions while growing the state coffers SIXTEEN TIMES more than we grow ours has got to stop.
We have been notified that HF294 the sales tax exemption bill is up for a hearing in the House Tax Committee on Tuesday, March 26 at 8 am in Committee room 5 in the State Office Building. We are working to understand if any of the other tax relief bills will be heard as well. HF69 and HF293 are in the House Tax Committee, but as yet unheard.
ACM held their annual legislative reception this past Monday. Attendance by legislators was light, due to the House being in session that evening, so two thirds of our possible attendees were debating bills. We reserve the space and the date a year in advance. There is no way to know that far ahead of time what the day will look like. We had thirteen charities in attendance, the most that we have ever had. Thanks go to Claremont Chamber of Commerce, Carlos Lions, Ballentine VFW Post, Osseo Lions, Morristown American Legion, North Country Snowmobile Club, Luverne Eagles, Rochester Youth Baseball, Baxter Lions, Northern Pine Riders, Forest Lake Lions, Bloomington Lions and Saint Paul Midway Lions. Legislators in attendance were Senators Ruud, Koran, Tomassoni, Relph, Weber and Hoffman. We thank them for their support.
Hello District 15 Presidents.pdf