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Last Updated: 1/25/2018

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Lawful Gambling Tax

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Lawful Gambling Tax > Tax Information > Filing requirements

  • How does the current (four-tier) tax calculation work for combined net receipts?Back to top

    ​Minnesota’s Combined Net Receipts Tax is a progressive tax that starts July 1 and runs through June 30 of each year. The tax is based on the combined net receipts (gross receipts minus prizes) from the following forms of gambling: linked bingo, tipboards, paper and electronic pull-tabs, as well as interest and other income.

    Lawful Gambling Combined Net Receipts Tax contains a tax table used to calculate the tax on a monthly basis. The following rates apply:

    • 9 percent on the first $87,500 in net receipts
    • 18 percent on net receipts over $87,500 and less than $122,500
    • 27 percet on net receipts over $122,500 and less than $157,500
    • 36 percent on net receipts over $157,500

    In order to determine an organization’s monthly tax liability, the organization must add their net receipts for the year (July through June) and then apply the correct rate based on the tax table. All taxes paid on the combined net receipts from previous months are subtracted from the current month’s taxes. Some organizations will fall into different brackets over the course of the year. The receipts reset to zero again in July of each year.

    Worksheet E was designed to assist organizations in calculating their monthly liability. Worksheet E instructs organizations to add their total receipts for the year (July through June) to determine the correct rate based on the tax table. When calculating the tax liability, the organization is instructed to subtract tax paid in the prior month from the current month’s liability.

    For example:
    In July 2017, the organization had $5,000 in combined net receipts. Using the tax table on Worksheet E, the organization calculated tax of $450 (based on the 9 percent rate).

    The following month, the organization had an additional $10,000 in combined net receipts, totaling $15,000 for the year (July through June). Using the tax table on Worksheet E it would appear that the organization would owe $1,350 (based on the 9 percent rate). However, the organization must first subtract the prior month’s tax liability to determine the tax liability for August. In this case, $1,350 minus $450 equals $900. The organization would be required to pay $900 in tax for the month of August.

  • Is our organization being double taxed from tier to tier when calculating combined net receipts?Back to top

    ​No, because organizations subtract tax paid in the prior month from the current month’s liability, each month’s net receipts are only taxed once.

  • Are all forms of gambling taxed based on the four-tier system when calculating the combined net receipts?Back to top

    ​No. Pull tabs, tipboards, and electronics use the four-tier system. Non-linked bingo, paddlewheels, and raffles have an 8.5 percent tax rate, no matter how high the sales are in a given year.

  • Why do we have to do the Annual Certified Physical Inventory and Cash Count?Back to top

    We're required track inventory for each organization (Minnesota Statute 297E.06, subd. 4). 

    The inventory and cash count also gives your organization a way to account for start bank money and missing inventory.

  • Are lottery tickets, pari-mutuel betting or games at casinos included in nonprofit lawful gambling?Back to top

    The Minnesota Lottery, slot machines and games at a casino or betting on a horse race at Canterbury Downs are not included in nonprofit lawful gambling.​