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Last Updated: 12/1/2017

Gambling Devices

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Taxability of gambling devices and equipment

This table explains when sales tax applies to the sale of gambling devices and equipment.

Minnesota law states that a retail sale is:

  • the sale, lease, or rental of tangible personal property;
  • the sale of tangible personal property used in conducting lawful gambling under chapter 349 or the State Lottery under chapter 349A and is not considered a sale of property for resale.

​Question

​Taxable or Not Taxable

​Reason and Reference

Is the rental of electronic gaming devices taxable?

Taxable to the lessee

The rental or lease of this equipment is subject to sales tax. It does not matter if there is a revenue sharing agreement in place.Minnesota Statutes 297A.61, subds. 4(k), 4(l), and 7

Are monthly equipment charges taxable?

Taxable to the lessee

The rental or lease of this equipment is subject to sales tax.

Minnesota Statutes 297A.61, subds. 4(k), 4(l), and 7

Are revenue sharing agreements taxable?

Taxable to the lessee

The total sales price of the rental or lease of an electronic gaming device – even when the sales price is separated into various components – is subject to Minnesota sales tax.

Minnesota Statutes 297A.61, subds. 4(k), 4(l), and 7

Are bingo cards and pull tabs taxable?

Taxable when sold to the retailer

All sales of tangible personal property are subject to sales tax unless an exemption applies. No exemption applies for these types of sales. Digital products also became taxable beginning July 1, 2014.

Minnesota Statutes 297A.61, subds. 3(l) and 7; and Fact Sheet 177, Digital Products

Are electronic pull tabs taxable?

Taxable when sold to the retailer

All sales of tangible personal property are subject to sales tax unless an exemption applies. No exemption applies for these types of sales. Digital products also became taxable beginning July 1, 2014.

Minnesota Statutes 297A.61, subds. 3(l) and 7; and Fact Sheet 177, Digital Products

Are apps for electronic gaming devices taxable?

Taxable when sold to the distributor

Digital products became taxable beginning July 1, 2014.

Minnesota Statutes 297A.61, subd. 3(l) and Fact Sheet 177, Digital Products

Is the sale of software taxable?

Taxable when sold to the distributor

The purchase of prewritten computer software is taxable.

Minnesota Statutes 297A.61, subd. 17 and Fact Sheet 134, Computer Softwareinnesota Statutes 297A.61, subd. 17 and Fact Sheet 134, Computer Software

Does local sales and use tax apply when the city also has a local gambling tax?

Not taxable – however, Minnesota (6.875%) sales tax still applies

Gambling devices and equipment are not subject to local sales and use tax when a city also imposes a local gambling tax.

Minnesota Statutes 349.213, subd. 3 and Revenue Notice 99-11innesota Statutes 349.213, subd. 3 and Revenue Notice 99-11

Are purchases of gambling equipment by a 501(c)3 organization with a gambling license taxable?

Taxable

These organizations must pay sales tax when they purchase, lease, or rent gambling devices and equipment.

Minnesota Statutes 297A.70, subd. 4 and Minnesota Rule 8130.6200, subp. 8

If you are unsure of where you fall in this spectrum or have any questions about the sales tax on the leasing or renting of the information dicussed in this table, please email us at salesuse.tech@state.mn.us.