HF 3069

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/02/2025 11:25 a.m.

A bill for an act
relating to taxation; establishing a tax on certain growth of certain assets of colleges
and universities; establishing an account in the special revenue fund; amending
Minnesota Statutes 2024, section 136A.121, by adding a subdivision; proposing
coding for new law in Minnesota Statutes, chapter 290.

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

Section 1.

Minnesota Statutes 2024, section 136A.121, is amended by adding a subdivision
to read:

new text begin Subd. 22. new text end

new text begin Higher education assets growth account. new text end

new text begin The higher education assets growth
account is created in the special revenue fund in the state treasury. Unless otherwise
appropriated, money in the account is appropriated to the commissioner for the state grant
program under this section. Earnings, including interest, dividends, and any other earnings
arising from the assets of the account, are credited to the account. Money remaining in the
account at the end of a fiscal year is not canceled to the general fund but remains available
until expended.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [290.0334] EXCISE TAX BASED ON ASSETS GROWTH OF COLLEGES
AND UNIVERSITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this subdivision, the following terms
have the meanings given.
new text end

new text begin (b) "Applicable educational institution" means an educational institution:
new text end

new text begin (1) with total assets at any time during the taxable year in excess of $100,000,000;
new text end

new text begin (2) having at least 500 tuition-paying students during the preceding taxable year; and
new text end

new text begin (3) having more than 50 percent of tuition-paying students located in Minnesota during
the taxable year.
new text end

new text begin (c) "Asset growth" means the positive difference between the value of assets at the close
of the current taxable year and the value of assets at the close of the immediately preceding
taxable year.
new text end

new text begin (d) "Assets" means assets used directly in carrying out an applicable educational
institution's exempt purpose, as provided in Code of Federal Regulations, title 26, section
53.4968-1(b)(5) (2020).
new text end

new text begin (e) "Educational institution" has the meaning given in section 25A(f)(2) of the Internal
Revenue Code.
new text end

new text begin (f) "Per-student assets" means the value of an applicable educational institution's assets
at the close of the current taxable year divided by the number of tuition-paying students at
the close of the current taxable year.
new text end

new text begin (g) "Related organization" has the meaning given in section 4968(d)(2) of the Internal
Revenue Code.
new text end

new text begin Subd. 2. new text end

new text begin Tax imposed. new text end

new text begin In addition to any other tax imposed under this chapter, a tax
equal to the percentages listed in subdivision 3 is imposed on the asset growth of an
applicable educational institution.
new text end

new text begin Subd. 3. new text end

new text begin Rates of tax. new text end

new text begin The tax under subdivision 2 is imposed as follows:
new text end

new text begin (1) for per-student assets over $74,999 but not over $150,000, 15 percent;
new text end

new text begin (2) for per-student assets over $150,000 but not over $250,000, 20 percent; and
new text end

new text begin (3) for per-student assets over $250,000, 25 percent.
new text end

new text begin Subd. 4. new text end

new text begin Other provisions apply. new text end

new text begin (a) For purposes of subdivision 1, paragraph (b),
clauses (1) and (2), the provisions of section 4968(b)(2) of the Internal Revenue Code apply.
new text end

new text begin (b) Assets of related organizations of educational institutions are treated as assets of the
educational institution, except that:
new text end

new text begin (1) assets of an educational institution do not include assets of a related organization;
and
new text end

new text begin (2) unless the related organization is controlled by the educational institution or is an
organization described in section 509(a)(3) of the Internal Revenue Code, assets not intended
or available for use or benefit of the educational institution are excluded from the calculation
of per-student endowment growth differential.
new text end

new text begin Subd. 5. new text end

new text begin Administration. new text end

new text begin The audit, assessment, refund, penalty, interest, enforcement,
collection remedies, appeal, and administrative provisions of chapters 270C and 289A that
are applicable to taxes imposed under this chapter apply to the tax imposed under this
section.
new text end

new text begin Subd. 6. new text end

new text begin Returns; payment of tax. new text end

new text begin (a) An applicable educational institution must report
the tax on a return prescribed by the commissioner and must remit the tax in a form and
manner prescribed by the commissioner.
new text end

new text begin (b) Interest must be paid on an overpayment refunded or credited to the taxpayer from
the date of payment of the tax until the date the refund is paid or credited. For purposes of
this subdivision, the date of payment is the due date of the return or the date of actual
payment of the tax, whichever is later.
new text end

new text begin Subd. 7. new text end

new text begin Deposit of revenues; account established. new text end

new text begin The commissioner must deposit
the revenues, including penalties and interest, minus any refunds, derived from the tax
imposed by this section in the higher education assets growth account in the special revenue
fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2025.
new text end