Minnesota Legislature
HF 1063
as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to taxation; providing for payment of a sales 1.3 tax rebate; providing for an automatic rebate under 1.4 certain circumstances; appropriating money; amending 1.5 Minnesota Statutes 2000, section 16A.1522, 1.6 subdivisions 2 and 5. 1.7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.8 Section 1. Minnesota Statutes 2000, section 16A.1522, 1.9 subdivision 2, is amended to read: 1.10 Subd. 2. [PLAN.] (a) If the commissioner designates an 1.11 amount for rebate in either forecast, the governor shall present 1.12 a plan to the legislature for rebating that amount. The plan 1.13 must provide for payments to begin no later than August 15 of 1.14 the odd-numbered year. ByApril 15May 23 of each odd-numbered 1.15 year, the legislature shall enact, modify, or reject the plan 1.16 presented by the governor. 1.17 (b) If the legislature fails to enact a plan under 1.18 paragraph (a) and if the commissioner certifies an amount under 1.19 subdivision 3 that exceeds one-half of one percent of the total 1.20 general fund biennial revenues, the commissioner of revenue 1.21 shall pay a rebate to taxpayers using the rebate schedule under 1.22 which a rebate was most recently paid by the state. The 1.23 schedule and formula must be applied using data from the most 1.24 recent tax year for which reliable data is available to permit 1.25 the commissioner of revenue to administer the rebate. The 1.26 commissioner of revenue shall proportionately adjust the dollar 2.1 amounts and percentages under the rebate schedule and formula so 2.2 that the total amount to be rebated equals the amount certified 2.3 by the commissioner under subdivision 3. 2.4 [EFFECTIVE DATE.] This section is effective the day 2.5 following final enactment. 2.6 Sec. 2. Minnesota Statutes 2000, section 16A.1522, 2.7 subdivision 5, is amended to read: 2.8 Subd. 5. [APPROPRIATION.] A sum sufficient to pay any 2.9 rebate due under the plan enacted or implemented under 2.10 subdivision 2 is appropriated from the general fund to the 2.11 commissioner of revenue. 2.12 [EFFECTIVE DATE.] This section is effective the day 2.13 following final enactment. 2.14 Sec. 3. [STATEMENT OF PURPOSE.] 2.15 (a) The state of Minnesota derives revenues from a variety 2.16 of taxes, fees, and other sources, including the state sales tax. 2.17 (b) It is fair and reasonable to refund the existing state 2.18 budget surplus in the form of a rebate of nonbusiness consumer 2.19 sales taxes paid by individuals in calendar year 1999. 2.20 (c) Information concerning the amount of sales tax paid at 2.21 various income levels is contained in the Minnesota tax 2.22 incidence report, which is written by the commissioner of 2.23 revenue and presented to the legislature according to Minnesota 2.24 Statutes, section 270.0682. 2.25 (d) It is fair and reasonable to use information contained 2.26 in the Minnesota tax incidence report, updated to calendar year 2.27 1999, to determine the proportionate share of the sales tax 2.28 rebate due each eligible taxpayer since no effective or 2.29 practical mechanism exists for determining the amount of actual 2.30 sales tax paid by each eligible individual. 2.31 Sec. 4. [SALES TAX REBATE.] 2.32 (a) An individual who was a resident of Minnesota for any 2.33 part of 1999, and filed a 1999 Minnesota income tax return on or 2.34 before November 30, 2001, and had a tax liability before 2.35 refundable credits on that return of at least $1 and who was not 2.36 allowed to be claimed as a dependent on a 1999 federal income 3.1 tax return filed by another person shall receive a sales tax 3.2 rebate. 3.3 (b) The sales tax rebate for taxpayers who qualify under 3.4 paragraph (a) as married filing joint or head of household must 3.5 be computed according to the following schedule: 3.6 Income Sales Tax Rebate 3.7 less than $2,500 $242 3.8 at least $2,500 but less than $5,000 $312 3.9 at least $5,000 but less than $10,000 $333 3.10 at least $10,000 but less than $15,000 $365 3.11 at least $15,000 but less than $20,000 $396 3.12 at least $20,000 but less than $25,000 $431 3.13 at least $25,000 but less than $30,000 $449 3.14 at least $30,000 but less than $35,000 $487 3.15 at least $35,000 but less than $40,000 $533 3.16 at least $40,000 but less than $45,000 $571 3.17 at least $45,000 but less than $50,000 $601 3.18 at least $50,000 but less than $60,000 $641 3.19 at least $60,000 but less than $70,000 $686 3.20 at least $70,000 but less than $80,000 $755 3.21 at least $80,000 but less than $90,000 $810 3.22 at least $90,000 but less than $100,000 $894 3.23 at least $100,000 but less than $120,000 $968 3.24 at least $120,000 but less than $140,000 $1,061 3.25 at least $140,000 but less than $160,000 $1,147 3.26 at least $160,000 but less than $180,000 $1,228 3.27 at least $180,000 but less than $200,000 $1,304 3.28 at least $200,000 but less than $400,000 $1,669 3.29 at least $400,000 but less than $600,000 $2,195 3.30 at least $600,000 but less than $800,000 $2,634 3.31 at least $800,000 but less than $1,000,000 $3,020 3.32 $1,000,000 and over $3,500 3.33 (c) The sales tax rebate for individuals who qualify under 3.34 paragraph (a) as single or married filing separately must be 3.35 computed according to the following schedule: 3.36 Income Sales Tax Rebate 4.1 less than $2,500 $138 4.2 at least $2,500 but less than $5,000 $168 4.3 at least $5,000 but less than $10,000 $197 4.4 at least $10,000 but less than $15,000 $265 4.5 at least $15,000 but less than $20,000 $303 4.6 at least $20,000 but less than $25,000 $329 4.7 at least $25,000 but less than $30,000 $343 4.8 at least $30,000 but less than $40,000 $374 4.9 at least $40,000 but less than $50,000 $419 4.10 at least $50,000 but less than $70,000 $494 4.11 at least $70,000 but less than $100,000 $627 4.12 at least $100,000 but less than $140,000 $755 4.13 at least $140,000 but less than $200,000 $912 4.14 at least $200,000 but less than $400,000 $1,237 4.15 at least $400,000 but less than $600,000 $1,627 4.16 $600,000 and over $1,750 4.17 (d) Individuals who were not residents of Minnesota for any 4.18 part of 1999 and who paid more than $10 in Minnesota sales tax 4.19 under Minnesota Statutes, chapters 297A and 297B, on nonbusiness 4.20 consumer purchases in that year qualify for a rebate under this 4.21 paragraph only. Qualifying nonresidents must file a claim for 4.22 rebate on a form prescribed by the commissioner by November 30, 4.23 2001. The claim must include receipts showing the Minnesota 4.24 sales tax paid and the date of the sale. Taxes paid on 4.25 purchases allowed in the computation of federal taxable income 4.26 or reimbursed by an employer are not eligible for the rebate. 4.27 The commissioner shall determine the qualifying taxes paid and 4.28 rebate the lesser of: 4.29 (1) 42.85 percent of that amount; or 4.30 (2) the maximum amount for which the claimant would have 4.31 been eligible as determined under paragraph (b) if the taxpayer 4.32 filed the 1999 federal income tax return as a married taxpayer 4.33 filing jointly or head of household, or as determined under 4.34 paragraph (c) for other taxpayers. 4.35 (e) "Income," for purposes of this section other than 4.36 paragraph (d), is taxable income as defined in section 63 of the 5.1 Internal Revenue Code of 1986, as amended through December 31, 5.2 1998, plus the sum of any additions to federal taxable income 5.3 for the taxpayer under Minnesota Statutes, section 290.01, 5.4 subdivision 19a, and reported on the original 1999 income tax 5.5 return, including subsequent adjustments to that return made 5.6 within the time limits specified in paragraph (l). For an 5.7 individual who was a resident of Minnesota for less than the 5.8 entire year, the sales tax rebate equals the sales tax rebate 5.9 calculated under paragraph (b) or (c) multiplied by the 5.10 percentage determined pursuant to Minnesota Statutes, section 5.11 290.06, subdivision 2c, paragraph (e), as calculated on the 5.12 original 1999 income tax return, including subsequent 5.13 adjustments to that return made within the time limits specified 5.14 in paragraph (l). For purposes of paragraph (d), "income" is 5.15 taxable income as defined in section 63 of the Internal Revenue 5.16 Code of 1986, as amended through December 31, 1998, and reported 5.17 on the taxpayer's original federal tax return for the first 5.18 taxable year beginning after December 31, 1998. 5.19 (f) Individuals who were residents of Minnesota for all of 5.20 1999, were not eligible for a rebate under paragraph (a), 5.21 attained the age of 18 on or before December 31, 1998, and 5.22 received in 1999 social security benefits as defined in section 5.23 86(d)(1) of the Internal Revenue Code of 1986, as amended 5.24 through December 31, 2000, are entitled to a rebate of $121. If 5.25 the Social Security Administration or Railroad Retirement Board 5.26 is paying benefits to a recipient by electronic funds transfers 5.27 in 2001, the rebate under this paragraph may be paid by the 5.28 commissioner through electronic funds transfer to the same 5.29 financial institution and into the same account into which the 5.30 Social Security Administration or Railroad Retirement Board 5.31 transfers social security benefits in calendar year 2001. 5.32 (g) An individual who: 5.33 (1) was allowed to be claimed as a dependent on a 1999 5.34 federal income tax return filed by another person; 5.35 (2) would have otherwise been eligible for a rebate under 5.36 clause (a); and 6.1 (3) reported earned income as defined in section 6.2 32(c)(2)(A)(i) of the Internal Revenue Code, 6.3 is eligible for a rebate under this paragraph only. The rebate 6.4 under this paragraph equals 35 percent of the amount allowed 6.5 under the schedule in paragraph (c) based on the individual's 6.6 income. For an individual who was a resident of Minnesota for 6.7 less than the entire year, the sales tax rebate equals the 6.8 rebate calculated under this paragraph multiplied by the 6.9 percentage determined pursuant to Minnesota Statutes, section 6.10 290.06, subdivision 2c, paragraph (e), as calculated on the 6.11 original 1999 income tax return. 6.12 (h) An individual who: 6.13 (1) was a resident of Minnesota for any part of 1999; 6.14 (2) was not eligible for a rebate under paragraph (a) or 6.15 (f); 6.16 (3) was not allowed to be claimed as a dependent on a 1999 6.17 federal income tax return by another person; and 6.18 (4) filed and received a property tax refund under 6.19 Minnesota Statutes, chapter 290A, for property taxes paid in 6.20 2000 or rent constituting property taxes paid in 1999; or 6.21 (5) filed a 1999 Minnesota income tax return before 6.22 November 30, 2001, in order to: 6.23 (i) claim a credit under section 290.067, 290.0671, or 6.24 290.0674; 6.25 (ii) claim a refund of withheld taxes; or 6.26 (iii) claim a refund of estimated taxes, 6.27 is eligible for a rebate under this paragraph only. For married 6.28 couples filing joint Minnesota income tax returns and 6.29 individuals filing Minnesota income tax returns with head of 6.30 household status, the rebate equals the minimum amount in 6.31 paragraph (b). For single filers and married individuals filing 6.32 separate Minnesota income tax returns, the rebate equals the 6.33 minimum amount in paragraph (c). For individuals who qualify 6.34 for a rebate under clause (4), the rebate equals the minimum 6.35 amount in paragraph (c) unless the property tax refund return is 6.36 a joint return and neither of the joint filers qualifies for a 7.1 rebate under any of the other rebate criteria in which case the 7.2 rebate equals the minimum amount in paragraph (b). For an 7.3 individual who was a resident of Minnesota for less than the 7.4 entire year, the sales tax rebate equals the rebate calculated 7.5 under this paragraph multiplied by the percentage determined 7.6 pursuant to Minnesota Statutes, section 290.06, subdivision 2c, 7.7 paragraph (e), as calculated on the original 1999 income tax 7.8 return. 7.9 (i) For a fiscal year taxpayer, the dates in paragraphs (a) 7.10 through (d) are extended one month for each month in calendar 7.11 year 1999 that occurred prior to the start of the individual's 7.12 1999 fiscal tax year. 7.13 (j) Before payment, the commissioner of revenue shall 7.14 adjust the rebate as follows: 7.15 the rebates calculated in paragraphs (b), (c), (d), (f), 7.16 (g), and (h) must be proportionately reduced to account for (i) 7.17 rebates under paragraphs (g) and (h) and (ii) 1999 income tax 7.18 returns that are filed on or after January 1, 2001, but before 7.19 June 1, 2001, so that the estimated amount of sales tax rebates 7.20 payable under paragraphs (b), (c), (d), (f), (g), and (h) on the 7.21 date the rebate is processed does not exceed $925,414,000. The 7.22 adjustment under this paragraph is not a rule subject to 7.23 Minnesota Statutes, chapter 14. 7.24 (k) The commissioner of revenue may begin making sales tax 7.25 rebates by July 1, 2001. Sales tax rebates not paid by January 7.26 1, 2002, bear interest at the rate specified in Minnesota 7.27 Statutes, section 270.75. 7.28 (l) A sales tax rebate shall not be adjusted based on 7.29 changes to a 1999 income tax return that are made by order of 7.30 assessment after the date the rebate is processed, or made by 7.31 the taxpayer that are filed with the commissioner of revenue 7.32 after that date. 7.33 (m) Individuals who filed a joint income tax return for 7.34 1999 shall receive a joint sales tax rebate. After the sales 7.35 tax rebate has been issued, but before the check has been 7.36 cashed, either joint claimant may request a separate check for 8.1 one-half of the joint sales tax rebate. Notwithstanding 8.2 anything in this section to the contrary, if prior to payment, 8.3 the commissioner has been notified that persons who filed a 8.4 joint 1999 income tax return or joint 1999 property tax refund 8.5 are living at separate addresses, as indicated on their 2000 8.6 income tax return or otherwise, the commissioner may issue 8.7 separate checks to each person. The amount payable to each 8.8 person is one-half of the total joint rebate. 8.9 (n) If a rebate is received by the estate of a deceased 8.10 individual after the probate estate has been closed, and if the 8.11 original rebate check is returned to the commissioner with a 8.12 copy of the decree of descent or final account of the estate, 8.13 social security numbers, and addresses of the beneficiaries, the 8.14 commissioner may issue separate checks in proportion to their 8.15 share in the residuary estate in the names of the residuary 8.16 beneficiaries of the estate. 8.17 (o) The sales tax rebate is a "Minnesota tax law" for 8.18 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 8.19 (p) The sales tax rebate is "an overpayment of any tax 8.20 collected by the commissioner" for purposes of Minnesota 8.21 Statutes, section 270.07, subdivision 5. For purposes of this 8.22 paragraph, a joint sales tax rebate is payable to each spouse 8.23 equally. 8.24 (q) If the commissioner of revenue cannot locate an 8.25 individual entitled to a sales tax rebate by July 1, 2002, or if 8.26 an individual to whom a sales tax rebate was issued has not 8.27 cashed the check by July 1, 2002, the right to the sales tax 8.28 rebate lapses and the check must be deposited in the general 8.29 fund. 8.30 (r) Individuals entitled to a sales tax rebate pursuant to 8.31 paragraph (a), (f), (g), or (h) but who did not receive one, and 8.32 individuals who receive a sales tax rebate that was not 8.33 correctly computed, must file a claim with the commissioner 8.34 before July 1, 2002, in a form prescribed by the commissioner. 8.35 These claims must be treated as if they are a claim for refund 8.36 under Minnesota Statutes, section 289A.50, subdivisions 4 and 7. 9.1 (s) The sales tax rebate is a refund subject to revenue 9.2 recapture under Minnesota Statutes, chapter 270A. The 9.3 commissioner of revenue shall remit the entire refund to the 9.4 claimant agency, which shall, upon the request of the spouse who 9.5 does not owe the debt, refund one-half of the joint sales tax 9.6 rebate to the spouse who does not owe the debt. 9.7 (t) The rebate is a reduction of fiscal year 2001 sales tax 9.8 revenues. The amount necessary to make the sales tax rebates 9.9 and interest provided in this section is appropriated from the 9.10 general fund to the commissioner of revenue in fiscal year 2001 9.11 and is available until June 30, 2003. 9.12 (u) If a sales tax rebate check is cashed by someone other 9.13 than the payee or payees of the check, and the commissioner of 9.14 revenue determines that the check has been forged or improperly 9.15 endorsed or the commissioner determines that a rebate was 9.16 overstated or erroneously issued, the commissioner may issue an 9.17 order of assessment for the amount of the check or the amount 9.18 the check is overstated against the person or persons cashing 9.19 it. The assessment must be made within two years after the 9.20 check is cashed, but if cashing the check constitutes theft 9.21 under Minnesota Statutes, section 609.52, or forgery under 9.22 Minnesota Statutes, section 609.631, the assessment can be made 9.23 at any time. The assessment may be appealed administratively 9.24 and judicially. The commissioner may take action to collect the 9.25 assessment in the same manner as provided by Minnesota Statutes, 9.26 chapter 289A, for any other order of the commissioner assessing 9.27 tax. 9.28 (v) Notwithstanding Minnesota Statutes, sections 9.031, 9.29 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 9.30 commissioner of revenue may take whatever actions the 9.31 commissioner deems necessary to pay the rebates required by this 9.32 section, and may, in consultation with the commissioner of 9.33 finance and the state treasurer, contract with a private vendor 9.34 or vendors to process, print, and mail the rebate checks or 9.35 warrants required under this section and receive and disburse 9.36 state funds to pay those checks or warrants. 10.1 (w) The commissioner may pay rebates required by this 10.2 section by electronic funds transfer to individuals who 10.3 requested that their 2000 individual income tax refund be paid 10.4 through electronic funds transfer. The commissioner may make 10.5 the electronic funds transfer payments to the same financial 10.6 institution and into the same account as the 2000 individual 10.7 income tax refund. 10.8 [EFFECTIVE DATE.] This section is effective the day 10.9 following final enactment. 10.10 Sec. 5. [APPROPRIATIONS.] 10.11 (a) $500,000 in fiscal year 2001 and $1,231,600 in fiscal 10.12 year 2002 are appropriated from the general fund to the 10.13 commissioner of revenue to administer the sales tax rebates in 10.14 this article. Any unencumbered balance remaining on June 30, 10.15 2001, does not cancel but is available for expenditure by the 10.16 commissioner of revenue until June 30, 2002. Notwithstanding 10.17 Minnesota Statutes, section 16A.285, and except as provided in 10.18 paragraph (b), the commissioner of revenue may not use this 10.19 appropriation for any purpose other than administering the 2001 10.20 sales tax rebates. This is a one-time appropriation and may not 10.21 be added to the agency's budget base. 10.22 (b) $278,000 in fiscal year 2002 is appropriated from the 10.23 general fund to the state treasurer to pay the cost of clearing 10.24 sales tax rebate checks through commercial banks. 10.25 [EFFECTIVE DATE.] This section is effective the day 10.26 following final enactment.