If your business pays pari-mutuel winnings on horse races, you must withhold Minnesota income tax on the winnings if all of these apply:
- You are required to withhold federal income tax
- The payoff of winnings exceeds $5,000 after deducting the bet amount
- The payoff is at least 300 times the bet amount
The withholding rate on pari-mutuel winnings is 9.85%.
For more information, see Minnesota Statute 290.92, subdivision 27.