Relating to the organization, operation and financing of state government; making technical, policy, clarifying and administrative modifications to certain tax and tax related provisions

ARTICLE 1 - INCOME, CORPORATE, FRANCHISE AND ESTATE TAXES

Requiring corporations claiming payment of taxes in excess of amount lawfully due to include on returns information necessary for payment of the tax in excess of the amount by electronic means; expanding eligibility to file composite income tax returns to certain trusts or estates and defining income for composite return purposes; modifying the filing date for corporations filing returns for a fractional part of a year; authorizing the filing of amended corporate franchise tax returns reflecting federal tax changes; expanding the civil penalty for understatement of tax liability to reckless disregard of laws or rules; placing certain claim restrictions on taxpayers improperly claiming refundable credits; creating an exception to additions to federal taxable income of the amount of expense, interest or taxes disallowed as nondeductible items; clarifying the depreciation deduction for shareholders of S corporations; eliminating the addition to corporate federal taxable income for environmental taxes paid; clarifying certain provisions under the education income tax credit; requiring calculation of the estate tax amount using Minnesota adjusted taxable estate in lieu of federal adjusted taxable estate, defining Minnesota adjusted taxable estate; repealing certain rules relating to the filing of declarations of estimated tax by corporations

ARTICLE 2 - PROPERTY TAXES

Delaying the annual date for state demographer preparation of population estimates for conveyance to local government units, requiring annual certification of estimates to the commissioner of revenue; clarifying the treatment of manufactured home personal property taxes for payment statement purposes; clarifying the requirement for reporting metropolitan revenue values in final abstracts of assessments; modifying the requirement for the commissioner to appoint special and deputy assessors for reappraisal of certain property; exempting property leased, loaned or otherwise made available to private individuals, corporations or associations under cooperative farming agreements or temporarily under housing and redevelopment authority redevelopment projects from the property tax; subjecting certain exempt property to certain additional limits; clarifying the exemption for rental housing property of institutions of public charity; exempting from the tax certain property subject to the taconite production or net proceeds tax and certain property of religious corporations, children's homes, HRAs, regional rail authorities and the spirit mountain recreation area authority and defining installed capacity for tax exemption purposes; accelerating the annual deadline for wind energy conversion system owners to file production reports with the commissioner and modifying the distribution of revenues from the wind energy production tax; modifying certain penalties for improper receipt of homestead benefits and requiring counties to file certain homestead property information with the commissioner by electronic means; defining farmable land for homestead classification purposes and limiting the inclusion of agricultural lands as homestead property based on the percentage of farmable land; modifying the eligibility of certain family farm trust property for homestead classification; clarifying the requirement for the inclusion of certain information necessary for the certification of certain property as homestead property; defining the scope and clarifying the applicability of proceedings and appeals of utility or railroad valuations; modifying and clarifying certain provisions relating to local boards of appeal and equalization; delaying the annual deadline for county auditor certification of proposed levies and tax rates in overlapping jurisdictions; modifying certain certification and reporting requirements for city, town, county and school district taxes; changing a certain county treasurer full settlement deadline; modifying the definition of population for taconite tax relief area revenue distribution purposes; modifying certain tax-forfeited land provisions; expanding the prohibition on the purchase of tax-forfeited lands to county attorneys; modifying the apportionment of proceeds of tax-forfeited land sales to taxing districts and the requirement to restore to the tax rolls forfeited agricultural lands and clarifying certain conveyance form and payment receipt requirements; providing for electronic filing of copies of certificates of rent paid by rental property owners or managers; including special assessments in the calculation of deferred property tax amounts for senior citizens; modifying city property tax transfer authority for border city development zones; expanding certain population estimate requirements of the metropolitan council, authorizing challenges; clarifying the definitions of population and household size for local government aid (LGA) purposes; clarifying certain county program aid provisions and the effective date of certain prior property tax distribution modifications; modifying a certain 2004 city aid reduction requirement; authorizing towns in Lincoln and Pipestone counties to adjust the payable 2004 levy for estimated wind energy production tax amounts; repealing certain provisions relating to property used for the production of hydropower, voter approved levies, taxes paid by mistake on railroad lands, the authority to extend the duration of tax increment financing (TIF) districts to offset deficits and a certain Alexandria sanitary sewer district joint powers agreement

ARTICLE 3 - SALES AND USE TAXES

Clarifying the inclusion of the use tax in a certain provision limiting the time for assessment of certain omitted taxes and the limit on sales and use tax refund claims for bad debt loss; imposing certain time limits on purchaser filed refund claims; expanding the definition of sale or purchase for general sales tax purposes to dietary supplements; clarifying the sales tax on lodging and related services, the definition of retail sale relating to the normal course of business and certain exemptions from the motor vehicle rental tax; modifying the application of the sourcing rule to watercraft, aircraft and modular, manufactured or mobile homes; excluding certain services from the definition of industrial production for exemption clarification purposes; clarifying the exemptions for certain electronic and ready mixed concrete equipment from the sales tax and excluding certain additional machinery and equipment from the definition of capital equipment; expanding the definition of telecommunications services; clarifying the exemption for tangible personal property or services under preexisting bids or contracts; modifying the local sales tax base and clarifying the exemption of tangible personal property from local taxes; imposing legal state debt responsibility on local government units for refunds of local sales taxes made by the commissioner after termination under certain conditions; repealing certain obsolete sales tax rules

ARTICLE 4 - SPECIAL TAXES

Exempting mortgages on armory buildings from the mortgage registry tax; defining blood components and excluding blood and blood components from the definition of legend drugs for hospital and health care provider gross earning tax determination purposes and subjecting enrollee deductibles, coinsurance and copayments to the tax; modifying the determination of underpayments of estimated taxes for fur clothing tax purposes; exempting aviation gasoline and jet fuel purchased by ambulance services from gasoline and special fuels taxes; granting the commissioner of revenue certain petroleum tax abatement authority; applying certain gambling tax provisions to linked bingo and expanding certain gambling organization recordkeeping requirements to copies of substitute checks; clarifying the application of the cigarette transport report requirement for tobacco tax purposes and authorizing the commissioner to require the furnishing of a corporate surety bond or certified check to guarantee payment of tax stamps purchased by distributors; clarifying the payment dates for cigarette and tobacco products distributors subject to accelerated May or June tax payment liability; providing for quarterly or annual tax payments by certain liquor manufacturers, wholesalers, brewers and importers; defining reinsurance for insurance gross premium tax purposes and clarifying the imposition of the tax on health maintenance organizations (HMO), nonprofit health service plan corporations and community integrated service networks (CISN); repealing a certain provision providing for the crediting of civil penalty payments for gambling tax violations

ARTICLE 5 - ELECTRONIC PAYMENTS

Specifying certain minimum dollar requirements for electronic payment of taxes and fees; repealing the civil penalty for failure to make payments electronically

ARTICLE 6 - MISCELLANEOUS

Authorizing case reviewers under the state debt collection procedure to issue debtor assistance orders under certain unjust or inequitable results determination conditions and transferring duties and authority of case reviewers to the taxpayer rights advocate; delegations of authority granted by the commissioner of revenue to remain in effect until revoked by the commissioner; specifying the assessment date in consent agreement cases; requiring compromise proposals relating to tax liability to be accompanied by a nonrefundable payment and providing for application of the payment; authorizing the transcription of lien notices to the secretary of state; classifying state taxpayer identifying numbers of business entities as public and clarifying the definition of data subject relating to business entities; clarifying the authority of the commissioner to extend the time limit for filing estate tax returns; imposing a time limit on requests for calculation of separate liability for taxes reported on joint income tax returns; authorizing the sending of assessment orders by electronic mail (e-mail); modifying and clarifying certain civil penalty provisions; clarifying the definition of employer for income tax withholding purposes; clarifying certain annual certification requirements under the sustainable forest resource management incentive program, providing for the length of covenants and clarifying the early withdrawal procedure in the case of eminent domain; eliminating the license revocation penalty for distributor sales below cost; clarifying the application of certain penalties relating to the metropolitan solid waste landfill fee
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