HF 582

as introduced - 93rd Legislature (2023 - 2024) Posted on 01/19/2023 02:56pm

A bill for an act
relating to taxation; establishing a private letter ruling program; requiring reports;
proposing coding for new law in Minnesota Statutes, chapter 270C.

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

Section 1.

new text begin [270C.075] PRIVATE LETTER RULINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Program established. new text end

new text begin By January 1, 2024, the commissioner shall, by
administrative rule adopted under chapter 14, establish and implement a program for issuing
private letter rulings to taxpayers to provide guidance as to how the commissioner will apply
Minnesota tax law to a specific transaction or proposed transaction, arrangement, or other
fact situation of the applying taxpayer. The commissioner must include in each ruling an
explanation of the reasoning for the determination. In establishing the terms of the program,
the commissioner may provide that rulings will not be issued in specified subject areas, for
categories of transactions, or under specified provisions of law, if the commissioner
determines doing so is in the best interests of the state and sound tax administration. The
program must include a process for the representative of a taxpayer to apply for a private
letter ruling and to communicate with the commissioner regarding the requested ruling.
new text end

new text begin Subd. 2. new text end

new text begin Application procedure; fees. new text end

new text begin (a) The commissioner shall establish an
application procedure and forms for a taxpayer or the taxpayer's appointed representative
to request a private letter ruling. The commissioner may require the taxpayer to provide any
supporting factual information and certifications that the commissioner determines necessary
or appropriate to issue a private letter ruling. The requirements may vary based on the type
of ruling requested.
new text end

new text begin (b) The commissioner may, in the administrative rule, establish a fee schedule to recover
the department's actual cost of preparing private letter rulings. The maximum fee per private
letter ruling is $........ The commissioner may require the applicant to pay the required fee
for a private letter ruling before the application is considered. If the administrative rule
provides for payment of a fee as a condition for providing a private letter ruling, the rule
must provide a fee structure that varies the amount of the fee by the complexity of the request
or the number and type of issues or both.
new text end

new text begin (c) If the commissioner fails to issue a ruling to the taxpayer within 90 days after the
taxpayer's filing of a completed application, the commissioner must refund the application
fee to the taxpayer; however, the commissioner must issue a private letter ruling unless the
taxpayer withdraws the request.
new text end

new text begin (d) Any fees collected under this section must be deposited in the Revenue Department
service and recovery special revenue fund established under section 270C.15, and are
appropriated to the commissioner to offset the cost of issuing private letter rulings and
related administrative costs.
new text end

new text begin Subd. 3. new text end

new text begin Effect. new text end

new text begin (a) A private letter ruling is binding on the commissioner with respect
to the taxpayer to whom the ruling is issued if:
new text end

new text begin (1) there was no misstatement or omission of material facts in the application or other
information provided to the commissioner;
new text end

new text begin (2) the facts that subsequently developed were not materially different from the facts
upon which the ruling was based;
new text end

new text begin (3) the applicable statute, administrative rule, federal law referenced by state law, or
other relevant law has not changed; and
new text end

new text begin (4) the taxpayer acted in good faith in applying for and relying on the ruling.
new text end

new text begin (b) Private letter rulings have no precedential effect and may not be relied upon by a
taxpayer other than as provided in paragraph (a).
new text end

new text begin Subd. 4. new text end

new text begin Public access. new text end

new text begin The commissioner shall make private letter rulings issued under
this section available to the public on the department's website. The commissioner must
organize the private letter rulings by tax type and must make them available in a searchable
format. The published rulings must redact any information that would permit identification
of the requesting taxpayer.
new text end

new text begin Subd. 5. new text end

new text begin Legislative report. new text end

new text begin (a) By January 31 of each odd-numbered year, the
commissioner shall report in writing to the legislature the following information for the
immediately preceding two calendar years:
new text end

new text begin (1) the number of applications for private letter rulings;
new text end

new text begin (2) the number of private letter rulings issued, including the number issued within the
90-day time period under subdivision 2, paragraph (c);
new text end

new text begin (3) the amount of application fees refunded by tax type;
new text end

new text begin (4) the tax types for which rulings were requested;
new text end

new text begin (5) the types and characteristics of taxpayers applying for rulings; and
new text end

new text begin (6) any other information that the commissioner considers relevant to legislative oversight
of the private letter ruling program.
new text end

new text begin (b) The report must be filed as provided in section 3.195, and copies must be provided
to the chairs and ranking minority members of the committees of the house of representatives
and the senate with jurisdiction over taxes and appropriations to the Department of Revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
that the first legislative report under subdivision 5 is due January 31, 2026.
new text end