Tax committee advances Robbins bill to cut and simplify charitable gambling tax; amendment adopted

The Minnesota House Taxes Committee on Thursday advanced House File 169 as amended, a bill by State Representative Marion Robbins that would replace the current tiered tax on charitable gambling net receipts with a flat 5% rate. The committee adopted a technical amendment (H0169A1) before laying the bill over for possible inclusion in the omnibus tax bill.

Robbins, the bill author, told members the change is aimed at returning more charitable gambling revenue to local communities. "This bill is sort of the middle ground attempt ... just put a flat tax," Robbins said, adding the change would not eliminate taxation but would cap the state's share at 5%.

Why it matters: Supporters said the proposal would strengthen small-town charities, veterans' groups and volunteer organizations that rely on gambling proceeds for local grants, scholarships and services. Rachel Jenner, executive director of Allied Charities of Minnesota, told the committee charities in the state pay about $195 million annually in taxes and that some organizations reported year‑over‑year revenue declines of 20% to 40% after electronic pull‑tab rule changes took effect January 1. "These losses directly impact veteran services, youth sports, fire departments, and essential community programs," Jenner said.

Committee debate and factual disputes: Members and witnesses disagreed over how large the revenue decline has been since the 2023 restrictions on certain electronic pull‑tab features took effect. Representative Stevenson said e‑pull‑tab play remains available and that industrywide figures show about a 10% decline in the first month under the new rules. "We should be very clear that e pull tabs were not taken away," Stevenson said, correcting points in the bill author's opening remarks. Robbins acknowledged she had misstated an earlier figure and said the forecast last summer projected a 25% decline in charitable gaming revenue to the general fund.

Testimony: Veterans and nonprofit witnesses described specific community uses for gambling proceeds. Dr. Christie Janigo, legislative chair for the American Legion Department of Minnesota, said American Legion posts use charitable funds for emergency veteran supports, suicide prevention programs and community events. Tim Engstrom, gambling manager for American Legion Post 550, described Minnesota's progressive tax schedule, noting it rises from a low rate to 33.5% on cumulative net receipts. Multiple local operators and club leaders — including Jim Propst of the South Robert Street Business Association, Wendy Dolan of the Ham Lake Lions Club and Heidi Zaworski of the Northeast Minneapolis Community Foundation — recounted donations to food shelves, school programs and equipment purchases they said would be harder to fund under current taxes.

Budget questions and opposing context: Several committee members, including Representative Sherry Gomez, urged caution given the potential fiscal impact. Gomez summarized where general‑fund revenue is spent and noted the bill, as written, would reduce general‑fund collections by an amount the department estimated at about $300 million per biennium. "When we talk about reducing taxes and narrowing the tax base in a permanent way we have to look at what these dollars buy," Gomez said, citing Health and Human Services and education as major general‑fund obligations.

Formal action: The committee adopted the H0169A1 technical amendment (voice vote) and Robbins renewed her motion that House File 169 as amended be laid over for possible inclusion in the omnibus tax bill. The committee recorded the motion as carried by voice vote; no roll‑call tally was taken in committee minutes.

What’s next: The bill was laid over for possible inclusion in the larger tax omnibus package. If included, the House‑Senate conference process and final budget decisions would determine whether the proposed flat 5% rate becomes law and how the state would offset the reduced general‑fund revenue.

Ending note: Supporters urged lawmakers to consider the local, direct uses of charitable gambling proceeds; other members asked for data on statewide and county budget impacts before making a permanent tax change.