HF 4163

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxes; state taxes; limiting the increase 
  1.3             in revenues collected by certain taxes and requiring 
  1.4             the commissioner of finance to reduce tax rates to 
  1.5             insure that revenues do not exceed the limits; 
  1.6             amending Minnesota Statutes 1998, sections 290.06, 
  1.7             subdivision 1; 297A.02, by adding a subdivision; and 
  1.8             297B.02, subdivision 1; Minnesota Statutes 1999 
  1.9             Supplement, section 290.06, subdivision 2c; proposing 
  1.10            coding for new law in Minnesota Statutes 1998, chapter 
  1.11            16A. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  [16A.151] [LIMITS ON CERTAIN TAX COLLECTIONS; 
  1.14  AUTHORITY TO REDUCE RATES.] 
  1.15     Subdivision 1.  [TAX LIMITS FOR CERTAIN TAXES.] The revenue 
  1.16  raised in each calendar year from each of the following taxes 
  1.17  shall be limited to an amount equal to the amount of revenue 
  1.18  raised by that tax in the previous calendar year, multiplied by 
  1.19  (1) one plus a percentage equal to the percentage increase in 
  1.20  the number of households in the state for the most recently 
  1.21  available calendar year as of July 1 of the prior year, and (2) 
  1.22  one plus a percentage increase equal to the percentage increase 
  1.23  in the implicit price deflator for government consumption and 
  1.24  gross investment for state and local governments prepared by the 
  1.25  Bureau of Economic Analysis of the United States Department of 
  1.26  Commerce for the 12 month period ending June 30 of the preceding 
  1.27  year: 
  1.28     (1) individual income taxes under chapter 290; 
  2.1      (2) corporate franchise taxes under chapter 290; 
  2.2      (3) sales and use tax under chapter 297A; and 
  2.3      (4) motor vehicle sales tax under chapter 297B. 
  2.4      Subd. 2.  [AUTHORITY FOR THE COMMISSIONER TO REDUCE TAX 
  2.5   RATES.] If, on the basis of a forecast of general fund revenues 
  2.6   after November 1 in each year, the commissioner of finance 
  2.7   determines that the projected amount of revenue to be raised by 
  2.8   a tax listed in subdivision 1 exceeds the amount that may be 
  2.9   raised by that tax in the next calendar year under subdivision 
  2.10  1, the commissioner shall reduce the rate for that tax for the 
  2.11  next calendar year from the statutorily established rate so that 
  2.12  the projected revenue shall equal the limit calculated in 
  2.13  subdivision 1. 
  2.14     Sec. 2.  Minnesota Statutes 1998, section 290.06, 
  2.15  subdivision 1, is amended to read: 
  2.16     Subdivision 1.  [COMPUTATION, CORPORATIONS.] The franchise 
  2.17  tax imposed upon corporations shall be computed by applying to 
  2.18  their taxable income the rate of 9.8 percent, adjusted as 
  2.19  required under section 16A.151. 
  2.20     Sec. 3.  Minnesota Statutes 1999 Supplement, section 
  2.21  290.06, subdivision 2c, is amended to read: 
  2.22     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
  2.23  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
  2.24  married individuals filing joint returns and surviving spouses 
  2.25  as defined in section 2(a) of the Internal Revenue Code must be 
  2.26  computed by applying to their taxable net income the following 
  2.27  schedule of rates, adjusted as required in section 16A.151: 
  2.28     (1) On the first $25,220, 5.5 percent; 
  2.29     (2) On all over $25,220, but not over $100,200, 7.25 
  2.30  percent; 
  2.31     (3) On all over $100,200, 8 percent. 
  2.32     Married individuals filing separate returns, estates, and 
  2.33  trusts must compute their income tax by applying the above rates 
  2.34  to their taxable income, except that the income brackets will be 
  2.35  one-half of the above amounts.  
  2.36     (b) The income taxes imposed by this chapter upon unmarried 
  3.1   individuals must be computed by applying to taxable net income 
  3.2   the following schedule of rates, adjusted as required in section 
  3.3   16A.151: 
  3.4      (1) On the first $17,250, 5.5 percent; 
  3.5      (2) On all over $17,250, but not over $56,680, 7.25 
  3.6   percent; 
  3.7      (3) On all over $56,680, 8 percent. 
  3.8      (c) The income taxes imposed by this chapter upon unmarried 
  3.9   individuals qualifying as a head of household as defined in 
  3.10  section 2(b) of the Internal Revenue Code must be computed by 
  3.11  applying to taxable net income the following schedule of rates, 
  3.12  adjusted as required in section 16A.151: 
  3.13     (1) On the first $21,240, 5.5 percent; 
  3.14     (2) On all over $21,240, but not over $85,350, 7.25 
  3.15  percent; 
  3.16     (3) On all over $85,350, 8 percent. 
  3.17     (d) In lieu of a tax computed according to the rates set 
  3.18  forth in this subdivision, the tax of any individual taxpayer 
  3.19  whose taxable net income for the taxable year is less than an 
  3.20  amount determined by the commissioner must be computed in 
  3.21  accordance with tables prepared and issued by the commissioner 
  3.22  of revenue based on income brackets of not more than $100.  The 
  3.23  amount of tax for each bracket shall be computed at the rates 
  3.24  set forth in this subdivision, provided that the commissioner 
  3.25  may disregard a fractional part of a dollar unless it amounts to 
  3.26  50 cents or more, in which case it may be increased to $1. 
  3.27     (e) An individual who is not a Minnesota resident for the 
  3.28  entire year must compute the individual's Minnesota income tax 
  3.29  as provided in this subdivision.  After the application of the 
  3.30  nonrefundable credits provided in this chapter, the tax 
  3.31  liability must then be multiplied by a fraction in which:  
  3.32     (1) the numerator is the individual's Minnesota source 
  3.33  federal adjusted gross income as defined in section 62 of the 
  3.34  Internal Revenue Code and increased by the additions required 
  3.35  under section 290.01, subdivision 19a, clauses (1) and (6), 
  3.36  after applying the allocation and assignability provisions of 
  4.1   section 290.081, clause (a), or 290.17; and 
  4.2      (2) the denominator is the individual's federal adjusted 
  4.3   gross income as defined in section 62 of the Internal Revenue 
  4.4   Code of 1986, increased by the amounts specified in section 
  4.5   290.01, subdivision 19a, clauses (1) and (6), and reduced by the 
  4.6   amounts specified in section 290.01, subdivision 19b, clause (1).
  4.7      (f) If the commissioner is required to adjust the 
  4.8   individual income tax as provided in section 16A.151, all the 
  4.9   rates listed in this subdivision shall be reduced by the same 
  4.10  proportion. 
  4.11     Sec. 4.  Minnesota Statutes 1998, section 297A.02, is 
  4.12  amended by adding a subdivision to read: 
  4.13     Subd. 6.  [ADJUSTMENT OF RATES BY THE COMMISSIONER OF 
  4.14  FINANCE.] If the commissioner of finance is required to reduce 
  4.15  the sales and use tax rates, as provided in section 16A.151, the 
  4.16  rates in subdivisions 1 to 4 shall be reduced by the same 
  4.17  proportion. 
  4.18     Sec. 5.  Minnesota Statutes 1998, section 297B.02, 
  4.19  subdivision 1, is amended to read: 
  4.20     Subdivision 1.  [RATE.] There is imposed an excise tax at 
  4.21  the rate provided in chapter 297A of 6.5 percent, except as 
  4.22  adjusted by the commissioner of finance as required in section 
  4.23  16A.151, on the purchase price of any motor vehicle purchased or 
  4.24  acquired, either in or outside of the state of Minnesota, which 
  4.25  is required to be registered under the laws of this state.  
  4.26     The excise tax is also imposed on the purchase price of 
  4.27  motor vehicles purchased or acquired on Indian reservations when 
  4.28  the tribal council has entered into a sales tax on motor 
  4.29  vehicles refund agreement with the state of Minnesota. 
  4.30     Sec. 6.  [EFFECTIVE DATE.] 
  4.31     Sections 1 to 5 are effective beginning with taxes 
  4.32  collected in calendar year 2001.