HF 3543

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/13/2024 04:39pm

A bill for an act
relating to taxation; individual income; property tax refunds; converting the
additional property tax refund to a refundable income tax credit; amending
Minnesota Statutes 2022, section 290A.23, subdivision 3; Minnesota Statutes 2023
Supplement, section 290A.03, subdivision 13; proposing coding for new law in
Minnesota Statutes, chapter 290; repealing Minnesota Statutes 2023 Supplement,
section 290A.04, subdivision 2h.

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

Section 1.

new text begin [290.0696] ADDITIONAL PROPERTY TAX REFUND.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have
the meanings given:
new text end

new text begin (1) "base year" means the calendar year that included the final day of the taxable year;
new text end

new text begin (2) "comparison year" means the calendar year following the base year;
new text end

new text begin (3) "property taxes payable" means the amount of property taxes payable, as defined in
section 290A.03, subdivision 13, but disregarding any refunds under this section or section
290A.04, subdivision 2; and
new text end

new text begin (4) "qualifying property tax change" means the difference between the taxpayer's property
taxes payable in the comparison year and the base year.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed; refundable; appropriation. new text end

new text begin (a) An individual is allowed a
credit against the tax due under this chapter equal to the amount determined under subdivision
3.
new text end

new text begin (b) If the amount of credit a taxpayer is eligible to receive under this section exceeds
the taxpayer's liability for tax under this chapter, the commissioner shall refund the excess
to the taxpayer.
new text end

new text begin (c) The amount necessary to pay the refunds under this section is appropriated from the
general fund to the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Amount of credit. new text end

new text begin (a) A taxpayer is allowed a credit under this section if the
taxpayer's qualifying property tax change is more than $100, and is an increase of at least
12 percent of the taxpayer's base year property taxes payable.
new text end

new text begin (b) The amount of the refund is calculated by:
new text end

new text begin (1) subtracting from the taxpayer's qualifying property tax change the greater of:
new text end

new text begin (i) $100; or
new text end

new text begin (ii) 12 percent of the taxpayer's base year property taxes payable; and
new text end

new text begin (2) multiplying the result of clause (1) by 60 percent.
new text end

new text begin (c) The credit under this section is limited to $1,000.
new text end

new text begin Subd. 4. new text end

new text begin Eligibility. new text end

new text begin Property taxes payable under this section are limited to taxes levied
on the same homestead occupied by the taxpayer on January 2 of the base year and
comparison year.
new text end

new text begin Subd. 5. new text end

new text begin Increases excluded from calculation. new text end

new text begin A taxpayer's qualifying property tax
change excludes the amount of an increase in the gross property taxes payable attributable
to improvements made to the homestead after the assessment date for the base year's taxes.
new text end

new text begin Subd. 6. new text end

new text begin Property tax statement required. new text end

new text begin To claim a credit under this section, a
taxpayer must include with the taxpayer's return a copy of the property tax statement for
taxes payable in the preceding year or other documents required by the commissioner.
new text end

new text begin Subd. 7. new text end

new text begin County officials must provide a list of eligible claimants. new text end

new text begin Upon request, the
appropriate county official shall make available the names and addresses of the property
taxpayers who may be eligible for a credit under this section. The information shall be
provided electronically. The county may recover its costs by charging the person requesting
the information the reasonable cost for preparing the data. The information may not be used
for any purpose other than for notifying the homeowner of potential eligibility and assisting
the homeowner, without charge, in preparing a refund claim.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2023.
new text end

Sec. 2.

Minnesota Statutes 2023 Supplement, section 290A.03, subdivision 13, is amended
to read:

Subd. 13.

Property taxes payable.

"Property taxes payable" means the property tax
exclusive of special assessments, penalties, and interest payable on a claimant's homestead
after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2,
and any other state paid property tax credits in any calendar year, and after any deleted text begin refund deleted text end new text begin credit new text end
claimed and allowable under section deleted text begin 290A.04, subdivision 2h deleted text end new text begin 290.0696 new text end , that is first payable
in the year that the property tax is payable. In the case of a claimant who makes ground
lease payments, "property taxes payable" includes the amount of the payments directly
attributable to the property taxes assessed against the parcel on which the house is located.
Regardless of the limitations in section 280A(c)(5) of the Internal Revenue Code, "property
taxes payable" must be apportioned or reduced for the use of a portion of the claimant's
homestead for a business purpose if the claimant deducts any business depreciation expenses
for the use of a portion of the homestead or deducts expenses under section 280A of the
Internal Revenue Code for a business operated in the claimant's homestead. For manufactured
homes, "property taxes payable" shall also include 17 percent of the gross rent paid in the
preceding year for the site on which the homestead is located. When a homestead is owned
by two or more persons as joint tenants or tenants in common, such tenants shall determine
between them which tenant may claim the property taxes payable on the homestead. If they
are unable to agree, the matter shall be referred to the commissioner of revenue whose
decision shall be final. Property taxes are considered payable in the year prescribed by law
for payment of the taxes.

In the case of a claim relating to "property taxes payable," the claimant must have owned
and occupied the homestead on January 2 of the year in which the tax is payable and (i) the
property must have been classified as homestead property pursuant to section 273.124, on
or before December 31 of the assessment year to which the "property taxes payable" relate;
or (ii) the claimant must provide documentation from the local assessor that application for
homestead classification has been made on or before December 31 of the year in which the
"property taxes payable" were payable and that the assessor has approved the application.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on property taxes
payable after December 31, 2024.
new text end

Sec. 3.

Minnesota Statutes 2022, section 290A.23, subdivision 3, is amended to read:

Subd. 3.

Annual appropriation.

For payments made after July 1, 1996, there is annually
appropriated from the general fund to the commissioner of revenue the amount necessary
to make the payments required under section 290A.04, deleted text begin subdivisions deleted text end new text begin subdivision new text end 2 deleted text begin and 2h deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on property taxes
payable after December 31, 2024.
new text end

Sec. 4. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2023 Supplement, section 290A.04, subdivision 2h, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on property taxes
payable after December 31, 2024.
new text end

APPENDIX

Repealed Minnesota Statutes: 24-05781

290A.04 REFUND ALLOWABLE.

Subd. 2h.

Additional refund.

(a) If the gross property taxes payable on a homestead increase more than 12 percent over the property taxes payable in the prior year on the same property that is owned and occupied by the same owner on January 2 of both years, and the amount of that increase is $100 or more, a claimant who is a homeowner shall be allowed an additional refund equal to 60 percent of the amount of the increase over the greater of 12 percent of the prior year's property taxes payable or $100. This subdivision shall not apply to any increase in the gross property taxes payable attributable to improvements made to the homestead after the assessment date for the prior year's taxes. This subdivision shall not apply to any increase in the gross property taxes payable attributable to the termination of valuation exclusions under section 273.11, subdivision 16.

The maximum refund allowed under this subdivision is $1,000.

(b) For purposes of this subdivision "gross property taxes payable" means property taxes payable determined without regard to the refund allowed under this subdivision.

(c) In addition to the other proofs required by this chapter, each claimant under this subdivision shall file with the property tax refund return a copy of the property tax statement for taxes payable in the preceding year or other documents required by the commissioner.

(d) Upon request, the appropriate county official shall make available the names and addresses of the property taxpayers who may be eligible for the additional property tax refund under this section. The information shall be provided electronically. The county may recover its costs by charging the person requesting the information the reasonable cost for preparing the data. The information may not be used for any purpose other than for notifying the homeowner of potential eligibility and assisting the homeowner, without charge, in preparing a refund claim.