In-Lieu-of-Sales Tax

Since the start of lottery sales in 1990, the legislature has imposed an "in-lieu-of-sales" tax on lottery tickets. This 6^1/2 percent tax is paid directly by the Lottery to the state treasury and is part of the regular lottery ticket purchase price.

Prior to the start of fiscal year 2000, this money was allocated to the General Fund, where it was commingled with other sources of revenue such as the income tax and regular sales tax. Through June 30, 2007 over $410 million was transferred to the General Fund through this tax.

Beginning on July 1, 2000 revenues from this tax were partially redirected to several environmental programs. For fiscal year 2007, 27.57 percent of the revenue continues to go to the General Fund, and 72.43 percent is directed as follows (amounts in parentheses are the FY2008 allocation):

• 37.4 percent ($11,094,000) to the Game and Fish Fund for activities that improve, enhance, or protect fish and wildlife resources,

• 16.0 percent ($4,738,000) to state parks and trails,

• 15.4 percent ($4,570,000) for metropolitan area parks and trails

• 2.2 percent ($655,000) for trails operated by local governments

• 1.4 percent ($407,000) to the Minnesota Zoo, Como Zoo, and Duluth Zoo