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2016 Omnibus Tax Bill Update

02 Jun 2016 09:17 | Allen Lund (Administrator)

Licensed Gaming Charities,                                                                                                        

In the 2016 omnibus tax bill there is a provision that would allow bingo halls to no longer pay the combined receipt tax on their paper pull tab income, but be capped at 9%.  When the bill that introduced the provision was heard in committee I testified that ACM welcomed much needed relief for charities, but that we could not support relief for only 8 of the 1200 of us. 

When the bingo hall provision was included in the omnibus tax bill, an error in drafting of that language included a provision that would allow all charities that conduct bingo plus those that are the only charity in a site to also be included in capping their paper pull tab tax at 9%.  What was a small tax cut for 8 bingo halls has turned into a potential $30 million dollar a year relief for many of the rest of us.  Read Section 28, specifically where the word or is used in line 120.26 where the word and would have been what was intended (the intent of this provision was not to give all of us relief, just bingo halls).  The language is:

Sec. 17. Minnesota Statutes 2014, section 297E.02, subdivision 1, is amended to read:
115.14    Subdivision 1. Imposition. (a) A tax is imposed on all lawful gambling other than 
115.15(1) paper or electronic pull-tab deals or games; (2) tipboard deals or games; (3) electronic 
115.16linked bingo; and (4) items listed in section 297E.01, subdivision 8, clauses (4) and (5), at 
115.17the rate of 8.5 percent on the gross receipts as defined in section 297E.01, subdivision 8, 
115.18less prizes actually paid. 
115.19(b) A tax is imposed on the conduct of paper pull-tabs, at the rate of nine percent of 
115.20the gross receipts, less prizes actually paid, of the pull-tab deal. The tax imposed under 
115.21this paragraph applies only to paper pull-tabs sold at a bingo hall as defined in section 
115.22349.12, subdivision 4a.
115.23(c) The tax imposed by this subdivision is in lieu of the tax imposed by section 
115.24297A.62 and all local taxes and license fees except a fee authorized under section 349.16, 
115.25subdivision 8 , or a tax authorized under subdivision 5.
115.26(d) The tax imposed under this subdivision is payable by the organization or party 
115.27conducting, directly or indirectly, the gambling.
115.28EFFECTIVE DATE.This section is effective for gross receipts received on or 
115.29after July 1, 2016.

 

    Sec. 28. Minnesota Statutes 2014, section 349.12, is amended by adding a subdivision 
120.21to read:
120.22    Subd. 4a. Bingo hall. (a) "Bingo hall" means the premises on which an organization 
120.23licensed under this chapter regularly conducts bingo if:
120.24(1) more than 50 percent of the organization's gross receipts from lawful gambling 
120.25in the prior calendar year were attributable to the conduct of bingo or the organization had 
120.26no receipts from lawful gambling in that year; or
120.27(2) no other organization conducts lawful gambling on the premises.
120.28(b) For purposes of this subdivision, "bingo" does not include a linked bingo game 
120.29as defined in this section.
120.30EFFECTIVE DATE.This section is effective July 1, 2016.

Governor Dayton has now said that he will only sign the tax bill if the House and Senate agree to fix the drafting error in a special session.  The MN Department of Revenue says that if the Governor signs the bill and the issue is not addressed, come July 1 they will make the change and reduce our taxes by approximately $30 million next fiscal year.  It will leave funding for the stadium short, so the state would have to implement a 10% gross receipts tax on stadium suite rentals and new games by the MN Lottery.   

Our belief is that there is money to give charitable gaming much needed relief and we need to use this opportunity to drive that message home!  We believe this because in the omnibus tax bill there are two provisions that we find particularly offensive.  One is that big tobacco companies are provided $36 million in relief and the other is that the Vikings (Wilf family) are getting another $3 million in relief.  Charities doing good in their communities get nothing and pay a high of 36% tax rate with no deductions of any kind.

We were led to believe that we were being included in the tax bill, but when the final bill was introduced, we were not except for the bingo hall provision that we opposed. 

Due to the drafting error the Governor and the Legislature have a chance to fix their mistake of not including all of us in the omnibus tax bill, but they will need convincing. 

Call or e-mail Governor Dayton @ 651-201-3400, mark.dayton@state.mn.us

Call or e-mail the Speaker of the House Kurt Daudt @ 651-296-5364, rep.kurt.daudt@house.mn

Call or e-mail the Senate Majority Leader Tom Bakk @ 651-296-8881, sen.tom.bakk@senate.mn

Call or e-mail the House Minority Leader Paul Thissen @ 651-296-5375, rep.paul.thissen@house.mn

Call or e-mail the Senate Minority Leader David Hann @ 651-296-1749, sen.david.hann@senate.mn

and tell them to; Keep the tax bill as it is, let it go into law on July 1 or give all of charitable gaming some other measure of relief.  Calling your own legislators to let them know what you think is a great idea as well. 

We will still be sending the state of Minnesota $30 million in taxes annually.  The Vikings pay less than that annually (by their own reports they pay less than $20 million per year to state and local government in MN).  The Vikings already got their $500 million in relief, their franchise is now reportedly worth $1 billion more than what they paid for it (in large part due to the new stadium) and they do not hold a candle to the work that we do in our communities every day of the year. 

Take time to help YOUR CHARITY and ask EVERYONE involved with YOUR ORGANIZATION and those who YOU BENEFIT to make the call.  The window of opportunity is very small, ACT NOW.

Letters from the Governor, Commissioner of Department of Revenue, Commissioner of Management & Budget and Speaker Daudt regarding the issue are attached. 

Regards,

Al Lund

Executive Director Allied Charities of Minnesota

Daudt Omnibus Tax Bill Issues 6_1_16 (1).pdf

2016_06_01_Omnibus_Tax_Bill.pdf

2016_06_1_GMD_Special_Session_Letter_to_Caucus_Leaders.pdf


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