1.1 	A bill for an act
1.2 	relating to taxation; providing conformity and nonconformity to certain federal 
1.3 	tax law changes; modifying individual income and corporate franchise taxes, sales 
1.4 	and use taxes, property taxes, local government aids, tobacco taxes, special taxes, 
1.5 	and other miscellaneous taxes and tax provisions; expanding and increasing working 
1.6 	family credit; expanding and modifying threshold for social security subtraction; 
1.7 	modifying the qualified data center exemption; changing qualification and 
1.8 	application provisions for the senior property tax deferral program; providing a 
1.9 	riparian buffer credit; providing an increase to local government aid and county 
1.10 	program aid; reinstating the inflator for the state general levy; reinstating the annual 
1.11 	indexing for the cigarette tax; reinstating a higher rate for premium cigars; 
1.12 	eliminating the increase in the estate tax exclusion amount; modifying sales tax 
1.13 	exemptions for local governments and nonprofits; appropriating money;amending 
1.14 	Minnesota Statutes 2018, sections 116J.8737, subdivisions 1, 2, 3, 4, 5, 6, 12; 
1.15 	270A.03, subdivision 5; 272.115, subdivision 1; 273.124, subdivisions 13, 13c, 
1.16 	13d, 14; 273.1245, subdivision 1; 273.13, subdivision 35; 273.1315, subdivision 
1.17 	2; 273.1384, subdivision 2; 273.1392; 273.1393; 275.025, subdivision 1; 275.065, 
1.18 	subdivision 3; 276.04, subdivision 2; 287.21, subdivision 1; 289A.08, subdivisions 
1.19 	1, 7; 289A.10, subdivision 1; 289A.11, by adding a subdivision; 289A.20, by 
1.20 	adding a subdivision; 289A.60, subdivision 29; 290.01, subdivisions 29a, 31, by 
1.21 	adding subdivisions; 290.0131, subdivisions 1, 3, 12, 13, by adding subdivisions; 
1.22 	290.0132, subdivisions 1, 7, 20, 26, by adding subdivisions; 290.0133, subdivision 
1.23 	6; 290.032, subdivision 2; 290.05, subdivision 3; 290.06, subdivisions 2c, 2d, 2h; 
1.24 	290.0671, subdivisions 1, 7; 290.0672, subdivision 2; 290.0681, subdivisions 3, 
1.25 	4; 290.0684, subdivision 2; 290.0802, subdivision 2; 290.091, subdivision 3; 
1.26 	290.0921, subdivisions 1, 8; 290.0922, subdivision 1; 290.095, subdivision 2; 
1.27 	290.21, by adding a subdivision; 290.92, subdivision 1; 290A.03, subdivision 12; 
1.28 	290A.04, subdivision 4; 290B.03, subdivision 1; 290B.04, subdivision 1; 291.016, 
1.29 	subdivision 3; 297A.66; 297A.68, subdivisions 25, 42; 297A.71, by adding a 
1.30 	subdivision; 297A.75, subdivisions 1, 2, 3; 297A.83, subdivision 1; 297B.03; 
1.31 	297F.01, subdivision 13a; 297F.05, subdivisions 3a, 4a, by adding a subdivision; 
1.32 	469.316, subdivision 1; 477A.03, subdivisions 2a, 2b; Minnesota Statutes 2019 
1.33 	Supplement, sections 289A.02, subdivision 7; 289A.12, subdivision 14; 289A.35; 
1.34 	290.01, subdivision 19; 290.0131, subdivision 10; 290.0132, subdivision 21; 
1.35 	290.0133, subdivision 12; 290.067, subdivision 2b; 290.0672, subdivision 1; 
1.36 	290.0681, subdivisions 1, 2; 290.0684, subdivisions 1, 2; 290.091, subdivision 2; 
1.37 	290.17, subdivision 2; 290A.03, subdivision 15; 291.005, subdivision 1; 462D.06, 
1.38 	subdivisions 1, 2; proposing coding for new law in Minnesota Statutes, chapters 
2.1 	273; 290; repealing Minnesota Statutes 2018, sections 290.0131, subdivisions 7, 
2.2 	11; 290.0133, subdivisions 13, 14; 290.10, subdivision 2.
2.3 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.4 	ARTICLE 1
2.5 	FEDERAL RESPONSE

2.6 	Section 1. Minnesota Statutes 2018, section 270A.03, subdivision 5, is amended to read:
2.7 		Subd. 5.Debt; debtor. (a) "Debt" means a legal obligation of a natural person to pay a 
2.8 	fixed and certain amount of money, which equals or exceeds $25 and which is due and 
2.9 	payable to a claimant agency. The term includes criminal fines imposed under section 609.10
2.10 	or 609.125, fines imposed for petty misdemeanors as defined in section 609.02, subdivision 
2.11 	4a, and restitution. A debt may arise under a contractual or statutory obligation, a court 
2.12 	order, or other legal obligation, but need not have been reduced to judgment.
2.13 	A debt includes any legal obligation of a current recipient of assistance which is based 
2.14 	on overpayment of an assistance grant where that payment is based on a client waiver or 
2.15 	an administrative or judicial finding of an intentional program violation; or where the debt 
2.16 	is owed to a program wherein the debtor is not a client at the time notification is provided 
2.17 	to initiate recovery under this chapter and the debtor is not a current recipient of food support, 
2.18 	transitional child care, or transitional medical assistance.
2.19 	(b) A debt does not include any legal obligation to pay a claimant agency for medical 
2.20 	care, including hospitalization if the income of the debtor at the time when the medical care 
2.21 	was rendered does not exceed the following amount:
2.22 	(1) for an unmarried debtor, an income of $12,560 or less;
2.23 	(2) for a debtor with one dependent, an income of $16,080 or less;
2.24 	(3) for a debtor with two dependents, an income of $19,020 or less;
2.25 	(4) for a debtor with three dependents, an income of $21,580 or less;
2.26 	(5) for a debtor with four dependents, an income of $22,760 or less; and
2.27 	(6) for a debtor with five or more dependents, an income of $23,730 or less.
2.28 	For purposes of this paragraph, "debtor" means the individual whose income, together 
2.29 	with the income of the individual's spouse, other than a separated spouse, brings the 
2.30 	individual within the income provisions of this paragraph. For purposes of this paragraph, 
2.31 	a spouse, other than a separated spouse, shall be considered a dependent.
3.1 	(c) The commissioner shall adjust the income amounts in paragraph (b) by the percentage 
3.2 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, as 
3.3 	amended through December 16, 2016, except that in section 1(f)(3)(B) the word "2014" 
3.4 	shall be substituted for the word "1992." For 2016, the commissioner shall then determine 
3.5 	the percent change from the 12 months ending on August 31, 2014, to the 12 months ending 
3.6 	on August 31, 2015, and in each subsequent year, from the 12 months ending on August 
3.7 	31, 2014, to the 12 months ending on August 31 of the year preceding the taxable year. The 
3.8 	determination of the commissioner pursuant to this subdivision shall not be considered a 
3.9 	"rule" and shall not be subject to the Administrative Procedure Act contained in chapter 14. 
3.10 	The income amount as adjusted must be rounded to the nearest $10 amount. If the amount 
3.11 	ends in $5, the amount is rounded up to the nearest $10 amount.
3.12 	(d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of the 
3.13 	dollar amount of the premium authorized under section 256L.15, subdivision 1a.

3.14 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
3.15 	after December 21, 2017.

3.16 	Sec. 2. Minnesota Statutes 2018, section 289A.02, subdivision 7, is amended to read:
3.17 		Subd. 7.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
3.18 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
3.19 	16, 2016 December 31, 2018.

3.20 	EFFECTIVE DATE. This section is effective the day following final enactment except 
3.21 	the changes incorporated by federal changes are effective retroactively at the same time the 
3.22 	changes became effective for federal purposes.

3.23 	Sec. 3. Minnesota Statutes 2018, section 289A.08, subdivision 1, is amended to read:
3.24 		Subdivision 1.Generally; individuals. (a) A taxpayer must file a return for each taxable 
3.25 	year the taxpayer is required to file a return under section 6012 of the Internal Revenue 
3.26 	Code or meets the requirements under paragraph (d) to file a return, except that:
3.27 	(1) an individual who is not a Minnesota resident for any part of the year is not required 
3.28 	to file a Minnesota income tax return if the individual's gross income derived from Minnesota 
3.29 	sources as determined under sections 290.081, paragraph (a), and 290.17, is less than the 
3.30 	filing requirements for a single individual who is a full year resident of Minnesota; and
3.31 	(2) an individual who is a Minnesota resident is not required to file a Minnesota income 
3.32 	tax return if the individual's gross income derived from Minnesota sources as determined 
4.1 	under section 290.17, less the subtractions allowed under section 290.0132, subdivisions 
4.2 	12 and 15, is less than the filing requirements for a single individual who is a full-year 
4.3 	resident of Minnesota.
4.4 	(b) The decedent's final income tax return, and other income tax returns for prior years 
4.5 	where the decedent had gross income in excess of the minimum amount at which an 
4.6 	individual is required to file and did not file, must be filed by the decedent's personal 
4.7 	representative, if any. If there is no personal representative, the return or returns must be 
4.8 	filed by the transferees, as defined in section 270C.58, subdivision 3, who receive property 
4.9 	of the decedent.
4.10 	(c) The term "gross income," as it is used in this section, has the same meaning given it 
4.11 	in section 290.01, subdivision 20.
4.12 	(d) The commissioner of revenue must annually determine the gross income levels at 
4.13 	which individuals are required to file a return for each taxable year based on the amounts 
4.14 	that may be deducted pursuant to the election under section 290.0803 and the personal and 
4.15 	dependent exemptions under section 290.0138, subdivision 1.

4.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
4.17 	31, 2018.

4.18 	Sec. 4. Minnesota Statutes 2018, section 289A.08, subdivision 7, is amended to read:
4.19 		Subd. 7.Composite income tax returns for nonresident partners, shareholders, and 
4.20 	beneficiaries. (a) The commissioner may allow a partnership with nonresident partners to 
4.21 	file a composite return and to pay the tax on behalf of nonresident partners who have no 
4.22 	other Minnesota source income. This composite return must include the names, addresses, 
4.23 	Social Security numbers, income allocation, and tax liability for the nonresident partners 
4.24 	electing to be covered by the composite return.
4.25 	(b) The computation of a partner's tax liability must be determined by multiplying the 
4.26 	income allocated to that partner by the highest rate used to determine the tax liability for 
4.27 	individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard 
4.28 	deductions, or personal exemptions are not allowed.
4.29 	(c) The partnership must submit a request to use this composite return filing method for 
4.30 	nonresident partners. The requesting partnership must file a composite return in the form 
4.31 	prescribed by the commissioner of revenue. The filing of a composite return is considered 
4.32 	a request to use the composite return filing method.
5.1 	(d) The electing partner must not have any Minnesota source income other than the 
5.2 	income from the partnership and other electing partnerships. If it is determined that the 
5.3 	electing partner has other Minnesota source income, the inclusion of the income and tax 
5.4 	liability for that partner under this provision will not constitute a return to satisfy the 
5.5 	requirements of subdivision 1. The tax paid for the individual as part of the composite return 
5.6 	is allowed as a payment of the tax by the individual on the date on which the composite 
5.7 	return payment was made. If the electing nonresident partner has no other Minnesota source 
5.8 	income, filing of the composite return is a return for purposes of subdivision 1.
5.9 	(e) This subdivision does not negate the requirement that an individual pay estimated 
5.10 	tax if the individual's liability would exceed the requirements set forth in section 289A.25. 
5.11 	The individual's liability to pay estimated tax is, however, satisfied when the partnership 
5.12 	pays composite estimated tax in the manner prescribed in section 289A.25.
5.13 	(f) If an electing partner's share of the partnership's gross income from Minnesota sources 
5.14 	is less than the filing requirements for a nonresident under this subdivision, the tax liability 
5.15 	is zero. However, a statement showing the partner's share of gross income must be included 
5.16 	as part of the composite return.
5.17 	(g) The election provided in this subdivision is only available to a partner who has no 
5.18 	other Minnesota source income and who is either (1) a full-year nonresident individual or 
5.19 	(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the 
5.20 	Internal Revenue Code.
5.21 	(h) A corporation defined in section 290.9725 and its nonresident shareholders may 
5.22 	make an election under this paragraph. The provisions covering the partnership apply to 
5.23 	the corporation and the provisions applying to the partner apply to the shareholder.
5.24 	(i) Estates and trusts distributing current income only and the nonresident individual 
5.25 	beneficiaries of the estates or trusts may make an election under this paragraph. The 
5.26 	provisions covering the partnership apply to the estate or trust. The provisions applying to 
5.27 	the partner apply to the beneficiary.
5.28 	(j) For the purposes of this subdivision, "income" means the partner's share of federal 
5.29 	adjusted gross income from the partnership modified by the additions provided in section 
5.30 	290.0131, subdivisions 8 to 11 10 and 17, and the subtractions provided in: (1) section 
5.31 	290.0132, subdivision 9, to the extent the amount is assignable or allocable to Minnesota 
5.32 	under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed 
5.33 	under section 290.0132, subdivision 9, is only allowed on the composite tax computation 
5.34 	to the extent the electing partner would have been allowed the subtraction.

6.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
6.2 	31, 2018.

6.3 	Sec. 5. Minnesota Statutes 2018, section 289A.12, subdivision 14, is amended to read:
6.4 		Subd. 14. Reporting exempt interest and exempt-interest dividends. (a) A regulated 
6.5 	investment company paying $10 or more in exempt-interest dividends to an individual who 
6.6 	is a resident of Minnesota, or any person receiving $10 or more of exempt interest or 
6.7 	exempt-interest dividends and paying as nominee to an individual who is a resident of 
6.8 	Minnesota, must make a return indicating the amount of the exempt interest or 
6.9 	exempt-interest dividends, the name, address, and Social Security number of the recipient, 
6.10 	and any other information that the commissioner specifies. The return must be provided to 
6.11 	the recipient by February 15 of the year following the year of the payment. The return 
6.12 	provided to the recipient must include a clear statement, in the form prescribed by the 
6.13 	commissioner, that the exempt interest or exempt-interest dividends must be included in 
6.14 	the computation of Minnesota taxable income. By June 1 of each year, the payer must file 
6.15 	a copy of the return with the commissioner.
6.16 	(b) For purposes of this subdivision, the following definitions apply.
6.17 	(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in section 
6.18 	852(b)(5) of the Internal Revenue Code, but does not include the portion of exempt-interest 
6.19 	dividends that are not required to be added to federal taxable adjusted gross income under 
6.20 	section 290.0131, subdivision 2, paragraph (b).
6.21 	(2) "Regulated investment company" means regulated investment company as defined 
6.22 	in section 851(a) of the Internal Revenue Code or a fund of the regulated investment company 
6.23 	as defined in section 851(g) of the Internal Revenue Code.
6.24 	(3) "Exempt interest" means income on obligations of any state other than Minnesota, 
6.25 	or a political or governmental subdivision, municipality, or governmental agency or 
6.26 	instrumentality of any state other than Minnesota, and exempt from federal income taxes 
6.27 	under the Internal Revenue Code or any other federal statute.

6.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
6.29 	31, 2018.

7.1 	Sec. 6. Minnesota Statutes 2018, section 289A.20, is amended by adding a subdivision to 
7.2 	read:
7.3 		Subd. 1a.Tax on deferred foreign income; election to pay in installments. (a) A 
7.4 	taxpayer subject to tax under section 290.06, subdivision 1, may elect to pay the net tax 
7.5 	liability on the deferred foreign income in installments in the same percentages of the net 
7.6 	tax liability for each taxable year as provided in section 965(h)(1) of the Internal Revenue 
7.7 	Code. Payment of an installment for a taxable year is due on the due date, determined without 
7.8 	regard to any extensions of time for filing the return, for the tax return for that taxable year.
7.9 	(b) If an acceleration of payment applies for federal income tax purposes under section 
7.10 	965(h)(3) of the Internal Revenue Code, the unpaid portion of the remaining installments 
7.11 	due under chapter 290 must be paid on the same date as the federal tax is due. Assessment 
7.12 	of deficiencies must be prorated as provided under section 965(h)(4) of the Internal Revenue 
7.13 	Code.
7.14 	(c) For purposes of determining date and time limits under sections 270C.62, 270C.63, 
7.15 	270C.67, and 270C.68, the date on which an installment is due under paragraph (a), including 
7.16 	any acceleration under paragraph (b), must be treated as the assessment date, due date, or 
7.17 	other date from which the time limit must be determined for that payment.
7.18 	(d) For purposes of this subdivision, "net tax liability" means the excess of:
7.19 	(1) the tax liability, determined under chapter 290, for the taxable year in which the 
7.20 	deferred foreign income was includable in federal taxable income; over
7.21 	(2) the tax liability, determined under chapter 290, for that taxable year computed after 
7.22 	excluding the deferred foreign income under section 965 of the Internal Revenue Code.
7.23 	(e) If a taxpayer has not made the first installment payment under paragraph (a), the 
7.24 	taxpayer must pay the first installment payment at the same time and due date as the second 
7.25 	installment payment. For purposes of paragraph (c), payments under this paragraph are 
7.26 	deemed to be due at the same time the second installment is due.

7.27 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
7.28 	after December 31, 2016.

7.29 	Sec. 7. Minnesota Statutes 2018, section 289A.35, is amended to read:
7.30 	289A.35 ASSESSMENTS ON RETURNS.
7.31 	(a) The commissioner may audit and adjust the taxpayer's computation of federal adjusted 
7.32 	gross income, federal taxable income, items of federal tax preferences, or federal credit 
8.1 	amounts to make them conform with the provisions of chapter 290 or section 298.01. If a 
8.2 	return has been filed, the commissioner shall enter the liability reported on the return and 
8.3 	may make any audit or investigation that is considered necessary.
8.4 	(b) Upon petition by a taxpayer, and when the commissioner determines that it is in the 
8.5 	best interest of the state, the commissioner may allow S corporations and partnerships to 
8.6 	receive orders of assessment issued under section 270C.33, subdivision 4, on behalf of their 
8.7 	owners, and to pay liabilities shown on such orders. In such cases, the owners' liability must 
8.8 	be calculated using the method provided in section 289A.08, subdivision 7, paragraph (b).
8.9 	(c) A taxpayer may petition the commissioner for the use of the method described in 
8.10 	paragraph (b) after the taxpayer is notified that an audit has been initiated and before an 
8.11 	order of assessment has been issued.
8.12 	(d) A determination of the commissioner under paragraph (b) to grant or deny the petition 
8.13 	of a taxpayer cannot be appealed to the Tax Court or any other court.
8.14 	(e) The commissioner may audit and adjust the taxpayer's computation of tax under 
8.15 	chapter 291. In the case of a return filed pursuant to section 289A.10, the commissioner 
8.16 	shall notify the estate no later than nine months after the filing date, as provided by section 
8.17 	289A.38, subdivision 2, whether the return is under examination or the return has been 
8.18 	processed as filed.

8.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
8.20 	31, 2018.

8.21 	Sec. 8. Minnesota Statutes 2018, section 290.01, is amended by adding a subdivision to 
8.22 	read:
8.23 		Subd. 3c.Determination of marital status. The determination of marital status is made 
8.24 	by section 7703 of the Internal Revenue Code.

8.25 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
8.26 	31, 2018.

8.27 	Sec. 9. Minnesota Statutes 2018, section 290.01, is amended by adding a subdivision to 
8.28 	read:
8.29 		Subd. 14a.Surviving spouse. The term "surviving spouse" means an individual who is 
8.30 	a surviving spouse under section 2(a) of the Internal Revenue Code for the taxable year.

9.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
9.2 	31, 2018.

9.3 	Sec. 10. Minnesota Statutes 2018, section 290.01, subdivision 19, is amended to read:
9.4 		Subd. 19.Net income. (a) For a trust or estate taxable under section 290.03, and a 
9.5 	corporation taxable under section 290.02, the term "net income" means the federal taxable 
9.6 	income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through 
9.7 	the date named in this subdivision, incorporating the federal effective dates of changes to 
9.8 	the Internal Revenue Code and any elections made by the taxpayer in accordance with the 
9.9 	Internal Revenue Code in determining federal taxable income for federal income tax 
9.10 	purposes, and with the modifications provided in sections 290.0131 to 290.0136.
9.11 	(b) For an individual, the term "net income" means federal adjusted gross income with 
9.12 	the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.
9.13 	(c) In the case of a regulated investment company or a fund thereof, as defined in section 
9.14 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
9.15 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
9.16 	except that:
9.17 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
9.18 	Revenue Code does not apply;
9.19 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue 
9.20 	Code must be applied by allowing a deduction for capital gain dividends and exempt-interest 
9.21 	dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; 
9.22 	and
9.23 	(3) the deduction for dividends paid must also be applied in the amount of any 
9.24 	undistributed capital gains which the regulated investment company elects to have treated 
9.25 	as provided in section 852(b)(3)(D) of the Internal Revenue Code.
9.26 	(d) The net income of a real estate investment trust as defined and limited by section 
9.27 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
9.28 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
9.29 	(e) The net income of a designated settlement fund as defined in section 468B(d) of the 
9.30 	Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal 
9.31 	Revenue Code.
10.1 	(f) The Internal Revenue Code of 1986, as amended through December 16, 2016
10.2 	December 31, 2018, shall be in effect for taxable years beginning after December 31, 1996.
10.3 	(g) Except as otherwise provided, references to the Internal Revenue Code in this 
10.4 	subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of 
10.5 	determining net income for the applicable year.

10.6 	EFFECTIVE DATE. (a) The amendments to paragraphs (a) and (b) are effective for 
10.7 	taxable years beginning after December 31, 2018.
10.8 	(b) The amendment to paragraph (f) is effective the day following final enactment, except 
10.9 	the changes incorporated by federal changes are effective retroactively at the same time as 
10.10 	the changes became effective for federal purposes.

10.11 	Sec. 11. Minnesota Statutes 2018, section 290.01, is amended by adding a subdivision to 
10.12 	read:
10.13 		Subd. 19i.Deferred foreign income. "Deferred foreign income" means the income of 
10.14 	a domestic corporation that is included in net income under section 965 of the Internal 
10.15 	Revenue Code, exclusive of the deduction allowed under section 965(c) of the Internal 
10.16 	Revenue Code.

10.17 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
10.18 	after December 31, 2016.

10.19 	Sec. 12. Minnesota Statutes 2018, section 290.01, is amended by adding a subdivision to 
10.20 	read:
10.21 		Subd. 21a.Adjusted gross income; federal adjusted gross income. The terms "adjusted 
10.22 	gross income" and "federal adjusted gross income" mean adjusted gross income, as defined 
10.23 	in section 62 of the Internal Revenue Code, as amended through the date named in 
10.24 	subdivision 19, incorporating the federal effective date of changes to the Internal Revenue 
10.25 	Code and any elections made by the taxpayer under the Internal Revenue Code in determining 
10.26 	federal adjusted gross income for federal income tax purposes.

10.27 	EFFECTIVE DATE. This section is effective the day following final enactment.

10.28 	Sec. 13. Minnesota Statutes 2018, section 290.01, subdivision 29a, is amended to read:
10.29 		Subd. 29a.State itemized deduction. (a) "State itemized deduction" means federal 
10.30 	itemized deductions, as defined in section 63(d) of the Internal Revenue Code, disregarding 
10.31 	any limitation under section 68 of the Internal Revenue Code, and reduced by the amount 
11.1 	of the addition required under section 290.0131, subdivision 13 the individual itemized 
11.2 	deductions for individual income tax listed in section 290.0139.

11.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
11.4 	31, 2018.

11.5 	Sec. 14. Minnesota Statutes 2018, section 290.01, subdivision 31, is amended to read:
11.6 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
11.7 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
11.8 	16, 2016 December 31, 2018. Internal Revenue Code also includes any uncodified provision 
11.9 	in federal law that relates to provisions of the Internal Revenue Code that are incorporated 
11.10 	into Minnesota law.

11.11 	EFFECTIVE DATE. This section is effective the day following final enactment, except 
11.12 	the changes incorporated by the federal changes are effective retroactively at the same time 
11.13 	as the changes became effective for federal purposes.

11.14 	Sec. 15. Minnesota Statutes 2018, section 290.0131, subdivision 1, is amended to read:
11.15 		Subdivision 1.Definition; scope. (a) For the purposes of this section, "addition" means 
11.16 	an amount that must be added to federal taxable income in the case of a trust or an estate 
11.17 	or federal adjusted gross income in the case of an individual in computing net income for 
11.18 	the taxable year to which the amounts relate.
11.19 	(b) The additions in this section apply to individuals, estates, and trusts.
11.20 	(c) Unless specifically indicated or unless the context clearly indicates otherwise, only 
11.21 	amounts that were deducted or excluded in computing federal taxable income in the case 
11.22 	of a trust or an estate or federal adjusted gross income in the case of individuals are an 
11.23 	addition under this section.

11.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
11.25 	31, 2018.

11.26 	Sec. 16. Minnesota Statutes 2018, section 290.0131, subdivision 3, is amended to read:
11.27 		Subd. 3.Income, sales and use, motor vehicle sales, or excise taxes paid. (a) For trusts 
11.28 	and estates, the amount of income, sales and use, motor vehicle sales, or excise taxes paid 
11.29 	or accrued within the taxable year under this chapter and the amount of taxes based on net 
11.30 	income, sales and use, motor vehicle sales, or excise taxes paid to any other state or to any 
12.1 	province or territory of Canada is an addition to the extent deducted under section 63(d) of 
12.2 	the Internal Revenue Code.
12.3 	(b) The addition under paragraph (a) may not be more than the amount by which the 
12.4 	state itemized deduction exceeds the amount of the standard deduction as defined in section 
12.5 	63(c) of the Internal Revenue Code. For the purpose of this subdivision, income, sales and 
12.6 	use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed under 
12.7 	subdivision 12.

12.8 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
12.9 	31, 2018.

12.10 	Sec. 17. Minnesota Statutes 2018, section 290.0131, subdivision 10, is amended to read:
12.11 		Subd. 10.Section 179 expensing. For property placed in service in taxable years 
12.12 	beginning before January 1, 2018, 80 percent of the amount by which the deduction allowed 
12.13 	under the dollar limits of section 179 of the Internal Revenue Code exceeds the deduction 
12.14 	allowable by section 179 of the Internal Revenue Code, as amended through December 31, 
12.15 	2003, is an addition.

12.16 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
12.17 	after December 31, 2017.

12.18 	Sec. 18. Minnesota Statutes 2018, section 290.0131, subdivision 12, is amended to read:
12.19 		Subd. 12.Disallowed itemized deductions. (a) The amount of disallowed itemized 
12.20 	deductions is an addition. The amount of disallowed itemized deductions, plus the addition 
12.21 	required under subdivision 3, may not be more than the amount by which the state itemized 
12.22 	deductions, as allowed under section 63(d) of the Internal Revenue Code, exceeds the amount 
12.23 	of the state standard deduction as defined in section 63(c) of the Internal Revenue Code.
12.24 	(b) The amount of disallowed itemized deductions is equal to the lesser of:
12.25 	(1) three percent of the excess of the taxpayer's federal adjusted gross income over the 
12.26 	applicable amount; or
12.27 	(2) 80 percent of the amount of the state itemized deductions otherwise allowable to the 
12.28 	taxpayer under the Internal Revenue Code section 290.0139 for the taxable year.
12.29 	(c) "Applicable amount" means $100,000, or $50,000 for a married individual filing a 
12.30 	separate return. Each dollar amount is increased by an amount equal to:
12.31 	(1) that dollar amount, multiplied by
13.1 	(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue 
13.2 	Code, as amended through December 16, 2016, for the calendar year in which the taxable 
13.3 	year begins, by substituting "calendar year 1990" for "calendar year 1992" in subparagraph 
13.4 	(B) of section 1(f)(3).
13.5 	(d) "Itemized deductions" excludes:
13.6 	(1) the deduction for medical expenses under section 213 of the Internal Revenue Code
13.7 	290.0139, subdivision 2;
13.8 	(2) any deduction for investment interest as defined in section 163(d) of the Internal 
13.9 	Revenue Code; and
13.10 	(3) the deduction under section 165(a) of the Internal Revenue Code 290.0139, 
13.11 	subdivision 7, for casualty or theft losses described in paragraph (2) or (3) of section 165(c) 
13.12 	of the Internal Revenue Code or for losses described in section 165(d) of the Internal Revenue 
13.13 	Code.

13.14 	EFFECTIVE DATE. (a) The amendments to paragraphs (a), (b), and (d) are effective 
13.15 	for taxable years beginning after December 31, 2018.
13.16 	(b) The amendment to paragraph (c) is effective retroactively for taxable years beginning 
13.17 	after December 31, 2017.

13.18 	Sec. 19. Minnesota Statutes 2018, section 290.0131, subdivision 13, is amended to read:
13.19 		Subd. 13.Disallowed personal exemption amount. (a) The amount of disallowed 
13.20 	personal exemptions for taxpayers with federal adjusted gross income over the threshold 
13.21 	amount is an addition.
13.22 	(b) The disallowed personal exemption amount is equal to the number of personal 
13.23 	exemptions and dependent exemption subtraction allowed under section 151(b) and (c) of 
13.24 	the Internal Revenue Code 290.0132, subdivision 20, multiplied by the dollar amount for 
13.25 	personal exemptions under section 151(d)(1) and (2) of the Internal Revenue Code, as 
13.26 	adjusted for inflation by section 151(d)(4) of the Internal Revenue Code, and by the
13.27 	applicable percentage.
13.28 	(c) For a married individual filing a separate return, "applicable percentage" means two 
13.29 	percentage points for each $1,250, or fraction of that amount, by which the taxpayer's federal 
13.30 	adjusted gross income for the taxable year exceeds the threshold amount. For all other filers, 
13.31 	applicable percentage means two percentage points for each $2,500, or fraction of that 
14.1 	amount, by which the taxpayer's federal adjusted gross income for the taxable year exceeds 
14.2 	the threshold amount. The applicable percentage must not exceed 100 percent.
14.3 	(d) "Threshold amount" means:
14.4 	(1) $150,000 for a joint return or a surviving spouse;
14.5 	(2) $125,000 for a head of a household;
14.6 	(3) $100,000 for an individual who is not married and who is not a surviving spouse or 
14.7 	head of a household; and
14.8 	(4) $75,000 for a married individual filing a separate return.
14.9 	(e) The thresholds must be increased by an amount equal to:
14.10 	(1) the threshold dollar amount, multiplied by
14.11 	(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue 
14.12 	Code, as amended through December 16, 2016, for the calendar year in which the taxable 
14.13 	year begins, by substituting "calendar year 1990" for "calendar year 1992" in subparagraph 
14.14 	(B) of section 1(f)(3).

14.15 	EFFECTIVE DATE. (a) The amendment to paragraph (b) is effective for taxable years 
14.16 	beginning after December 31, 2018.
14.17 	(b) The amendment to paragraph (e) is effective retroactively for taxable years beginning 
14.18 	after December 31, 2017.

14.19 	Sec. 20. Minnesota Statutes 2018, section 290.0131, is amended by adding a subdivision 
14.20 	to read:
14.21 		Subd. 15.529 plan addition. (a) The definitions under sections 290.06, subdivision 2h, 
14.22 	and 290.0684, apply for the purposes of this subdivision.
14.23 	(b) The amount of a distribution attributed to gain from a qualified account that is not 
14.24 	used to pay qualified higher education expenses as defined in section 290.0684, subdivision 
14.25 	1, paragraph (e), is an addition to the distributee to the extent it is not included in federal 
14.26 	taxable income.
14.27 	(c) The amount of distribution attributed to gain is determined by:
14.28 	(1) the total amount of contributions minus any distributions made for qualified higher 
14.29 	education expenses made prior to the distribution that was not used to pay qualified higher 
14.30 	education expenses;
15.1 	(2) divided by account value on the date of the distribution;
15.2 	(3) multiplied by the amount of the distribution;
15.3 	(4) the result of which is then subtracted from the amount of the distribution.
15.4 	(d) "Distributee" means the person who received the benefit of the distribution, but in 
15.5 	the case of a dependent as defined under section 152 of the Internal Revenue Code, the 
15.6 	distributee is the taxpayer who claims the dependent under section 151 of the Internal 
15.7 	Revenue Code.

15.8 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
15.9 	after December 31, 2017.

15.10 	Sec. 21. Minnesota Statutes 2018, section 290.0131, is amended by adding a subdivision 
15.11 	to read:
15.12 		Subd. 16.Section 199A addition. For trusts and estates, the amount deducted under 
15.13 	section 199A of the Internal Revenue Code in computing the trust or estate's federal taxable 
15.14 	income is an addition.

15.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
15.16 	31, 2018.

15.17 	Sec. 22. Minnesota Statutes 2018, section 290.0132, subdivision 1, is amended to read:
15.18 		Subdivision 1.Definition; scope. (a) For the purposes of this section, "subtraction" 
15.19 	means an amount that shall be subtracted from federal taxable income in the case of a trust 
15.20 	or an estate or federal adjusted gross income in the case of an individual in computing net 
15.21 	income for the taxable year to which the amounts relate.
15.22 	(b) The subtractions in this section apply to individuals, estates, and trusts.
15.23 	(c) Unless specifically indicated or unless the context clearly indicates otherwise, no 
15.24 	amount deducted, subtracted, or otherwise excluded in computing federal taxable income 
15.25 	in the case of a trust or an estate or federal adjusted gross income in the case of an individual 
15.26 	is a subtraction under this section.

15.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
15.28 	31, 2018.

16.1 	Sec. 23. Minnesota Statutes 2018, section 290.0132, subdivision 7, is amended to read:
16.2 		Subd. 7.Charitable contributions for taxpayers who do not itemize. To the extent 
16.3 	not deducted or not deductible under section 408(d)(8)(E) of the Internal Revenue Code in 
16.4 	determining federal taxable income by For an individual who does not elect to itemize 
16.5 	deductions for federal income tax purposes under section 290.0803 for the taxable year, an 
16.6 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
16.7 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code
16.8 	290.0139, subdivision 5, is a subtraction. The subtraction under this subdivision must not 
16.9 	include a distribution that is excluded from federal adjusted gross income and that is not 
16.10 	deductible under section 408(d)(8)(E) of the Internal Revenue Code.

16.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
16.12 	31, 2018.

16.13 	Sec. 24. Minnesota Statutes 2018, section 290.0132, subdivision 20, is amended to read:
16.14 		Subd. 20.Disallowed Personal and dependent exemption. The amount of the phaseout 
16.15 	of personal exemptions under section 151(d) of the Internal Revenue Code is a subtraction.
16.16 	The amount of personal and dependent exemptions calculated under section 290.0138 is a 
16.17 	subtraction.

16.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
16.19 	31, 2018.

16.20 	Sec. 25. Minnesota Statutes 2018, section 290.0132, subdivision 21, is amended to read:
16.21 		Subd. 21.Military service pension; retirement pay.  To the extent included in federal 
16.22 	taxable adjusted gross income, compensation received from a pension or other retirement 
16.23 	pay from the federal government for service in the military, as computed under United 
16.24 	States Code, title 10, sections 1401 to 1414, 1447 to 1455, and 12733, is a subtraction. The 
16.25 	subtraction is limited to individuals who do not claim the credit under section 290.0677.

16.26 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
16.27 	31, 2018.

17.1 	Sec. 26. Minnesota Statutes 2018, section 290.0132, is amended by adding a subdivision 
17.2 	to read:
17.3 		Subd. 27.Moving expenses. Moving expenses that qualify as a deduction under section 
17.4 	217(a) through (f) of the Internal Revenue Code to the extent the expenses are not deducted 
17.5 	in the computation of federal adjusted gross income is a subtraction.

17.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
17.7 	31, 2018.

17.8 	Sec. 27. Minnesota Statutes 2018, section 290.0132, is amended by adding a subdivision 
17.9 	to read:
17.10 		Subd. 28.Standard or itemized deduction. The amount allowed under section 290.0138 
17.11 	or 290.0139, as elected under section 290.0803, is a subtraction.

17.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
17.13 	31, 2018.

17.14 	Sec. 28. Minnesota Statutes 2018, section 290.0132, is amended by adding a subdivision 
17.15 	to read:
17.16 		Subd. 29.Deferred foreign income of nonresidents. In the case of a nonresident 
17.17 	individual the amount of deferred foreign income as defined in section 290.01, subdivision 
17.18 	19, is a subtraction.

17.19 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
17.20 	after December 31, 2016.

17.21 	Sec. 29. Minnesota Statutes 2018, section 290.0133, subdivision 6, is amended to read:
17.22 		Subd. 6.Special deductions. (a) The amount of any special deductions under sections 
17.23 	241 to 247 and 965, except paragraph (h) of section 965, of the Internal Revenue Code is 
17.24 	an addition.
17.25 	(b) The addition under this subdivision is reduced by the amount of the deduction under 
17.26 	section 245A of the Internal Revenue Code equal to any amount included in federal taxable 
17.27 	income in a prior taxable year under section 965 of the Internal Revenue Code.

17.28 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
17.29 	after December 31, 2016.

18.1 	Sec. 30. Minnesota Statutes 2018, section 290.0133, subdivision 12, is amended to read:
18.2 		Subd. 12.Section 179 expensing. For property placed in service in taxable years 
18.3 	beginning before January 1, 2018, 80 percent of the amount by which the deduction allowed 
18.4 	under the dollar limits of section 179 of the Internal Revenue Code exceeds the deduction 
18.5 	allowable by section 179 of the Internal Revenue Code, as amended through December 31, 
18.6 	2003, is an addition.

18.7 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
18.8 	after December 31, 2017.

18.9 	Sec. 31. [290.0138] PERSONAL AND DEPENDENT EXEMPTIONS; STANDARD 
18.10 	DEDUCTION.
18.11 		Subdivision 1.Personal and dependent exemptions. (a) A taxpayer is allowed a 
18.12 	subtraction from federal adjusted gross income equal to:
18.13 	(1) a personal exemption in the amount of $4,250, and in the case of a married couple 
18.14 	filing a joint return or a surviving spouse an additional personal exemption of $4,250; plus
18.15 	(2) a dependent exemption of $4,250 multiplied by the number of dependents of the 
18.16 	taxpayer, as defined under sections 151 and 152 of the Internal Revenue Code.
18.17 	(b) The personal and dependent exemptions are not allowed to an individual who is 
18.18 	eligible to be claimed as a dependent, as defined in sections 151 or 152 of the Internal 
18.19 	Revenue Code, by another taxpayer.
18.20 		Subd. 2.Standard deduction. (a) In addition to the exemptions allowed under 
18.21 	subdivision 1, an individual is allowed a standard deduction as provided in this subdivision.
18.22 	(b) The standard deduction is equal to:
18.23 	(1) for married filing jointly or surviving spouse, $13,000;
18.24 	(2) for a head of household, $9,750; or
18.25 	(3) for any other taxpayer, $6,650.
18.26 	(c) Taxpayers who are elderly or blind are entitled to an additional standard deduction 
18.27 	amount equal to:
18.28 	(1) $1,300 if the taxpayer has attained age 65 before the close of the taxable year, plus 
18.29 	$1,300 for the spouse of the taxpayer if the spouse has obtained age 65 before the close of 
18.30 	the taxable year and meets the requirements of section 151(b) of the Internal Revenue Code;
19.1 	(2) $1,300, if the taxpayer is blind before the close of the taxable year, plus $1,300 for 
19.2 	the spouse of the taxpayer if the spouse is blind as of the close of the taxable year and meets 
19.3 	the requirements of section 151(b) of the Internal Revenue Code. If the spouse dies during 
19.4 	the taxable year, the determination of whether the spouse is blind shall be made as of the 
19.5 	time of the death of the spouse; or
19.6 	(3) In the case if an individual who is not married and is not a surviving spouse, $1,650 
19.7 	if the taxpayer has attained the age of 65 before the close of the taxable year and $1,650 if 
19.8 	the taxpayer has not attained the age of 65 before the close of the taxable year.
19.9 	(d) For purposes of paragraph (c), an individual is blind only if the taxpayer's central 
19.10 	visual acuity does not exceed 20/200 in the better eye with correcting lenses, or if the 
19.11 	taxpayer's visual acuity is greater than 20/200 but is accompanied by a limitation in the 
19.12 	fields of vision such that the widest diameter of the visual field subtends an angle no greater 
19.13 	than 20 degrees.
19.14 	(e) The standard deduction under this section for an individual that is a dependent under 
19.15 	section 151 of the Internal Revenue Code for a taxable year beginning in the calendar year 
19.16 	in which the individual's tax year begins, must not exceed the greater of:
19.17 	(1) $1,100; or
19.18 	(2) the sum of $350 plus the amount of earned income of the individual, but in no case 
19.19 	may the individual's standard deduction exceed $6,650.
19.20 	(f) A taxpayer who is not eligible for the standard deduction under section 63(b)(6) of 
19.21 	the Internal Revenue Code, is not eligible for a standard deduction under this section.
19.22 		Subd. 3.Itemized deductions. In lieu of the standard deduction in subdivision 2, a 
19.23 	taxpayer may elect under section 290.0803 to take state itemized deductions as allowed 
19.24 	under section 290.0139.
19.25 		Subd. 4.Cost-of-living adjustment. For taxable years beginning after December 31, 
19.26 	2018, the commissioner shall annually adjust the amounts in subdivisions 1 and 2 by the 
19.27 	percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue 
19.28 	Code as amended through December 16, 2016, except that in section 1(f)(3)(B), the word 
19.29 	"2017" shall be substituted for the word "1992." The exemption amount as adjusted for 
19.30 	inflation must be rounded to the nearest $50. If a dollar amount as adjusted for inflation is 
19.31 	not a multiple of $50, the dollar amount must be rounded to the next lowest multiple of $50. 
19.32 	The determination of the commissioner under this subdivision is not a rule under the 
19.33 	Administrative Procedure Act, including section 14.386.

20.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
20.2 	31, 2018.

20.3 	Sec. 32. [290.0139] INDIVIDUAL ITEMIZED DEDUCTIONS.
20.4 		Subdivision 1.Allowance of deductions. If a taxpayer elects under section 290.0803, 
20.5 	the taxpayer may subtract from federal adjusted gross income the deductions in this section 
20.6 	to the extent not already deducted in computing federal adjusted gross income. The 
20.7 	deductions in this section are in lieu of the standard deduction under section 290.0138, 
20.8 	subdivision 2.
20.9 		Subd. 2.Medical expenses. A deduction is allowed for medical expenses as provided 
20.10 	in section 213 of the Internal Revenue Code.
20.11 		Subd. 3.Taxes. A deduction is allowed for the amount paid or accrued during the taxable 
20.12 	year for real or personal property taxes imposed by a state or a political subdivision of a 
20.13 	state.
20.14 		Subd. 4.Interest. To the extent not already deducted from federal adjusted gross income, 
20.15 	a deduction is allowed for interest paid or accrued, as provided in section 163 of the Internal 
20.16 	Revenue Code, disregarding the limitation on interest deductions in paragraphs (h)(3)(F)(i)(I), 
20.17 	(III), and (IV).
20.18 		Subd. 5.Charitable contributions. A deduction is allowed for charitable contributions 
20.19 	as provided in section 170 of the Internal Revenue Code.
20.20 		Subd. 6.Losses. A deduction is allowed for losses, as provided for in sections 165(d) 
20.21 	and 165(h) of the Internal Revenue Code, disregarding the limitation on personal casualty 
20.22 	losses in paragraph (h)(5).
20.23 		Subd. 7.Other miscellaneous expenses subject to a minimum. A deduction is allowed 
20.24 	for miscellaneous expenses as provided for in section 67 of the Internal Revenue Code, 
20.25 	disregarding paragraph (g). The expenses shall only be allowed to the extent that the 
20.26 	aggregate amount of miscellaneous deductions exceeds two percent of federal adjusted 
20.27 	gross income.

20.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
20.29 	31, 2018.

21.1 	Sec. 33. Minnesota Statutes 2018, section 290.032, subdivision 2, is amended to read:
21.2 		Subd. 2.Computation. The amount of tax imposed by subdivision 1 shall be computed 
21.3 	in the same way as the tax imposed under section 402(d) of the Internal Revenue Code of 
21.4 	1986, as amended through December 31, 1995, except that the initial separate tax shall be 
21.5 	an amount equal to five times the tax which would be imposed by section 290.06, subdivision 
21.6 	2c, if the recipient was an unmarried individual, and the taxable net income was an amount 
21.7 	equal to one-fifth of the excess of
21.8 	(i) the total taxable amount of the lump-sum distribution for the year, over
21.9 	(ii) the minimum distribution allowance, and except that references in section 402(d) of 
21.10 	the Internal Revenue Code of 1986, as amended through December 31, 1995, to paragraph 
21.11 	(1)(A) thereof shall instead be references to subdivision 1, and the excess, if any, of the 
21.12 	subtraction base amount over federal taxable net income for a qualified individual as provided 
21.13 	under section 290.0802, subdivision 2.

21.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
21.15 	31, 2018.

21.16 	Sec. 34. Minnesota Statutes 2018, section 290.05, subdivision 3, is amended to read:
21.17 		Subd. 3.Taxes imposed on exempt entities. (a) An organization exempt from taxation 
21.18 	under subdivision 2 shall, nevertheless, be subject to tax under this chapter to the extent 
21.19 	provided in the following provisions of the Internal Revenue Code:
21.20 	(1) section 527 (dealing with political organizations);
21.21 	(2) section 528 (dealing with certain homeowners associations);
21.22 	(3) sections 511 to 515 (dealing with unrelated business income);
21.23 	(4) section 521 (dealing with farmers' cooperatives); and
21.24 	(5) section 6033(e)(2) (dealing with lobbying expense); but notwithstanding this 
21.25 	subdivision, shall be considered an organization exempt from income tax for the purposes 
21.26 	of any law which refers to organizations exempt from income taxes.
21.27 	(b) The tax shall be imposed on the taxable income of political organizations or 
21.28 	homeowner associations or the unrelated business taxable income, as defined in section 512 
21.29 	of the Internal Revenue Code, of organizations defined in section 511 of the Internal Revenue 
21.30 	Code, provided that the tax is not imposed on:
22.1 	(1) advertising revenues from a newspaper published by an organization described in 
22.2 	section 501(c)(4) of the Internal Revenue Code; or
22.3 	(2) revenues from lawful gambling authorized under chapter 349 that are expended for 
22.4 	purposes that qualify for the deduction for charitable contributions under section 170 of the 
22.5 	Internal Revenue Code, disregarding the limitation under section 170(b)(2), but only to the 
22.6 	extent the contributions are not deductible in computing federal taxable income.; or
22.7 	(3) any increase in unrelated business taxable income from disallowed fringe benefit as 
22.8 	provided in section 512(a)(7) of the Internal Revenue Code.
22.9 	The tax shall be at the corporate rates. The tax shall only be imposed on income and 
22.10 	deductions assignable to this state under sections 290.17 to 290.20. To the extent deducted 
22.11 	in computing federal taxable income, the deductions contained in section 290.21 shall not 
22.12 	be allowed in computing Minnesota taxable net income.
22.13 	(c) The tax shall be imposed on organizations subject to federal tax under section 
22.14 	6033(e)(2) of the Internal Revenue Code, in an amount equal to the corporate tax rate 
22.15 	multiplied by the amount of lobbying expenses taxed under section 6033(e)(2) which are 
22.16 	attributable to lobbying the Minnesota state government.

22.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
22.18 	31, 2018.

22.19 	Sec. 35. Minnesota Statutes 2018, section 290.06, subdivision 2c, is amended to read:
22.20 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income taxes 
22.21 	imposed by this chapter upon married individuals filing joint returns and surviving spouses 
22.22 	as defined in section 2(a) of the Internal Revenue Code must be computed by applying to 
22.23 	their taxable net income the following schedule of rates:
22.24 	(1) On the first $35,480, 5.35 percent;
22.25 	(2) On all over $35,480, but not over $140,960, 7.05 percent;
22.26 	(3) On all over $140,960, but not over $250,000, 7.85 percent;
22.27 	(4) On all over $250,000, 9.85 percent.
22.28 	Married individuals filing separate returns, estates, and trusts must compute their income 
22.29 	tax by applying the above rates to their taxable income, except that the income brackets 
22.30 	will be one-half of the above amounts.
23.1 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
23.2 	computed by applying to taxable net income the following schedule of rates:
23.3 	(1) On the first $24,270, 5.35 percent;
23.4 	(2) On all over $24,270, but not over $79,730, 7.05 percent;
23.5 	(3) On all over $79,730, but not over $150,000, 7.85 percent;
23.6 	(4) On all over $150,000, 9.85 percent.
23.7 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as 
23.8 	a head of household as defined in section 2(b) of the Internal Revenue Code must be 
23.9 	computed by applying to taxable net income the following schedule of rates:
23.10 	(1) On the first $29,880, 5.35 percent;
23.11 	(2) On all over $29,880, but not over $120,070, 7.05 percent;
23.12 	(3) On all over $120,070, but not over $200,000, 7.85 percent;
23.13 	(4) On all over $200,000, 9.85 percent.
23.14 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax 
23.15 	of any individual taxpayer whose taxable net income for the taxable year is less than an 
23.16 	amount determined by the commissioner must be computed in accordance with tables 
23.17 	prepared and issued by the commissioner of revenue based on income brackets of not more 
23.18 	than $100. The amount of tax for each bracket shall be computed at the rates set forth in 
23.19 	this subdivision, provided that the commissioner may disregard a fractional part of a dollar 
23.20 	unless it amounts to 50 cents or more, in which case it may be increased to $1.
23.21 	(e) An individual who is not a Minnesota resident for the entire year must compute the 
23.22 	individual's Minnesota income tax as provided in this subdivision. After the application of 
23.23 	the nonrefundable credits provided in this chapter, the tax liability must then be multiplied 
23.24 	by a fraction in which:
23.25 	(1) the numerator is the individual's Minnesota source federal adjusted gross income as 
23.26 	defined in section 62 of the Internal Revenue Code and increased by the additions required 
23.27 	under section 290.0131, subdivisions 2and, 6, 8 to 11 10, 16, and 17, and reduced by the 
23.28 	Minnesota assignable portion of the subtraction for United States government interest under 
23.29 	section 290.0132, subdivision 2, and the subtractions under section 290.0132, subdivisions 
23.30 	9, 10, 14, 15, 17, and 18, and 29, after applying the allocation and assignability provisions 
23.31 	of section 290.081, clause (a), or 290.17; and
24.1 	(2) the denominator is the individual's federal adjusted gross income as defined in section 
24.2 	62 of the Internal Revenue Code, increased by the amounts specified in section 290.0131, 
24.3 	subdivisions 2and, 6, 8 to 11 10, 16, and 17, and reduced by the amounts specified in section 
24.4 	290.0132, subdivisions 2, 9, 10, 14, 15, 17, and 18, and 29.

24.5 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
24.6 	31, 2018.

24.7 	Sec. 36. Minnesota Statutes 2018, section 290.06, subdivision 2d, is amended to read:
24.8 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
24.9 	December 31, 2013, the minimum and maximum dollar amounts for each rate bracket for 
24.10 	which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage 
24.11 	determined under paragraph (b). For the purpose of making the adjustment as provided in 
24.12 	this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets 
24.13 	as they existed for taxable years beginning after December 31, 2012, and before January 1, 
24.14 	2014. The rate applicable to any rate bracket must not be changed. The dollar amounts 
24.15 	setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate 
24.16 	brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in 
24.17 	$5, it must be rounded up to the nearest $10 amount.
24.18 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
24.19 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, as amended through 
24.20 	December 16, 2016, except that in section 1(f)(3)(B) the word "2012" shall be substituted 
24.21 	for the word "1992." For 2014, the commissioner shall then determine the percent change 
24.22 	from the 12 months ending on August 31, 2012, to the 12 months ending on August 31, 
24.23 	2013, and in each subsequent year, from the 12 months ending on August 31, 2012, to the 
24.24 	12 months ending on August 31 of the year preceding the taxable year. The determination 
24.25 	of the commissioner pursuant to this subdivision shall not be considered a "rule" and shall 
24.26 	not be subject to the Administrative Procedure Act contained in chapter 14.
24.27 	No later than December 15 of each year, the commissioner shall announce the specific 
24.28 	percentage that will be used to adjust the tax rate brackets.

24.29 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
24.30 	after December 31, 2017.

24.31 	Sec. 37. Minnesota Statutes 2018, section 290.06, subdivision 2h, is amended to read:
24.32 		Subd. 2h.Section 529 plan recapture. (a) For the purposes of this subdivision:
25.1 	(1) the definitions under section 290.0684 apply;
25.2 	(2) "account owner" means an individual who owns one or more qualified accounts;
25.3 	(3) "credit ratio" means the ratio of (i) two times the total amount of credits that an 
25.4 	account owner claimed under section 290.0684 for contributions to the account owner's 
25.5 	qualified accounts to (ii) the total contributions in all taxable years to the account owner's 
25.6 	qualified accounts; and
25.7 	(4) "qualified higher education expenses" has the meaning given in section 29(e)(3) of 
25.8 	the Internal Revenue Code except section 529(c)(7) does not apply; and
25.9 	(4) (5) "subtraction ratio" means the ratio of (i) the total amount of subtractions that an 
25.10 	account owner claimed under section 290.0132, subdivision 23, for contributions to the 
25.11 	account owner's qualified accounts to (ii) the total contributions in all taxable years to the 
25.12 	account owner's qualified accounts.
25.13 	(b) If a distribution from a qualified account is used for a purpose other than to pay for 
25.14 	qualified higher education expenses, the account owner must pay an additional tax equal 
25.15 	to:
25.16 	(1) 50 percent of the product of the credit ratio and the amount of the distribution; plus
25.17 	(2) ten percent of the product of the subtraction ratio and the amount of the distribution.
25.18 	(c) The additional tax under this subdivision does not apply to any portion of a distribution 
25.19 	that is subject to the additional tax under section 529(c)(6) of the Internal Revenue Code.

25.20 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
25.21 	after December 31, 2017.

25.22 	Sec. 38. Minnesota Statutes 2018, section 290.067, subdivision 2b, is amended to read:
25.23 		Subd. 2b.Inflation adjustment. The commissioner shall adjust the dollar amount of 
25.24 	the income threshold at which the maximum credit begins to be reduced under subdivision 
25.25 	1 by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
25.26 	Revenue Code, as amended through December 16, 2016, except that in section 1(f)(3)(B) 
25.27 	the word "2016" shall be substituted for the word "1992." For 2018, the commissioner shall 
25.28 	then determine the percent change from the 12 months ending on August 31, 2016, to the 
25.29 	12 months ending on August 31, 2017, and in each subsequent year, from the 12 months 
25.30 	ending on August 31, 2016, to the 12 months ending on August 31 of the year preceding 
25.31 	the taxable year. The determination of the commissioner pursuant to this subdivision must 
25.32 	not be considered a "rule" and is not subject to the Administrative Procedure Act contained 
26.1 	in chapter 14. The threshold amount as adjusted must be rounded to the nearest $10 amount. 
26.2 	If the amount ends in $5, the amount is rounded up to the nearest $10 amount.

26.3 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
26.4 	after December 31, 2017.

26.5 	Sec. 39. Minnesota Statutes 2018, section 290.0671, subdivision 1, is amended to read:
26.6 		Subdivision 1.Credit allowed. (a) An individual who is a resident of Minnesota is 
26.7 	allowed a credit against the tax imposed by this chapter equal to a percentage of earned 
26.8 	income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the 
26.9 	Internal Revenue Code, except that a taxpayer with no qualifying children who has attained 
26.10 	the age of 21, but not attained age 65 before the close of the taxable year and is otherwise 
26.11 	eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit.
26.12 	(b) For individuals with no qualifying children, the credit equals 2.10 percent of the first 
26.13 	$6,180 of earned income. The credit is reduced by 2.01 percent of earned income or adjusted 
26.14 	gross income, whichever is greater, in excess of $8,130, but in no case is the credit less than 
26.15 	zero.
26.16 	(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first 
26.17 	$11,120 of earned income. The credit is reduced by 6.02 percent of earned income or adjusted 
26.18 	gross income, whichever is greater, in excess of $21,190, but in no case is the credit less 
26.19 	than zero.
26.20 	(d) For individuals with two or more qualifying children, the credit equals 11 percent 
26.21 	of the first $18,240 of earned income. The credit is reduced by 10.82 percent of earned 
26.22 	income or adjusted gross income, whichever is greater, in excess of $25,130, but in no case 
26.23 	is the credit less than zero.
26.24 	(e) For a part-year resident, the credit must be allocated based on the percentage calculated 
26.25 	under section 290.06, subdivision 2c, paragraph (e).
26.26 	(f) For a person who was a resident for the entire tax year and has earned income not 
26.27 	subject to tax under this chapter, including income excluded under section 290.0132, 
26.28 	subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross 
26.29 	income reduced by the earned income not subject to tax under this chapter over federal 
26.30 	adjusted gross income. For purposes of this paragraph, the following clauses are not 
26.31 	considered "earned income not subject to tax under this chapter":
26.32 	(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
27.1 	(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
27.2 	(3) income derived from an Indian reservation by an enrolled member of the reservation 
27.3 	while living on the reservation.
27.4 	(g) For tax years beginning after December 31, 2013, the $8,130 in paragraph (b), the 
27.5 	$21,190 in paragraph (c), and the $25,130 in paragraph (d), after being adjusted for inflation 
27.6 	under subdivision 7, are each increased by $5,000 for married taxpayers filing joint returns. 
27.7 	For tax years beginning after December 31, 2013, the commissioner shall annually adjust 
27.8 	the $5,000 by the percentage determined pursuant to the provisions of section 1(f) of the 
27.9 	Internal Revenue Code as amended through December 16, 2016, except that in section 
27.10 	1(f)(3)(B), the word "2008" shall be substituted for the word "1992." For 2014, the 
27.11 	commissioner shall then determine the percent change from the 12 months ending on August 
27.12 	31, 2008, to the 12 months ending on August 31, 2013, and in each subsequent year, from 
27.13 	the 12 months ending on August 31, 2008, to the 12 months ending on August 31 of the 
27.14 	year preceding the taxable year. The earned income thresholds as adjusted for inflation must 
27.15 	be rounded to the nearest $10. If the amount ends in $5, the amount is rounded up to the 
27.16 	nearest $10. The determination of the commissioner under this subdivision is not a rule 
27.17 	under the Administrative Procedure Act.
27.18 	(h) The commissioner shall construct tables showing the amount of the credit at various 
27.19 	income levels and make them available to taxpayers. The tables shall follow the schedule 
27.20 	contained in this subdivision, except that the commissioner may graduate the transition 
27.21 	between income brackets.

27.22 	EFFECTIVE DATE. This section is effectively retroactively for taxable years beginning 
27.23 	after December 31, 2017.

27.24 	Sec. 40. Minnesota Statutes 2018, section 290.0671, subdivision 7, is amended to read:
27.25 		Subd. 7.Inflation adjustment. The earned income amounts used to calculate the credit 
27.26 	and the income thresholds at which the maximum credit begins to be reduced in subdivision 
27.27 	1 must be adjusted for inflation. The commissioner shall adjust by the percentage determined 
27.28 	pursuant to the provisions of section 1(f) of the Internal Revenue Code as amended through 
27.29 	December 16, 2016, except that in section 1(f)(3)(B) the word "2013" shall be substituted 
27.30 	for the word "1992." For 2015, the commissioner shall then determine the percent change 
27.31 	from the 12 months ending on August 31, 2013, to the 12 months ending on August 31, 
27.32 	2014, and in each subsequent year, from the 12 months ending on August 31, 2013, to the 
27.33 	12 months ending on August 31 of the year preceding the taxable year. The earned income 
27.34 	thresholds as adjusted for inflation must be rounded to the nearest $10 amount. If the amount 
28.1 	ends in $5, the amount is rounded up to the nearest $10 amount. The determination of the 
28.2 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.

28.3 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
28.4 	after December 31, 2017.

28.5 	Sec. 41. Minnesota Statutes 2018, section 290.0672, subdivision 1, is amended to read:
28.6 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
28.7 	the meanings given.
28.8 	(b) "Long-term care insurance" means a policy that:
28.9 	(1) qualifies for a deduction under section 213 of the Internal Revenue Code, disregarding 
28.10 	the adjusted gross income test; or meets the requirements given in section 62A.46; or provides 
28.11 	similar coverage issued under the laws of another jurisdiction; and
28.12 	(2) has a lifetime long-term care benefit limit of not less than $100,000; and
28.13 	(3) has been offered in compliance with the inflation protection requirements of section 
28.14 	62S.23.
28.15 	(c) "Qualified beneficiary" means the taxpayer or the taxpayer's spouse.
28.16 	(d) "Premiums deducted in determining federal taxable net income" means the lesser of 
28.17 	(1) long-term care insurance premiums that qualify as deductions under section 213 of the 
28.18 	Internal Revenue Code; and (2) the total amount deductible for medical care under section 
28.19 	213 of the Internal Revenue Code sections 290.01, subdivision 29a, and 290.0132, 
28.20 	subdivision 28.

28.21 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
28.22 	31, 2018.

28.23 	Sec. 42. Minnesota Statutes 2018, section 290.0672, subdivision 2, is amended to read:
28.24 		Subd. 2.Credit. A taxpayer is allowed a credit against the tax imposed by this chapter 
28.25 	for long-term care insurance policy premiums paid during the tax year. The credit for each 
28.26 	policy equals 25 percent of premiums paid to the extent not deducted in determining federal 
28.27 	taxable net income. A taxpayer may claim a credit for only one policy for each qualified 
28.28 	beneficiary. A maximum of $100 applies to each qualified beneficiary. The maximum total 
28.29 	credit allowed per year is $200 for married couples filing joint returns and $100 for all other 
28.30 	filers. For a nonresident or part-year resident, the credit determined under this section must 
29.1 	be allocated based on the percentage calculated under section 290.06, subdivision 2c, 
29.2 	paragraph (e).

29.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
29.4 	31, 2018.

29.5 	Sec. 43. Minnesota Statutes 2018, section 290.0681, subdivision 1, is amended to read:
29.6 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
29.7 	the meanings given.
29.8 	(b) "Account" means the historic credit administration account in the special revenue 
29.9 	fund.
29.10 	(c) "Office" means the State Historic Preservation Office of the Department of 
29.11 	Administration.
29.12 	(d) "Project" means rehabilitation of a certified historic structure, as defined in section 
29.13 	47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is allowed a 
29.14 	federal credit.
29.15 	(e) "Federal credit" means the credit allowed under section 47(a)(2) 47(a) of the Internal 
29.16 	Revenue Code, except that the amount allowed is deemed to be allocated in the taxable year 
29.17 	that the project is placed in service.
29.18 	(f) "Placed in service" has the meaning used in section 47 of the Internal Revenue Code.
29.19 	(g) "Qualified rehabilitation expenditures" has the meaning given in section 47 of the 
29.20 	Internal Revenue Code.

29.21 	EFFECTIVE DATE. This section is effective retroactively for applications for allocation 
29.22 	certificates submitted after December 31, 2017.

29.23 	Sec. 44. Minnesota Statutes 2018, section 290.0681, subdivision 2, is amended to read:
29.24 		Subd. 2.Credit or grant allowed; certified historic structure. (a) A credit is allowed 
29.25 	against the tax imposed under this chapter equal to not more than 100 percent of the credit 
29.26 	allowed under section 47(a)(2) 47(a) of the Internal Revenue Code for a project. The credit 
29.27 	is payable each taxable year in five equal yearly installments beginning with the year the 
29.28 	project is placed in service. To qualify for the credit:
29.29 	(1) the project must receive Part 3 certification and be placed in service during the taxable 
29.30 	year; and
30.1 	(2) the taxpayer must be allowed the federal credit and be issued a credit certificate for 
30.2 	the taxable year as provided in subdivision 4.
30.3 	(b) The commissioner of administration may pay a grant in lieu of the credit. The grant 
30.4 	equals 90 percent of the credit that would be allowed for the project. The grant is payable 
30.5 	each taxable year in five equal yearly installments beginning with the year the project is 
30.6 	placed in service.
30.7 	(c) In lieu of the credit under paragraph (a), an insurance company may claim a credit 
30.8 	against the insurance premiums tax imposed under chapter 297I.

30.9 	EFFECTIVE DATE. This section is effective retroactively for applications for allocation 
30.10 	certificates submitted after December 31, 2017.

30.11 	Sec. 45. Minnesota Statutes 2018, section 290.0681, subdivision 3, is amended to read:
30.12 		Subd. 3.Applications; allocations. (a) To qualify for a credit or grant under this section, 
30.13 	the developer of a project must apply to the office before the rehabilitation begins. The 
30.14 	application must contain the information and be in the form prescribed by the office. The 
30.15 	office may collect a fee for application of up to 0.5 percent of qualified rehabilitation 
30.16 	expenditures, up to $40,000, based on estimated qualified rehabilitation expenditures, to 
30.17 	offset costs associated with personnel and administrative expenses related to administering 
30.18 	the credit and preparing the economic impact report in subdivision 9. Application fees are 
30.19 	deposited in the account. The application must indicate if the application is for a credit or 
30.20 	a grant in lieu of the credit or a combination of the two and designate the taxpayer qualifying 
30.21 	for the credit or the recipient of the grant.
30.22 	(b) Upon approving an application for credit, the office shall issue allocation certificates 
30.23 	that:
30.24 	(1) verify eligibility for the credit or grant;
30.25 	(2) state the amount of credit or grant anticipated with the project, with the credit amount 
30.26 	equal to 100 percent and the grant amount equal to 90 percent of the federal credit anticipated 
30.27 	in the application;
30.28 	(3) state that the credit or grant allowed may increase or decrease if the federal credit 
30.29 	the project receives at the time it is placed in service is different than the amount anticipated 
30.30 	at the time the allocation certificate is issued; and
30.31 	(4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer or 
30.32 	grant recipient is entitled to receive one-fifth of the total amount of either the credit or the 
31.1 	grant at the time the project is placed in service, provided that date is within three calendar 
31.2 	years following the issuance of the allocation certificate.
31.3 	(c) The office, in consultation with the commissioner, shall determine if the project is 
31.4 	eligible for a credit or a grant under this section and must notify the developer in writing 
31.5 	of its determination. Eligibility for the credit is subject to review and audit by the 
31.6 	commissioner.
31.7 	(d) The federal credit recapture and repayment requirements under section 50 of the 
31.8 	Internal Revenue Code do not apply to the credit allowed under this section.
31.9 	(e) Any decision of the office under paragraph (c) may be challenged as a contested case 
31.10 	under chapter 14. The contested case proceeding must be initiated within 45 days of the 
31.11 	date of written notification by the office.

31.12 	EFFECTIVE DATE. This section is effective retroactively for applications for allocation 
31.13 	certificates submitted after December 31, 2017.

31.14 	Sec. 46. Minnesota Statutes 2018, section 290.0681, subdivision 4, is amended to read:
31.15 		Subd. 4.Credit certificates; grants. (a)(1) The developer of a project for which the 
31.16 	office has issued an allocation certificate must notify the office when the project is placed 
31.17 	in service. Upon verifying that the project has been placed in service, and was allowed a 
31.18 	federal credit, the office must issue a credit certificate to the taxpayer designated in the 
31.19 	application or must issue a grant to the recipient designated in the application. The credit 
31.20 	certificate must state the amount of the credit.
31.21 	(2) The credit amount equals the federal credit allowed for the project.
31.22 	(3) The grant amount equals 90 percent of the federal credit allowed for the project.
31.23 	(b) The recipient of a credit certificate may assign the certificate to another taxpayer
31.24 	before the first one-fifth payment is claimed, which is then allowed the credit under this 
31.25 	section or section 297I.20, subdivision 3. An assignment is not valid unless the assignee 
31.26 	notifies the commissioner within 30 days of the date that the assignment is made. The 
31.27 	commissioner shall prescribe the forms necessary for notifying the commissioner of the 
31.28 	assignment of a credit certificate and for claiming a credit by assignment.
31.29 	(c) Credits passed through to partners, members, shareholders, or owners pursuant to 
31.30 	subdivision 5 are not an assignment of a credit certificate under this subdivision.
31.31 	(d) A grant agreement between the office and the recipient of a grant may allow the 
31.32 	grant to be issued to another individual or entity.

32.1 	EFFECTIVE DATE. This section is effective retroactively for applications for allocation 
32.2 	certificates submitted after December 31, 2017.

32.3 	Sec. 47. Minnesota Statutes 2018, section 290.0684, subdivision 1, is amended to read:
32.4 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
32.5 	the meanings given them.
32.6 	(b) "Contribution" means the amount contributed to one or more qualified accounts 
32.7 	except that the amount:
32.8 	(1) is reduced by any withdrawals or distributions, other than transfers or rollovers to 
32.9 	another qualified account, from a qualified account during the taxable year; and
32.10 	(2) excludes the amount of any transfers or rollovers from a qualified account made 
32.11 	during the taxable year.
32.12 	(c) "Federal adjusted gross income" has the meaning given under section 62(a) of the 
32.13 	Internal Revenue Code.
32.14 	(d) "Qualified account" means an account qualifying under section 529 of the Internal 
32.15 	Revenue Code.
32.16 	(e) "Qualified higher education expenses" has the meaning given in section 529 of the 
32.17 	Internal Revenue Code.

32.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

32.19 	Sec. 48. Minnesota Statutes 2018, section 290.0684, subdivision 2, is amended to read:
32.20 		Subd. 2.Credit allowed. (a) An individual who is a resident of Minnesota is allowed a 
32.21 	credit against the tax imposed by this chapter. The credit is not allowed to an individual 
32.22 	who is eligible to be claimed as a dependent, as defined in sections 151 and 152 of the 
32.23 	Internal Revenue Code. The credit may not exceed the liability for tax under this chapter.
32.24 	(b) The amount of the credit allowed equals 50 percent of contributions for the taxable 
32.25 	year. The maximum credit is $500, subject to the phaseout in paragraphs (c) and (d). In no 
32.26 	case is the credit less than zero.
32.27 	(c) For individual filers, the maximum credit is reduced by two percent of adjusted gross 
32.28 	income in excess of $75,000.
32.29 	(d) For married couples filing a joint return, the maximum credit is phased out as follows:
33.1 	(1) for married couples with adjusted gross income in excess of $75,000, but not more 
33.2 	than $100,000, the maximum credit is reduced by one percent of adjusted gross income in 
33.3 	excess of $75,000;
33.4 	(2) for married couples with adjusted gross income in excess of $100,000, but not more 
33.5 	than $135,000, the maximum credit is $250; and
33.6 	(3) for married couples with adjusted gross income in excess of $135,000, the maximum 
33.7 	credit is $250, reduced by one percent of adjusted gross income in excess of $135,000.
33.8 	(e) The income thresholds in paragraphs (c) and (d) used to calculate the maximum 
33.9 	credit must be adjusted for inflation. The commissioner shall adjust the income thresholds 
33.10 	by the percentage determined under the provisions of section 1(f) of the Internal Revenue 
33.11 	Code, as amended through December 16, 2016, except that in section 1(f)(3)(B) the word 
33.12 	"2016" is substituted for the word "1992." For 2018, the commissioner shall then determine 
33.13 	the percent change from the 12 months ending on August 31, 2016, to the 12 months ending 
33.14 	on August 31, 2017, and in each subsequent year, from the 12 months ending on August 
33.15 	31, 2016, to the 12 months ending on August 31 of the year preceding the taxable year. The 
33.16 	income thresholds as adjusted for inflation must be rounded to the nearest $10 amount. If 
33.17 	the amount ends in $5, the amount is rounded up to the nearest $10 amount. The 
33.18 	determination of the commissioner under this subdivision is not subject to chapter 14, 
33.19 	including section 14.386.

33.20 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
33.21 	after December 31, 2017.

33.22 	Sec. 49. Minnesota Statutes 2018, section 290.0802, subdivision 2, is amended to read:
33.23 		Subd. 2.Subtraction. (a) A qualified individual is allowed a subtraction from federal 
33.24 	taxable adjusted gross income of the individual's subtraction base amount. The excess of 
33.25 	the subtraction base amount over the taxable net income computed without regard to the 
33.26 	subtraction for the elderly or disabled under section 290.0132, subdivision 5, may be used 
33.27 	to reduce the amount of a lump sum distribution subject to tax under section 290.032.
33.28 	(b)(1) The initial subtraction base amount equals
33.29 	(i) $12,000 for a married taxpayer filing a joint return if a spouse is a qualified individual,
33.30 	(ii) $9,600 for a single taxpayer, and
33.31 	(iii) $6,000 for a married taxpayer filing a separate federal return.
34.1 	(2) The qualified individual's initial subtraction base amount, then, must be reduced by 
34.2 	the sum of nontaxable retirement and disability benefits and one-half of the amount of 
34.3 	adjusted gross income in excess of the following thresholds:
34.4 	(i) $18,000 for a married taxpayer filing a joint return if both spouses are qualified 
34.5 	individuals,
34.6 	(ii) $14,500 for a single taxpayer or for a married couple filing a joint return if only one 
34.7 	spouse is a qualified individual, and
34.8 	(iii) $9,000 for a married taxpayer filing a separate federal return.
34.9 	(3) In the case of a qualified individual who is under the age of 65, the maximum amount 
34.10 	of the subtraction base may not exceed the taxpayer's disability income.
34.11 	(4) The resulting amount is the subtraction base amount.

34.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
34.13 	31, 2018.

34.14 	Sec. 50. [290.0803] STANDARD OR ITEMIZED DEDUCTION.
34.15 		Subdivision 1.Election. An individual may elect to claim state itemized deductions in 
34.16 	lieu of a state standard deduction. However, in the case of a married individual filing a 
34.17 	separate return, if one spouse elects to claim state itemized deductions, the other spouse is 
34.18 	not allowed a state standard deduction.
34.19 		Subd. 2.Subtraction. Based on the election under subdivision 1, individuals are allowed 
34.20 	to subtract from federal adjusted gross income:
34.21 	(1) the state standard deduction under section 290.0138, subdivision 2; or
34.22 	(2) the state itemized deduction under section 290.0139.

34.23 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
34.24 	31, 2018.

34.25 	Sec. 51. Minnesota Statutes 2018, section 290.091, subdivision 2, is amended to read:
34.26 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
34.27 	terms have the meanings given.
34.28 	(a) "Alternative minimum taxable income" means the sum of the following for the taxable 
34.29 	year:
35.1 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
35.2 	55(b)(2) of the Internal Revenue Code;
35.3 	(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum 
35.4 	taxable income, but excluding:
35.5 	(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
35.6 	(ii) the medical expense deduction;
35.7 	(iii) the casualty, theft, and disaster loss deduction; and
35.8 	(iv) the impairment-related work expenses of a disabled person;
35.9 	(3) for depletion allowances computed under section 613A(c) of the Internal Revenue 
35.10 	Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), 
35.11 	to the extent not included in federal alternative minimum taxable income, the excess of the 
35.12 	deduction for depletion allowable under section 611 of the Internal Revenue Code for the 
35.13 	taxable year over the adjusted basis of the property at the end of the taxable year (determined 
35.14 	without regard to the depletion deduction for the taxable year);
35.15 	(4) to the extent not included in federal alternative minimum taxable income, the amount 
35.16 	of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue 
35.17 	Code determined without regard to subparagraph (E);
35.18 	(5) to the extent not included in federal alternative minimum taxable income, the amount 
35.19 	of interest income as provided by section 290.0131, subdivision 2; and
35.20 	(6) the amount of addition required by section 290.0131, subdivisions 9to 11;, 10, and 
35.21 	16; and
35.22 	(7) the deduction allowed under section 199A of the Internal Revenue Code;
35.23 	less the sum of the amounts determined under the following:
35.24 	(i) interest income as defined in section 290.0132, subdivision 2;
35.25 	(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 
35.26 	3, to the extent included in federal alternative minimum taxable income;
35.27 	(iii) the amount of investment interest paid or accrued within the taxable year on 
35.28 	indebtedness to the extent that the amount does not exceed net investment income, as defined 
35.29 	in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted 
35.30 	in computing federal adjusted gross income;
36.1 	(iv) amounts subtracted from federal taxable income as provided by section 290.0132, 
36.2 	subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 29; and
36.3 	(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, 
36.4 	paragraph (c).; and
36.5 	(vi) the amount allowable as a Minnesota itemized deduction under section 290.0139, 
36.6 	subdivision 7.
36.7 	In the case of an estate or trust, alternative minimum taxable income must be computed 
36.8 	as provided in section 59(c) of the Internal Revenue Code, except alternative minimum 
36.9 	taxable income must be increased by the addition in section 290.0131, subdivision 17.
36.10 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) of 
36.11 	the Internal Revenue Code.
36.12 	(c) "Net minimum tax" means the minimum tax imposed by this section.
36.13 	(d) "Regular tax" means the tax that would be imposed under this chapter (without regard 
36.14 	to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed 
36.15 	under this chapter.
36.16 	(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income 
36.17 	after subtracting the exemption amount determined under subdivision 3.

36.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
36.19 	31, 2018.

36.20 	Sec. 52. Minnesota Statutes 2018, section 290.091, subdivision 3, is amended to read:
36.21 		Subd. 3.Exemption amount. (a) For purposes of computing the alternative minimum 
36.22 	tax, the exemption amount is, for taxable years beginning after December 31, 2005, $60,000 
36.23 	for married couples filing joint returns, $30,000 for married individuals filing separate 
36.24 	returns, estates, and trusts, and $45,000 for unmarried individuals.
36.25 	(b) The exemption amount determined under this subdivision is subject to the phase out 
36.26 	under section 55(d)(3) 55(d)(2) of the Internal Revenue Code, except that alternative 
36.27 	minimum taxable income as determined under this section must be substituted in the 
36.28 	computation of the phase out.
36.29 	(c) For taxable years beginning after December 31, 2006, the exemption amount under 
36.30 	paragraph (a) must be adjusted for inflation. The commissioner shall adjust the exemption 
36.31 	amount by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
36.32 	Revenue Code, as amended through December 16, 2016, except that in section 1(f)(3)(B) 
37.1 	the word "2005" shall be substituted for the word "1992." For 2007, the commissioner shall 
37.2 	then determine the percent change from the 12 months ending on August 31, 2005, to the 
37.3 	12 months ending on August 31, 2006, and in each subsequent year, from the 12 months 
37.4 	ending on August 31, 2005, to the 12 months ending on August 31 of the year preceding 
37.5 	the taxable year. The exemption amount as adjusted must be rounded to the nearest $10. If 
37.6 	the amount ends in $5, it must be rounded up to the nearest $10 amount. The determination 
37.7 	of the commissioner under this subdivision is not a rule under the Administrative Procedure 
37.8 	Act.

37.9 	EFFECTIVE DATE. (a) The amendment to paragraph (b) is effective the day following 
37.10 	final enactment.
37.11 	(b) The amendment to paragraph (c) is effective retroactively for taxable years beginning 
37.12 	after December 31, 2017.

37.13 	Sec. 53. Minnesota Statutes 2018, section 290.0921, subdivision 1, is amended to read:
37.14 		Subdivision 1.Tax imposed. In addition to the taxes computed under this chapter without 
37.15 	regard to this section, for taxable years beginning before January 1, 2018, the franchise tax 
37.16 	imposed on corporations includes a tax equal to the excess, if any, for the taxable year of:
37.17 	(1) 5.8 percent of Minnesota alternative minimum taxable income; over
37.18 	(2) the tax imposed under section 290.06, subdivision 1, without regard to this section.

37.19 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
37.20 	after December 31, 2017.

37.21 	Sec. 54. Minnesota Statutes 2018, section 290.0921, subdivision 8, is amended to read:
37.22 		Subd. 8.Carryover credit. (a) A corporation is allowed a credit against qualified regular 
37.23 	tax for qualified alternative minimum tax previously paid. The credit is allowable only if 
37.24 	the corporation has no tax liability under this section for the taxable year and if the 
37.25 	corporation has an alternative minimum tax credit carryover from a previous year. The 
37.26 	credit allowable in a taxable year equals the lesser of:
37.27 	(1) the excess of the qualified regular tax for the taxable year over the amount computed 
37.28 	under subdivision 1, clause (1), for the taxable year; or
37.29 	(2) the carryover credit to the taxable year.
37.30 	(b) For purposes of this subdivision, the following terms have the meanings given.
38.1 	(1) "Qualified alternative minimum tax" equals the amount determined under subdivision 
38.2 	1 for the a taxable year beginning before January 1, 2018.
38.3 	(2) "Qualified regular tax" means the tax imposed under section 290.06, subdivision 1.
38.4 	(c) The qualified alternative minimum tax for a taxable year is an alternative minimum 
38.5 	tax credit carryover to each of the three taxable years succeeding the taxable year. The entire 
38.6 	amount of the credit must be carried to the earliest taxable year to which the amount may 
38.7 	be carried. Any unused portion of the credit must be carried to the following taxable year. 
38.8 	No credit may be carried to a taxable year in which alternative minimum tax was paid.
38.9 	(d) An acquiring corporation may carry over this credit from a transferor or distributor 
38.10 	corporation in a corporate acquisition. The provisions of section 381 of the Internal Revenue 
38.11 	Code apply in determining the amount of the carryover, if any.

38.12 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
38.13 	after December 31, 2017.

38.14 	Sec. 55. Minnesota Statutes 2018, section 290.0922, subdivision 1, is amended to read:
38.15 		Subdivision 1.Imposition. (a) In addition to the tax imposed by this chapter without 
38.16 	regard to this section, the franchise tax imposed on a corporation required to file under 
38.17 	section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation under 
38.18 	section 290.9725 for the taxable year includes a tax equal to the following amounts:

38.19
38.20	If the sum of the corporation's Minnesota 
property, payrolls, and sales or receipts is:
		the tax equals:
	
38.21			less than
		$
	930,000
		$
	0
		
38.22		$
	930,000
	to
	$
	1,869,999
		$
	190
		
38.23		$
	1,870,000
	to
	$
	9,339,999
		$
	560
		
38.24		$
	9,340,000
	to
	$
	18,679,999
		$
	1,870
		
38.25		$
	18,680,000
	to
	$
	37,359,999
		$
	3,740
		
38.26		$
	37,360,000
	or
	more
			$
	9,340
		
38.27 	(b) A tax is imposed for each taxable year on a corporation required to file a return under 
38.28 	section 289A.12, subdivision 3, that is treated as an "S" corporation under section 290.9725
38.29 	and on a partnership required to file a return under section 289A.12, subdivision 3, other 
38.30 	than a partnership that derives over 80 percent of its income from farming. The tax imposed 
38.31 	under this paragraph is due on or before the due date of the return for the taxpayer due under 
38.32 	section 289A.18, subdivision 1. The commissioner shall prescribe the return to be used for 
38.33 	payment of this tax. The tax under this paragraph is equal to the following amounts:

39.1
39.2
39.3
39.4	If the sum of the S corporation's 
or partnership's Minnesota 
property, payrolls, and sales or 
receipts is:
			the tax equals:
	
39.5			less than
		$
	930,000
		$
	0
		
39.6		$
	930,000
	to
	$
	1,869,999
		$
	190
		
39.7		$
	1,870,000
	to
	$
	9,339,999
		$
	560
		
39.8		$
	9,340,000
	to
	$
	18,679,999
		$
	1,870
		
39.9		$
	18,680,000
	to
	$
	37,359,999
		$
	3,740
		
39.10		$
	37,360,000
	or
	more
			$
	9,340
		
39.11 	(c) The commissioner shall adjust the dollar amounts of both the tax and the property, 
39.12 	payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage 
39.13 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, as 
39.14 	amended through December 16, 2016, except that in section 1(f)(3)(B) the word "2012" 
39.15 	must be substituted for the word "1992." For 2014, the commissioner shall determine the 
39.16 	percentage change from the 12 months ending on August 31, 2012, to the 12 months ending 
39.17 	on August 31, 2013, and in each subsequent year, from the 12 months ending on August 
39.18 	31, 2012, to the 12 months ending on August 31 of the year preceding the taxable year. The 
39.19 	determination of the commissioner pursuant to this subdivision is not a "rule" subject to the 
39.20 	Administrative Procedure Act contained in chapter 14. The tax amounts as adjusted must 
39.21 	be rounded to the nearest $10 amount and the threshold amounts must be adjusted to the 
39.22 	nearest $10,000 amount. For tax amounts that end in $5, the amount is rounded up to the 
39.23 	nearest $10 amount and for the threshold amounts that end in $5,000, the amount is rounded 
39.24 	up to the nearest $10,000.

39.25 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
39.26 	after December 31, 2017.

39.27 	Sec. 56. Minnesota Statutes 2018, section 290.095, subdivision 2, is amended to read:
39.28 		Subd. 2.Defined and limited. (a) The term "net operating loss" as used in this section 
39.29 	shall mean a net operating loss as defined in section 172(c) of the Internal Revenue Code, 
39.30 	with the modifications specified in subdivision 4. The deductions provided in section 290.21
39.31 	cannot be used in the determination of a net operating loss.
39.32 	(b) The term "net operating loss deduction" as used in this section means the aggregate 
39.33 	of the net operating loss carryovers to the taxable year, computed in accordance with 
39.34 	subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating to 
39.35 	the carryback of net operating losses, do not apply.
40.1 	(c) The amount of net operating loss deduction under this section must not exceed 80 
40.2 	percent of taxable net income in a single taxable year.

40.3 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
40.4 	after December 31, 2017.

40.5 	Sec. 57. Minnesota Statutes 2018, section 290.17, subdivision 2, is amended to read:
40.6 		Subd. 2.Income not derived from conduct of a trade or business. The income of a 
40.7 	taxpayer subject to the allocation rules that is not derived from the conduct of a trade or 
40.8 	business must be assigned in accordance with paragraphs (a) to (f):
40.9 	(a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in section 
40.10 	3401(a) and, (f), and (i) of the Internal Revenue Code is assigned to this state if, and to the 
40.11 	extent that, the work of the employee is performed within it; all other income from such 
40.12 	sources is treated as income from sources without this state.
40.13 	Severance pay shall be considered income from labor or personal or professional services.
40.14 	(2) In the case of an individual who is a nonresident of Minnesota and who is an athlete 
40.15 	or entertainer, income from compensation for labor or personal services performed within 
40.16 	this state shall be determined in the following manner:
40.17 	(i) the amount of income to be assigned to Minnesota for an individual who is a 
40.18 	nonresident salaried athletic team employee shall be determined by using a fraction in which 
40.19 	the denominator contains the total number of days in which the individual is under a duty 
40.20 	to perform for the employer, and the numerator is the total number of those days spent in 
40.21 	Minnesota. For purposes of this paragraph, off-season training activities, unless conducted 
40.22 	at the team's facilities as part of a team imposed program, are not included in the total number 
40.23 	of duty days. Bonuses earned as a result of play during the regular season or for participation 
40.24 	in championship, play-off, or all-star games must be allocated under the formula. Signing 
40.25 	bonuses are not subject to allocation under the formula if they are not conditional on playing 
40.26 	any games for the team, are payable separately from any other compensation, and are 
40.27 	nonrefundable; and
40.28 	(ii) the amount of income to be assigned to Minnesota for an individual who is a 
40.29 	nonresident, and who is an athlete or entertainer not listed in item (i), for that person's athletic 
40.30 	or entertainment performance in Minnesota shall be determined by assigning to this state 
40.31 	all income from performances or athletic contests in this state.
40.32 	(3) For purposes of this section, amounts received by a nonresident as "retirement income" 
40.33 	as defined in section (b)(1) of the State Income Taxation of Pension Income Act, Public 
41.1 	Law 104-95, are not considered income derived from carrying on a trade or business or 
41.2 	from wages or other compensation for work an employee performed in Minnesota, and are 
41.3 	not taxable under this chapter.
41.4 	(b) Income or gains from tangible property located in this state that is not employed in 
41.5 	the business of the recipient of the income or gains must be assigned to this state.
41.6 	(c) Income or gains from intangible personal property not employed in the business of 
41.7 	the recipient of the income or gains must be assigned to this state if the recipient of the 
41.8 	income or gains is a resident of this state or is a resident trust or estate.
41.9 	Gain on the sale of a partnership interest is allocable to this state in the ratio of the 
41.10 	original cost of partnership tangible property in this state to the original cost of partnership 
41.11 	tangible property everywhere, determined at the time of the sale. If more than 50 percent 
41.12 	of the value of the partnership's assets consists of intangibles, gain or loss from the sale of 
41.13 	the partnership interest is allocated to this state in accordance with the sales factor of the 
41.14 	partnership for its first full tax period immediately preceding the tax period of the partnership 
41.15 	during which the partnership interest was sold.
41.16 	Gain on the sale of an interest in a single member limited liability company that is 
41.17 	disregarded for federal income tax purposes is allocable to this state as if the single member 
41.18 	limited liability company did not exist and the assets of the limited liability company are 
41.19 	personally owned by the sole member.
41.20 	Gain on the sale of goodwill or income from a covenant not to compete that is connected 
41.21 	with a business operating all or partially in Minnesota is allocated to this state to the extent 
41.22 	that the income from the business in the year preceding the year of sale was allocable to 
41.23 	Minnesota under subdivision 3.
41.24 	When an employer pays an employee for a covenant not to compete, the income allocated 
41.25 	to this state is in the ratio of the employee's service in Minnesota in the calendar year 
41.26 	preceding leaving the employment of the employer over the total services performed by the 
41.27 	employee for the employer in that year.
41.28 	(d) Income from winnings on a bet made by an individual while in Minnesota is assigned 
41.29 	to this state. In this paragraph, "bet" has the meaning given in section 609.75, subdivision 
41.30 	2, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3).
41.31 	(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the 
41.32 	taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
42.1 	(f) For the purposes of this section, working as an employee shall not be considered to 
42.2 	be conducting a trade or business.

42.3 	EFFECTIVE DATE. This section is effective for wages paid after December 31, 2018.

42.4 	Sec. 58. Minnesota Statutes 2018, section 290.21, is amended by adding a subdivision to 
42.5 	read:
42.6 		Subd. 9.Controlled foreign corporations. For the purposes of this chapter, the net 
42.7 	income of a domestic corporation that is included pursuant to sections 951, 951A, and 965 
42.8 	of the Internal Revenue Code is dividend income.

42.9 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
42.10 	after December 31, 2016.

42.11 	Sec. 59. Minnesota Statutes 2018, section 290.92, subdivision 1, is amended to read:
42.12 		Subdivision 1.Definitions. (1) Wages. For purposes of this section, the term "wages" 
42.13 	means the same as that term is defined in section 3401(a) and, (f), and (i) of the Internal 
42.14 	Revenue Code.
42.15 	(2) Payroll period. For purposes of this section the term "payroll period" means a period 
42.16 	for which a payment of wages is ordinarily made to the employee by the employee's 
42.17 	employer, and the term "miscellaneous payroll period" means a payroll period other than a 
42.18 	daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual payroll 
42.19 	period.
42.20 	(3) Employee. For purposes of this section the term "employee" means any resident 
42.21 	individual performing services for an employer, either within or without, or both within and 
42.22 	without the state of Minnesota, and every nonresident individual performing services within 
42.23 	the state of Minnesota, the performance of which services constitute, establish, and determine 
42.24 	the relationship between the parties as that of employer and employee. As used in the 
42.25 	preceding sentence, the term "employee" includes an officer of a corporation, and an officer, 
42.26 	employee, or elected official of the United States, a state, or any political subdivision thereof, 
42.27 	or the District of Columbia, or any agency or instrumentality of any one or more of the 
42.28 	foregoing.
42.29 	(4) Employer. For purposes of this section the term "employer" means any person, 
42.30 	including individuals, fiduciaries, estates, trusts, partnerships, limited liability companies, 
42.31 	and corporations transacting business in or deriving any income from sources within the 
42.32 	state of Minnesota for whom an individual performs or performed any service, of whatever 
43.1 	nature, as the employee of such person, except that if the person for whom the individual 
43.2 	performs or performed the services does not have control of the payment of the wages for 
43.3 	such services, the term "employer," except for purposes of paragraph (1), means the person 
43.4 	having control of the payment of such wages. As used in the preceding sentence, the term 
43.5 	"employer" includes any corporation, individual, estate, trust, or organization which is 
43.6 	exempt from taxation under section 290.05 and further includes, but is not limited to, officers 
43.7 	of corporations who have control, either individually or jointly with another or others, of 
43.8 	the payment of the wages.
43.9 	(5) Number of withholding exemptions claimed. For purposes of this section, the term 
43.10 	"number of withholding exemptions claimed" means the number of withholding exemptions 
43.11 	claimed in a withholding exemption certificate in effect under subdivision 5, except that if 
43.12 	no such certificate is in effect, the number of withholding exemptions claimed shall be 
43.13 	considered to be zero.

43.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
43.15 	31, 2018.

43.16 	Sec. 60. [290.993] SPECIAL LIMITED ADJUSTMENT.
43.17 	(a) For an individual income taxpayer subject to tax under section 290.06, subdivision 
43.18 	2c, or a partnership that elects to file a composite return under section 289A.08, subdivision 
43.19 	7, for taxable years beginning after December 31, 2017, and before January 1, 2019, the 
43.20 	following special rules apply:
43.21 	(1) sections 63(c)(7) and 151(d)(5) of the Internal Revenue Code do not apply;
43.22 	(2) an individual income taxpayer may: (i) take the standard deduction, or (ii) make an 
43.23 	election under section 63(e) of the Internal Revenue Code to itemize, for Minnesota individual 
43.24 	income tax purposes, regardless of the choice made on their federal return; and
43.25 	(3) there is an adjustment to tax equal to the difference between the tax calculated under 
43.26 	this chapter using the Internal Revenue Code as amended through December 16, 2016, and 
43.27 	the tax calculated under this chapter using the Internal Revenue Code amended through 
43.28 	December 31, 2018, before the application of credits. The end result must be zero additional 
43.29 	tax due or refund.
43.30 	(b) The adjustment in paragraph (a), clause (3), does not apply to any changes due to 
43.31 	sections 13101, 13201, 13202, 13203, 13204, 13205, 13207, 13303, 13313, 13502, 13503, 
43.32 	13801, 14102, 14103, 14201, 14202, 14211 through 14215, and 14501 of Public Law 
43.33 	115-97; and section 40411 of Public Law 115-123.

44.1 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
44.2 	after December 31, 2017, and before January 1, 2019.

44.3 	Sec. 61. Minnesota Statutes 2018, section 290A.03, subdivision 12, is amended to read:
44.4 		Subd. 12.Gross rent. (a) "Gross rent" means rental paid for the right of occupancy, at 
44.5 	arm's length, of a homestead, exclusive of charges for any medical services furnished by 
44.6 	the landlord as a part of the rental agreement, whether expressly set out in the rental 
44.7 	agreement or not.
44.8 	(b) The gross rent of a resident of a nursing home or intermediate care facility is $350 
44.9 	per month. The gross rent of a resident of an adult foster care home is $550 per month. 
44.10 	Beginning for rent paid in 2002, the commissioner shall annually adjust for inflation the 
44.11 	gross rent amounts stated in this paragraph. The adjustment must be made in accordance 
44.12 	with section 1(f) of the Internal Revenue Code, as amended through December 16, 2016, 
44.13 	except that for purposes of this paragraph the percentage increase shall be determined from 
44.14 	the year ending on June 30, 2001, to the year ending on June 30 of the year in which the 
44.15 	rent is paid. The commissioner shall round the gross rents to the nearest $10 amount. If the 
44.16 	amount ends in $5, the commissioner shall round it up to the next $10 amount. The 
44.17 	determination of the commissioner under this paragraph is not a rule under the Administrative 
44.18 	Procedure Act.
44.19 	(c) If the landlord and tenant have not dealt with each other at arm's length and the 
44.20 	commissioner determines that the gross rent charged was excessive, the commissioner may 
44.21 	adjust the gross rent to a reasonable amount for purposes of this chapter.
44.22 	(d) Any amount paid by a claimant residing in property assessed pursuant to section 
44.23 	273.124, subdivision 3, 4, 5, or 6 for occupancy in that property shall be excluded from 
44.24 	gross rent for purposes of this chapter. However, property taxes imputed to the homestead 
44.25 	of the claimant or the dwelling unit occupied by the claimant that qualifies for homestead 
44.26 	treatment pursuant to section 273.124, subdivision 3, 4, 5, or 6 shall be included within the 
44.27 	term "property taxes payable" as defined in subdivision 13, notwithstanding the fact that 
44.28 	ownership is not in the name of the claimant.

44.29 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
44.30 	after December 31, 2017.

45.1 	Sec. 62. Minnesota Statutes 2018, section 290A.03, subdivision 15, is amended to read:
45.2 		Subd. 15.Internal Revenue Code.  "Internal Revenue Code" means the Internal Revenue 
45.3 	Code of 1986, as amended through December 16, 2016 December 31, 2018.

45.4 	EFFECTIVE DATE. This section is effective the day following final enactment, except 
45.5 	the changes to household income adopted by the federal changes are effective retroactively 
45.6 	at the same time the changes became effective for federal purposes.

45.7 	Sec. 63. Minnesota Statutes 2018, section 290A.04, subdivision 4, is amended to read:
45.8 		Subd. 4.Inflation adjustment. (a) Beginning for property tax refunds payable in calendar 
45.9 	year 2002, the commissioner shall annually adjust the dollar amounts of the income thresholds 
45.10 	and the maximum refunds under subdivisions 2 and 2a for inflation. The commissioner 
45.11 	shall make the inflation adjustments in accordance with section 1(f) of the Internal Revenue 
45.12 	Code, as amended through December 16, 2016, except that for purposes of this subdivision 
45.13 	the percentage increase shall be determined as provided in this subdivision.
45.14 	(b) In adjusting the dollar amounts of the income thresholds and the maximum refunds 
45.15 	under subdivision 2 for inflation, the percentage increase shall be determined from the year 
45.16 	ending on June 30, 2013, to the year ending on June 30 of the year preceding that in which 
45.17 	the refund is payable.
45.18 	(c) In adjusting the dollar amounts of the income thresholds and the maximum refunds 
45.19 	under subdivision 2a for inflation, the percentage increase shall be determined from the 
45.20 	year ending on June 30, 2013, to the year ending on June 30 of the year preceding that in 
45.21 	which the refund is payable.
45.22 	(d) The commissioner shall use the appropriate percentage increase to annually adjust 
45.23 	the income thresholds and maximum refunds under subdivisions 2 and 2a for inflation 
45.24 	without regard to whether or not the income tax brackets are adjusted for inflation in that 
45.25 	year. The commissioner shall round the thresholds and the maximum amounts, as adjusted 
45.26 	to the nearest $10 amount. If the amount ends in $5, the commissioner shall round it up to 
45.27 	the next $10 amount.
45.28 	(e) The commissioner shall annually announce the adjusted refund schedule at the same 
45.29 	time provided under section 290.06. The determination of the commissioner under this 
45.30 	subdivision is not a rule under the Administrative Procedure Act.

45.31 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
45.32 	after December 31, 2017.

46.1 	Sec. 64. Minnesota Statutes 2018, section 291.005, subdivision 1, is amended to read:
46.2 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following terms 
46.3 	used in this chapter shall have the following meanings:
46.4 	(1) "Commissioner" means the commissioner of revenue or any person to whom the 
46.5 	commissioner has delegated functions under this chapter.
46.6 	(2) "Federal gross estate" means the gross estate of a decedent as required to be valued 
46.7 	and otherwise determined for federal estate tax purposes under the Internal Revenue Code, 
46.8 	increased by the value of any property in which the decedent had a qualifying income interest 
46.9 	for life and for which an election was made under section 291.03, subdivision 1d, for 
46.10 	Minnesota estate tax purposes, but was not made for federal estate tax purposes.
46.11 	(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, 
46.12 	as amended through December 16, 2016 December 31, 2018.
46.13 	(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
46.14 	excluding therefrom any property included in the estate which has its situs outside Minnesota, 
46.15 	and (b) including any property omitted from the federal gross estate which is includable in 
46.16 	the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.
46.17 	(5) "Nonresident decedent" means an individual whose domicile at the time of death 
46.18 	was not in Minnesota.
46.19 	(6) "Personal representative" means the executor, administrator or other person appointed 
46.20 	by the court to administer and dispose of the property of the decedent. If there is no executor, 
46.21 	administrator or other person appointed, qualified, and acting within this state, then any 
46.22 	person in actual or constructive possession of any property having a situs in this state which 
46.23 	is included in the federal gross estate of the decedent shall be deemed to be a personal 
46.24 	representative to the extent of the property and the Minnesota estate tax due with respect 
46.25 	to the property.
46.26 	(7) "Resident decedent" means an individual whose domicile at the time of death was 
46.27 	in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply 
46.28 	to determinations of domicile under this chapter.
46.29 	(8) "Situs of property" means, with respect to:
46.30 	(i) real property, the state or country in which it is located;
46.31 	(ii) tangible personal property, the state or country in which it was normally kept or 
46.32 	located at the time of the decedent's death or for a gift of tangible personal property within 
47.1 	three years of death, the state or country in which it was normally kept or located when the 
47.2 	gift was executed;
47.3 	(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue 
47.4 	Code, owned by a nonresident decedent and that is normally kept or located in this state 
47.5 	because it is on loan to an organization, qualifying as exempt from taxation under section 
47.6 	501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is 
47.7 	deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and
47.8 	(iv) intangible personal property, the state or country in which the decedent was domiciled 
47.9 	at death or for a gift of intangible personal property within three years of death, the state or 
47.10 	country in which the decedent was domiciled when the gift was executed.
47.11 	For a nonresident decedent with an ownership interest in a pass-through entity with 
47.12 	assets that include real or tangible personal property, situs of the real or tangible personal 
47.13 	property, including qualified works of art, is determined as if the pass-through entity does 
47.14 	not exist and the real or tangible personal property is personally owned by the decedent. If 
47.15 	the pass-through entity is owned by a person or persons in addition to the decedent, ownership 
47.16 	of the property is attributed to the decedent in proportion to the decedent's capital ownership 
47.17 	share of the pass-through entity.
47.18 	(9) "Pass-through entity" includes the following:
47.19 	(i) an entity electing S corporation status under section 1362 of the Internal Revenue 
47.20 	Code;
47.21 	(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
47.22 	(iii) a single-member limited liability company or similar entity, regardless of whether 
47.23 	it is taxed as an association or is disregarded for federal income tax purposes under Code 
47.24 	of Federal Regulations, title 26, section 301.7701-3; or
47.25 	(iv) a trust to the extent the property is includible includable in the decedent's federal 
47.26 	gross estate; but excludes
47.27 	(v) an entity whose ownership interest securities are traded on an exchange regulated 
47.28 	by the Securities and Exchange Commission as a national securities exchange under section 
47.29 	6 of the Securities Exchange Act, United States Code, title 15, section 78f.

47.30 	EFFECTIVE DATE. This section is effective the day following final enactment except 
47.31 	the changes incorporated by federal changes are effective retroactively at the same time the 
47.32 	changes became effective for federal purposes.

48.1 	Sec. 65. Minnesota Statutes 2018, section 297A.68, subdivision 25, is amended to read:
48.2 		Subd. 25.Sale of property used in a trade or business. (a) The sale of tangible personal 
48.3 	property primarily used in a trade or business is exempt if the sale is not made in the normal 
48.4 	course of business of selling that kind of property and if one of the following conditions is 
48.5 	satisfied:
48.6 	(1) the sale occurs in a transaction subject to or described in section 118, 331, 332, 336, 
48.7 	337, 338, 351, 355, 368, 721, 731, 1031, or 1033 of the Internal Revenue Code, as amended 
48.8 	through December 16, 2016;
48.9 	(2) the sale is between members of a controlled group as defined in section 1563(a) of 
48.10 	the Internal Revenue Code;
48.11 	(3) the sale is a sale of farm machinery;
48.12 	(4) the sale is a farm auction sale;
48.13 	(5) the sale is a sale of substantially all of the assets of a trade or business; or
48.14 	(6) the total amount of gross receipts from the sale of trade or business property made 
48.15 	during the calendar month of the sale and the preceding 11 calendar months does not exceed 
48.16 	$1,000.
48.17 	The use, storage, distribution, or consumption of tangible personal property acquired as 
48.18 	a result of a sale exempt under this subdivision is also exempt.
48.19 	(b) For purposes of this subdivision, the following terms have the meanings given.
48.20 	(1) A "farm auction" is a public auction conducted by a licensed auctioneer if substantially 
48.21 	all of the property sold consists of property used in the trade or business of farming and 
48.22 	property not used primarily in a trade or business.
48.23 	(2) "Trade or business" includes the assets of a separate division, branch, or identifiable 
48.24 	segment of a trade or business if, before the sale, the income and expenses attributable to 
48.25 	the separate division, branch, or identifiable segment could be separately ascertained from 
48.26 	the books of account or record (the lease or rental of an identifiable segment does not qualify 
48.27 	for the exemption).
48.28 	(3) A "sale of substantially all of the assets of a trade or business" must occur as a single 
48.29 	transaction or a series of related transactions within the 12-month period beginning on the 
48.30 	date of the first sale of assets intended to qualify for the exemption provided in paragraph 
48.31 	(a), clause (5).

49.1 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
49.2 	made after December 31, 2017.

49.3 	Sec. 66. Minnesota Statutes 2018, section 297B.03, is amended to read:
49.4 	297B.03 EXEMPTIONS.
49.5 	There is specifically exempted from the provisions of this chapter and from computation 
49.6 	of the amount of tax imposed by it the following:
49.7 	(1) purchase or use, including use under a lease purchase agreement or installment sales 
49.8 	contract made pursuant to section 465.71, of any motor vehicle by the United States and its 
49.9 	agencies and instrumentalities and by any person described in and subject to the conditions 
49.10 	provided in section 297A.67, subdivision 11;
49.11 	(2) purchase or use of any motor vehicle by any person who was a resident of another 
49.12 	state or country at the time of the purchase and who subsequently becomes a resident of 
49.13 	Minnesota, provided the purchase occurred more than 60 days prior to the date such person 
49.14 	began residing in the state of Minnesota and the motor vehicle was registered in the person's 
49.15 	name in the other state or country;
49.16 	(3) purchase or use of any motor vehicle by any person making a valid election to be 
49.17 	taxed under the provisions of section 297A.90;
49.18 	(4) purchase or use of any motor vehicle previously registered in the state of Minnesota 
49.19 	when such transfer constitutes a transfer within the meaning of section 118, 331, 332, 336, 
49.20 	337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal Revenue Code, 
49.21 	as amended through December 16, 2016;
49.22 	(5) purchase or use of any vehicle owned by a resident of another state and leased to a 
49.23 	Minnesota-based private or for-hire carrier for regular use in the transportation of persons 
49.24 	or property in interstate commerce provided the vehicle is titled in the state of the owner or 
49.25 	secured party, and that state does not impose a sales tax or sales tax on motor vehicles used 
49.26 	in interstate commerce;
49.27 	(6) purchase or use of a motor vehicle by a private nonprofit or public educational 
49.28 	institution for use as an instructional aid in automotive training programs operated by the 
49.29 	institution. "Automotive training programs" includes motor vehicle body and mechanical 
49.30 	repair courses but does not include driver education programs;
50.1 	(7) purchase of a motor vehicle by an ambulance service licensed under section 144E.10
50.2 	when that vehicle is equipped and specifically intended for emergency response or for 
50.3 	providing ambulance service;
50.4 	(8) purchase of a motor vehicle by or for a public library, as defined in section 134.001, 
50.5 	subdivision 2, as a bookmobile or library delivery vehicle;
50.6 	(9) purchase of a ready-mixed concrete truck;
50.7 	(10) purchase or use of a motor vehicle by a town for use exclusively for road 
50.8 	maintenance, including snowplows and dump trucks, but not including automobiles, vans, 
50.9 	or pickup trucks;
50.10 	(11) purchase or use of a motor vehicle by a corporation, society, association, foundation, 
50.11 	or institution organized and operated exclusively for charitable, religious, or educational 
50.12 	purposes, except a public school, university, or library, but only if the vehicle is:
50.13 	(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
50.14 	passenger automobile, as defined in section 168.002, if the automobile is designed and used 
50.15 	for carrying more than nine persons including the driver; and
50.16 	(ii) intended to be used primarily to transport tangible personal property or individuals, 
50.17 	other than employees, to whom the organization provides service in performing its charitable, 
50.18 	religious, or educational purpose;
50.19 	(12) purchase of a motor vehicle for use by a transit provider exclusively to provide 
50.20 	transit service is exempt if the transit provider is either (i) receiving financial assistance or 
50.21 	reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 
50.22 	473.388, or 473.405;
50.23 	(13) purchase or use of a motor vehicle by a qualified business, as defined in section 
50.24 	469.310, located in a job opportunity building zone, if the motor vehicle is principally 
50.25 	garaged in the job opportunity building zone and is primarily used as part of or in direct 
50.26 	support of the person's operations carried on in the job opportunity building zone. The 
50.27 	exemption under this clause applies to sales, if the purchase was made and delivery received 
50.28 	during the duration of the job opportunity building zone. The exemption under this clause 
50.29 	also applies to any local sales and use tax;
50.30 	(14) purchase of a leased vehicle by the lessee who was a participant in a lease-to-own 
50.31 	program from a charitable organization that is:
50.32 	(i) described in section 501(c)(3) of the Internal Revenue Code; and
51.1 	(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4; and
51.2 	(15) purchase of a motor vehicle used exclusively as a mobile medical unit for the 
51.3 	provision of medical or dental services by a federally qualified health center, as defined 
51.4 	under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget 
51.5 	Reconciliation Act of 1990.

51.6 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
51.7 	made after December 31, 2017.

51.8 	Sec. 67. Minnesota Statutes 2018, section 462D.06, subdivision 1, is amended to read:
51.9 		Subdivision 1.Subtraction. (a) As provided in section 290.0132, subdivision 25, an 
51.10 	account holder is allowed a subtraction from the federal taxable adjusted gross income equal 
51.11 	to interest or dividends earned on the first-time home buyer savings account during the 
51.12 	taxable year.
51.13 	(b) The subtraction under paragraph (a) is allowed each year for the taxable years 
51.14 	including and following the taxable year in which the account was established. No person 
51.15 	other than the account holder is allowed a subtraction under this section.

51.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
51.17 	31, 2018.

51.18 	Sec. 68. Minnesota Statutes 2018, section 462D.06, subdivision 2, is amended to read:
51.19 		Subd. 2.Addition. (a) As provided in section 290.0131, subdivision 14, an account 
51.20 	holder must add to federal taxable adjusted gross income the following amounts:
51.21 	(1) the amount in excess of the total contributions for all taxable years that is withdrawn 
51.22 	and used for other than eligible costs, or for a transfer permitted under section 462D.04, 
51.23 	subdivision 2; and
51.24 	(2) the amount remaining in the first-time home buyer savings account at the close of 
51.25 	the tenth taxable year that exceeds the total contributions to the account for all taxable years.
51.26 	(b) For an account that received a transfer under section 462D.04, subdivision 2, the 
51.27 	ten-year period under paragraph (a), clause (2), ends at the close of the earliest taxable year 
51.28 	that applies to either account under that clause.

51.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
51.30 	31, 2018.

52.1 	Sec. 69. Minnesota Statutes 2018, section 469.316, subdivision 1, is amended to read:
52.2 		Subdivision 1.Application. An individual, estate, or trust operating a trade or business 
52.3 	in a job opportunity building zone, and an individual, estate, or trust making a qualifying 
52.4 	investment in a qualified business operating in a job opportunity building zone qualifies for 
52.5 	the exemptions from taxes imposed under chapter 290, as provided in this section. The 
52.6 	exemptions provided under this section apply only to the extent that the income otherwise 
52.7 	would be taxable under chapter 290. Subtractions under this section from federal adjusted 
52.8 	gross income, federal taxable income, alternative minimum taxable income, or any other 
52.9 	base subject to tax are limited to the amount that otherwise would be included in the tax 
52.10 	base absent the exemption under this section. This section applies only to taxable years 
52.11 	beginning during the duration of the job opportunity building zone.

52.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
52.13 	31, 2018.

52.14 	Sec. 70. REPEALER.
 52.15 	Minnesota Statutes 2018, sections 290.0131, subdivisions 7 and 11; 290.0133, 
52.16 	subdivisions 13 and 14; and 290.10, subdivision 2, are repealed.

52.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
52.18 	31, 2018.

52.19 	ARTICLE 2
52.20 	INDIVIDUAL INCOME TAX

52.21 	Section 1. Minnesota Statutes 2018, section 116J.8737, subdivision 1, is amended to read:
52.22 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms have 
52.23 	the meanings given.
52.24 	(b) "Qualified small business" means a business that has been certified by the 
52.25 	commissioner under subdivision 2.
52.26 	(c) "Qualified investor" means an investor who has been certified by the commissioner 
52.27 	under subdivision 3.
52.28 	(d) "Qualified fund" means a pooled angel investment network fund that has been certified 
52.29 	by the commissioner under subdivision 4.
52.30 	(e) "Qualified investment" means a cash investment in a qualified small business of a 
52.31 	minimum of:
53.1 	(1) $10,000 in a calendar year by a qualified investor; or
53.2 	(2) $7,500 in a calendar year by a qualified investor in qualified greater Minnesota 
53.3 	businesses or minority- or women-owned businesses in Minnesota; or
53.4 	(2) (3) $30,000 in a calendar year by a qualified fund.
53.5 	A qualified investment must be made in exchange for common stock, a partnership or 
53.6 	membership interest, preferred stock, debt with mandatory conversion to equity, or an 
53.7 	equivalent ownership interest as determined by the commissioner.
53.8 	(f) "Family" means a family member within the meaning of the Internal Revenue Code, 
53.9 	section 267(c)(4).
53.10 	(g) "Pass-through entity" means a corporation that for the applicable taxable year is 
53.11 	treated as an S corporation or a general partnership, limited partnership, limited liability 
53.12 	partnership, trust, or limited liability company and which for the applicable taxable year is 
53.13 	not taxed as a corporation under chapter 290.
53.14 	(h) "Intern" means a student of an accredited institution of higher education, or a former 
53.15 	student who has graduated in the past six months from an accredited institution of higher 
53.16 	education, who is employed by a qualified small business in a nonpermanent position for 
53.17 	a duration of nine months or less that provides training and experience in the primary 
53.18 	business activity of the business.
53.19 	(i) "Liquidation event" means a conversion of qualified investment for cash, cash and 
53.20 	other consideration, or any other form of equity or debt interest.
53.21 	(j) "Qualified greater Minnesota business" means a qualified small business that is also 
53.22 	certified by the commissioner as a qualified greater Minnesota business under subdivision 
53.23 	2, paragraph (h).
53.24 	(k) "Minority group member" means a United States citizen who is Asian, Pacific 
53.25 	Islander, Black, Hispanic, or Native American.
53.26 	(l) "Minority-owned business" means a business for which one or more minority group 
53.27 	members:
53.28 	(1) own at least 50 percent of the business, or, in the case of a publicly owned business, 
53.29 	own at least 51 percent of the stock; and
53.30 	(2) manage the business and control the daily business operations.
53.31 	(m) "Women" means persons of the female gender.
54.1 	(n) "Women-owned business" means a business for which one or more women:
54.2 	(1) own at least 50 percent of the business, or, in the case of a publicly owned business, 
54.3 	own at least 51 percent of the stock; and
54.4 	(2) manage the business and control the daily business operations.
54.5 	(o) "Officer" means a person elected or appointed by the board of directors to manage 
54.6 	the daily operations of the qualified small business.
54.7 	(p) "Principal" means a person having authority to act on behalf of the qualified small 
54.8 	business.

54.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
54.10 	31, 2018.

54.11 	Sec. 2. Minnesota Statutes 2018, section 116J.8737, subdivision 2, is amended to read:
54.12 		Subd. 2.Certification of qualified small businesses. (a) Businesses may apply to the 
54.13 	commissioner for certification as a qualified small business or qualified greater Minnesota 
54.14 	small business for a calendar year. The application must be in the form and be made under 
54.15 	the procedures specified by the commissioner, accompanied by an application fee of $150. 
54.16 	Application fees are deposited in the small business investment tax credit administration 
54.17 	account in the special revenue fund. The application for certification for 2010 must be made 
54.18 	available on the department's website by August 1, 2010. Applications for subsequent years'
54.19 	certification must be made available on the department's website by November 1 of the 
54.20 	preceding year.
54.21 	(b) Within 30 days of receiving an application for certification under this subdivision, 
54.22 	the commissioner must either certify the business as satisfying the conditions required of a 
54.23 	qualified small business or qualified greater Minnesota small business, request additional 
54.24 	information from the business, or reject the application for certification. If the commissioner 
54.25 	requests additional information from the business, the commissioner must either certify the 
54.26 	business or reject the application within 30 days of receiving the additional information. If 
54.27 	the commissioner neither certifies the business nor rejects the application within 30 days 
54.28 	of receiving the original application or within 30 days of receiving the additional information 
54.29 	requested, whichever is later, then the application is deemed rejected, and the commissioner 
54.30 	must refund the $150 application fee. A business that applies for certification and is rejected 
54.31 	may reapply.
54.32 	(c) To receive certification as a qualified small business, a business must satisfy all of 
54.33 	the following conditions:
55.1 	(1) the business has its headquarters in Minnesota;
55.2 	(2) at least: (i) 51 percent of the business's employees are employed in Minnesota; (ii) 
55.3 	51 percent of the business's total payroll is paid or incurred in the state; and (iii) 51 percent 
55.4 	of the total value of all contractual agreements to which the business is a party in connection 
55.5 	with its primary business activity is for services performed under contract in Minnesota, 
55.6 	unless the business obtains a waiver under paragraph (i);
55.7 	(3) the business is engaged in, or is committed to engage in, innovation in Minnesota in 
55.8 	one of the following as its primary business activity:
55.9 	(i) using proprietary technology to add value to a product, process, or service in a qualified 
55.10 	high-technology field;
55.11 	(ii) researching or developing a proprietary product, process, or service in a qualified 
55.12 	high-technology field;
55.13 	(iii) researching or developing a proprietary product, process, or service in the fields of 
55.14 	agriculture, tourism, forestry, mining, manufacturing, or transportation; or
55.15 	(iv) researching, developing, or producing a new proprietary technology for use in the 
55.16 	fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;
55.17 	(4) other than the activities specifically listed in clause (3), the business is not engaged 
55.18 	in real estate development, insurance, banking, lending, lobbying, political consulting, 
55.19 	information technology consulting, wholesale or retail trade, leisure, hospitality, 
55.20 	transportation, construction, ethanol production from corn, or professional services provided 
55.21 	by attorneys, accountants, business consultants, physicians, or health care consultants;
55.22 	(5) the business has fewer than 25 employees;
55.23 	(6) the business must either:
55.24 	(i) pay its employees annual wages of at least 175 percent of the federal poverty guideline 
55.25 	for the year for a family of four and must pay its interns annual wages of at least 175 percent 
55.26 	of the federal minimum wage used for federally covered employers, except that this 
55.27 	requirement must be reduced proportionately for employees and interns who work less than 
55.28 	full-time, and does not apply to an executive, officer, or member of the board of the business, 
55.29 	or to any employee who owns, controls, or holds power to vote more than 20 percent of the 
55.30 	outstanding securities of the business; or
55.31 	(ii) if the business is a qualified greater Minnesota business or minority- or women-owned 
55.32 	qualified small business, pay at least 51 percent of its employees annual wages of at least 
56.1 	175 percent of the federal poverty guideline for the year for a family of four and must pay 
56.2 	its interns annual wages of at least 175 percent of the federal minimum wage used for 
56.3 	federally covered employers, except that this requirement must be reduced proportionately 
56.4 	for employees and interns who work less than full-time, and does not apply to an executive, 
56.5 	officer, or member of the board of the business, or to any employee who owns, controls, or 
56.6 	holds power to vote more than 20 percent of the outstanding securities of the business;
56.7 	(7) the business has (i) not been in operation for more than ten years, or (ii) not been in 
56.8 	operation for more than 20 years if the business is engaged in the research, development, 
56.9 	or production of medical devices or pharmaceuticals for which United States Food and Drug 
56.10 	Administration approval is required for use in the treatment or diagnosis of a disease or 
56.11 	condition;
56.12 	(8) the business has not previously received private equity investments of more than 
56.13 	$4,000,000;
56.14 	(9) the business is not an entity disqualified under section 80A.50, paragraph (b), clause 
56.15 	(3); and
56.16 	(10) the business has not issued securities that are traded on a public exchange.
56.17 	(d) In applying the limit under paragraph (c), clause (5), the employees in all members 
56.18 	of the unitary business, as defined in section 290.17, subdivision 4, must be included.
56.19 	(e) In order for a qualified investment in a business to be eligible for tax credits:
56.20 	(1) the business must have applied for and received certification for the calendar year 
56.21 	in which the investment was made prior to the date on which the qualified investment was 
56.22 	made;
56.23 	(2) the business must not have issued securities that are traded on a public exchange;
56.24 	(3) the business must not issue securities that are traded on a public exchange within 
56.25 	180 days after the date on which the qualified investment was made; and
56.26 	(4) the business must not have a liquidation event within 180 days after the date on 
56.27 	which the qualified investment was made.
56.28 	(f) The commissioner must maintain a list of qualified small businesses and qualified 
56.29 	greater Minnesota businesses certified under this subdivision for the calendar year and make 
56.30 	the list accessible to the public on the department's website.
56.31 	(g) For purposes of this subdivision, the following terms have the meanings given:
57.1 	(1) "qualified high-technology field" includes aerospace, agricultural processing, 
57.2 	renewable energy, energy efficiency and conservation, environmental engineering, food 
57.3 	technology, cellulosic ethanol, information technology, materials science technology, 
57.4 	nanotechnology, telecommunications, biotechnology, medical device products, 
57.5 	pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar fields;
57.6 	(2) "proprietary technology" means the technical innovations that are unique and legally 
57.7 	owned or licensed by a business and includes, without limitation, those innovations that are 
57.8 	patented, patent pending, a subject of trade secrets, or copyrighted; and
57.9 	(3) "greater Minnesota" means the area of Minnesota located outside of the metropolitan 
57.10 	area as defined in section 473.121, subdivision 2.
57.11 	(h) To receive certification as a qualified greater Minnesota business, a business must 
57.12 	satisfy all of the requirements of paragraph (c) and must satisfy the following conditions:
57.13 	(1) the business has its headquarters in greater Minnesota; and
57.14 	(2) at least: (i) 51 percent of the business's employees are employed in greater Minnesota; 
57.15 	(ii) 51 percent of the business's total payroll is paid or incurred in greater Minnesota; and 
57.16 	(iii) 51 percent of the total value of all contractual agreements to which the business is a 
57.17 	party in connection with its primary business activity is for services performed under contract 
57.18 	in greater Minnesota, unless the business obtains a waiver under paragraph (i).
57.19 	(i) The commissioner must exempt a business from the requirement under paragraph 
57.20 	(c), clause (2), item (iii), if the business certifies to the commissioner that the services 
57.21 	required under a contract in connection with the primary business activity cannot be 
57.22 	performed in Minnesota if the business otherwise qualifies as a qualified small business, or 
57.23 	in greater Minnesota if the business otherwise qualifies as a qualified greater Minnesota 
57.24 	business. The business must submit the certification required under this paragraph every 
57.25 	six months from the month the exemption was granted. The exemption allowed under this 
57.26 	paragraph must be submitted in a form and manner prescribed by the commissioner.

57.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
57.28 	31, 2018.

57.29 	Sec. 3. Minnesota Statutes 2018, section 116J.8737, subdivision 3, is amended to read:
57.30 		Subd. 3.Certification of qualified investors. (a) Investors may apply to the 
57.31 	commissioner for certification as a qualified investor for a taxable year. The application 
57.32 	must be in the form and be made under the procedures specified by the commissioner, 
57.33 	accompanied by an application fee of $350. Application fees are deposited in the small 
58.1 	business investment tax credit administration account in the special revenue fund. The 
58.2 	application for certification for 2010 must be made available on the department's website 
58.3 	by August 1, 2010. Applications for subsequent years' certification must be made available 
58.4 	on the department's website by November 1 of the preceding year.
58.5 	(b) Within 30 days of receiving an application for certification under this subdivision, 
58.6 	the commissioner must either certify the investor as satisfying the conditions required of a 
58.7 	qualified investor, request additional information from the investor, or reject the application 
58.8 	for certification. If the commissioner requests additional information from the investor, the 
58.9 	commissioner must either certify the investor or reject the application within 30 days of 
58.10 	receiving the additional information. If the commissioner neither certifies the investor nor 
58.11 	rejects the application within 30 days of receiving the original application or within 30 days 
58.12 	of receiving the additional information requested, whichever is later, then the application 
58.13 	is deemed rejected, and the commissioner must refund the $350 application fee. An investor 
58.14 	who applies for certification and is rejected may reapply.
58.15 	(c) To receive certification, an investor must (1) be a natural person; and (2) certify to 
58.16 	the commissioner that the investor will only invest in a transaction that is exempt under 
58.17 	section 80A.46, clause (13) or (14), in a security exempt under section 80A.461, or in a 
58.18 	security registered under section 80A.50, paragraph (b).
58.19 	(d) In order for a qualified investment in a qualified small business to be eligible for tax 
58.20 	credits, a qualified investor who makes the investment must have applied for and received 
58.21 	certification for the calendar year prior to making the qualified investment, except in the 
58.22 	case of an investor who is not an accredited investor, within the meaning of Regulation D 
58.23 	of the Securities and Exchange Commission, Code of Federal Regulations, title 17, section 
58.24 	230.501, paragraph (a), application for certification may be made within 30 days after 
58.25 	making the qualified investment.

58.26 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
58.27 	31, 2018.

58.28 	Sec. 4. Minnesota Statutes 2018, section 116J.8737, subdivision 4, is amended to read:
58.29 		Subd. 4.Certification of qualified funds. (a) A pass-through entity may apply to the 
58.30 	commissioner for certification as a qualified fund for a calendar year. The application must 
58.31 	be in the form and be made under the procedures specified by the commissioner, accompanied 
58.32 	by an application fee of $1,000. Application fees are deposited in the small business 
58.33 	investment tax credit administration account in the special revenue fund. The application 
58.34 	for certification for 2010 of qualified funds must be made available on the department's 
59.1 	website by August 1, 2010. Applications for subsequent years' certification must be made 
59.2 	available by November 1 of the preceding year.
59.3 	(b) Within 30 days of receiving an application for certification under this subdivision, 
59.4 	the commissioner must either certify the fund as satisfying the conditions required of a 
59.5 	qualified fund, request additional information from the fund, or reject the application for 
59.6 	certification. If the commissioner requests additional information from the fund, the 
59.7 	commissioner must either certify the fund or reject the application within 30 days of receiving 
59.8 	the additional information. If the commissioner neither certifies the fund nor rejects the 
59.9 	application within 30 days of receiving the original application or within 30 days of receiving 
59.10 	the additional information requested, whichever is later, then the application is deemed 
59.11 	rejected, and the commissioner must refund the $1,000 application fee. A fund that applies 
59.12 	for certification and is rejected may reapply.
59.13 	(c) To receive certification, a fund must:
59.14 	(1) invest or intend to invest in qualified small businesses;
59.15 	(2) be organized as a pass-through entity; and
59.16 	(3) have at least three separate investors, of whom at least three whose investment is 
59.17 	made in the certified business and who seek a tax credit allocation satisfy the conditions in 
59.18 	subdivision 3, paragraph (c).
59.19 	(d) Investments in the fund may consist of equity investments or notes that pay interest 
59.20 	or other fixed amounts, or any combination of both.
59.21 	(e) In order for a qualified investment in a qualified small business to be eligible for tax 
59.22 	credits, a qualified fund that makes the investment must have applied for and received 
59.23 	certification for the calendar year prior to making the qualified investment.

59.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
59.25 	31, 2018.

59.26 	Sec. 5. Minnesota Statutes 2018, section 116J.8737, subdivision 5, is amended to read:
59.27 		Subd. 5.Credit allowed. (a)(1) A qualified investor or qualified fund is eligible for a 
59.28 	credit equal to 25 percent of the qualified investment in a qualified small business. 
59.29 	Investments made by a pass-through entity qualify for a credit only if the entity is a qualified 
59.30 	fund. The commissioner must not allocate more than $15,000,000 $10,000,000 in credits 
59.31 	to qualified investors or qualified funds for taxable years beginning after December 31, 
59.32 	2013, and before January 1, 2017, and must not allocate more than $10,000,000 in credits 
60.1 	to qualified investors or qualified funds for taxable years beginning after December 31, 
60.2 	2016, and before January 1, 2018; and (2) for taxable years beginning after December 31, 
60.3 	2014, and before January 1, 2018, and before January 1, 2021. For each taxable year, 50 
60.4 	percent must be allocated to credits for qualifying investments in qualified greater Minnesota 
60.5 	businesses and minority- or women-owned qualified small businesses in Minnesota. Any 
60.6 	portion of a taxable year's credits that is reserved for qualifying investments in greater 
60.7 	Minnesota businesses and minority- or women-owned qualified small businesses in 
60.8 	Minnesota that is not allocated by September 30 of the taxable year is available for allocation 
60.9 	to other credit applications beginning on October 1. Any portion of a taxable year's credits 
60.10 	that is not allocated by the commissioner does not cancel and may be carried forward to 
60.11 	subsequent taxable years until all credits have been allocated.
60.12 	(b) The commissioner may not allocate more than a total maximum amount in credits 
60.13 	for a taxable year to a qualified investor for the investor's cumulative qualified investments 
60.14 	as an individual qualified investor and as an investor in a qualified fund; for married couples 
60.15 	filing joint returns the maximum is $250,000, and for all other filers the maximum is 
60.16 	$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits 
60.17 	over all taxable years for qualified investments in any one qualified small business.
60.18 	(c) The commissioner may not allocate a credit to a qualified investor either as an 
60.19 	individual qualified investor or as an investor in a qualified fund if, at the time the investment 
60.20 	is proposed:
60.21 	(1) the investor is an officer or principal of the qualified small business; or
60.22 	(2) the investor, either individually or in combination with one or more members of the 
60.23 	investor's family, owns, controls, or holds the power to vote 20 percent or more of the 
60.24 	outstanding securities of the qualified small business.
60.25 	A member of the family of an individual disqualified by this paragraph is not eligible for a 
60.26 	credit under this section. For a married couple filing a joint return, the limitations in this 
60.27 	paragraph apply collectively to the investor and spouse. For purposes of determining the 
60.28 	ownership interest of an investor under this paragraph, the rules under section 267(c) and 
60.29 	267(e) of the Internal Revenue Code apply.
60.30 	(d) Applications for tax credits for 2010 must be made available on the department's 
60.31 	website by September 1, 2010, and the department must begin accepting applications by 
60.32 	September 1, 2010. Applications for subsequent years must be made available by November 
60.33 	1 of the preceding year.
61.1 	(e) Qualified investors and qualified funds must apply to the commissioner for tax credits. 
61.2 	Tax credits must be allocated to qualified investors or qualified funds in the order that the 
61.3 	tax credit request applications are filed with the department. The commissioner must approve 
61.4 	or reject tax credit request applications within 15 days of receiving the application. The 
61.5 	investment specified in the application must be made within 60 days of the allocation of 
61.6 	the credits. If the investment is not made within 60 days, the credit allocation is canceled 
61.7 	and available for reallocation. A qualified investor or qualified fund that fails to invest as 
61.8 	specified in the application, within 60 days of allocation of the credits, must notify the 
61.9 	commissioner of the failure to invest within five business days of the expiration of the 
61.10 	60-day investment period.
61.11 	(f) All tax credit request applications filed with the department on the same day must 
61.12 	be treated as having been filed contemporaneously. If two or more qualified investors or 
61.13 	qualified funds file tax credit request applications on the same day, and the aggregate amount 
61.14 	of credit allocation claims exceeds the aggregate limit of credits under this section or the 
61.15 	lesser amount of credits that remain unallocated on that day, then the credits must be allocated 
61.16 	among the qualified investors or qualified funds who filed on that day on a pro rata basis 
61.17 	with respect to the amounts claimed. The pro rata allocation for any one qualified investor 
61.18 	or qualified fund is the product obtained by multiplying a fraction, the numerator of which 
61.19 	is the amount of the credit allocation claim filed on behalf of a qualified investor and the 
61.20 	denominator of which is the total of all credit allocation claims filed on behalf of all 
61.21 	applicants on that day, by the amount of credits that remain unallocated on that day for the 
61.22 	taxable year.
61.23 	(g) A qualified investor or qualified fund, or a qualified small business acting on their 
61.24 	behalf, must notify the commissioner when an investment for which credits were allocated 
61.25 	has been made, and the taxable year in which the investment was made. A qualified fund 
61.26 	must also provide the commissioner with a statement indicating the amount invested by 
61.27 	each investor in the qualified fund based on each investor's share of the assets of the qualified 
61.28 	fund at the time of the qualified investment. After receiving notification that the investment 
61.29 	was made, the commissioner must issue credit certificates for the taxable year in which the 
61.30 	investment was made to the qualified investor or, for an investment made by a qualified 
61.31 	fund, to each qualified investor who is an investor in the fund. The certificate must state 
61.32 	that the credit is subject to revocation if the qualified investor or qualified fund does not 
61.33 	hold the investment in the qualified small business for at least three years, consisting of the 
61.34 	calendar year in which the investment was made and the two following years. The three-year 
61.35 	holding period does not apply if:
62.1 	(1) the investment by the qualified investor or qualified fund becomes worthless before 
62.2 	the end of the three-year period;
62.3 	(2) 80 percent or more of the assets of the qualified small business is sold before the end 
62.4 	of the three-year period;
62.5 	(3) the qualified small business is sold before the end of the three-year period;
62.6 	(4) the qualified small business's common stock begins trading on a public exchange 
62.7 	before the end of the three-year period; or
62.8 	(5) the qualified investor dies before the end of the three-year period.
62.9 	(h) The commissioner must notify the commissioner of revenue of credit certificates 
62.10 	issued under this section.

62.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
62.12 	31, 2018.

62.13 	Sec. 6. Minnesota Statutes 2018, section 116J.8737, subdivision 6, is amended to read:
62.14 		Subd. 6.Annual reports. (a) By February 1 of each year each qualified small business 
62.15 	that received an investment that qualified for a credit, and each qualified investor and 
62.16 	qualified fund that made an investment that qualified for a credit, must submit an annual 
62.17 	report to the commissioner and pay a filing fee of $100 as required under this subdivision. 
62.18 	Each qualified investor and qualified fund must submit reports for three years following 
62.19 	each year in which it made an investment that qualified for a credit, and each qualified small 
62.20 	business must submit reports for five years following the year in which it received an 
62.21 	investment qualifying for a credit. Reports must be made in the form required by the 
62.22 	commissioner. All filing fees collected are deposited in the small business investment tax 
62.23 	credit administration account in the special revenue fund.
62.24 	(b) A report from a qualified small business must certify that the business satisfies the 
62.25 	following requirements:
62.26 	(1) the business has its headquarters in Minnesota;
62.27 	(2) at least 51 percent of the business's employees are employed in Minnesota, and 51 
62.28 	percent of the business's total payroll is paid or incurred in the state;
62.29 	(3) that the business is engaged in, or is committed to engage in, innovation in Minnesota 
62.30 	as defined under subdivision 2; and
63.1 	(4) that the business meets the payroll requirements in subdivision 2, paragraph (c), 
63.2 	clause (6).
63.3 	(c) Reports from qualified investors must certify that the investor remains invested in 
63.4 	the qualified small business as required by subdivision 5, paragraph (g).
63.5 	(d) Reports from qualified funds must certify that the fund remains invested in the 
63.6 	qualified small business as required by subdivision 5, paragraph (g).
63.7 	(e) A qualified small business that ceases all operations and becomes insolvent must file 
63.8 	a final annual report in the form required by the commissioner documenting its insolvency. 
63.9 	In following years the business is exempt from the annual reporting requirement, the report 
63.10 	filing fee, and the fine for failure to file a report.
63.11 	(f) A qualified small business, qualified investor, or qualified fund that fails to file an 
63.12 	annual report by February 1 as required under this subdivision is subject to a $500 $100
63.13 	fine.
63.14 	(g) A qualified investor or qualified fund that fails to file an annual report by April 1 
63.15 	may, at the commissioner's discretion, have any credit allocated and certified to the investor 
63.16 	or fund revoked and such credit must be repaid by the investor.
63.17 	(h) A qualified business that fails to file an annual report by April 1 may, at the 
63.18 	commissioner's discretion, be subject to the credit repayment provisions in subdivision 7, 
63.19 	paragraph (b).

63.20 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
63.21 	31, 2018.

63.22 	Sec. 7. Minnesota Statutes 2018, section 116J.8737, subdivision 12, is amended to read:
63.23 		Subd. 12.Sunset. This section expires for taxable years beginning after December 31, 
63.24 	2017 2020, except that reporting requirements under subdivision 6 and revocation of credits 
63.25 	under subdivision 7 remain in effect through 2019 2022 for qualified investors and qualified 
63.26 	funds, and through 2021 2024 for qualified small businesses, reporting requirements under 
63.27 	subdivision 9 remain in effect through 2022 2020, and the appropriation in subdivision 11 
63.28 	remains in effect through 2021 2024.

63.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
63.30 	31, 2018.

64.1 	Sec. 8. Minnesota Statutes 2018, section 290.0132, subdivision 26, is amended to read:
64.2 		Subd. 26.Social Security benefits. (a) A portion of taxable Social Security benefits is 
64.3 	allowed as a subtraction. The subtraction equals the lesser of taxable Social Security benefits 
64.4 	or a maximum subtraction subject to the limits under paragraphs (b), (c), and (d).
64.5 	(b) For married taxpayers filing a joint return and surviving spouses, the maximum 
64.6 	subtraction equals $4,500 $6,000. The maximum subtraction is reduced by 20 percent of 
64.7 	provisional income over $77,000 $74,000. In no case is the subtraction less than zero.
64.8 	(c) For single or head-of-household taxpayers, the maximum subtraction equals $3,500
64.9 	$4,500. The maximum subtraction is reduced by 20 percent of provisional income over 
64.10 	$60,200 $58,700. In no case is the subtraction less than zero.
64.11 	(d) For married taxpayers filing separate returns, the maximum subtraction equals $2,250
64.12 	$3,000. The maximum subtraction is reduced by 20 percent of provisional income over 
64.13 	$38,500 $37,000. In no case is the subtraction less than zero.
64.14 	(e) For purposes of this subdivision, "provisional income" means modified adjusted 
64.15 	gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of 
64.16 	the taxable Social Security benefits received during the taxable year, and "Social Security 
64.17 	benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
64.18 	(f) The commissioner shall adjust the maximum subtraction and threshold amounts in 
64.19 	paragraphs (b) to (d) by the percentage determined pursuant to the provisions of section 
64.20 	1(f) of the Internal Revenue Code, as amended through December 16, 2016, except that in 
64.21 	section 1(f)(3)(B) of the Internal Revenue Code the word "2016 2018" shall be substituted 
64.22 	for the word "1992." For 2018 2020, the commissioner shall then determine the percentage 
64.23 	change from the 12 months ending on August 31, 2016 2018, to the 12 months ending on 
64.24 	August 31, 2017 2019, and in each subsequent year, from the 12 months ending on August 
64.25 	31, 2016 2018, to the 12 months ending on August 31 of the year preceding the taxable 
64.26 	year. The determination of the commissioner pursuant to this subdivision must not be 
64.27 	considered a rule and is not subject to the Administrative Procedure Act contained in chapter 
64.28 	14, including section 14.386. The maximum subtraction and threshold amounts as adjusted 
64.29 	must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is rounded 
64.30 	up to the nearest $10 amount.

64.31 	EFFECTIVE DATE. (a) The amendments to paragraphs (b), (c), (d), and (f), except 
64.32 	for the amendment adding the words "as amended through December 31, 2016," are effective 
64.33 	for taxable years beginning after December 31, 2018.
65.1 	(b) The amendments to paragraphs (a) and (e), and the amendment to paragraph (f) 
65.2 	adding the words "as amended through December 31, 2016," are effective retroactively for 
65.3 	taxable years beginning after December 31, 2017.

65.4 	Sec. 9. Minnesota Statutes 2018, section 290.0671, subdivision 1, is amended to read:
65.5 		Subdivision 1.Credit allowed. (a) An individual who is a resident of Minnesota is 
65.6 	allowed a credit against the tax imposed by this chapter equal to a percentage of earned 
65.7 	income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the 
65.8 	Internal Revenue Code, except that:
65.9 	(1) a taxpayer with no qualifying children who has attained the age of 21, but not attained 
65.10 	age 65 before the close of the taxable year and is otherwise eligible for a credit under section 
65.11 	32 of the Internal Revenue Code may also receive a credit.; and
65.12 	(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal 
65.13 	Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted 
65.14 	gross income exceeds the income limitation under section 32 of the Internal Revenue Code.
65.15 	(b) For individuals with no qualifying children, the credit equals 2.10 percent of the first 
65.16 	$6,180 $6,640 of earned income. The credit is reduced by 2.01 percent of earned income 
65.17 	or adjusted gross income, whichever is greater, in excess of $8,130 $8,730, but in no case 
65.18 	is the credit less than zero.
65.19 	(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first 
65.20 	$11,120 $11,950 of earned income. The credit is reduced by 6.02 percent of earned income 
65.21 	or adjusted gross income, whichever is greater, in excess of $21,190 $22,770, but in no case 
65.22 	is the credit less than zero.
65.23 	(d) For individuals with two or more qualifying children, the credit equals 11 percent 
65.24 	of the first $18,240 $14,600 of earned income. The credit is reduced by 10.82 percent of 
65.25 	earned income or adjusted gross income, whichever is greater, in excess of $25,130 $27,000, 
65.26 	but in no case is the credit less than zero.
65.27 	(e) For individuals with three or more qualifying children, the credit equals 12.38 percent 
65.28 	of the first $19,600 of earned income. The credit is reduced by 10.82 percent of earned 
65.29 	income or adjusted gross income, whichever is greater, in excess of $27,000, but in no case 
65.30 	is the credit less than zero.
65.31 	(f) For taxpayers eligible for a credit under this section, an additional credit is allowed 
65.32 	as follows:
66.1 	(1) $200 for a married filing joint return or a surviving spouse; and
66.2 	(2) $100 for all other taxpayers.
66.3 	(e) (g) For a part-year resident, the credit must be allocated based on the percentage 
66.4 	calculated under section 290.06, subdivision 2c, paragraph (e).
66.5 	(f) (h) For a person who was a resident for the entire tax year and has earned income 
66.6 	not subject to tax under this chapter, including income excluded under section 290.0132, 
66.7 	subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross 
66.8 	income reduced by the earned income not subject to tax under this chapter over federal 
66.9 	adjusted gross income. For purposes of this paragraph, the following clauses are not 
66.10 	considered "earned income not subject to tax under this chapter":
66.11 	(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
66.12 	(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
66.13 	(3) income derived from an Indian reservation by an enrolled member of the reservation 
66.14 	while living on the reservation.
66.15 	(g) (i) For tax years beginning after December 31, 2013 2018, the $8,130 $8,730 in 
66.16 	paragraph (b), the $21,190 $22,700 in paragraph (c), and the $25,130 $27,000 in paragraph 
66.17 	(d), and the $27,000 in paragraph (e), after being adjusted for inflation under subdivision 
66.18 	7, are each increased by $5,000 $5,840 for married taxpayers filing joint returns. For tax 
66.19 	years beginning after December 31, 2013, the commissioner shall annually adjust the $5,000 
66.20 	by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
66.21 	Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for 
66.22 	the word "1992." For 2014, the commissioner shall then determine the percent change from 
66.23 	the 12 months ending on August 31, 2008, to the 12 months ending on August 31, 2013, 
66.24 	and in each subsequent year, from the 12 months ending on August 31, 2008, to the 12 
66.25 	months ending on August 31 of the year preceding the taxable year. The earned income 
66.26 	thresholds as adjusted for inflation must be rounded to the nearest $10. If the amount ends 
66.27 	in $5, the amount is rounded up to the nearest $10. The determination of the commissioner 
66.28 	under this subdivision is not a rule under the Administrative Procedure Act.
66.29 	(h) (j) The commissioner shall construct tables showing the amount of the credit at 
66.30 	various income levels and make them available to taxpayers. The tables shall follow the 
66.31 	schedule contained in this subdivision, except that the commissioner may graduate the 
66.32 	transition between income brackets.

67.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
67.2 	31, 2018.

67.3 	Sec. 10. Minnesota Statutes 2018, section 290.0671, subdivision 7, is amended to read:
67.4 		Subd. 7.Inflation adjustment. The earned income amounts used to calculate the credit 
67.5 	and the income thresholds at which the maximum credit begins to be reduced in subdivision 
67.6 	1, and the additional threshold amount for married taxpayers filing joint returns, must be 
67.7 	adjusted for inflation. The commissioner shall adjust by the percentage determined pursuant 
67.8 	to the provisions of section 1(f) of the Internal Revenue Code, as amended through December 
67.9 	16, 2016, except that in section 1(f)(3)(B) the word "2013" "2018" shall be substituted for 
67.10 	the word "1992." For 2015 2020, the commissioner shall then determine the percent change 
67.11 	from the 12 months ending on August 31, 2013 2018, to the 12 months ending on August 
67.12 	31, 2014 2019, and in each subsequent year, from the 12 months ending on August 31, 2013
67.13 	2018, to the 12 months ending on August 31 of the year preceding the taxable year. The 
67.14 	earned income thresholds as adjusted for inflation must be rounded to the nearest $10 
67.15 	amount. If the amount ends in $5, the amount is rounded up to the nearest $10 amount. The 
67.16 	determination of the commissioner under this subdivision is not a rule under the 
67.17 	Administrative Procedure Act.

67.18 	EFFECTIVE DATE. The amendment adding the words "as amended through December 
67.19 	16, 2016," is effective retroactively for taxable years beginning after December 31, 2017. 
67.20 	The remaining amendments are effective for taxable years beginning after December 31, 
67.21 	2018.

67.22 	Sec. 11. Minnesota Statutes 2018, section 290.0684, subdivision 2, is amended to read:
67.23 		Subd. 2.Credit allowed. (a) An individual who is a resident of Minnesota is allowed a 
67.24 	credit against the tax imposed by this chapter. The credit is not allowed to an individual 
67.25 	who is eligible to be claimed as a dependent, as defined in sections 151 and 152 of the 
67.26 	Internal Revenue Code. The credit may not exceed the liability for tax under this chapter.
67.27 	(b) The amount of the credit allowed equals 50 percent of contributions for the taxable 
67.28 	year. The maximum credit is $500, subject to the phaseout in paragraphs (c) and (d). In no 
67.29 	case is the credit less than zero.
67.30 	(c) For individual filers, the maximum credit is reduced by two percent of adjusted gross 
67.31 	income in excess of $75,000.
67.32 	(d) For married couples filing a joint return, the maximum credit is phased out as follows:
68.1 	(1) for married couples with adjusted gross income in excess of $75,000, but not more 
68.2 	than $100,000 $135,000, the maximum credit is reduced by one percent of adjusted gross 
68.3 	income in excess of $75,000 until the maximum credit amount equals $250; and
68.4 	(2) for married couples with adjusted gross income in excess of $100,000, but not more 
68.5 	than $135,000, the maximum credit is $250; and
68.6 	(3) (2) for married couples with adjusted gross income in excess of $135,000, the 
68.7 	maximum credit is $250, reduced by one percent of adjusted gross income in excess of 
68.8 	$135,000.
68.9 	(e) The income thresholds in paragraphs (c) and (d) used to calculate the maximum 
68.10 	credit must be adjusted for inflation. The commissioner shall adjust the income thresholds 
68.11 	by the percentage determined under the provisions of section 1(f) of the Internal Revenue 
68.12 	Code, except that in section 1(f)(3)(B) the word "2016" is substituted for the word "1992." 
68.13 	For 2018, the commissioner shall then determine the percent change from the 12 months 
68.14 	ending on August 31, 2016, to the 12 months ending on August 31, 2017, and in each 
68.15 	subsequent year, from the 12 months ending on August 31, 2016, to the 12 months ending 
68.16 	on August 31 of the year preceding the taxable year. The income thresholds as adjusted for 
68.17 	inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount 
68.18 	is rounded up to the nearest $10 amount. The determination of the commissioner under this 
68.19 	subdivision is not subject to chapter 14, including section 14.386.

68.20 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
68.21 	31, 2019.

68.22 	Sec. 12. APPLICATION OF SMALL BUSINESS INVESTMENT TAX CREDIT 
68.23 	FOR TAXABLE YEAR 2019.
 68.24 	Applications for (1) certification as a qualified small business, qualified investor, or 
68.25 	qualified fund under Minnesota Statutes, section 116J.8737, subdivisions 2, 3, and 4, and 
68.26 	(2) the credit under Minnesota Statutes, section 116J.8737, subdivision 5, for taxable year 
68.27 	2019 must be made available on the Department of Employment and Economic 
68.28 	Development's website by September 1, 2019. The provisions of Minnesota Statutes, section 
68.29 	116J.8737, generally apply to the taxable year 2019 extension of the credit in sections 1 to 
68.30 	7.

68.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

69.1 	ARTICLE 3
69.2 	SALES AND USE TAX

69.3 	Section 1. Minnesota Statutes 2018, section 289A.11, is amended by adding a subdivision 
69.4 	to read:
69.5 		Subd. 4.Marketplace provider information report. (a) A marketplace provider required 
69.6 	to collect and remit sales and use taxes under section 297A.66 shall file an information 
69.7 	report for each calendar quarter containing the information regarding the sales it facilitates 
69.8 	for each retailer as required by this section. The report is due on the 30th day following the 
69.9 	last day of the most recently completed calendar quarter. The commissioner shall prescribe 
69.10 	the content, format, and manner of the information report pursuant to section 270C.03. The 
69.11 	report must include each retailer's:
69.12 	(1) name, address, and federal employer identification number (FEIN);
69.13 	(2) total gross receipts for the period;
69.14 	(3) total taxable sales for the period;
69.15 	(4) total state sales tax collected and remitted for the period; and
69.16 	(5) itemized total of each local sales tax collected and remitted for the period.
69.17 	(b) No payment of tax is required to be remitted with the quarterly information report. 
69.18 	A marketplace provider that fails to file this information report is subject to the penalty 
69.19 	imposed under section 289A.60, subdivision 29.

69.20 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
69.21 	30, 2019.

69.22 	Sec. 2. Minnesota Statutes 2018, section 289A.60, subdivision 29, is amended to read:
69.23 		Subd. 29.Penalty for failure to file report liquor sales. In the case of a failure to file 
69.24 	an informational report required by section 289A.11, subdivision 4, or 297A.8155, with the 
69.25 	commissioner on or before the datedates prescribed, the person failing to file the report 
69.26 	shall pay a penalty of $500 for each failure. If a failure to file a report is intentional, the 
69.27 	penalty shall be $1,000 for each failure.

69.28 	EFFECTIVE DATE. This section is effective for reports first due for sales and purchases 
69.29 	made after June 30, 2019.

70.1 	Sec. 3. Minnesota Statutes 2018, section 297A.66, is amended to read:
70.2 	297A.66 JURISDICTION TO REQUIRE COLLECTION AND REMITTANCE 
70.3 	OF TAX BY RETAILER.
70.4 		Subdivision 1.Definitions. (a) To the extent allowed by the United States Constitution 
70.5 	and the laws of the United States, the terms "retailer maintaining a place of business in this 
70.6 	state," and "marketplace provider maintaining a place of business in this state,"or a similar 
70.7 	term, meansterms mean a retailer or marketplace provider:
70.8 	(1) having or maintaining within this state, directly or by a subsidiary or an affiliate, an 
70.9 	office, place of distribution, sales, storage, or sample room or place, warehouse, or other 
70.10 	place of business, including the employment of a resident of this state who works from a 
70.11 	home office in this state; or
70.12 	(2) having a representative, including, but not limited to, an affiliate, agent, salesperson, 
70.13 	canvasser, marketplace provider, solicitor, or other third party operating in this state under 
70.14 	the authority of the retailer or marketplace provider, or its subsidiary, for any purpose, 
70.15 	including the repairing, selling, delivering, installing, facilitating sales, processing sales, or 
70.16 	soliciting of orders for the retailer's or a retailer's goods or services, or the leasing of tangible 
70.17 	personal property located in this state, whether the place of business or agent, representative, 
70.18 	affiliate, salesperson, canvasser, or solicitor is located in the state permanently or temporarily, 
70.19 	or whether or not the retailer or marketplace provider, subsidiary, or affiliate is authorized 
70.20 	to do business in this state. A retailer is represented by a marketplace provider in this state 
70.21 	if the retailer makes sales in this state facilitated by a marketplace provider that maintains 
70.22 	a place of business in this state.
70.23 	(b) "Destination of a sale" means the location to which the retailer makes delivery of 
70.24 	the property sold, or causes the property to be delivered, to the purchaser of the property, 
70.25 	or to the agent or designee of the purchaser. The delivery may be made by any means, 
70.26 	including the United States Postal Service or a for-hire carrier.
70.27 	(c) (b) To the extent allowed by the United States Constitution and the laws of the United 
70.28 	States, the terms "retailer not maintaining a place of business in this state," and "marketplace 
70.29 	provider not maintaining a place of business in this state," or similar terms mean a retailer 
70.30 	or marketplace provider making or facilitating retail sales from outside this state to a 
70.31 	destination within this state and not maintaining a place of business in this state as provided 
70.32 	in paragraph (a) that engages in the regular or systematic soliciting of sales from potential 
70.33 	customers in this state by:
71.1 	(1) distribution, by mail or otherwise, of catalogs, periodicals, advertising flyers, or other 
71.2 	written solicitations of business to customers in this state;
71.3 	(2) advertisements on billboards or other outdoor advertising in this state;
71.4 	(3) advertisements in newspapers published in this state;
71.5 	(4) advertisements in trade journals or other periodicals the circulation of which is 
71.6 	primarily within this state;
71.7 	(5) advertisements in a Minnesota edition of a national or regional publication or a 
71.8 	limited regional edition in which this state is included as part of a broader regional or national 
71.9 	publication that are not placed in other geographically defined editions of the same issue 
71.10 	of the same publication;
71.11 	(6) advertisements in regional or national publications in an edition that is not by its 
71.12 	contents geographically targeted to Minnesota but is sold over the counter in Minnesota or 
71.13 	by subscription to Minnesota residents;
71.14 	(7) advertisements broadcast on a radio or television station located in Minnesota; or
71.15 	(8) any other solicitation by telephone, computer database, cable, optic, microwave, or 
71.16 	any other communication system, including but not limited to a website accessible from 
71.17 	within Minnesota.
71.18 	The location of independent vendors that provide products or services to a retailer or 
71.19 	marketplace provider in connection with a retailer or marketplace provider's solicitation of 
71.20 	customers within this state, including such products and services as creation of copy, printing, 
71.21 	distribution, and recording is not considered in determining whether the retailer or 
71.22 	marketplace provider is required to collect tax. Paragraph (b) must be construed without 
71.23 	regard to the state from which distribution of the materials originated or in which they were 
71.24 	prepared.
71.25 	(c) "Regular or systematic soliciting of sales from potential customers in this state" 
71.26 	means the retailer not maintaining a place of business in this state or marketplace provider 
71.27 	not maintaining a place of business in this state is engaged in any of the solicitations listed 
71.28 	in paragraph (b), and:
71.29 	(1) makes or facilitates 100 or more retail sales from outside this state to destinations in 
71.30 	this state during the prior 12-month period; or
71.31 	(2) makes or facilitates retail sales totaling more than $100,000 from outside this state 
71.32 	to destinations in this state during the prior 12-month period.
72.1 	(d) "Marketplace provider" means any person who facilitates a retail sale by a retailer 
72.2 	by:
72.3 	(1) listing or advertising for sale by the retailer in any forum, tangible personal property, 
72.4 	services, or digital goods that are subject to tax under this chapter; and
72.5 	(2) either directly or indirectly through agreements or arrangements with third parties 
72.6 	collecting payment from the customer and transmitting that payment to the retailer regardless 
72.7 	of whether the marketplace provider receives compensation or other consideration in 
72.8 	exchange for its services.
72.9 	(d) "Total taxable retail sales" means the gross receipts from the sale of all tangible 
72.10 	goods, services, and digital goods subject to sales and use tax under this chapter.
72.11 	(e) "Destination of a sale" means the location to which the retailer makes delivery of 
72.12 	the property sold, or causes the property to be delivered, to the purchaser of the property, 
72.13 	or to the agent or designee of the purchaser. The delivery may be made by any means, 
72.14 	including the United States Postal Service or a for-hire carrier.
72.15 		Subd. 2.Retailer maintaining place of business in this state Collection and remittance 
72.16 	requirements for retailers and marketplace providers. (a) Except as provided in paragraph 
72.17 	(b) (d), a retailer maintaining a place of business in this state and a retailer not maintaining 
72.18 	a place of business in this state who makes retail sales in Minnesota or to a destination in 
72.19 	Minnesota shall collect sales and use taxes and remit them to the commissioner under section 
72.20 	297A.77 for all retail sales other than those facilitated by a marketplace provider maintaining 
72.21 	a place of business in this state or a marketplace provider not maintaining a place of business 
72.22 	in this state that is required to collect and remit sales and use taxes under paragraph (b).
72.23 	(b) A retailer with total taxable retail sales to customers in this state of less than $10,000 
72.24 	in the 12-month period ending on the last day of the most recently completed calendar 
72.25 	quarter is not required to collect and remit sales tax if it is determined to be a retailer 
72.26 	maintaining a place of business in the state solely because it made sales through one or more 
72.27 	marketplace providers. The provisions of this paragraph do not apply to a retailer that is or 
72.28 	was registered to collect sales and use tax in this state. Except as provided in paragraph (d), 
72.29 	a marketplace provider maintaining a place of business in this state and a marketplace 
72.30 	provider not maintaining a place of business in this state who facilitates retail sales in 
72.31 	Minnesota or to a destination in Minnesota shall collect sales and use taxes and remit them 
72.32 	to the commissioner under section 297A.77 unless:
73.1 	(1) the retailer provides a copy of the retailer's registration to collect sales and use taxes 
73.2 	in this state to the marketplace provider before the marketplace provider facilitates a sale 
73.3 	on behalf of the retailer; or
73.4 	(2) upon inquiry by the marketplace provider or its agent, the commissioner discloses 
73.5 	that the retailer is registered to collect sales and use taxes in this state.
73.6 	(c) Nothing in paragraph (b) shall be construed to interfere with the ability of a 
73.7 	marketplace provider and a retailer to enter into an agreement regarding fulfillment of the 
73.8 	requirements of this chapter.
73.9 	(d) A retailer not maintaining a place of business in this state and a marketplace provider 
73.10 	not maintaining a place of business in this state shall:
73.11 	(1) begin collecting and remitting sales and use taxes to the commissioner on the first 
73.12 	day of a calendar month occurring no later than 60 days after the retailer or marketplace 
73.13 	provider engages in regular or systematic soliciting of sales from potential customers in this 
73.14 	state; and
73.15 	(2) continue to collect and remit sales and use taxes to the commissioner until at least 
73.16 	the last day of the 12th calendar month following the calendar month in which the retailer 
73.17 	or marketplace provider began collecting and remitting sales and use taxes under clause 
73.18 	(1).
73.19 	(e) A retailer not maintaining a place of business in this state and a marketplace provider 
73.20 	not maintaining a place of business in this state may cease collecting and remitting sales 
73.21 	and use taxes to the commissioner after the period in paragraph (d), clause (2), if the retailer 
73.22 	or marketplace provider no longer engages in regular or systematic soliciting of sales from 
73.23 	potential customers in this state.
73.24 	(f) A retailer or marketplace provider may cease collecting and remitting sales and use 
73.25 	taxes under paragraph (e) only after notifying the commissioner that the retailer or 
73.26 	marketplace provider is no longer engaged in the regular or systematic soliciting of sales 
73.27 	from potential customers in this state. The commissioner shall prescribe the content, format, 
73.28 	and manner of the notification pursuant to section 270C.30. If a retailer or marketplace 
73.29 	provider subsequently engages in regular or systematic soliciting of sales from potential 
73.30 	customers in this state, the retailer shall again comply with the requirements of paragraph 
73.31 	(d).
73.32 		Subd. 3.Retailer not maintaining place of business in this state Marketplace provider 
73.33 	liability. (a) To the extent allowed by the United States Constitution and in accordance with 
74.1 	the terms and conditions of federal remote seller law, a retailer making retail sales from 
74.2 	outside this state to a destination within this state and not maintaining a place of business 
74.3 	in this state shall collect sales and use taxes and remit them to the commissioner under 
74.4 	section 297A.77.
74.5 	(b) To the extent allowed by the United States Constitution and the laws of the United 
74.6 	States, a retailer making retail sales from outside this state to a destination within this state 
74.7 	and not maintaining a place of business in this state shall collect sales and use taxes and 
74.8 	remit them to the commissioner under section 297A.77, if the retailer engages in the regular 
74.9 	or systematic soliciting of sales from potential customers in this state by:
74.10 	(1) distribution, by mail or otherwise, of catalogs, periodicals, advertising flyers, or other 
74.11 	written solicitations of business to customers in this state;
74.12 	(2) display of advertisements on billboards or other outdoor advertising in this state;
74.13 	(3) advertisements in newspapers published in this state;
74.14 	(4) advertisements in trade journals or other periodicals the circulation of which is 
74.15 	primarily within this state;
74.16 	(5) advertisements in a Minnesota edition of a national or regional publication or a 
74.17 	limited regional edition in which this state is included as part of a broader regional or national 
74.18 	publication which are not placed in other geographically defined editions of the same issue 
74.19 	of the same publication;
74.20 	(6) advertisements in regional or national publications in an edition which is not by its 
74.21 	contents geographically targeted to Minnesota but which is sold over the counter in Minnesota 
74.22 	or by subscription to Minnesota residents;
74.23 	(7) advertisements broadcast on a radio or television station located in Minnesota; or
74.24 	(8) any other solicitation by telegraphy, telephone, computer database, cable, optic, 
74.25 	microwave, or other communication system.
74.26 	This paragraph must be construed without regard to the state from which distribution 
74.27 	of the materials originated or in which they were prepared.
74.28 	(c) The location within or without this state of independent vendors that provide products 
74.29 	or services to the retailer in connection with its solicitation of customers within this state, 
74.30 	including such products and services as creation of copy, printing, distribution, and recording, 
74.31 	is not considered in determining whether the retailer is required to collect tax.
75.1 	(d) A retailer not maintaining a place of business in this state is presumed, subject to 
75.2 	rebuttal, to be engaged in regular solicitation within this state if it engages in any of the 
75.3 	activities in paragraph (b) and:
75.4 	(1) makes 100 or more retail sales from outside this state to destinations in this state 
75.5 	during a period of 12 consecutive months; or
75.6 	(2) makes ten or more retail sales totaling more than $100,000 from outside this state 
75.7 	to destinations in this state during a period of 12 consecutive months.
75.8 	(a) A marketplace provider is subject to audit on the retail sales it facilitates if it is 
75.9 	required to collect sales and use taxes and remit them to the commissioner under subdivision 
75.10 	2, paragraphs (b) and (c).
75.11 	(b) A marketplace provider is not liable for failing to file, collect, and remit sales and 
75.12 	use taxes to the commissioner if the marketplace provider demonstrates that the error was 
75.13 	due to incorrect or insufficient information given to the marketplace provider by the retailer. 
75.14 	This paragraph does not apply if the marketplace provider and the marketplace retailer are 
75.15 	related as defined in subdivision 4, paragraph (b).
75.16 		Subd. 4.Affiliated entities. (a) An entity is an "affiliate" of the retailer for purposes of 
75.17 	subdivision 1, paragraph (a), if the entity:
75.18 	(1) uses its facilities or employees in this state to advertise, promote, or facilitate the 
75.19 	establishment or maintenance of a market for sales of items by the retailer to purchasers in 
75.20 	this state or for the provision of services to the retailer's purchasers in this state, such as 
75.21 	accepting returns of purchases for the retailer, providing assistance in resolving customer 
75.22 	complaints of the retailer, or providing other services;
75.23 	(2) has the same or a similar business name to the retailer and sells, from a location or 
75.24 	locations in this state, tangible personal property, digital goods, or services, taxable under 
75.25 	this chapter, that are similar to that sold by the retailer;
75.26 	(3) maintains an office, distribution facility, salesroom, warehouse, storage place, or 
75.27 	other similar place of business in this state to facilitate the delivery of tangible personal 
75.28 	property, digital goods, or services sold by the retailer to its customers in this state;
75.29 	(4) maintains a place of business in this state and uses trademarks, service marks, or 
75.30 	trade names in this state that are the same or substantially similar to those used by the retailer, 
75.31 	and that use is done with the express or implied consent of the holder of the marks or names;
76.1 	(5) delivers, installs, or assembles tangible personal property in this state, or performs 
76.2 	maintenance or repair services on tangible personal property in this state, for tangible 
76.3 	personal property sold by the retailer;
76.4 	(6) facilitates the delivery of tangible personal property to customers of the retailer by 
76.5 	allowing the customers to pick up tangible personal property sold by the retailer at a place 
76.6 	of business the entity maintains in this state; or
76.7 	(7) shares management, business systems, business practices, or employees with the 
76.8 	retailer, or engages in intercompany transactions with the retailer related to the activities 
76.9 	that establish or maintain the market in this state of the retailer.
76.10 	(b) Two entities are related parties under this section if one of the entities meets at least 
76.11 	one of the following tests with respect to the other entity:
76.12 	(1) one or both entities is a corporation, and one entity and any party related to that entity 
76.13 	in a manner that would require an attribution of stock from the corporation to the party or 
76.14 	from the party to the corporation under the attribution rules of section 318 of the Internal 
76.15 	Revenue Code owns directly, indirectly, beneficially, or constructively at least 50 percent 
76.16 	of the value of the corporation's outstanding stock;
76.17 	(2) one or both entities is a partnership, estate, or trust and any partner or beneficiary, 
76.18 	and the partnership, estate, or trust and its partners or beneficiaries own directly, indirectly, 
76.19 	beneficially, or constructively, in the aggregate, at least 50 percent of the profits, capital, 
76.20 	stock, or value of the other entity or both entities;
76.21 	(3) an individual stockholder and the members of the stockholder's family (as defined 
76.22 	in section 318 of the Internal Revenue Code) owns directly, indirectly, beneficially, or 
76.23 	constructively, in the aggregate, at least 50 percent of the value of both entities' outstanding 
76.24 	stock;
76.25 	(4) the entities are related within the meaning of subsections (b) and (c) of section 267 
76.26 	or 707(b)(1) of the Internal Revenue Code; or
76.27 	(5) the entities have one or more ownership relationships and the relationships were 
76.28 	designed with a principal purpose of avoiding the application of this section.
76.29 	(c) An entity is an affiliate under the provisions of this subdivision if the requirements 
76.30 	of paragraphs (a) and (b) are met during any part of the 12-month period ending on the first 
76.31 	day of the month before the month in which the sale was made.
77.1 		Subd. 4a.Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a), means 
77.2 	a person, whether an independent contractor or other representative, who directly or indirectly 
77.3 	solicits business for the retailer.
77.4 	(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement 
77.5 	with a resident under which the resident, for a commission or other substantially similar 
77.6 	consideration, directly or indirectly refers potential customers, whether by a link on an 
77.7 	Internet website, or otherwise, to the seller. This paragraph only applies if the total gross 
77.8 	receipts are at least $10,000 in the 12-month period ending on the last day of the most recent 
77.9 	calendar quarter before the calendar quarter in which the sale is made. For purposes of this 
77.10 	paragraph, gross receipts means receipts from sales to customers located in the state who 
77.11 	were referred to the retailer by all residents with this type of agreement with the retailer.
77.12 	(c) The presumption under paragraph (b) may be rebutted by proof that the resident with 
77.13 	whom the seller has an agreement did not engage in any solicitation in the state on behalf 
77.14 	of the retailer that would satisfy the nexus requirement of the United States Constitution 
77.15 	during the 12-month period in question. Nothing in this section shall be construed to narrow 
77.16 	the scope of the terms affiliate, agent, salesperson, canvasser, or other representative for 
77.17 	purposes of subdivision 1, paragraph (a).
77.18 	(d) For purposes of this subdivision, "resident" includes an individual who is a resident 
77.19 	of this state, as defined in section 290.01, or a business that owns tangible personal property 
77.20 	located in this state or has one or more employees providing services for the business in 
77.21 	this state.
77.22 	(e) This subdivision does not apply to chapter 290 and does not expand or contract the 
77.23 	jurisdiction to tax a trade or business under chapter 290.
77.24 		Subd. 4b.Collection and remittance requirements for marketplace providers and 
77.25 	marketplace retailers. (a) A marketplace provider shall collect sales and use taxes and 
77.26 	remit them to the commissioner under section 297A.77 for all facilitated sales for a retailer, 
77.27 	and is subject to audit on the retail sales it facilitates unless either:
77.28 	(1) the retailer provides a copy of the retailer's registration to collect sales and use tax 
77.29 	in this state to the marketplace provider before the marketplace provider facilitates a sale; 
77.30 	or
77.31 	(2) upon inquiry by the marketplace provider or its agent, the commissioner discloses 
77.32 	that the retailer is registered to collect sales and use taxes in this state.
78.1 	(b) Nothing in this subdivision shall be construed to interfere with the ability of a 
78.2 	marketplace provider and a retailer to enter into an agreement regarding fulfillment of the 
78.3 	requirements of this chapter.
78.4 	(c) A marketplace provider is not liable under this subdivision for failure to file and 
78.5 	collect and remit sales and use taxes if the marketplace provider demonstrates that the error 
78.6 	was due to incorrect or insufficient information given to the marketplace provider by the 
78.7 	retailer. This paragraph does not apply if the marketplace provider and the marketplace 
78.8 	retailer are related as defined in subdivision 4, paragraph (b).
78.9 		Subd. 5.Withdrawal from streamlined sales and use tax agreement. If the state has 
78.10 	withdrawn its membership or been expelled from the streamlined sales and use tax agreement, 
78.11 	it shall not use a seller's registration with the central registration system and the collection 
78.12 	of sales and use taxes in the state as a factor in determining whether the seller has nexus 
78.13 	with that state for any tax at any time.
78.14 		Subd. 6.Lodging services. An accommodations intermediary shall collect sales tax and 
78.15 	remit it to the commissioner under section 297A.77 for services provided in connection 
78.16 	with or for lodging located in this state.

78.17 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
78.18 	September 30, 2019.

78.19 	Sec. 4. Minnesota Statutes 2018, section 297A.68, subdivision 42, is amended to read:
78.20 		Subd. 42.Qualified data centers. (a) Purchases of enterprise information technology 
78.21 	equipment and computer software are exempt from tax as follows:
78.22 	(1) purchases of enterprise information technology equipment and computer software, 
78.23 	and replacements or upgrades to the equipment, for use in a qualified data center, or a 
78.24 	qualified refurbished data center, are exempt,;
78.25 	(2) purchases of prewritten computer software, and replacements or upgrades to the 
78.26 	software, for use by or in a qualified data center or a qualified refurbished data center are 
78.27 	exempt as follows:
78.28 	(i) for purchases prior to July 1, 2019, software that is loaded at the data center and either 
78.29 	operates, maintains, or monitors the enterprise information technology equipment exempt 
78.30 	under clause (1), or manages, manipulates, analyzes, collects, stores, processes, distributes, 
78.31 	or allows access to large amounts of data, or any other similar functions related to the data, 
78.32 	at the qualified data center or qualified refurbished data center, is exempt. This exemption 
78.33 	does not apply to software that is distributed to users outside of the facility;
79.1 	(ii) for purchases after June 30, 2019, all software that is loaded at the data center is 
79.2 	exempt, including software that is distributed to users outside of the facility, but the refund 
79.3 	provided in paragraph (c) is limited to 50 percent of the tax paid on the software; and
79.4 	(iii) purchases of software exempt under this clause include licenses to use the software 
79.5 	and maintenance agreements for the software, except that computer software maintenance 
79.6 	agreements are exempt for purchases made after June 30, 2013. ; and
79.7 	(3) the tax on purchases exempt under this paragraph must be imposed and collected as 
79.8 	if the rate under section 297A.62, subdivision 1, applied, and then refunded after June 30, 
79.9 	2013, in the manner provided under clause (2), item (ii), and in section 297A.75. This 
79.10 	exemption includes enterprise information technology equipment and computer software 
79.11 	purchased to replace or upgrade enterprise information technology equipment and computer 
79.12 	software in a qualified data center, or a qualified refurbished data center.
79.13 	(b) Electricity used or consumed in the operation of a qualified data center or qualified 
79.14 	refurbished data center is exempt.
79.15 	(c) For purposes of this subdivision, "qualified data center" means a facility in Minnesota:
79.16 	(1) that is comprised of one or more buildings that consist in the aggregate of at least 
79.17 	25,000 square feet, and that are located on a single parcel or on contiguous parcels, where 
79.18 	the total cost of construction or refurbishment, investment in enterprise information 
79.19 	technology equipment, and computer software is at least $30,000,000 within a 48-month 
79.20 	period. The 48-month period begins no sooner than July 1, 2012, except that costs for 
79.21 	computer software maintenance agreements purchased before July 1, 2013, are not included 
79.22 	in determining if the $30,000,000 threshold has been met;
79.23 	(2) that is constructed or substantially refurbished after June 30, 2012, where 
79.24 	"substantially refurbished" means that at least 25,000 square feet have been rebuilt or 
79.25 	modified, including:
79.26 	(i) installation of enterprise information technology equipment; environmental control, 
79.27 	computer software, and energy efficiency improvements; and
79.28 	(ii) building improvements; and
79.29 	(3) that is used to house enterprise information technology equipment, where the facility 
79.30 	has the following characteristics:
79.31 	(i) uninterruptible power supplies, generator backup power, or both;
79.32 	(ii) sophisticated fire suppression and prevention systems; and
80.1 	(iii) enhanced security. A facility will be considered to have enhanced security if it has 
80.2 	restricted access to the facility to selected personnel; permanent security guards; video 
80.3 	camera surveillance; an electronic system requiring pass codes, keycards, or biometric scans, 
80.4 	such as hand scans and retinal or fingerprint recognition; or similar security features.
80.5 	In determining whether the facility has the required square footage, the square footage 
80.6 	of the following spaces shall be included if the spaces support the operation of enterprise 
80.7 	information technology equipment: office space, meeting space, and mechanical and other 
80.8 	support facilities. For purposes of meeting investment and square footage criteria in this 
80.9 	subdivision paragraph, "computer software" includes, but is not limited to, software utilized 
80.10 	or loaded at a qualified data center or qualified refurbished data center, including 
80.11 	maintenance, licensing, means both software that is exempt under paragraph (a), clause (2),
80.12 	and software customization.
80.13 	(d) For purposes of this subdivision, a "qualified refurbished data center" means an 
80.14 	existing facility that qualifies as a data center under paragraph (c), clauses (2) and (3), but 
80.15 	that is comprised of one or more buildings that consist in the aggregate of at least 25,000 
80.16 	square feet, and that are located on a single parcel or contiguous parcels, where the total 
80.17 	cost of construction or refurbishment, investment in enterprise information technology 
80.18 	equipment, and computer software is at least $50,000,000 within a 24-month period.
80.19 	(e) For purposes of this subdivision, "enterprise information technology equipment" 
80.20 	means computers and equipment supporting computing, networking, or data storage, 
80.21 	including servers and routers. It includes, but is not limited to: cooling systems, cooling 
80.22 	towers, and other temperature control infrastructure; power infrastructure for transformation, 
80.23 	distribution, or management of electricity used for the maintenance and operation of a 
80.24 	qualified data center or qualified refurbished data center, including but not limited to exterior 
80.25 	dedicated business-owned substations, backup power generation systems, battery systems, 
80.26 	and related infrastructure; and racking systems, cabling, and trays, which are necessary for 
80.27 	the maintenance and operation of the qualified data center or qualified refurbished data 
80.28 	center.
80.29 	(f) A qualified data center or qualified refurbished data center may claim the following:
80.30 	(1) the exemptions in this subdivision provided under paragraphs (a), clause (1), and 
80.31 	(b), for purchases made either within 20 years of the date of its first purchase qualifying for 
80.32 	the exemption exemptions under paragraph (a), or by June 30, 2042, whichever is earlier.;
80.33 	(2) where the first purchase qualifying for the exemptions under paragraph (a) was made 
80.34 	between July 1, 2012, and June 30, 2014, the exemption provided under paragraph (a), 
81.1 	clause (2), item (i), for those purchases of software made within a period starting on the 
81.2 	date of the first purchase qualifying for the exemption under paragraph (a) and ending with 
81.3 	the last purchase made prior to July 1, 2019;
81.4 	(3) where the first purchase qualifying for the exemptions under paragraph (a) was made 
81.5 	after June 30, 2019, the exemption provided under paragraph (a), clause (2), item (ii), for 
81.6 	purchases of software made within five years of the date of its first purchase qualifying for 
81.7 	the exemption under paragraph (a), or by June 30, 2042, whichever is earlier;
81.8 	(4) where the first purchase qualifying for the exemptions under paragraph (a) was made 
81.9 	between July 1, 2014, and June 30, 2019, the exemption provided under paragraph (a), 
81.10 	clause (2), item (i), for purchases of software made prior to July 1, 2019, and the exemption 
81.11 	provided under paragraph (a), clause (2), item (ii), for purchases of software made after 
81.12 	June 30, 2019, for purchases made within five years of the first purchase qualifying for the 
81.13 	exemptions under paragraph (a); and
81.14 	(5) notwithstanding clauses (2) to (4), and paragraph (a), clause (2), a qualified data 
81.15 	center or qualified refurbished data center may claim the exemption for purchases of software 
81.16 	under paragraph (a), clause (2), during only one exemption period, as described in either 
81.17 	clause (2), (3), or (4), per data center location. If the commissioner of employment and 
81.18 	economic development subsequently certifies the data center as newly meeting the 
81.19 	requirements under paragraph (c) or (d) at the same data center location, a data center that 
81.20 	previously qualified for the exemption on purchases of software under paragraph (a), clause 
81.21 	(2), as either a qualified data center or a qualified refurbished data center for the relevant 
81.22 	period described in clause (2), (3), or (4), is not eligible for the exemption on purchases of 
81.23 	software under the subsequent certification.
81.24 	(g) The purpose of this exemption is to create jobs in the construction and data center 
81.25 	industries.
81.26 	(h) This subdivision is effective for sales and purchases made before July 1, 2042, as 
81.27 	limited by paragraph (f).
81.28 	(i) The commissioner of employment and economic development must certify to the 
81.29 	commissioner of revenue, in a format approved by the commissioner of revenue, when a 
81.30 	qualified data center has met the requirements under paragraph (c) or a qualified refurbished 
81.31 	data center has met the requirements under paragraph (d). The certification must provide 
81.32 	the following information regarding each qualified data center or qualified refurbished data 
81.33 	center:
81.34 	(1) the total square footage amount;
82.1 	(2) the total amount of construction or refurbishment costs and the total amount of 
82.2 	qualifying investments in enterprise information technology equipment and computer 
82.3 	software; and
82.4 	(3) the beginning and ending of the applicable period under either paragraph (c) or (d) 
82.5 	in which the qualifying expenditures and purchases under clause (2) were made, but in no 
82.6 	case shall the period begin before July 1, 2012;
82.7 	(j) Any refund for sales tax paid on qualifying purchases under this subdivision must 
82.8 	not be issued unless the commissioner of revenue has received the certification required 
82.9 	under paragraph (i) either from the commissioner of employment and economic development 
82.10 	or the qualified data center or qualified refurbished data center claiming the refund; and
82.11 	(k) The commissioner of employment and economic development must annually notify 
82.12 	the commissioner of revenue of the qualified data centers that are projected to meet the 
82.13 	requirements under paragraph (c) and the qualified refurbished data centers that are projected 
82.14 	to meet the requirements under paragraph (d) in each of the next four years. The notification 
82.15 	must provide the information required under paragraph (i), clauses (1) to (3), for each 
82.16 	qualified data center or qualified refurbished data center.

82.17 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
82.18 	30, 2019; except that paragraph (a), clause (2), item (i), and those portions of paragraph (f) 
82.19 	relating to the exemption provided under paragraph (a), clause (2), item (i), are effective 
82.20 	retroactively to the first purchase qualifying for the exemptions under paragraph (a) made 
82.21 	after June 30, 2012, for sales and purchases of software made prior to July 1, 2019.

82.22 	Sec. 5. Minnesota Statutes 2018, section 297A.71, is amended by adding a subdivision to 
82.23 	read:
82.24 		Subd. 51.Construction materials purchased by contractors; exemption for certain 
82.25 	entities. (a) Building, construction, or reconstruction materials, supplies, and equipment 
82.26 	purchased by a contractor, subcontractor, or builder and used or consumed in or incorporated 
82.27 	into buildings or facilities used principally by the following entities are exempt:
82.28 	(1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c);
82.29 	(2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d);
82.30 	(3) hospitals and nursing homes owned and operated by political subdivisions of the 
82.31 	state, as described under section 297A.70, subdivision 2, paragraph (a), clause (3);
83.1 	(4) county law libraries under chapter 134A and public libraries, regional public library 
83.2 	systems, and multicounty, multitype library systems, as defined in section 134.001;
83.3 	(5) nonprofit groups, as defined under section 297A.70, subdivision 4;
83.4 	(6) hospitals, outpatient surgical centers, and critical access dental providers, as defined 
83.5 	under section 297A.70, subdivision 7; and
83.6 	(7) nursing homes and boarding care homes, as defined under section 297A.70, 
83.7 	subdivision 18.
83.8 	(b) Materials and supplies used or consumed in, and equipment incorporated into, the 
83.9 	construction, reconstruction, repair, maintenance, or improvement of public infrastructure 
83.10 	of any kind including but not limited to roads, bridges, culverts, drinking water facilities, 
83.11 	and wastewater facilities, purchased by a contractor, subcontractor, or builder as part of a 
83.12 	contract with the following entities are exempt:
83.13 	(1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c); or
83.14 	(2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d).
83.15 	(c) The tax on purchases exempt under this subdivision must be imposed and collected 
83.16 	as if the rate under section 297A.62, subdivision 1, applied, and then refunded in the manner 
83.17 	provided in section 297A.75.

83.18 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
83.19 	30, 2019.

83.20 	Sec. 6. Minnesota Statutes 2018, section 297A.75, subdivision 1, is amended to read:
83.21 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the following 
83.22 	exempt items must be imposed and collected as if the sale were taxable and the rate under 
83.23 	section 297A.62, subdivision 1, applied. The exempt items include:
83.24 	(1) building materials for an agricultural processing facility exempt under section 
83.25 	297A.71, subdivision 13;
83.26 	(2) building materials for mineral production facilities exempt under section 297A.71, 
83.27 	subdivision 14;
83.28 	(3) building materials for correctional facilities under section 297A.71, subdivision 3;
83.29 	(4) building materials used in a residence for disabled veterans exempt under section 
83.30 	297A.71, subdivision 11;
83.31 	(5) elevators and building materials exempt under section 297A.71, subdivision 12;
84.1 	(6) materials and supplies for qualified low-income housing under section 297A.71, 
84.2 	subdivision 23;
84.3 	(7) materials, supplies, and equipment for municipal electric utility facilities under 
84.4 	section 297A.71, subdivision 35;
84.5 	(8) equipment and materials used for the generation, transmission, and distribution of 
84.6 	electrical energy and an aerial camera package exempt under section 297A.68, subdivision 
84.7 	37;
84.8 	(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph 
84.9 	(a), clause (10);
84.10 	(10) materials, supplies, and equipment for construction or improvement of projects and 
84.11 	facilities under section 297A.71, subdivision 40;
84.12 	(11) materials, supplies, and equipment for construction, improvement, or expansion 
84.13 	of:
84.14 	(i) an aerospace defense manufacturing facility exempt under Minnesota Statutes 2014, 
84.15 	section 297A.71, subdivision 42;
84.16 	(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 
84.17 	45;
84.18 	(iii) a research and development facility exempt under Minnesota Statutes 2014, section 
84.19 	297A.71, subdivision 46; and
84.20 	(iv) an industrial measurement manufacturing and controls facility exempt under 
84.21 	Minnesota Statutes 2014, section 297A.71, subdivision 47;
84.22 	(12) enterprise information technology equipment and computer software for use in a 
84.23 	qualified data center exempt under section 297A.68, subdivision 42;
84.24 	(13) materials, supplies, and equipment for qualifying capital projects under section 
84.25 	297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);
84.26 	(14) items purchased for use in providing critical access dental services exempt under 
84.27 	section 297A.70, subdivision 7, paragraph (c);
84.28 	(15) items and services purchased under a business subsidy agreement for use or 
84.29 	consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 
84.30 	44;
85.1 	(16) building materials, equipment, and supplies for constructing or replacing real 
85.2 	property exempt under section 297A.71, subdivision 49; and
85.3 	(17) building materials, equipment, and supplies for constructing or replacing real 
85.4 	property exempt under section 297A.71, subdivision 50, paragraph (b).; and
85.5 	(18) building construction or reconstruction materials, supplies, and equipment exempt 
85.6 	under section 297A.71, subdivision 51.

85.7 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
85.8 	30, 2019.

85.9 	Sec. 7. Minnesota Statutes 2018, section 297A.75, subdivision 2, is amended to read:
85.10 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
85.11 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items, 
85.12 	except as otherwise provided in this chapter, must be paid to the applicant. Only the following 
85.13 	persons may apply for the refund:
85.14 	(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;
85.15 	(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;
85.16 	(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits 
85.17 	provided in United States Code, title 38, chapter 21;
85.18 	(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead 
85.19 	property;
85.20 	(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;
85.21 	(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a 
85.22 	joint venture of municipal electric utilities;
85.23 	(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying 
85.24 	business;
85.25 	(8) for subdivision 1, clauses (9), (10), and (13), the applicant must be the governmental 
85.26 	entity that owns or contracts for the project or facility;
85.27 	(9) for subdivision 1, clause (16), the applicant must be the owner or developer of the 
85.28 	building or project; and
85.29 	(10) for subdivision 1, clause (17), the applicant must be the owner or developer of the 
85.30 	building or project.; and
86.1 	(11) for subdivision 1, clause (18), the applicant must be the entity:
86.2 	(i) listed in section 297A.71, subdivision 51, paragraph (a), that principally uses the 
86.3 	building or facility; or
86.4 	(ii) listed in section 297A.71, subdivision 51, paragraph (b), that contracts with a 
86.5 	contractor, subcontractor, or builder for the public infrastructure project.

86.6 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
86.7 	30, 2019.

86.8 	Sec. 8. Minnesota Statutes 2018, section 297A.75, subdivision 3, is amended to read:
86.9 		Subd. 3.Application. (a) The application must include sufficient information to permit 
86.10 	the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor, 
86.11 	or builder, under subdivision 1, clauses (3) to (13) or (15) to (17) (18), the contractor, 
86.12 	subcontractor, or builder must furnish to the refund applicant a statement including the cost 
86.13 	of the exempt items and the taxes paid on the items unless otherwise specifically provided 
86.14 	by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under 
86.15 	this section.
86.16 	(b) An applicant may not file more than two applications per calendar year for refunds 
86.17 	for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

86.18 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
86.19 	30, 2019.

86.20 	Sec. 9. Minnesota Statutes 2018, section 297A.83, subdivision 1, is amended to read:
86.21 		Subdivision 1.Persons applying. (a) A retailerperson required to collect and remit 
86.22 	sales taxes under section 297A.66 shall file with the commissioner an application for a 
86.23 	permit.
86.24 	(b) A retailer making retail sales from outside this state to a destination within this state 
86.25 	who is not required to obtain a permit under paragraph (a) may nevertheless voluntarily file 
86.26 	an application for a permit.
86.27 	(c) The commissioner may require any person or class of persons obligated to file a use 
86.28 	tax return under section 289A.11, subdivision 3, to file an application for a permit.

86.29 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
86.30 	30, 2019.

87.1 	ARTICLE 4
87.2 	PROPERTY TAXES

87.3 	Section 1. Minnesota Statutes 2018, section 272.115, subdivision 1, is amended to read:
87.4 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 6, or 7, 
87.5 	whenever any real estate is sold for a consideration in excess of $1,000 $3,000, whether by 
87.6 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
87.7 	grantee or the legal agent of either shall file a certificate of value with the county auditor 
87.8 	in the county in which the property is located when the deed or other document is presented 
87.9 	for recording. Contract for deeds are subject to recording under section 507.235, subdivision 
87.10 	1. Value shall, in the case of any deed not a gift, be the amount of the full actual consideration 
87.11 	thereof, paid or to be paid, including the amount of any lien or liens assumed. The items 
87.12 	and value of personal property transferred with the real property must be listed and deducted 
87.13 	from the sale price. The certificate of value shall include the classification to which the 
87.14 	property belongs for the purpose of determining the fair market value of the property, and 
87.15 	shall include any proposed change in use of the property known to the person filing the 
87.16 	certificate that could change the classification of the property. The certificate shall include 
87.17 	financing terms and conditions of the sale which are necessary to determine the actual, 
87.18 	present value of the sale price for purposes of the sales ratio study. If the property is being 
87.19 	acquired as part of a like-kind exchange under section 1031 of the Internal Revenue Code 
87.20 	of 1986, as amended through December 31, 2006, that must be indicated on the certificate. 
87.21 	The commissioner of revenue shall promulgate administrative rules specifying the financing 
87.22 	terms and conditions which must be included on the certificate. The certificate of value 
87.23 	must include the Social Security number or the federal employer identification number of 
87.24 	the grantors and grantees. However, a married person who is not an owner of record and 
87.25 	who is signing a conveyance instrument along with the person's spouse solely to release 
87.26 	and convey their marital interest, if any, in the real property being conveyed is not a grantor 
87.27 	for the purpose of the preceding sentence. A statement in the deed that is substantially in 
87.28 	the following form is sufficient to allow the county auditor to accept a certificate for filing 
87.29 	without the Social Security number of the named spouse: "(Name) claims no ownership 
87.30 	interest in the real property being conveyed and is executing this instrument solely to release 
87.31 	and convey a marital interest, if any, in that real property." The identification numbers of 
87.32 	the grantors and grantees are private data on individuals or nonpublic data as defined in 
87.33 	section 13.02, subdivisions 9 and 12, but, notwithstanding that section, the private or 
87.34 	nonpublic data may be disclosed to the commissioner of revenue for purposes of tax 
87.35 	administration. The information required to be shown on the certificate of value is limited 
88.1 	to the information required as of the date of the acknowledgment on the deed or other 
88.2 	document to be recorded.

88.3 	EFFECTIVE DATE. This section is effective for certificates of value filed after 
88.4 	December 31, 2019.

88.5 	Sec. 2. Minnesota Statutes 2018, section 273.124, subdivision 13, is amended to read:
88.6 		Subd. 13.Homestead application. (a) A person who meets the homestead requirements 
88.7 	under subdivision 1 must file a homestead application with the county assessor to initially 
88.8 	obtain homestead classification.
88.9 	(b) The commissioner shall prescribe the content, format, and manner of the homestead 
88.10 	application required to be filed under this chapter pursuant to section 270C.30. The 
88.11 	application must clearly inform the taxpayer that this application must be signed by all 
88.12 	owners who occupy the property or by the qualifying relative and returned to the county 
88.13 	assessor in order for the property to receive homestead treatment.
88.14 	(c) Every property owner applying for homestead classification must furnish to the 
88.15 	county assessor the Social Security number or individual tax identification number of each 
88.16 	occupant who is listed as an owner of the property on the deed of record, the name and 
88.17 	address of each owner who does not occupy the property, and the name and Social Security 
88.18 	number or individual tax identification number of each owner's spouse. The application 
88.19 	must be signed by each owner who occupies the property and by each owner's spouse who 
88.20 	occupies the property, or, in the case of property that qualifies as a homestead under 
88.21 	subdivision 1, paragraph (c), by the qualifying relative.
88.22 	If a property owner occupies a homestead, the property owner's spouse may not claim 
88.23 	another property as a homestead unless the property owner and the property owner's spouse 
88.24 	file with the assessor an affidavit or other proof required by the assessor stating that the 
88.25 	property qualifies as a homestead under subdivision 1, paragraph (e).
88.26 	Owners or spouses occupying residences owned by their spouses and previously occupied 
88.27 	with the other spouse, either of whom fail to include the other spouse's name and Social 
88.28 	Security number or individual tax identification number on the homestead application or 
88.29 	provide the affidavits or other proof requested, will be deemed to have elected to receive 
88.30 	only partial homestead treatment of their residence. The remainder of the residence will be 
88.31 	classified as nonhomestead residential. When an owner or spouse's name and Social Security 
88.32 	number or individual tax identification number appear on homestead applications for two 
89.1 	separate residences and only one application is signed, the owner or spouse will be deemed 
89.2 	to have elected to homestead the residence for which the application was signed.
89.3 	(d) If residential real estate is occupied and used for purposes of a homestead by a relative 
89.4 	of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in order for 
89.5 	the property to receive homestead status, a homestead application must be filed with the 
89.6 	assessor. The Social Security number or individual tax identification number of each relative 
89.7 	occupying the property and the name and Social Security number or individual tax 
89.8 	identification number of the spouse of a relative occupying the property shall be required 
89.9 	on the homestead application filed under this subdivision. If a different relative of the owner 
89.10 	subsequently occupies the property, the owner of the property must notify the assessor 
89.11 	within 30 days of the change in occupancy. The Social Security number or individual tax 
89.12 	identification number of a relative occupying the property or the spouse of a relative 
89.13 	occupying the property is private data on individuals as defined by section 13.02, subdivision 
89.14 	12, but may be disclosed to the commissioner of revenue, or, for the purposes of proceeding 
89.15 	under the Revenue Recapture Act to recover personal property taxes owing, to the county 
89.16 	treasurer.
89.17 	(e) The homestead application shall also notify the property owners that if the property 
89.18 	is granted homestead status for any assessment year, that same property shall remain 
89.19 	classified as homestead until the property is sold or transferred to another person, or the 
89.20 	owners, the spouse of the owner, or the relatives no longer use the property as their 
89.21 	homestead. Upon the sale or transfer of the homestead property, a certificate of value must 
89.22 	be timely filed with the county auditor as provided under section 272.115. Failure to notify 
89.23 	the assessor within 30 days that the property has been sold, transferred, or that the owner, 
89.24 	the spouse of the owner, or the relative is no longer occupying the property as a homestead, 
89.25 	shall result in the penalty provided under this subdivision and the property will lose its 
89.26 	current homestead status.
89.27 	(f) If a homestead application has not been filed with the county by December 15, the 
89.28 	assessor shall classify the property as nonhomestead for the current assessment year for 
89.29 	taxes payable in the following year, provided that the owner may be entitled to receive the 
89.30 	homestead classification by proper application under section 375.192.

89.31 	EFFECTIVE DATE. This section is effective for applications for homestead filed in 
89.32 	2019 and thereafter.

90.1 	Sec. 3. Minnesota Statutes 2018, section 273.124, subdivision 13c, is amended to read:
90.2 		Subd. 13c.Property lists.  In addition to lists of homestead properties, the commissioner 
90.3 	may ask the counties to furnish lists of all properties and the record owners. The Social 
90.4 	Security numbers, individual tax identification numbers, and federal identification numbers 
90.5 	that are maintained by a county or city assessor for property tax administration purposes, 
90.6 	and that may appear on the lists retain their classification as private or nonpublic data; but 
90.7 	may be viewed, accessed, and used by the county auditor or treasurer of the same county 
90.8 	for the limited purpose of assisting the commissioner in the preparation of microdata samples 
90.9 	under section 270C.12. The commissioner shall use the information provided on the lists 
90.10 	as appropriate under the law, including for the detection of improper claims by owners, or 
90.11 	relatives of owners, under chapter 290A.

90.12 	EFFECTIVE DATE. This section is effective for homestead data provided to the 
90.13 	commissioner of revenue in 2020 and thereafter.

90.14 	Sec. 4. Minnesota Statutes 2018, section 273.124, subdivision 13d, is amended to read:
90.15 		Subd. 13d.Homestead data.  On or before April 30 each year beginning in 2007, each 
90.16 	county must provide the commissioner with the following data for each parcel of homestead 
90.17 	property by electronic means as defined in section 289A.02, subdivision 8:
90.18 	(1) the property identification number assigned to the parcel for purposes of taxes payable 
90.19 	in the current year;
90.20 	(2) the name and Social Security number or individual tax identification number of each 
90.21 	occupant of homestead property who is the property owner or qualifying relative of a property 
90.22 	owner, and the spouse of the property owner who occupies homestead property or spouse 
90.23 	of a qualifying relative of a property owner who occupies homestead property;
90.24 	(3) the classification of the property under section 273.13 for taxes payable in the current 
90.25 	year and in the prior year;
90.26 	(4) an indication of whether the property was classified as a homestead for taxes payable 
90.27 	in the current year because of occupancy by a relative of the owner or by a spouse of a 
90.28 	relative;
90.29 	(5) the property taxes payable as defined in section 290A.03, subdivision 13, for the 
90.30 	current year and the prior year;
90.31 	(6) the market value of improvements to the property first assessed for tax purposes for 
90.32 	taxes payable in the current year;
91.1 	(7) the assessor's estimated market value assigned to the property for taxes payable in 
91.2 	the current year and the prior year;
91.3 	(8) the taxable market value assigned to the property for taxes payable in the current 
91.4 	year and the prior year;
91.5 	(9) whether there are delinquent property taxes owing on the homestead;
91.6 	(10) the unique taxing district in which the property is located; and
91.7 	(11) such other information as the commissioner decides is necessary.
91.8 	The commissioner shall use the information provided on the lists as appropriate under 
91.9 	the law, including for the detection of improper claims by owners, or relatives of owners, 
91.10 	under chapter 290A.

91.11 	EFFECTIVE DATE. This section is effective for homestead data provided to the 
91.12 	commissioner of revenue in 2020 and thereafter.

91.13 	Sec. 5. Minnesota Statutes 2018, section 273.124, subdivision 14, is amended to read:
91.14 		Subd. 14.Agricultural homesteads; special provisions.  (a) Real estate of less than ten 
91.15 	acres that is the homestead of its owner must be classified as class 2a under section 273.13, 
91.16 	subdivision 23, paragraph (a), if:
91.17 	(1) the parcel on which the house is located is contiguous on at least two sides to (i) 
91.18 	agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 
91.19 	Service, or (iii) land administered by the Department of Natural Resources on which in lieu 
91.20 	taxes are paid under sections 477A.11 to 477A.14;
91.21 	(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 20 
91.22 	acres;
91.23 	(3) the noncontiguous land is located not farther than four townships or cities, or a 
91.24 	combination of townships or cities from the homestead; and
91.25 	(4) the agricultural use value of the noncontiguous land and farm buildings is equal to 
91.26 	at least 50 percent of the market value of the house, garage, and one acre of land.
91.27 	Homesteads initially classified as class 2a under the provisions of this paragraph shall 
91.28 	remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 
91.29 	properties, as long as the homestead remains under the same ownership, the owner owns a 
91.30 	noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 
92.1 	value qualifies under clause (4). Homestead classification under this paragraph is limited 
92.2 	to property that qualified under this paragraph for the 1998 assessment.
92.3 	(b)(i) Agricultural property shall be classified as the owner's homestead, to the same 
92.4 	extent as other agricultural homestead property, if all of the following criteria are met:
92.5 	(1) the agricultural property consists of at least 40 acres including undivided government 
92.6 	lots and correctional 40's;
92.7 	(2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the owner 
92.8 	or of the owner's spouse, is actively farming the agricultural property, either on the person's 
92.9 	own behalf as an individual or on behalf of a partnership operating a family farm, family 
92.10 	farm corporation, joint family farm venture, or limited liability company of which the person 
92.11 	is a partner, shareholder, or member;
92.12 	(3) both the owner of the agricultural property and the person who is actively farming 
92.13 	the agricultural property under clause (2), are Minnesota residents;
92.14 	(4) neither the owner nor the spouse of the owner claims another agricultural homestead 
92.15 	in Minnesota; and
92.16 	(5) neither the owner nor the person actively farming the agricultural property lives 
92.17 	farther than four townships or cities, or a combination of four townships or cities, from the 
92.18 	agricultural property, except that if the owner or the owner's spouse is required to live in 
92.19 	employer-provided housing, the owner or owner's spouse, whichever is actively farming 
92.20 	the agricultural property, may live more than four townships or cities, or combination of 
92.21 	four townships or cities from the agricultural property.
92.22 	The relationship under this paragraph may be either by blood or marriage.
92.23 	(ii) Agricultural property held by a trustee under a trust is eligible for agricultural 
92.24 	homestead classification under this paragraph if the qualifications in clause (i) are met, 
92.25 	except that "owner" means the grantor of the trust.
92.26 	(iii) Property containing the residence of an owner who owns qualified property under 
92.27 	clause (i) shall be classified as part of the owner's agricultural homestead, if that property 
92.28 	is also used for noncommercial storage or drying of agricultural crops.
92.29 	(iv) As used in this paragraph, "agricultural property" means class 2a property and any 
92.30 	class 2b property that is contiguous to and under the same ownership as the class 2a property.
92.31 	(c) Noncontiguous land shall be included as part of a homestead under section 273.13, 
92.32 	subdivision 23, paragraph (a), only if the homestead is classified as class 2a and the detached 
93.1 	land is located in the same township or city, or not farther than four townships or cities or 
93.2 	combination thereof from the homestead. Any taxpayer of these noncontiguous lands must 
93.3 	notify the county assessor that the noncontiguous land is part of the taxpayer's homestead, 
93.4 	and, if the homestead is located in another county, the taxpayer must also notify the assessor 
93.5 	of the other county.
93.6 	(d) Agricultural land used for purposes of a homestead and actively farmed by a person 
93.7 	holding a vested remainder interest in it must be classified as a homestead under section 
93.8 	273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, any other 
93.9 	dwellings on the land used for purposes of a homestead by persons holding vested remainder 
93.10 	interests who are actively engaged in farming the property, and up to one acre of the land 
93.11 	surrounding each homestead and reasonably necessary for the use of the dwelling as a home, 
93.12 	must also be assessed class 2a.
93.13 	(e) Agricultural land and buildings that were class 2a homestead property under section 
93.14 	273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain classified as 
93.15 	agricultural homesteads for subsequent assessments if:
93.16 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
93.17 	homestead as a result of the April 1997 floods;
93.18 	(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, or 
93.19 	Wilkin;
93.20 	(3) the agricultural land and buildings remain under the same ownership for the current 
93.21 	assessment year as existed for the 1997 assessment year and continue to be used for 
93.22 	agricultural purposes;
93.23 	(4) the dwelling occupied by the owner is located in Minnesota and is within 30 miles 
93.24 	of one of the parcels of agricultural land that is owned by the taxpayer; and
93.25 	(5) the owner notifies the county assessor that the relocation was due to the 1997 floods, 
93.26 	and the owner furnishes the assessor any information deemed necessary by the assessor in 
93.27 	verifying the change in dwelling. Further notifications to the assessor are not required if the 
93.28 	property continues to meet all the requirements in this paragraph and any dwellings on the 
93.29 	agricultural land remain uninhabited.
93.30 	(f) Agricultural land and buildings that were class 2a homestead property under section 
93.31 	273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain classified 
93.32 	agricultural homesteads for subsequent assessments if:
94.1 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
94.2 	homestead as a result of damage caused by a March 29, 1998, tornado;
94.3 	(2) the property is located in the county of Blue Earth, Brown, Cottonwood, LeSueur, 
94.4 	Nicollet, Nobles, or Rice;
94.5 	(3) the agricultural land and buildings remain under the same ownership for the current 
94.6 	assessment year as existed for the 1998 assessment year;
94.7 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles of 
94.8 	one of the parcels of agricultural land that is owned by the taxpayer; and
94.9 	(5) the owner notifies the county assessor that the relocation was due to a March 29, 
94.10 	1998, tornado, and the owner furnishes the assessor any information deemed necessary by 
94.11 	the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 
94.12 	owner must notify the assessor by December 1, 1998. Further notifications to the assessor 
94.13 	are not required if the property continues to meet all the requirements in this paragraph and 
94.14 	any dwellings on the agricultural land remain uninhabited.
94.15 	(g) Agricultural property of a family farm corporation, joint family farm venture, family 
94.16 	farm limited liability company, or partnership operating a family farm as described under 
94.17 	subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead 
94.18 	property, if all of the following criteria are met:
94.19 	(1) the property consists of at least 40 acres including undivided government lots and 
94.20 	correctional 40's;
94.21 	(2) a shareholder, member, or partner of that entity is actively farming the agricultural 
94.22 	property;
94.23 	(3) that shareholder, member, or partner who is actively farming the agricultural property 
94.24 	is a Minnesota resident;
94.25 	(4) neither that shareholder, member, or partner, nor the spouse of that shareholder, 
94.26 	member, or partner claims another agricultural homestead in Minnesota; and
94.27 	(5) that shareholder, member, or partner does not live farther than four townships or 
94.28 	cities, or a combination of four townships or cities, from the agricultural property.
94.29 	Homestead treatment applies under this paragraph for property leased to a family farm 
94.30 	corporation, joint farm venture, limited liability company, or partnership operating a family 
94.31 	farm if legal title to the property is in the name of an individual who is a member, shareholder, 
94.32 	or partner in the entity.
95.1 	(h) To be eligible for the special agricultural homestead under this subdivision, an initial 
95.2 	full application must be submitted to the county assessor where the property is located. 
95.3 	Owners and the persons who are actively farming the property shall be required to complete 
95.4 	only a one-page abbreviated version of the application in each subsequent year provided 
95.5 	that none of the following items have changed since the initial application:
95.6 	(1) the day-to-day operation, administration, and financial risks remain the same;
95.7 	(2) the owners and the persons actively farming the property continue to live within the 
95.8 	four townships or city criteria and are Minnesota residents;
95.9 	(3) the same operator of the agricultural property is listed with the Farm Service Agency;
95.10 	(4) a Schedule F or equivalent income tax form was filed for the most recent year;
95.11 	(5) the property's acreage is unchanged; and
95.12 	(6) none of the property's acres have been enrolled in a federal or state farm program 
95.13 	since the initial application.
95.14 	The owners and any persons who are actively farming the property must include the 
95.15 	appropriate Social Security numbers or individual tax identification numbers, and sign and 
95.16 	date the application. If any of the specified information has changed since the full application 
95.17 	was filed, the owner must notify the assessor, and must complete a new application to 
95.18 	determine if the property continues to qualify for the special agricultural homestead. The 
95.19 	commissioner of revenue shall prepare a standard reapplication form for use by the assessors.
95.20 	(i) Agricultural land and buildings that were class 2a homestead property under section 
95.21 	273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain classified 
95.22 	agricultural homesteads for subsequent assessments if:
95.23 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
95.24 	homestead as a result of damage caused by the August 2007 floods;
95.25 	(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, Steele, 
95.26 	Wabasha, or Winona;
95.27 	(3) the agricultural land and buildings remain under the same ownership for the current 
95.28 	assessment year as existed for the 2007 assessment year;
95.29 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles of 
95.30 	one of the parcels of agricultural land that is owned by the taxpayer; and
95.31 	(5) the owner notifies the county assessor that the relocation was due to the August 2007 
95.32 	floods, and the owner furnishes the assessor any information deemed necessary by the 
96.1 	assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the 
96.2 	owner must notify the assessor by December 1, 2008. Further notifications to the assessor 
96.3 	are not required if the property continues to meet all the requirements in this paragraph and 
96.4 	any dwellings on the agricultural land remain uninhabited.
96.5 	(j) Agricultural land and buildings that were class 2a homestead property under section 
96.6 	273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain classified as 
96.7 	agricultural homesteads for subsequent assessments if:
96.8 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
96.9 	homestead as a result of the March 2009 floods;
96.10 	(2) the property is located in the county of Marshall;
96.11 	(3) the agricultural land and buildings remain under the same ownership for the current 
96.12 	assessment year as existed for the 2008 assessment year and continue to be used for 
96.13 	agricultural purposes;
96.14 	(4) the dwelling occupied by the owner is located in Minnesota and is within 50 miles 
96.15 	of one of the parcels of agricultural land that is owned by the taxpayer; and
96.16 	(5) the owner notifies the county assessor that the relocation was due to the 2009 floods, 
96.17 	and the owner furnishes the assessor any information deemed necessary by the assessor in 
96.18 	verifying the change in dwelling. Further notifications to the assessor are not required if the 
96.19 	property continues to meet all the requirements in this paragraph and any dwellings on the 
96.20 	agricultural land remain uninhabited.

96.21 	EFFECTIVE DATE. This section is effective for applications for homestead filed in 
96.22 	2019 and thereafter.

96.23 	Sec. 6. Minnesota Statutes 2018, section 273.1245, subdivision 1, is amended to read:
96.24 		Subdivision 1.Private or nonpublic data. The following data are private or nonpublic 
96.25 	data as defined in section 13.02, subdivisions 9 and 12, when they are submitted to a county 
96.26 	or local assessor under section 273.124, 273.13, or another section, to support a claim for 
96.27 	the property tax homestead classification under section 273.13, or other property tax 
96.28 	classification or benefit:
96.29 	(1) Social Security numbers;
96.30 	(2) individual tax identification numbers;
96.31 	(2) (3) copies of state or federal income tax returns; and
97.1 	(3) (4) state or federal income tax return information, including the federal income tax 
97.2 	schedule F.

97.3 	EFFECTIVE DATE. This section is effective for applications for homestead filed in 
97.4 	2019 and thereafter.

97.5 	Sec. 7. Minnesota Statutes 2018, section 273.13, subdivision 35, is amended to read:
97.6 		Subd. 35.Homestead market value exclusion. (a) Prior to determining a property's 
97.7 	net tax capacity under this section, property classified as class 1a or 1b under subdivision 
97.8 	22, and the portion of property classified as class 2a under subdivision 23 consisting of the 
97.9 	house, garage, and surrounding one acre of land, shall be eligible for a market value exclusion 
97.10 	as determined under paragraph (b).
97.11 	(b) For a homestead valued at $76,000 or less, the exclusion is 40 percent of market 
97.12 	value. For a homestead valued between $76,000 and $413,800, the exclusion is $30,400 
97.13 	minus nine percent of the valuation over $76,000. For a homestead valued at $413,800 or 
97.14 	more, there is no valuation exclusion. The valuation exclusion shall be rounded to the nearest 
97.15 	whole dollar, and may not be less than zero.
97.16 	(c) Any valuation exclusions or adjustments under section 273.11 shall be applied prior 
97.17 	to determining the amount of the valuation exclusion under this subdivision.
97.18 	(d) In the case of a property that is classified as part homestead and part nonhomestead, 
97.19 	(i) the exclusion shall apply only to the homestead portion of the property, but (ii) if a portion 
97.20 	of a property is classified as nonhomestead solely because not all the owners occupy the 
97.21 	property, not all the owners have qualifying relatives occupying the property, or solely 
97.22 	because not all the spouses of owners occupy the property, the exclusion amount shall be 
97.23 	initially computed as if that nonhomestead portion were also in the homestead class and 
97.24 	then prorated to the owner-occupant's percentage of ownership homestead. For the purpose 
97.25 	of this section, when an owner-occupant's spouse does not occupy the property, the 
97.26 	percentage of ownership homestead for the owner-occupant spouse is one-half of the couple's 
97.27 	ownership percentage.

97.28 	EFFECTIVE DATE. This section is effective for taxes payable in 2020 and thereafter.

97.29 	Sec. 8. Minnesota Statutes 2018, section 273.1315, subdivision 2, is amended to read:
97.30 		Subd. 2.Class 1b homestead declaration 2009 and thereafter. (a) Any property owner 
97.31 	seeking classification and assessment of the owner's homestead as class 1b property pursuant 
97.32 	to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file with the 
98.1 	county assessor a class 1b homestead declaration, on a form prescribed by the commissioner 
98.2 	of revenue. The declaration must contain the following information:
98.3 	(1) the information necessary to verify that, on or before June 30 of the filing year, the 
98.4 	property owner or the owner's spouse satisfies the requirements of section 273.13, subdivision 
98.5 	22, paragraph (b), for class 1b classification; and
98.6 	(2) any additional information prescribed by the commissioner.
98.7 	(b) The declaration must be filed on or before October 1 to be effective for property 
98.8 	taxes payable during the succeeding calendar year. The Social Security numbers, individual 
98.9 	tax identification numbers, and income and medical information received from the property 
98.10 	owner pursuant to this subdivision are private data on individuals as defined in section 
98.11 	13.02. If approved by the assessor, the declaration remains in effect until the property no 
98.12 	longer qualifies under section 273.13, subdivision 22, paragraph (b). Failure to notify the 
98.13 	assessor within 30 days that the property no longer qualifies under that paragraph because 
98.14 	of a sale, change in occupancy, or change in the status or condition of an occupant shall 
98.15 	result in the penalty provided in section 273.124, subdivision 13b, computed on the basis 
98.16 	of the class 1b benefits for the property, and the property shall lose its current class 1b 
98.17 	classification.

98.18 	EFFECTIVE DATE. This section is effective for applications for homestead filed in 
98.19 	2019 and thereafter.

98.20 	Sec. 9. Minnesota Statutes 2018, section 273.1384, subdivision 2, is amended to read:
98.21 		Subd. 2.Agricultural homestead market value credit. Property classified as agricultural 
98.22 	homestead under section 273.13, subdivision 23, paragraph (a), is eligible for an agricultural 
98.23 	credit. The credit is computed using the property's agricultural credit market value, defined 
98.24 	for this purpose as the property's market value excluding the market value of the house, 
98.25 	garage, and immediately surrounding one acre of land. The credit is equal to 0.3 percent of 
98.26 	the first $115,000 of the property's agricultural credit market value plus 0.1 percent of the 
98.27 	property's agricultural credit market value in excess of $115,000, subject to a maximum 
98.28 	credit of $490 for a full agricultural homestead. In the case of property that is classified as 
98.29 	part homestead and part nonhomestead solely because not all the owners occupy or farm 
98.30 	the property, not all the owners have qualifying relatives occupying or farming the property, 
98.31 	or solely because not all the spouses of owners occupy the property, the credit is computed 
98.32 	on the amount of agricultural credit market value corresponding to the percentage of 
98.33 	homestead. the percentage of homestead is equal to 100 divided by the number of owners 
99.1 	of the property, or, in the case of a trust, the number of grantors of the trust that owns the 
99.2 	property., and the maximum credit equals $490 multiplied by the percentage of homestead.

99.3 	EFFECTIVE DATE. This section is effective for taxes payable in 2020 and thereafter.

99.4 	Sec. 10. [273.1388] RIPARIAN BUFFER CREDIT.
99.5 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
99.6 	the meanings given them.
99.7 	(b) "Alternative riparian water quality practice" or "alternative practice" means a water 
99.8 	quality practice or combination of structural, vegetative, and management practices, based 
99.9 	on the Natural Resources Conservation Service Field Office Technical Guide, common 
99.10 	alternative practices adopted and published by the board, other practices approved by the 
99.11 	board, or practices based on local conditions approved by the local soil and water 
99.12 	conservation district that are consistent with the Field Office Technical Guide, that provide 
99.13 	water quality protection comparable to the buffer protection for the water body that the 
99.14 	property abuts. Included in these practices are retention ponds and alternative measures that 
99.15 	prevent overland flow to the water resource.
99.16 	(c) "Board" means the Board of Water and Soil Resources.
99.17 	(d) "Riparian buffer" or "buffer" means a buffer required under section 103F.48, 
99.18 	subdivision 3.
99.19 		Subd. 2.Eligibility requirements. Land may be eligible for the riparian buffer credit 
99.20 	if all of the following conditions are met, as determined by the county auditor:
99.21 	(1) the land is classified as 2a under section 273.13, subdivision 23;
99.22 	(2) a buffer or alternative riparian water quality practice is required to be maintained on 
99.23 	the property according to section 103F.48;
99.24 	(3) there are no delinquent property taxes on the land;
99.25 	(4) the land has not been compensated for damages under chapter 103E for purposes of 
99.26 	installing a buffer; and
99.27 	(5) the soil and water conservation district has not found the landowner noncompliant 
99.28 	with the requirements of section 103F.48.
99.29 		Subd. 3.Application. In order to initially qualify for a credit under this section, an owner 
99.30 	of agricultural land must file an application with the county auditor on or before December 
99.31 	31, 2019, on a form prescribed by the commissioner of revenue. The application must 
100.1 	specifically identify the land meeting the requirements of this section. Once an application 
100.2 	has been made for land to receive a credit under this section, no further applications for the 
100.3 	land to receive the credit are required, provided that the owner must notify the auditor if 
100.4 	there has been any change in the status of the land relative to the eligibility requirements 
100.5 	under subdivision 2 or if there is a change to the ownership of the land.
100.6 		Subd. 4.Coordination with administrative entities. (a) By February 1, 2020, the 
100.7 	county auditor must notify the local soil and water conservation district of the parcels within 
100.8 	the district's jurisdiction for which an application for the credit under this section has been 
100.9 	received. By March 1, 2020, the soil and water conservation district must verify compliance 
100.10 	with section 103F.48 on the parcels which the credit is being claimed and certify the 
100.11 	information to the county auditor.
100.12 	(b) By March 1, 2020, and March 1 of each year thereafter, the soil and water 
100.13 	conservation district must notify the county auditor of any noncompliant parcels under 
100.14 	section 103F.48, subdivision 7.
100.15 		Subd. 5.Amount of credit. Land meeting the requirements of this section is eligible 
100.16 	for a credit at the rate of $50 per acre.
100.17 		Subd. 6.Credit reimbursements. The county auditor shall determine the tax reductions 
100.18 	allowed under this section within the county for each taxes payable year and shall certify 
100.19 	that amount to the commissioner of revenue as a part of the abstracts of tax lists submitted 
100.20 	by the county auditors under section 275.29. Any prior year adjustments shall also be 
100.21 	certified on the abstracts of tax lists. The commissioner of revenue shall review the 
100.22 	certifications for accuracy, and may make such changes as are deemed necessary or return 
100.23 	the certification to the county auditor for correction. The credit under this section must be 
100.24 	used to proportionately reduce the net tax capacity-based property tax payable to each local 
100.25 	taxing jurisdiction as provided in section 273.1393.
100.26 		Subd. 7.Payment. (a) The commissioner of revenue shall reimburse each local taxing 
100.27 	jurisdiction, other than school districts, for the tax reductions granted under this section, in 
100.28 	two equal installments on October 31 and December 26 of the taxes payable year for which 
100.29 	the reductions are granted, including in each payment the prior year adjustments certified 
100.30 	on the abstracts for that taxes payable year. The reimbursements related to tax increments 
100.31 	shall be issued in one installment each year on December 26.
100.32 	(b) The commissioner of revenue shall certify the total of the tax reductions granted 
100.33 	under this section for each taxes payable year within each school district to the commissioner 
101.1 	of education, and the commissioner of education shall pay the reimbursement amounts to 
101.2 	each school district as provided in section 273.1392.
101.3 		Subd. 8.Appropriation. An amount sufficient to make the payments required by this 
101.4 	section to taxing jurisdictions other than school districts is annually appropriated from the 
101.5 	general fund to the commissioner of revenue. An amount sufficient to make the payments 
101.6 	required by this section for school districts is annually appropriated from the general fund 
101.7 	to the commissioner of education.

101.8 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

101.9 	Sec. 11. Minnesota Statutes 2018, section 273.1392, is amended to read:
101.10 	273.1392 PAYMENT; SCHOOL DISTRICTS.
101.11 	The amounts of bovine tuberculosis credit reimbursements under section 273.113; 
101.12 	conservation tax credits under section 273.119; disaster or emergency reimbursement under 
101.13 	sections 273.1231 to 273.1235; agricultural credits under sections 273.1384and,273.1387, 
101.14 	and 273.1388; aids and credits under section 273.1398; enterprise zone property credit 
101.15 	payments under section 469.171; and metropolitan agricultural preserve reduction under 
101.16 	section 473H.10 for school districts, shall be certified to the Department of Education by 
101.17 	the Department of Revenue. The amounts so certified shall be paid according to section 
101.18 	127A.45, subdivisions 9, 10, and 13.

101.19 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

101.20 	Sec. 12. Minnesota Statutes 2018, section 273.1393, is amended to read:
101.21 	273.1393 COMPUTATION OF NET PROPERTY TAXES.
101.22 	Notwithstanding any other provisions to the contrary, "net" property taxes are determined 
101.23 	by subtracting the credits in the order listed from the gross tax:
101.24 	(1) disaster credit as provided in sections 273.1231 to 273.1235;
101.25 	(2) powerline credit as provided in section 273.42;
101.26 	(3) agricultural preserves credit as provided in section 473H.10;
101.27 	(4) enterprise zone credit as provided in section 469.171;
101.28 	(5) disparity reduction credit;
101.29 	(6) conservation tax credit as provided in section 273.119;
101.30 	(7) the school bond credit as provided in section 273.1387;
102.1 	(8) riparian buffer credit under section 273.1388;
102.2 	(9) agricultural credit as provided in section 273.1384;
102.3 	(9) (10) taconite homestead credit as provided in section 273.135;
102.4 	(10) (11) supplemental homestead credit as provided in section 273.1391; and
102.5 	(11) (12) the bovine tuberculosis zone credit, as provided in section 273.113.
102.6 	The combination of all property tax credits must not exceed the gross tax amount.

102.7 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

102.8 	Sec. 13. Minnesota Statutes 2018, section 275.065, subdivision 3, is amended to read:
102.9 		Subd. 3.Notice of proposed property taxes. (a) The county auditor shall prepare and 
102.10 	the county treasurer shall deliver after November 10 and on or before November 24 each 
102.11 	year, by first class mail to each taxpayer at the address listed on the county's current year's 
102.12 	assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer, 
102.13 	the treasurer may send the notice in electronic form or by electronic mail instead of on paper 
102.14 	or by ordinary mail.
102.15 	(b) The commissioner of revenue shall prescribe the form of the notice.
102.16 	(c) The notice must inform taxpayers that it contains the amount of property taxes each 
102.17 	taxing authority proposes to collect for taxes payable the following year. In the case of a 
102.18 	town, or in the case of the state general tax, the final tax amount will be its proposed tax. 
102.19 	The notice must clearly state for each city that has a population over 500, county, school 
102.20 	district, regional library authority established under section 134.201, and metropolitan taxing 
102.21 	districts as defined in paragraph (i), the time and place of a meeting for each taxing authority 
102.22 	in which the budget and levy will be discussed and public input allowed, prior to the final 
102.23 	budget and levy determination. The taxing authorities must provide the county auditor with 
102.24 	the information to be included in the notice on or before the time it certifies its proposed 
102.25 	levy under subdivision 1. The public must be allowed to speak at that meeting, which must 
102.26 	occur after November 24 and must not be held before 6:00 p.m. It must provide a telephone 
102.27 	number for the taxing authority that taxpayers may call if they have questions related to the 
102.28 	notice and an address where comments will be received by mail, except that no notice 
102.29 	required under this section shall be interpreted as requiring the printing of a personal 
102.30 	telephone number or address as the contact information for a taxing authority. If a taxing 
102.31 	authority does not maintain public offices where telephone calls can be received by the 
103.1 	authority, the authority may inform the county of the lack of a public telephone number and 
103.2 	the county shall not list a telephone number for that taxing authority.
103.3 	(d) The notice must state for each parcel:
103.4 	(1) the market value of the property as determined under section 273.11, and used for 
103.5 	computing property taxes payable in the following year and for taxes payable in the current 
103.6 	year as each appears in the records of the county assessor on November 1 of the current 
103.7 	year; and, in the case of residential property, whether the property is classified as homestead 
103.8 	or nonhomestead. The notice must clearly inform taxpayers of the years to which the market 
103.9 	values apply and that the values are final values;
103.10 	(2) the items listed below, shown separately by county, city or town, and state general 
103.11 	tax, agricultural homestead credit under section 273.1384, school building bond agricultural 
103.12 	credit under section 273.1387, riparian buffer credit under section 273.1388, voter approved 
103.13 	school levy, other local school levy, and the sum of the special taxing districts, and as a 
103.14 	total of all taxing authorities:
103.15 	(i) the actual tax for taxes payable in the current year; and
103.16 	(ii) the proposed tax amount.
103.17 	If the county levy under clause (2) includes an amount for a lake improvement district 
103.18 	as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose 
103.19 	must be separately stated from the remaining county levy amount.
103.20 	In the case of a town or the state general tax, the final tax shall also be its proposed tax 
103.21 	unless the town changes its levy at a special town meeting under section 365.52. If a school 
103.22 	district has certified under section 126C.17, subdivision 9, that a referendum will be held 
103.23 	in the school district at the November general election, the county auditor must note next 
103.24 	to the school district's proposed amount that a referendum is pending and that, if approved 
103.25 	by the voters, the tax amount may be higher than shown on the notice. In the case of the 
103.26 	city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately 
103.27 	from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for 
103.28 	the St. Paul Library Agency must be listed separately from the remaining amount of the 
103.29 	city's levy. In the case of Ramsey County, any amount levied under section 134.07 may be 
103.30 	listed separately from the remaining amount of the county's levy. In the case of a parcel 
103.31 	where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F 
103.32 	applies, the proposed tax levy on the captured value or the proposed tax levy on the tax 
103.33 	capacity subject to the areawide tax must each be stated separately and not included in the 
103.34 	sum of the special taxing districts; and
104.1 	(3) the increase or decrease between the total taxes payable in the current year and the 
104.2 	total proposed taxes, expressed as a percentage.
104.3 	For purposes of this section, the amount of the tax on homesteads qualifying under the 
104.4 	senior citizens' property tax deferral program under chapter 290B is the total amount of 
104.5 	property tax before subtraction of the deferred property tax amount.
104.6 	(e) The notice must clearly state that the proposed or final taxes do not include the 
104.7 	following:
104.8 	(1) special assessments;
104.9 	(2) levies approved by the voters after the date the proposed taxes are certified, including 
104.10 	bond referenda and school district levy referenda;
104.11 	(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday 
104.12 	in November of the levy year as provided under section 275.73;
104.13 	(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring 
104.14 	after the date the proposed taxes are certified;
104.15 	(5) amounts necessary to pay tort judgments against the taxing authority that become 
104.16 	final after the date the proposed taxes are certified; and
104.17 	(6) the contamination tax imposed on properties which received market value reductions 
104.18 	for contamination.
104.19 	(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the 
104.20 	county treasurer to deliver the notice as required in this section does not invalidate the 
104.21 	proposed or final tax levy or the taxes payable pursuant to the tax levy.
104.22 	(g) If the notice the taxpayer receives under this section lists the property as 
104.23 	nonhomestead, and satisfactory documentation is provided to the county assessor by the 
104.24 	applicable deadline, and the property qualifies for the homestead classification in that 
104.25 	assessment year, the assessor shall reclassify the property to homestead for taxes payable 
104.26 	in the following year.
104.27 	(h) In the case of class 4 residential property used as a residence for lease or rental 
104.28 	periods of 30 days or more, the taxpayer must either:
104.29 	(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter, 
104.30 	or lessee; or
104.31 	(2) post a copy of the notice in a conspicuous place on the premises of the property.
105.1 	The notice must be mailed or posted by the taxpayer by November 27 or within three 
105.2 	days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer 
105.3 	of the address of the taxpayer, agent, caretaker, or manager of the premises to which the 
105.4 	notice must be mailed in order to fulfill the requirements of this paragraph.
105.5 	(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing 
105.6 	districts" means the following taxing districts in the seven-county metropolitan area that 
105.7 	levy a property tax for any of the specified purposes listed below:
105.8 	(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 473.446, 
105.9 	473.521, 473.547, or 473.834;
105.10 	(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; and
105.11 	(3) Metropolitan Mosquito Control Commission under section 473.711.
105.12 	For purposes of this section, any levies made by the regional rail authorities in the county 
105.13 	of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A 
105.14 	shall be included with the appropriate county's levy.
105.15 	(j) The governing body of a county, city, or school district may, with the consent of the 
105.16 	county board, include supplemental information with the statement of proposed property 
105.17 	taxes about the impact of state aid increases or decreases on property tax increases or 
105.18 	decreases and on the level of services provided in the affected jurisdiction. This supplemental 
105.19 	information may include information for the following year, the current year, and for as 
105.20 	many consecutive preceding years as deemed appropriate by the governing body of the 
105.21 	county, city, or school district. It may include only information regarding:
105.22 	(1) the impact of inflation as measured by the implicit price deflator for state and local 
105.23 	government purchases;
105.24 	(2) population growth and decline;
105.25 	(3) state or federal government action; and
105.26 	(4) other financial factors that affect the level of property taxation and local services 
105.27 	that the governing body of the county, city, or school district may deem appropriate to 
105.28 	include.
105.29 	The information may be presented using tables, written narrative, and graphic 
105.30 	representations and may contain instruction toward further sources of information or 
105.31 	opportunity for comment.

105.32 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2021.

106.1 	Sec. 14. Minnesota Statutes 2018, section 276.04, subdivision 2, is amended to read:
106.2 		Subd. 2.Contents of tax statements. (a) The treasurer shall provide for the printing of 
106.3 	the tax statements. The commissioner of revenue shall prescribe the form of the property 
106.4 	tax statement and its contents. The tax statement must not state or imply that property tax 
106.5 	credits are paid by the state of Minnesota. The statement must contain a tabulated statement 
106.6 	of the dollar amount due to each taxing authority and the amount of the state tax from the 
106.7 	parcel of real property for which a particular tax statement is prepared. The dollar amounts 
106.8 	attributable to the county, the state tax, the voter approved school tax, the other local school 
106.9 	tax, the township or municipality, and the total of the metropolitan special taxing districts 
106.10 	as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. The 
106.11 	amounts due all other special taxing districts, if any, may be aggregated except that any 
106.12 	levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin, 
106.13 	Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly 
106.14 	under the appropriate county's levy. If the county levy under this paragraph includes an 
106.15 	amount for a lake improvement district as defined under sections 103B.501 to 103B.581, 
106.16 	the amount attributable for that purpose must be separately stated from the remaining county 
106.17 	levy amount. In the case of Ramsey County, if the county levy under this paragraph includes 
106.18 	an amount for public library service under section 134.07, the amount attributable for that 
106.19 	purpose may be separated from the remaining county levy amount. The amount of the tax 
106.20 	on homesteads qualifying under the senior citizens' property tax deferral program under 
106.21 	chapter 290B is the total amount of property tax before subtraction of the deferred property 
106.22 	tax amount. The amount of the tax on contamination value imposed under sections 270.91 
106.23 	to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar 
106.24 	amount of any special assessments, may be rounded to the nearest even whole dollar. For 
106.25 	purposes of this section whole odd-numbered dollars may be adjusted to the next higher 
106.26 	even-numbered dollar. The amount of market value excluded under section 273.11, 
106.27 	subdivision 16, if any, must also be listed on the tax statement.
106.28 	(b) The property tax statements for manufactured homes and sectional structures taxed 
106.29 	as personal property shall contain the same information that is required on the tax statements 
106.30 	for real property.
106.31 	(c) Real and personal property tax statements must contain the following information 
106.32 	in the order given in this paragraph. The information must contain the current year tax 
106.33 	information in the right column with the corresponding information for the previous year 
106.34 	in a column on the left:
106.35 	(1) the property's estimated market value under section 273.11, subdivision 1;
107.1 	(2) the property's homestead market value exclusion under section 273.13, subdivision 
107.2 	35;
107.3 	(3) the property's taxable market value under section 272.03, subdivision 15;
107.4 	(4) the property's gross tax, before credits;
107.5 	(5) for agricultural properties, the credits under sections 273.1384 and, 273.1387, and 
107.6 	273.1388;
107.7 	(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; 
107.8 	273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit 
107.9 	received under section 273.135 must be separately stated and identified as "taconite tax 
107.10 	relief"; and
107.11 	(7) the net tax payable in the manner required in paragraph (a).
107.12 	(d) If the county uses envelopes for mailing property tax statements and if the county 
107.13 	agrees, a taxing district may include a notice with the property tax statement notifying 
107.14 	taxpayers when the taxing district will begin its budget deliberations for the current year, 
107.15 	and encouraging taxpayers to attend the hearings. If the county allows notices to be included 
107.16 	in the envelope containing the property tax statement, and if more than one taxing district 
107.17 	relative to a given property decides to include a notice with the tax statement, the county 
107.18 	treasurer or auditor must coordinate the process and may combine the information on a 
107.19 	single announcement.

107.20 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

107.21 	Sec. 15. Minnesota Statutes 2018, section 287.21, subdivision 1, is amended to read:
107.22 		Subdivision 1.Determination of tax. (a) A tax is imposed on each deed or instrument 
107.23 	by which any real property in this state is granted, assigned, transferred, or otherwise 
107.24 	conveyed. The tax applies against the net consideration. For purposes of the tax, the 
107.25 	conversion of a corporation to a limited liability company, a limited liability company to a 
107.26 	corporation, a partnership to a limited partnership, a limited partnership to another limited 
107.27 	partnership or other entity, or a similar conversion of one entity to another does not grant, 
107.28 	assign, transfer, or convey real property.
107.29 	(b) The tax is determined in the following manner: (1) when transfers are made by 
107.30 	instruments pursuant to (i) consolidations or mergers, or (ii) designated transfers, the tax is 
107.31 	$1.65; (2) when there is no consideration or when the consideration, exclusive of the value 
107.32 	of any lien or encumbrance remaining thereon at the time of sale, is $500 $3,000 or less, 
108.1 	the tax is $1.65; or (3) when the consideration, exclusive of the value of any lien or 
108.2 	encumbrance remaining at the time of sale, exceeds $500 $3,000, the tax is .0033 of the net 
108.3 	consideration.
108.4 	(c) If, within six months from the date of a designated transfer, an ownership interest in 
108.5 	the grantee entity is transferred by an initial owner to any person or entity with the result 
108.6 	that the designated transfer would not have been a designated transfer if made to the grantee 
108.7 	entity with its subsequent ownership, then a tax is imposed at .0033 of the net consideration 
108.8 	for the designated transfer. If the subsequent transfer of ownership interests was reasonably 
108.9 	expected at the time of the designated transfer, the applicable penalty under section 287.31, 
108.10 	subdivision 1, must be paid. The deed tax imposed under this paragraph is due within 30 
108.11 	days of the subsequent transfer that caused the tax to be imposed under this paragraph. 
108.12 	Involuntary transfers of ownership shall not be considered transfers of ownership under this 
108.13 	paragraph. The commissioner may adopt rules defining the types of transfers to be considered 
108.14 	involuntary.
108.15 	(d) The tax is due at the time a taxable deed or instrument is presented for recording, 
108.16 	except as provided in paragraph (c). The commissioner may require the tax to be documented 
108.17 	in a manner prescribed by the commissioner, and may require that the documentation be 
108.18 	attached to and recorded as part of the deed or instrument. The county recorder or registrar 
108.19 	of titles shall accept the attachment for recording as part of the deed or instrument and may 
108.20 	not require, as a condition of recording a deed or instrument, evidence that a transfer is a 
108.21 	designated transfer in addition to that required by the commissioner. Such an attachment 
108.22 	shall not, however, provide actual or constructive notice of the information contained therein 
108.23 	for purposes of determining any interest in the real property. The commissioner shall 
108.24 	prescribe the manner in which the tax due under paragraph (c) is to be paid and may require 
108.25 	grantees of designated transfers to file with the commissioner subsequent statements verifying 
108.26 	that the tax provided under paragraph (c) does not apply.

108.27 	EFFECTIVE DATE. This section is effective for deeds recorded after December 31, 
108.28 	2019.

108.29 	Sec. 16. Minnesota Statutes 2018, section 290B.03, subdivision 1, is amended to read:
108.30 		Subdivision 1.Program qualifications. The qualifications for the senior citizens' 
108.31 	property tax deferral program are as follows:
108.32 	(1) the property must be owned and occupied as a homestead by a person 65 years of 
108.33 	age or older. In the case of a married couple, at least one of the spouses must be at least 65 
108.34 	years old at the time the first property tax deferral is granted, regardless of whether the 
109.1 	property is titled in the name of one spouse or both spouses, or titled in another way that 
109.2 	permits the property to have homestead status, and the other spouse must be at least 62 years 
109.3 	of age;
109.4 	(2) the total household income of the qualifying homeowners, as defined in section 
109.5 	290A.03, subdivision 5, for the calendar year preceding the year of the initial application 
109.6 	may not exceed $60,000;
109.7 	(3) the homestead must have been owned and occupied as the homestead of at least one 
109.8 	of the qualifying homeowners for at least 15 five years prior to the year the initial application 
109.9 	is filed;
109.10 	(4) there are no state or federal tax liens or judgment liens on the homesteaded property;
109.11 	(5) there are no mortgages or other liens on the property that secure future advances, 
109.12 	except for those subject to credit limits that result in compliance with clause (6); and
109.13 	(6) the total unpaid balances of debts secured by mortgages and other liens on the 
109.14 	property, including unpaid and delinquent special assessments and interest and any delinquent 
109.15 	property taxes, penalties, and interest, but not including property taxes payable during the 
109.16 	year or debts secured by a residential PACE lien, as defined in section 216C.435, subdivision 
109.17 	10d, does not exceed 75 percent of the assessor's estimated market value for the year.

109.18 	EFFECTIVE DATE. This section is effective for applications for deferral of taxes 
109.19 	payable in 2020 and thereafter.

109.20 	Sec. 17. Minnesota Statutes 2018, section 290B.04, subdivision 1, is amended to read:
109.21 		Subdivision 1.Initial application. (a) A taxpayer meeting the program qualifications 
109.22 	under section 290B.03 may apply to the commissioner of revenue for the deferral of taxes. 
109.23 	Applications are due on or before July November 1 for deferral of any of the following 
109.24 	year's property taxes. A taxpayer may apply in the year in which the taxpayer becomes 65 
109.25 	years old, provided that no deferral of property taxes will be made until the calendar year 
109.26 	after the taxpayer becomes 65 years old. The application, which shall be prescribed by the 
109.27 	commissioner of revenue, shall include the following items and any other information which 
109.28 	the commissioner deems necessary:
109.29 	(1) the name, address, and Social Security number of the owner or owners;
109.30 	(2) a copy of the property tax statement for the current payable year for the homesteaded 
109.31 	property;
109.32 	(3) the initial year of ownership and occupancy as a homestead;
110.1 	(4) the owner's household income for the previous calendar year; and
110.2 	(5) information on any mortgage loans or other amounts secured by mortgages or other 
110.3 	liens against the property, for which purpose the commissioner may require the applicant 
110.4 	to provide a copy of the mortgage note, the mortgage, or a statement of the balance owing 
110.5 	on the mortgage loan provided by the mortgage holder. The commissioner may require the 
110.6 	appropriate documents in connection with obtaining and confirming information on unpaid 
110.7 	amounts secured by other liens.
110.8 	The application must state that program participation is voluntary. The application must 
110.9 	also state that the deferred amount depends directly on the applicant's household income, 
110.10 	and that program participation includes authorization for the annual deferred amount, the 
110.11 	cumulative deferral and interest that appear on each year's notice prepared by the county 
110.12 	under subdivision 6, is public data.
110.13 	The application must state that program participants may claim the property tax refund 
110.14 	based on the full amount of property taxes eligible for the refund, including any deferred 
110.15 	amounts. The application must also state that property tax refunds will be used to offset any 
110.16 	deferral and interest under this program, and that any other amounts subject to revenue 
110.17 	recapture under section 270A.03, subdivision 7, will also be used to offset any deferral and 
110.18 	interest under this program.
110.19 	(b) As part of the initial application process, the commissioner may require the applicant 
110.20 	to obtain at the applicant's own cost and submit:
110.21 	(1) if the property is registered property under chapter 508 or 508A, a copy of the original 
110.22 	certificate of title in the possession of the county registrar of titles (sometimes referred to 
110.23 	as "condition of register"); or
110.24 	(2) if the property is abstract property, a report prepared by a licensed abstracter showing 
110.25 	the last deed and any unsatisfied mortgages, liens, judgments, and state and federal tax lien 
110.26 	notices which were recorded on or after the date of that last deed with respect to the property 
110.27 	or to the applicant.
110.28 	The certificate or report under clauses (1) and (2) need not include references to any 
110.29 	documents filed or recorded more than 40 years prior to the date of the certification or report. 
110.30 	The certification or report must be as of a date not more than 30 days prior to submission 
110.31 	of the application.
110.32 	The commissioner may also require the county recorder or county registrar of the county 
110.33 	where the property is located to provide copies of recorded documents related to the applicant 
111.1 	or the property, for which the recorder or registrar shall not charge a fee. The commissioner 
111.2 	may use any information available to determine or verify eligibility under this section. The 
111.3 	household income from the application is private data on individuals as defined in section 
111.4 	13.02, subdivision 12.

111.5 	EFFECTIVE DATE. This section is effective for applications for deferral of taxes 
111.6 	payable in 2020 and thereafter.

111.7 	Sec. 18. ADMINISTRATIVE APPROPRIATION.
 111.8 	$2,045,000 in fiscal year 2020 is appropriated from the general fund to the Board of 
111.9 	Water and Soil Resources for payments to soil and water conservation districts and for 
111.10 	agreements with coordinating administrative entities. This appropriation is for the purposes 
111.11 	of implementing the riparian buffer credit under Minnesota Statutes, section 273.1388.

111.12 	EFFECTIVE DATE. This section is effective the day following final enactment.

111.13 	ARTICLE 5
111.14 	LOCAL GOVERNMENT AIDS

111.15 	Section 1. Minnesota Statutes 2018, section 477A.03, subdivision 2a, is amended to read:
111.16 		Subd. 2a.Cities. For aids payable in 2016 and 2017, the total aid paid under section 
111.17 	477A.013, subdivision 9, is $519,398,012. For aids payable in 2018 and thereafter 2019, 
111.18 	the total aid paid under section 477A.013, subdivision 9, is $534,398,012. For aids payable 
111.19 	in 2020 and thereafter, the total aid paid under section 477A.013, subdivision 9, is 
111.20 	$564,990,952.

111.21 	EFFECTIVE DATE. This section is effective for aids payable in 2020 and thereafter.

111.22 	Sec. 2. Minnesota Statutes 2018, section 477A.03, subdivision 2b, is amended to read:
111.23 		Subd. 2b.Counties. (a) For aids payable in 2018 through 2024 2019, the total aid payable 
111.24 	under section 477A.0124, subdivision 3, is $103,795,000, of which $3,000,000 shall be 
111.25 	allocated as required under Laws 2014, chapter 150, article 4, section 6. For aids payable 
111.26 	in 2020 through 2024, the total aid payable under section 477A.0124, subdivision 3, is 
111.27 	$118,972,778, of which $3,000,000 shall be allocated as required under Laws 2014, chapter 
111.28 	150, article 4, section 6. For aids payable in 2025 and thereafter, the total aid payable under 
111.29 	section 477A.0124, subdivision 3, is $100,795,000 $115,972,778. Each calendar year, 
111.30 	$500,000 of this appropriation shall be retained by the commissioner of revenue to make 
111.31 	reimbursements to the commissioner of management and budget for payments made under 
112.1 	section 611.27. The reimbursements shall be to defray the additional costs associated with 
112.2 	court-ordered counsel under section 611.27. Any retained amounts not used for 
112.3 	reimbursement in a year shall be included in the next distribution of county need aid that 
112.4 	is certified to the county auditors for the purpose of property tax reduction for the next taxes 
112.5 	payable year.
112.6 	(b) For aids payable in 2018 and thereafter 2019, the total aid under section 477A.0124, 
112.7 	subdivision 4, is $130,873,444. For aids payable in 2020 and thereafter, the total aid under 
112.8 	section 477A.0124, subdivision 4, is $146,051,222. The commissioner of revenue shall 
112.9 	transfer to the commissioner of management and budget $207,000 annually for the cost of 
112.10 	preparation of local impact notes as required by section 3.987, and other local government 
112.11 	activities. The commissioner of revenue shall transfer to the commissioner of education 
112.12 	$7,000 annually for the cost of preparation of local impact notes for school districts as 
112.13 	required by section 3.987. The commissioner of revenue shall deduct the amounts transferred 
112.14 	under this paragraph from the appropriation under this paragraph. The amounts transferred 
112.15 	are appropriated to the commissioner of management and budget and the commissioner of 
112.16 	education respectively.

112.17 	EFFECTIVE DATE. This section is effective for aids payable in 2020 and thereafter.

112.18 	ARTICLE 6
112.19 	REVENUE STABILITY

112.20 	Section 1. Minnesota Statutes 2018, section 275.025, subdivision 1, is amended to read:
112.21 		Subdivision 1.Levy amount. The state general levy is levied against 
112.22 	commercial-industrial property and seasonal residential recreational property, as defined 
112.23 	in this section. The state general levy base amount for commercial-industrial property is 
112.24 	$784,590,000 for taxes payable in 2018 and thereafter 2019. The state general levy base 
112.25 	amount for seasonal-recreational property is $44,190,000 for taxes payable in 2018 and 
112.26 	thereafter 2019. For taxes payable in subsequent years, the levy base amount for 
112.27 	commercial-industrial property and seasonal-recreational property is increased each year 
112.28 	by multiplying the levy base amount for the prior year by the sum of one plus the rate of 
112.29 	increase, if any, in the implicit price deflator for government consumption expenditures and 
112.30 	gross investment for state and local governments prepared by the Bureau of Economic 
112.31 	Analysts of the United States Department of Commerce for the 12-month period ending 
112.32 	March 31 of the year prior to the year the taxes are payable. The tax under this section is 
112.33 	not treated as a local tax rate under section 469.177 and is not the levy of a governmental 
112.34 	unit under chapters 276A and 473F.
113.1 	The commissioner shall increase or decrease the preliminary or final rate for a year as 
113.2 	necessary to account for errors and tax base changes that affected a preliminary or final rate 
113.3 	for either of the two preceding years. Adjustments are allowed to the extent that the necessary 
113.4 	information is available to the commissioner at the time the rates for a year must be certified, 
113.5 	and for the following reasons:
113.6 	(1) an erroneous report of taxable value by a local official;
113.7 	(2) an erroneous calculation by the commissioner; and
113.8 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
113.9 	residential recreational property reported on the abstracts of tax lists submitted under section 
113.10 	275.29 that was not reported on the abstracts of assessment submitted under section 270C.89 
113.11 	for the same year.
113.12 	The commissioner may, but need not, make adjustments if the total difference in the tax 
113.13 	levied for the year would be less than $100,000.

113.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2020 and thereafter.

113.15 	Sec. 2. Minnesota Statutes 2018, section 289A.10, subdivision 1, is amended to read:
113.16 		Subdivision 1.Return required. (a) In the case of a decedent who has an interest in 
113.17 	property with a situs in Minnesota, the personal representative must submit a Minnesota 
113.18 	estate tax return to the commissioner, on a form prescribed by the commissioner, if:
113.19 	(1) a federal estate tax return is required to be filed; or
113.20 	(2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in 
113.21 	section 2001(b) of the Internal Revenue Code, made within three years of the date of the 
113.22 	decedent's death exceeds $1,200,000 for estates of decedents dying in 2014; $1,400,000 for 
113.23 	estates of decedents dying in 2015; $1,600,000 for estates of decedents dying in 2016; 
113.24 	$2,100,000 for estates of decedents dying in 2017; $2,400,000 for estates of decedents dying 
113.25 	in 2018; $2,700,000and $2,800,000 for estates of decedents dying in 2019; and $3,000,000 
113.26 	for estates of decedents dying in 2020 and thereafter.
113.27 	(b) The return must contain a computation of the Minnesota estate tax due. The return 
113.28 	must be signed by the personal representative.

113.29 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
113.30 	dying in 2019 and thereafter.

114.1 	Sec. 3. Minnesota Statutes 2018, section 291.016, subdivision 3, is amended to read:
114.2 		Subd. 3.Subtraction. (a) For estates of decedents dying after December 31, 2016, A 
114.3 	subtraction is allowed in computing the Minnesota taxable estate, equal to the sum of:
114.4 	(1) the exclusion amount for the year of death under paragraph (b); and
114.5 	(2) the lesser of:
114.6 	(i) the value of qualified small business property under section 291.03, subdivision 9, 
114.7 	and the value of qualified farm property under section 291.03, subdivision 10; or
114.8 	(ii) $5,000,000 minus the exclusion amount for the year of death under paragraph (b).
114.9 	(b) The following exclusion amounts apply for the year of death:
114.10 	(1) $2,100,000 for decedents dying in 2017;
114.11 	(2) (1) $2,400,000 for estates of decedents dying in 2018; and
114.12 	(3) $2,700,000 for decedents dying in 2019; and
114.13 	(4) $3,000,000 for decedents dying in 2020 (2) $2,800,000 for estates of decedents dying 
114.14 	in 2019 and thereafter.
114.15 	(c) (b) The subtraction under this subdivision must not reduce the Minnesota taxable 
114.16 	estate to less than zero.

114.17 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
114.18 	dying in 2019 and thereafter.

114.19 	Sec. 4. Minnesota Statutes 2018, section 297F.01, subdivision 13a, is amended to read:
114.20 		Subd. 13a.Premium cigar. "Premium cigar" means any cigar that is hand-constructed
114.21 	and hand-rolled, has a wrapper that is made entirely from whole tobacco leaf, has a filler 
114.22 	and binder that is made entirely of tobacco, except for adhesives or other materials used to 
114.23 	maintain size, texture, or flavor, and has a wholesale price of no less than $2.

114.24 	EFFECTIVE DATE. This section is effective July 1, 2019.

114.25 	Sec. 5. Minnesota Statutes 2018, section 297F.05, is amended by adding a subdivision to 
114.26 	read:
114.27 		Subd. 1b.Annual indexing. (a) Each year the commissioner shall adjust the tax rates 
114.28 	under subdivision 1, including any adjustment made in prior years under this subdivision, 
114.29 	by multiplying the mill rates for the current calendar year by an adjustment factor and 
115.1 	rounding the result to the nearest mill. The adjustment factor equals the in-lieu sales tax 
115.2 	rate that applies to the following calendar year divided by the in-lieu sales tax rate for the 
115.3 	current calendar year. For purposes of this subdivision, "in-lieu sales tax rate" means the 
115.4 	tax rate established under section 297F.25, subdivision 1. For purposes of the calculations 
115.5 	under this subdivision to be made in any year in which an increase in the federal or state 
115.6 	excise tax on cigarettes is implemented, the commissioner shall exclude from the calculated 
115.7 	average price for the current year an amount equal to any increase in the state or federal 
115.8 	excise tax rate.
115.9 	(b) The commissioner shall publish the resulting rate by November 1 and the rate applies 
115.10 	to sales made on or after January 1 of the following year.
115.11 	(c) The determination of the commissioner under this subdivision is not a rule and is 
115.12 	not subject to the Administrative Procedure Act in chapter 14, including section 14.386.

115.13 	EFFECTIVE DATE. This section is effective the day following final enactment and 
115.14 	applies beginning with rates calculated for calendar year 2020.

115.15 	Sec. 6. Minnesota Statutes 2018, section 297F.05, subdivision 3a, is amended to read:
115.16 		Subd. 3a.Rates; premium cigars. (a) A tax is imposed upon all premium cigars in this 
115.17 	state and upon any person engaged in business as a tobacco product distributor, at the lesser 
115.18 	of:
115.19 	(1) the rate of 95 percent of the wholesale sales price of the premium cigars; or
115.20 	(2) $0.50 $3.50 per premium cigar.
115.21 	(b) The tax imposed under paragraph (a) is imposed at the time the tobacco products 
115.22 	distributor:
115.23 	(1) brings, or causes to be brought, into this state from outside the state premium cigars 
115.24 	for sale;
115.25 	(2) makes, manufactures, or fabricates premium cigars in this state for sale in this state; 
115.26 	or
115.27 	(3) ships or transports premium cigars to retailers in this state, to be sold by those retailers.

115.28 	EFFECTIVE DATE. This section is effective for cigars brought into the state or 
115.29 	manufactured in the state after June 30, 2019.

116.1 	Sec. 7. Minnesota Statutes 2018, section 297F.05, subdivision 4a, is amended to read:
116.2 		Subd. 4a.Use tax; premium cigars. A tax is imposed upon the use or storage by 
116.3 	consumers of all premium cigars in this state, and upon such consumers, at the lesser of:
116.4 	(1) the rate of 95 percent of the cost to the consumer of the premium cigars; or
116.5 	(2) $0.50 $3.50 per premium cigar.

116.6 	EFFECTIVE DATE. This section is effective for cigars for which the consumer has 
116.7 	acquired title to, or possession of, after June 30, 2019.

116.8 	Sec. 8. ADMINISTRATIVE APPROPRIATION.
 116.9 	$4,217,000 in fiscal year 2020 and $2,853,000 in fiscal year 2021 are appropriated from 
116.10 	the general fund to the commissioner of revenue for administering this act. The funding 
116.11 	base for this appropriation in fiscal year 2022 and each fiscal year thereafter is $1,450,000.

116.12 	EFFECTIVE DATE. This section is effective the day following final enactment.

APPENDIX 

Repealed Minnesota Statutes: 19-2918 

290.0131 INDIVIDUALS; ADDITIONS TO FEDERAL TAXABLE INCOME.Subd. 7.Fines, fees, and penalties. 
The amount of expenses disallowed under section 290.10, subdivision 2, is an addition. 

Subd. 11.Income attributable to domestic production activities. 
The amount of the deduction allowable under section 199 of the Internal Revenue Code is an addition. 

290.0133 CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE INCOME.Subd. 13.Income attributable to domestic production activities. 
The amount of the deduction allowable under section 199 of the Internal Revenue Code is an addition. 

Subd. 14.Fines, fees, and penalties. 
The amount of expenses disallowed under section 290.10, subdivision 2, is an addition. 

290.10 NONDEDUCTIBLE ITEMS.Subd. 2.Fines, fees, and penalties. 
(a) Except as provided in this subdivision, no deduction from taxable income for a trade or business expense under section 162(a) of the Internal Revenue Code shall be allowed for any amount paid or incurred, whether by suit, agreement, or otherwise, to, or at the direction of, a government or entity described in paragraph (d) in relation to the violation of any law or the investigation or inquiry by such government or entity into the potential violation of any law. 

(b) Exception for amounts constituting restitution or paid to come into compliance with the law. Paragraph (a) does not apply to any amount which: 

(1) the taxpayer establishes: 

(i) constitutes restitution, including remediation of property for damage or harm caused by or which may be caused by the violation of any law or the potential violation of any law; or 

(ii) is paid to come into compliance with any law which was violated or involved in the investigation or inquiry; and 

(2) is identified as restitution or as an amount paid to come into compliance with the law, as the case may be, in the court order or settlement agreement. 

This paragraph does not apply to any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation. 

(c) Paragraph (a) does not apply to any amount paid or incurred by order of a court in a suit in which no government or entity described in paragraph (d) is a party. 

(d) An entity is described in this paragraph if it is: 

(1) a nongovernmental entity which exercises self-regulatory powers, including imposing sanctions, in connection with a qualified board or exchange, as defined in section 1256(g)(7) of the Internal Revenue Code; or 

(2) to the extent provided in federal regulations, a nongovernmental entity which exercises self-regulatory powers, including imposing sanctions, as part of performing an essential governmental function. 

(e) Paragraph (a) does not apply to any amount paid or incurred as taxes due.