SF 745

as introduced - 89th Legislature (2015 - 2016) Posted on 02/13/2015 08:56am

A bill for an act
relating to taxation; individual income; estates; modifying the definition of
domicile; amending Minnesota Statutes 2014, sections 290.01, subdivision 7;
291.005, subdivision 1.

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

Section 1.

Minnesota Statutes 2014, section 290.01, subdivision 7, is amended to read:

Subd. 7.

Resident.

(a) The term "resident" means any individual domiciled
in Minnesota, except that an individual is not a "resident" for the period of time that
the individual is a "qualified individual" as defined in section 911(d)(1) of the Internal
Revenue Code, if the qualified individual notifies the county within three months of
moving out of the country that homestead status be revoked for the Minnesota residence
of the qualified individual, and the property is not classified as a homestead while the
individual remains a qualified individual.

(b) "Resident" also means any individual domiciled outside the state who maintains
a place of abode in the state and spends in the aggregate more than one-half of the tax
year in Minnesota, unless:

(1) the individual or the spouse of the individual is in the armed forces of the United
States; or

(2) the individual is covered under the reciprocity provisions in section 290.081.

For purposes of this subdivision, presence within the state for any part of a calendar
day constitutes a day spent in the state. Individuals shall keep adequate records to
substantiate the days spent outside the state.

The term "abode" means a dwelling maintained by an individual, whether or not
owned by the individual and whether or not occupied by the individual, and includes a
dwelling place owned or leased by the individual's spouse.

(c) new text begin In determining if an individual is domiciled in Minnesota, new text end neither the
commissioner nor any court shall consider new text begin :
new text end

new text begin (1) new text end charitable contributions made by deleted text begin an deleted text end new text begin the new text end individual within or without the state deleted text begin in
determining if the individual is domiciled in Minnesota deleted text end new text begin ;
new text end

new text begin (2) the location of the individual's attorney, certified public accountant, or financial
advisor; or
new text end

new text begin (3) the place of business of a financial institution at which the individual applies for
any new type of credit or at which the individual opens or maintains any type of account new text end .

new text begin (d) For purposes of this subdivision, the following terms have the meanings given
them:
new text end

new text begin (1) "financial advisor" means an individual, financial institution, or other firm
engaged in the business of providing services related to trust and estate administration;
personal financial advice and budgeting; investment selection or allocation; or purchase
of life, disability, long-term care, annuities, or similar insurance products; and includes
certified financial planners, registered investment advisors, securities broker-dealers,
agents licensed to sell life insurance or annuities, and similar; and
new text end

new text begin (2) "financial institution" means a financial institution as that term is defined in
section 47.015, subdivision 1, a state or nationally chartered credit union, and a registered
broker-dealer under the Securities and Exchange Act of 1934.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment but
does not apply to any case for which an appeal, petition, or complaint has been filed in
tax court or district court before that date.
new text end

Sec. 2.

Minnesota Statutes 2014, section 291.005, subdivision 1, is amended to read:

Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following
terms used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
increased by the value of any property in which the decedent had a qualifying income
interest for life and for which an election was made under section 291.03, subdivision 1d,
for Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through March 26, 2014.

(4) "Minnesota gross estate" means the federal gross estate of a decedent after
(a) excluding therefrom any property included in the estate which has its situs outside
Minnesota, and (b) including any property omitted from the federal gross estate which
is includable in the estate, has its situs in Minnesota, and was not disclosed to federal
taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person
appointed by the court to administer and dispose of the property of the decedent. If there
is no executor, administrator or other person appointed, qualified, and acting within this
state, then any person in actual or constructive possession of any property having a situs in
this state which is included in the federal gross estate of the decedent shall be deemed
to be a personal representative to the extent of the property and the Minnesota estate tax
due with respect to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota. new text begin The provisions of section 290.01, subdivision 7, paragraphs (c) and
(d), apply to determinations of domicile under this chapter.
new text end

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept
or located at the time of the decedent's death or for a gift of tangible personal property
within three years of death, the state or country in which it was normally kept or located
when the gift was executed;

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was
domiciled at death or for a gift of intangible personal property within three years of death,
the state or country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent.
If the pass-through entity is owned by a person or persons in addition to the decedent,
ownership of the property is attributed to the decedent in proportion to the decedent's
capital ownership share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of
whether it is taxed as an association or is disregarded for federal income tax purposes
under Code of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includible in the decedent's federal gross
estate; but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under
section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment but
does not apply to any case for which an appeal, petition, or complaint has been filed in
tax court or district court before that date.
new text end