HF 1509

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to tax compliance; requiring toll-free telephone access for taxpayer
assistance; providing for income tax return processing; requiring certain
withholding returns be filed by electronic means; providing for a study of sales
and use tax compliance assistance for taxpayers of limited English proficiency;
appropriating money for additional auditors; amending Minnesota Statutes 2006,
sections 270C.03, subdivision 1; 289A.09, subdivision 2; proposing coding for
new law in Minnesota Statutes, chapter 270C.

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

Section 1.

Minnesota Statutes 2006, section 270C.03, subdivision 1, is amended to read:

Subdivision 1.

Powers and duties.

The commissioner shall have and exercise
the following powers and duties:

(1) administer and enforce the assessment and collection of taxes;

(2) make determinations, corrections, and assessments with respect to taxes,
including interest, additions to taxes, and assessable penalties;

(3) use statistical or other sampling techniques consistent with generally accepted
auditing standards in examining returns or records and making assessments;

(4) investigate the tax laws of other states and countries, and formulate and submit
to the legislature such legislation as the commissioner may deem expedient to prevent
evasions of state revenue laws and to secure just and equal taxation and improvement in
the system of state revenue laws;

(5) consult and confer with the governor upon the subject of taxation, the
administration of the laws in regard thereto, and the progress of the work of the
department, and furnish the governor, from time to time, such assistance and information
as the governor may require relating to tax matters;

(6) execute and administer any agreement with the secretary of the treasury or the
Bureau of Alcohol, Tobacco, Firearms, and Explosives in the Department of Justice of the
United States or a representative of another state regarding the exchange of information
and administration of the state revenue laws;

(7) require town, city, county, and other public officers to report information as to the
collection of taxes received from licenses and other sources, and such other information
as may be needful in the work of the commissioner, in such form as the commissioner
may prescribe;

(8) authorize the use of unmarked motor vehicles to conduct seizures or criminal
investigations pursuant to the commissioner's authority; deleted text begin and
deleted text end

(9) new text begin maintain toll-free telephone access for taxpayer assistance for calls from
locations within the state; and
new text end

new text begin (10) new text end exercise other powers and authority and perform other duties required of or
imposed upon the commissioner by law.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2008.
new text end

Sec. 2.

new text begin [270C.415] INCOME TAX RETURN PROCESSING; AGREEMENT
WITH INTERNAL REVENUE SERVICE.
new text end

new text begin The commissioner of revenue shall enter into an agreement with the United States
Internal Revenue Service to participate in a tax processing program whereby the Internal
Revenue Service processes electronically filed state returns together with the federal
returns. If possible, the ability of taxpayers to file property tax refund claims under chapter
290A with state income tax returns must be preserved.
new text end

Sec. 3.

Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read:

Subd. 2.

Withholding statement to employee or payee and to commissioner.

(a)
A person required to deduct and withhold from an employee a tax under section 290.92,
subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to
deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required
to withhold tax under section 290.923, subdivision 2, determined without regard to
section 290.92, subdivision 19, if the employee or payee had claimed no more than one
withholding exemption, or who paid wages or made payments not subject to withholding
under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or
person receiving royalty payments in excess of $600, or who has entered into a voluntary
withholding agreement with a payee under section 290.92, subdivision 20, must give
every employee or person receiving royalty payments in respect to the remuneration paid
by the person to the employee or person receiving royalty payments during the calendar
year, on or before January 31 of the succeeding year, or, if employment is terminated
before the close of the calendar year, within 30 days after the date of receipt of a written
request from the employee if the 30-day period ends before January 31, a written statement
showing the following:

(1) name of the person;

(2) the name of the employee or payee and the employee's or payee's Social Security
account number;

(3) the total amount of wages as that term is defined in section 290.92, subdivision
1, paragraph (1); the total amount of remuneration subject to withholding under section
290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the
Internal Revenue Code; and the amount of royalties subject to withholding under section
290.923, subdivision 2; and

(4) the total amount deducted and withheld as tax under section 290.92, subdivision
2a or 3, or 290.923, subdivision 2.

(b) The statement required to be furnished by deleted text begin this deleted text end paragraph new text begin (a) new text end with respect to any
remuneration must be furnished at those times, must contain the information required, and
must be in the form the commissioner prescribes.

(c) The commissioner may prescribe rules providing for reasonable extensions of
time, not in excess of 30 days, to employers or payers required to give the statements to
their employees or payees under this subdivision.

(d) A duplicate of any statement made under this subdivision and in accordance
with rules prescribed by the commissioner, along with a reconciliation in the form the
commissioner prescribes of the statements for the calendar year, including a reconciliation
of the quarterly returns required to be filed under subdivision 1, must be filed with the
commissioner on or before February 28 of the year after the payments were made.

(e) If an employer cancels the employer's Minnesota withholding account number
required by section 290.92, subdivision 24, the information required by paragraph (d),
must be filed with the commissioner within 30 days of the end of the quarter in which
the employer cancels its account number.

(f) The employer must submit the statements required to be sent to the commissioner
deleted text begin on magnetic media, if the magnetic media was deleted text end new text begin in the same manner new text end required to satisfy the
federal reporting requirements of section 6011(e) of the Internal Revenue Code and the
regulations issued under it. new text begin For wages paid in calendar year 2007, an employer must
submit statements to the commissioner required by this section by electronic means if the
employer is required to send more than 100 statements to the commissioner, even though
the employer is not required to submit the returns federally by electronic means. For
calendar year 2008, the 100 statements threshold is reduced to 25, and for calendar year
2009 and thereafter, the threshold is reduced to ten.
new text end

(g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph
(a), clause (2), must submit the returns required by this subdivision and subdivision 1,
paragraph (a), with the commissioner by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for wages paid after December 31,
2006.
new text end

Sec. 4. new text begin SALES AND USE TAX; SERVICES TO TAXPAYERS WITH LIMITED
ENGLISH PROFICIENCY.
new text end

new text begin The commissioner of revenue shall study and implement procedures and services
that will assist sales and use taxpayers of limited English proficiency in complying with
sales and use tax laws. The benefits of translating sales and use tax fact sheets, forms,
and instructions into Spanish and other languages must be considered. In addition, the
commissioner shall study how to direct taxpayers of limited English proficiency who
contact the Department of Revenue by telephone to assistance in Spanish and other
languages as determined by the commissioner. The commissioner shall provide a written
report on the results of the study and a plan to implement them to the senate and house
of representatives committees with jurisdiction over tax laws by February 1, 2008, in
compliance with Minnesota Statutes, sections 3.195 and 3.197.
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. 5. new text begin APPROPRIATION.
new text end

new text begin (a) $4,330,000 in fiscal year 2008 and $5,907,000 in fiscal year 2009 are appropriated
from the general fund to the commissioner of revenue for tax compliance initiatives.
new text end

new text begin (b) $3,455,000 the first year and $4,352,000 the second year are for additional
activities to identify and collect tax liabilities from individuals and businesses that
currently do not pay all taxes owed. This initiative is expected to result in new general
fund revenues of $21,200,000 for the biennium ending June 30, 2009.
new text end

new text begin (c) The department must report to the chairs of the house of representatives Ways
and Means and senate Finance Committees, in compliance with Minnesota Statutes,
sections 3.195 and 3.197, by March 1, 2008, and January 15, 2009, on the following
performance indicators:
new text end

new text begin (1) the number of corporations noncompliant with the corporate tax system each
year and the percentage and dollar amounts of valid tax liabilities collected;
new text end

new text begin (2) the number of businesses noncompliant with the sales and use tax system and the
percentage and dollar amount of the valid tax liabilities collected; and
new text end

new text begin (3) the number of individual noncompliant cases resolved and the percentage and
dollar amounts of valid tax liabilities collected.
new text end

new text begin (d) The reports must also identify base-level expenditures and staff positions related
to compliance and audit activities, including baseline information as of January 1, 2006.
The information must be provided at the budget activity level.
new text end

new text begin (e) $875,000 the first year and $1,555,000 the second year are for additional
activities to identify and collect tax liabilities from individuals and businesses that
currently do not pay all taxes owed. This initiative is expected to result in new general
revenues of $30,000,000 for the biennium ending June 30, 2009.
new text end