HF 3909

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/25/2026 12:58 p.m.

A bill for an act
relating to taxation; imposing a tax on the gross revenues of private detention
facilities; proposing coding for new law in Minnesota Statutes, chapter 295.

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

Section 1.

new text begin [295.90] PRIVATE DETENTION FACILITIES TAX.
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 section, the following terms have
the meanings given.
new text end

new text begin (b) "Detention facility" means a facility in which persons are incarcerated or otherwise
involuntarily confined for purposes of execution of a punitive sentence imposed by a court
or detention pending a trial, hearing, or other judicial or administrative proceeding.
new text end

new text begin (c) "Gross revenues" means total amounts received in money or otherwise by a private
detention facility for providing detention-related services in Minnesota.
new text end

new text begin (d) "Private detention facility" means a detention facility that is operated by a private,
nongovernmental, for-profit entity pursuant to a contract or agreement with a governmental
entity. Private detention facility does not include privately owned residential facilities,
including halfway houses, group homes, work release centers, or treatment facilities, to
provide for the care, custody, and rehabilitation of:
new text end

new text begin (1) inmates who have been released from prison under section 241.26, 244.05, 244.0513,
244.065, or 244.172, or any other form of supervised or conditional release; and
new text end

new text begin (2) offenders who are on probation, work release, or another form of approved release
status.
new text end

new text begin Subd. 2. new text end

new text begin Tax imposed on gross receipts. new text end

new text begin For gross revenues received after December
31, 2026, a tax is imposed on a private detention facility equal to 50 percent of the facility's
gross revenues.
new text end

new text begin Subd. 3. new text end

new text begin Taxes paid to another state. new text end

new text begin A private detention facility that has paid taxes
to another jurisdiction measured by gross revenues and is subject to tax under this section
on the same gross revenues is entitled to a credit for the tax legally due and paid to another
jurisdiction to the extent of the lesser of (1) the tax actually paid to the other jurisdiction,
or (2) the amount of tax imposed by Minnesota on the gross revenues subject to tax in the
other taxing jurisdictions.
new text end

new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin Unless provided otherwise by this section, 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 chapter 297A apply to taxes imposed under this section.
new text end

new text begin Subd. 5. new text end

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

new text begin A private detention facility must report the tax on
a return prescribed by the commissioner of revenue and must remit the tax with the return.
The return and the tax must be filed and paid using the filing cycle and due dates provided
for taxes imposed under chapter 297A.
new text end

new text begin Subd. 6. new text end

new text begin Deposit of revenues. new text end

new text begin The commissioner must deposit all revenues, including
penalties and interest, derived from the tax imposed by this section in the general fund.
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