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Last Updated: 1/25/2018

Frequently Asked Questions

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Lawful Gambling Tax

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Lawful Gambling Tax > Tax Information

  • Is the net receipts loss (NRL) only for bingo, paddletickets and raffles?Back to top

    Yes. These are the games that are taxed at the 8.5% net receipts tax.​

  • Should I file the net receipts loss (NRL) if one site balances out the loss at another site?Back to top

    No. Net receipts are only considered a loss if the total of line 4c is negative. You only need to file the NRL when you intend to claim the credit.​

  • What if I'm being audited?Back to top

    ​The Minnesota Department of Revenue audits tax returns to make sure the information you provide is correct.

    We usually have 3½ years after a return is due or filed, whichever is later, to audit your return and send you a formal notice of any change in the amount of tax, penalty, and interest you owe, or if we owe you a refund.

    If we decide to audit your organization, we will contact you to arrange a date and time for the audit. We will also send you a confirmation letter which will include the “Minnesota Revenue is auditing (reviewing) my tax return. Now What?" fact sheet.

  • What records do I need to keep?Back to top

    You are required to maintain complete, accurate, and legible records supporting all your gambling activities. Records include, but are not limited to:

    • Winning and unsold tickets for paper pull-tab, tipboard, paddlewheel and raffle games and game flares
    • Reports and statements, including checker's records for each bingo occasion
    • Cash journals, ledgers, deposit slips, register tapes, and bank statements supporting gambling activity receipts
    • Invoices that represent purchases of gambling products
    • Canceled checks or substitute checks and other documents supporting gambling activity expenditures
    • Organization minutes

  • How long do I need to keep records?Back to top

    You must keep gambling-related records for at least 3.5 years. We may inspect your records at any reasonable time without notice or a search warrant.

    For returns filed on time, the retention period starts on the return due date or the date you filed the return, whichever is later. It does not start on the invoice purchase date or the date you removed the game from play.

    If you file the return after the due date, the retention period starts on the date you filed the return.

    For example, if you report a game as played on your January 2017 return, but file the return late (April 15, 2017), the retention period begins on April 15, 2017 and ends October 15, 2020.

    Keep a copy of all tax returns, schedules and worksheets for your records, including all amended returns.​

  • How do we handle game destruction?Back to top

    Bingo paper

    • If you want to destroy bingo paper, call us at 651-297-1772 for options on how to deliver the bingo paper to the Department of Revenue.

    Barcoded games

    • If you have a pull-tab, tipboard, paddleticket, or raffle board game that you do not want to put into play, or a damaged game that you cannot put into play, contact your distributor to see if you can get credit for the cost of the game and/or tax paid on the game.
    • If you cannot get credit for the game, contact us and we will direct you to either destroy the game or send the game to us to destroy.
      • Report the game(s) on the Lawful Gambling Report of Barcoded Games (Schedule B2), and check the box for “Destroyed with Revenue approval.” Complete a separate Schedule B2 for each type of destroyed game (pull-tabs, tipboards, paddletickets, or raffle board).
    • If you send the game to us to destroy, include a copy of the Schedule B2 you reported it on. We will certify the Schedule B2 and provide you with a written receipt that we received the game and destroyed it. You must keep the receipt in your permanent gambling records for at least 3½ years.
    • If you destroy an unplayed game without our approval, we will treat it as a missing game. You must report the game on your next monthly return at the ideal amount and pay any tax liability due.

    Games destroyed by a catastrophic event
    • If your unplayed games, games in play, and/or played game remnants are destroyed by a catastrophic event (e.g., fire, flood, tornado, etc.), call us for instructions.