HF 5247

as introduced - 93rd Legislature (2023 - 2024) Posted on 04/02/2024 11:52am

A bill for an act
relating to taxation; modifying property taxes, individual income and corporate
franchise taxes, gross receipts taxes, and local government aids; clarifying the
definition of certain attachments and appurtenances; proposing advanced payments
of the child tax credit; clarifying the credit for research calculation for the gross
receipts tax; modifying the effective date of a reduction in the limitation on the
deductibility of net operating losses; modifying Tribal Nation aid payment dates;
appropriating money; amending Minnesota Statutes 2022, sections 272.02,
subdivision 19; 273.38; 273.41; 289A.08, subdivision 1; 295.53, subdivision 4a;
Minnesota Statutes 2023 Supplement, sections 290.0661, subdivision 7, by adding
a subdivision; 477A.40, subdivisions 4, 5; Laws 2023, chapter 64, article 1, section
44.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 272.02, subdivision 19, is amended to read:

Subd. 19.

Property used to distribute electricity to farmers.

Electric power distribution
deleted text begin lines and their attachments and appurtenances deleted text end new text begin systems, not including substations, or
transmission or generation equipment new text end , that are used primarily for supplying electricity to
farmers at retail, are exempt.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2024 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2022, section 273.38, is amended to read:

273.38 PERCENTAGE OF ASSESSMENTS; EXCEPTIONS.

The distribution deleted text begin lines and the attachments and appurtenances thereto deleted text end new text begin systems, not
including substations, or transmission or generation equipment new text end of cooperative associations
organized under the provisions of Laws 1923, chapter 326, and laws amendatory thereof
and supplemental thereto, and engaged in the electrical heat, light and power business, upon
a mutual, nonprofit and cooperative plan, shall be assessed and taxed as provided in sections
273.40 and 273.41.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2024 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2022, section 273.41, is amended to read:

273.41 AMOUNT OF TAX; DISTRIBUTION.

There is hereby imposed upon each such cooperative association on December 31 of
each year a tax of $10 for each 100 members, or fraction thereof, of such association. The
tax, when paid, shall be in lieu of all personal property taxes, state, county, or local, upon
deleted text begin distribution lines and the attachments and appurtenances thereto of such associations deleted text end new text begin that
part of the association's distribution system, not including substations, or transmission or
generation equipment, new text end located in rural areas. The tax shall be payable on or before March
1 of the next succeeding year, to the commissioner of revenue. If the tax, or any portion
thereof, is not paid within the time herein specified for the payment thereof, there shall be
added thereto a specific penalty equal to ten percent of the amount so remaining unpaid.
Such penalty shall be collected as part of said tax, and the amount of said tax not timely
paid, together with said penalty, shall bear interest at the rate specified in section 270C.40
from the time such tax should have been paid until paid. The commissioner shall deposit
the amount so received in the general fund of the state treasury.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2024 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2022, section 289A.08, subdivision 1, is amended to read:

Subdivision 1.

Generally; individuals.

(a) A taxpayer must file a return for each taxable
year the taxpayer is required to file a return under section 6012 of the Internal Revenue
Code or meets the requirements under paragraph (d) to file a return, except that:

(1) an individual who is not a Minnesota resident for any part of the year is not required
to file a Minnesota income tax return if the individual's gross income derived from Minnesota
sources as determined under sections 290.081, paragraph (a), and 290.17, is less than the
filing requirements for a single individual who is a full year resident of Minnesota;

(2) an individual who is a Minnesota resident is not required to file a Minnesota income
tax return if the individual's gross income derived from Minnesota sources as determined
under section 290.17, less the subtractions allowed under section 290.0132, subdivisions
12 and 15, is less than the filing requirements for a single individual who is a full-year
resident of Minnesota.

(b) The decedent's final income tax return, and other income tax returns for prior years
where the decedent had gross income in excess of the minimum amount at which an
individual is required to file and did not file, must be filed by the decedent's personal
representative, if any. If there is no personal representative, the return or returns must be
filed by the transferees, as defined in section 270C.58, subdivision 3, who receive property
of the decedent.

(c) The term "gross income," as it is used in this section, has the same meaning given it
in section 290.01, subdivision 20.

(d) The commissioner of revenue must annually determine the gross income levels at
which individuals are required to file a return for each taxable year based on the amounts
allowed as a deduction under section 290.0123.

new text begin (e) Notwithstanding paragraph (a), an individual must file a Minnesota income tax return
for each taxable year that the taxpayer has made an election to receive advance payments
of the child tax credit under section 290.0661, subdivision 8.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2024.
new text end

Sec. 5.

Minnesota Statutes 2023 Supplement, section 290.0661, subdivision 7, is amended
to read:

Subd. 7.

Inflation adjustment.

(a) For taxable years beginning after December 31,
2025, the commissioner of revenue must annually adjust for inflation the credit amount in
subdivision 3 as provided in section 270C.22. The adjusted amounts must be rounded to
the nearest $60. The statutory year is taxable year 2025.

(b) For taxable years beginning after December 31, 2023, the commissioner of revenue
must annually adjust for inflation the phaseout thresholds in subdivision 4, as provided in
section 270C.22. The statutory year is taxable year 2023.

new text begin (c) For taxable years beginning after December 31, 2025, and before January 1, 2029,
the commissioner of revenue must annually adjust for inflation the limitations for adjusted
gross income in subdivision 9, paragraph (a), clause (2), as provided in section 270C.22.
The statutory year is taxable year 2025.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2025.
new text end

Sec. 6.

Minnesota Statutes 2023 Supplement, section 290.0661, is amended by adding a
subdivision to read:

new text begin Subd. 9. new text end

new text begin Minimum credit. new text end

new text begin (a) For taxable years beginning after December 31, 2024,
and before January 1, 2029, an eligible taxpayer is allowed the greater of the credit allowed
under subdivision 2 or the minimum credit described in this subdivision. A taxpayer is
eligible for the minimum credit under this subdivision if the taxpayer:
new text end

new text begin (1) received the credit under subdivision 2 in the preceding taxable year; and
new text end

new text begin (2) has adjusted gross income in the current taxable year equal to or less than:
new text end

new text begin (i) $60,100 for married taxpayers filing a joint return with one qualifying child; or
new text end

new text begin (ii) $49,570 for all other filers with one qualifying child.
new text end

new text begin (b) The adjusted gross income limitations in paragraph (a), clause (2), are increased by
$9,000 for each additional qualifying child.
new text end

new text begin (c) The credit allowed under this subdivision is equal to 50 percent of the credit received
under subdivision 2 in the prior taxable year, unless paragraph (d) applies.
new text end

new text begin (d) If a taxpayer is claiming fewer qualifying children in the current taxable year than
in the prior taxable year, the minimum credit allowed under this subdivision is equal to 50
percent of credit received under this section in the prior taxable year multiplied by a fraction
in which:
new text end

new text begin (1) the numerator is the number of qualifying children in the current taxable year; and
new text end

new text begin (2) the denominator is the number of qualifying children in the prior taxable year.
new text end

new text begin (e) The commissioner must certify the total change in individual income tax liability
from the credit allowed under this subdivision compared to the credit calculated under
subdivision 2 to the commissioner of management and budget by June 30 of each year.
new text end

new text begin (f) A minimum child tax credit account is created in the special revenue fund. Money
in the account is appropriated to the commissioner of management and budget for transfers
to the general fund required in paragraph (h).
new text end

new text begin (g) $45,000,000 in fiscal year 2025 is transferred from the general fund to the minimum
child tax credit account established in paragraph (f). This transfer is for fiscal year 2025
only.
new text end

new text begin (h) The commissioner of management and budget must annually transfer an amount
sufficient to cover the amount certified in paragraph (e) from the minimum child tax credit
account to the general fund beginning in fiscal year 2026. Any amount remaining in the
minimum child tax credit account on July 1, 2029, cancels to the general fund.
new text end

new text begin (i) This subdivision expires January 1, 2029, for taxable years beginning after December
31, 2028.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2024.
new text end

Sec. 7.

Minnesota Statutes 2022, section 295.53, subdivision 4a, is amended to read:

Subd. 4a.

Credit for research.

(a) In addition to the exemptions allowed under
subdivision 1, a hospital or health care provider may claim an annual credit against the total
amount of tax, if any, the hospital or health care provider owes for that calendar year under
sections 295.50 to 295.57. The credit shall equal deleted text begin 2.5 deleted text end new text begin 0.5 new text end percent of revenues for patient
services used to fund expenditures for qualifying research conducted by an allowable research
program. The amount of the credit shall not exceed the tax liability of the hospital or health
care provider under sections 295.50 to 295.57.

(b) For purposes of this subdivision, the following requirements apply:

(1) expenditures must be for program costs of qualifying research conducted by an
allowable research program;

(2) an allowable research program must be a formal program of medical and health care
research conducted by an entity which is exempt under section 501(c)(3) of the Internal
Revenue Code as defined in section 289A.02, subdivision 7, or is owned and operated under
authority of a governmental unit;

(3) qualifying research must:

(A) be approved in writing by the governing body of the hospital or health care provider
which is taking the deduction under this subdivision;

(B) have as its purpose the development of new knowledge in basic or applied science
relating to the diagnosis and treatment of conditions affecting the human body;

(C) be subject to review by individuals with expertise in the subject matter of the proposed
study but who have no financial interest in the proposed study and are not involved in the
conduct of the proposed study; and

(D) be subject to review and supervision by an institutional review board operating in
conformity with federal regulations if the research involves human subjects or an institutional
animal care and use committee operating in conformity with federal regulations if the
research involves animal subjects. Research expenses are not exempt if the study is a routine
evaluation of health care methods or products used in a particular setting conducted for the
purpose of making a management decision. Costs of clinical research activities paid directly
for the benefit of an individual patient are excluded from this exemption. Basic research in
fields including biochemistry, molecular biology, and physiology are also included if such
programs are subject to a peer review process.

(c) No credit shall be allowed under this subdivision for any revenue received by the
hospital or health care provider in the form of a grant, gift, or otherwise, whether from a
government or nongovernment source, on which the tax liability under section 295.52 is
not imposed.

(d) The taxpayer shall apply for the credit under this section on the annual return under
section 295.55, subdivision 5.

deleted text begin (e) Beginning September 1, 2001, if the actual or estimated amount paid under this
section for the calendar year exceeds $2,500,000, the commissioner of management and
budget shall determine the rate of the research credit for the following calendar year to the
nearest one-half percent so that refunds paid under this section will most closely equal
$2,500,000. The commissioner of management and budget shall publish in the State Register
by October 1 of each year the rate of the credit for the following calendar year. A
determination under this section is not subject to the rulemaking provisions of chapter 14.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2023 Supplement, section 477A.40, subdivision 4, is amended
to read:

Subd. 4.

Application.

An eligible Tribal Nation may choose to receive an aid distribution
under this section by submitting an application under this subdivision. An eligible Tribal
Nation which has not received a distribution in a prior aids payable year may elect to begin
participation in the program by submitting an application in the manner and form prescribed
by the commissioner of revenue by January 15 of the aids payable year. In order to receive
a distribution, an eligible Tribal Nation must certify to the commissioner of revenue the
most recent estimate of the total number of enrolled members of the eligible Tribal Nation.
The information must be annually certified by March 1 in the form prescribed by the
commissioner of revenue. The commissioner of revenue must annually calculate and certify
the amount of aid payable to each eligible Tribal Nation deleted text begin on or before August 1 deleted text end new text begin by June 1 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2023 Supplement, section 477A.40, subdivision 5, is amended
to read:

Subd. 5.

Payments.

The commissioner of revenue must pay Tribal Nation aid annually
by deleted text begin December 27 deleted text end new text begin July 20 new text end of the year the aid is certified.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aid paid in 2025 and thereafter.
new text end

Sec. 10.

Laws 2023, chapter 64, article 1, section 44, the effective date, is amended to
read:

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, deleted text begin 2022 deleted text end new text begin 2023 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2022.
new text end

Sec. 11. new text begin 2024 TRIBAL NATION AID.
new text end

new text begin (a) Notwithstanding any law to the contrary, for calendar year 2024 the commissioner
of revenue must pay Tribal Nation aid under Minnesota Statutes, section 477A.40, by June
20, 2024.
new text end

new text begin (b) $35,000,000 in fiscal year 2024 is appropriated from the general fund to the
commissioner of revenue to make payments required under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12. new text begin APPROPRIATION.
new text end

new text begin $1,878,000 in fiscal year 2025 is appropriated from the general fund to the commissioner
of revenue to administer Minnesota Statutes, section 290.0661, subdivision 8. The base for
this appropriation is $2,838,000 in fiscal year 2026 and $1,934,000 in fiscal year 2027.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end