Department of Revenue says $31.7 million was over‑distributed to Legacy Fund; correction recorded

The Minnesota Department of Revenue told the Legacy Finance Committee on March 5 that it over‑distributed roughly $31.7 million to the Legacy Fund over about 15 years after Minnesota Lottery receipts were treated as subject to the Legacy sales‑tax allocation rather than routed to the general fund.

"On behalf of the Department of Revenue, I want to apologize to the Legacy Finance Committee and to the Legacy Fund," Commissioner Paul Marquardt said, acknowledging the error and telling members the mistake will complicate upcoming budget work.

Committee members were told the issue occurred because lottery receipts were filed on the sales‑tax variable‑rate line and the department historically multiplied the total reported on that line by the Legacy share (5.45 percent), rather than excluding the lottery portion before the Legacy calculation. Chief Financial Officer Maggie Rittenhouse said the department discovered the Minnesota Lottery was effectively an "in lieu of" tax and therefore should not have been included in the Legacy allocation.

Rittenhouse described the mechanics to the committee: each month the department takes the total reported on the variable‑rate line,…