Minnesota Legislature
Legislative Session number- 86
Bill Name: HF2323
HF2323
THIRD ENGROSSMENT
Omnibus tax bill.
Article 1: Individual
income, corporate franchise, and estate and gift taxes provision
provided.
Sec. 1: Internal Revenue Code definition modified.
Sec. 2:
Withholding tax, withholding from payments to out-of-state contractors, and
withholding by partnerships and small business corporations liability provision
language added.
Sec. 3: Domestic corporation definition modified.
Sec. 4:
Tax haven definition provided.
Sec. 5: Net income definition
modified.
Sec. 6: Federal taxable income additions provision language
modified.
Sec. 7: Federal taxable income subtractions provision language
modified.
Sec. 8: Federal taxable income additions for corporations provision
language modified.
Sec. 9: Modifications decreasing federal taxable income
for corporations provision language modified.
Sec. 10: Taxable income
definition modified.
Sec. 11: Internal Revenue Code definition
modified.
Sec. 12: Minnesota developmental subsidies and definition
provided.
Sec. 13: Qualified obligations provision provided.
Sec. 14:
Nonresident individual return filing provision language modified.
Sec. 15:
Taxable net income schedule of rates for individuals, estates, and trusts
language modified.
Sec. 16: Inflation adjustment of brackets provision
language modified.
Sec. 17: Mortgage interest credit authorized.
Sec. 18:
Charitable contributions credit authorized.
Sec. 19: Allowed credit provision
language modified.
Sec. 20: Taxpayer allowed credit provision language
modified.
Sec. 21: Credit prohibition from exceeding the liability for tax
provision language modified.
Sec. 22: Partnerships and S corporations
provision language modified.
Sec. 23: Minnesota Child Credit
established.
Sec. 24: Definitions modified.
Sec. 25: Alternative minimum
taxable income definition modified.
Sec. 26: Franchise tax imposition
provision language modified.
Sec. 27: Minnesota sales or receipts, property,
and payrolls definitions modified.
Sec. 28: Inflation adjustment
authorized.
Sec. 29: Income not derived from conduct of a trade or business
provision language modified.
Sec. 30: Unitary business principle provision
language modified.
Sec. 31: Apportionment formula of general application
modified.
Sec. 32: Apportionment formula for financial institutions
modified.
Sec. 33: Internal Revenue Code definition modified.
Sec. 34:
Scope provided.
Sec. 35: Imposed tax amount provision language
modified.
Sec. 36: Definitions provided; taxable gifts definition
included.
Sec. 37: Gift tax imposed, lifetime credit authorized, and
out-of-state gifts provision provided.
Sec. 38: Gift tax returns
authorized.
Sec. 39: Gift tax returns filing requirements provided.
Sec.
40: Appraisal of property authorized upon demand, declaration by
donor
required.
Sec. 41: Administrative provisions provided.
Sec. 42: Credit
authorized against the estate tax.
Sec. 43: Job opportunity building zone tax
incentives provision language modified.
Sec. 44: Prohibition against
amendments to business subsidy agreement provision language added.
Sec. 45:
Revisor's instruction; Internal cross-references corrected.
Sec. 46:
Repealer.
Article 2: County revenue reform provision provided.
Sec . 1:
Local governmental unit definition modified.
Sec. 2: Levy limit base
provision language modified.
Sec. 3: Adjusted levy limit base provision
language modified.
Sec. 4: Property tax levy limit provision for a local
governmental unit
language modified.
Sec. 5: Political subdivision tax
authorization and scope provision language modified.
Sec. 6: Counties
authorized to impose general local sales tax.
Sec. 7: Optional tax effect on
existing local sales taxes provided, and satisfaction of preexisting obligations
required.
Sec. 8: County program aid provision provided.
Sec. 9:
Appropriation for reimbursement payments provision language modified.
Sec.
10: Repealer.
Article 3: Property tax reform, accountability, value, and
efficiency provisions provided.
Sec. 1: The Council on Local Results and
Innovation established.
Sec. 2: Reports of local performance measure
required, and benefits of
standard measures program participation
provided.
Sec. 3: Regional library basic system support grants provision
language modified.
Sec. 4: Support grant limitations provision language
modified.
Sec. 5: Children's mental health collaborative responsibilities
provision language modified.
Sec. 6: County confinement facilities
requirement language modified.
Sec. 7: Medical assistance benefits
eligibility under Code of Federal Regulations provision language
modified.
Sec. 8: Equitable funding of health and human services reform
provided.
Sec. 9: Property tax system benchmarks and critical indicators
provided.
Sec. 10: County reimbursement reductions provided.
Sec. 11:
Temporary suspension of new or increased maintenance of effort and matching fund
requirements provided.
Sec. 12: Repealer.
Article 4: Local government
flexibility and mandate reduction provisions provided.
Sec. 1: Objections to
rules by the commission, Legislative Commission on Mandate Reform, or a
committee provision language modified.
Sec. 2: Public hearings by state
agencies provision language modified.
Sec. 3: The Legislative Commission on
Mandate Reform established.
Sec. 4: Legislative Commission on Mandate Reform
review of mandates and recommendations required.
Sec. 5: Legislative
Commission on Mandate Reform recommended grants authorized.
Sec. 6:
Expiration.
Sec. 7: Effective date provided for rules requiring local
implementation.
Sec. 8: Best value contracting system for construction
establishment and purpose provision language modified.
Sec. 9: Counties
authorized to prohibit further burials in abandoned cemeteries that it has
accepted responsibility for.
Sec. 10: Fence viewer compensation requirement
language modified.
Sec. 11: Public burial ground determined town property
after ten years of
public use provision language modified.
Sec. 12: Council
plans and specifications and advertisement for bids
provision language
modified.
Sec. 13: Improvements contracts and day labor provision language
modified.
Sec. 14: Letting of contracts and performance bonds provision
language modified.
Sec. 15: Fee authorization provision for persons booked
for confinement at a county or regional jail language modified.
Sec. 16:
First meeting requirement provided for the Legislative Commission on Mandate
Reform.
Article 5: Truth in taxation provisions provided.
Sec. 1: Board
publication requirements of revenue and expenditure budgets language
modified.
Sec. 2: Taxing authority proposed budget requirement language
modified.
Sec. 3: Overlapping taxing authority jurisdictions provision
language modified.
Sec. 4: Taxing authorities in the process of negotiating
an agreement for sharing, merging, or consolidating services provision language
modified.
Sec. 5: Notice of proposed property taxes requirement language
modified.
Sec. 6: Adoption of budget and property tax levy procedure language
modified.
Sec. 7: Certification of levy provision language modified.
Sec.
8: County auditor report requirement language modified.
Sec. 9: Determination
of county tax rate provision language modified.
Sec. 10: Joint property tax
advisory committee duties provision language modified.
Sec. 11: Tax levy for
repayment authorization provision language modified.
Sec. 12: Corporations
created by political subdivision compliance with other laws provision language
modified.
Sec. 13: Metropolitan council budget requirements language
modified.
Sec. 14: Repealer.
Article 6: Property tax provisions
provided.
Sec. 1: Agricultural preserve eligibility provision language
modified to include conditions for termination of eligibility.
Sec. 2:
Institutions of public charity federal income taxation exemption provision
language modified.
Sec. 3: Nursing home or facility federal income taxation
exemption provided.
Sec. 4: Railroad wye connections exemption
provided.
Sec. 5: Electric generation facility exemption provided.
Sec. 6:
New generating plants built on personal property exemption provided.
Sec. 7:
Distribution of revenues provision language modified.
Sec. 8:
Cross-compliance with agricultural chemical and water laws provision
provided.
Sec. 9: Preservation of riparian buffers provided.
Sec. 10:
Applicability provision language modified.
Sec. 11: Disaster and emergency
area damaged property reassessments requirement language modified.
Sec. 12:
Disaster-damaged homes partial valuation exclusion provided.
Sec. 13:
Residential homestead general rule provision language modified.
Sec. 14:
Class 4 residential real estate provision language modified.
Sec. 15:
Homestead of a disabled veteran classification provision language
modified.
Sec. 16: Computation provision of net property taxes language
modified; bovine tuberculosis zone credit removed.
Sec. 17: Levy amount
levied against commercial-industrial property and seasonal residential
recreational property provision language modified.
Sec. 18:
Commercial-industrial tax capacity definition modified.
Sec. 19: Contents of
tax statements provision language modified.
Sec. 20: Forms publication
correction provision language modified.
Sec. 21: Apportionment of proceeds to
taxing districts provision language modified.
Sec. 22: Senior citizens'
property tax deferral program qualification provision language modified.
Sec.
23: Excess-income certification by taxpayer provision language modified.
Sec.
24: Resumption of tax deferral program participation provision language
modified.
Sec. 25: Determination of qualifying homeowner's annual maximum
property tax amount provision language modified.
Sec. 26: Deadline for
establishment of a new special service district extended to 2013.
Sec. 27:
Deadline for establishment of a new housing improvement area extended to
2012.
Sec. 28: Municipality provision language modified.
Sec. 29: Council
of municipality authorized to make certain improvements provision language
modified.
Sec. 30: Municipal street improvement districts establishment
authorized.
Sec. 31: Termination of program eligibility provision
provided.
Sec. 32: Owners of certified long-term agricultural land
applications for an agricultural preserve provision language modified.
Sec.
33: Emergency special service district limitation provision language
modified.
Sec. 34: Effective date.
Sec. 35: Effective date.
Sec. 36:
Commissioner of revenue guidance purpose provided.
Sec. 37: Administrative
auditor report required on the feasibility of basing
fiscal year disparities
calculations on current year tax rates.
Sec. 38: Minneapolis Convention
Center property tax exemption provided.
Sec. 39: Repealer.
Article 7:
Aids and credits provided.
Sec. 1: Residential homestead market value credit
provision language modified.
Sec. 2: Reimbursement payments for local taxing
jurisdictions provision language modified.
Sec. 3: Homeowners income payment
provision language modified.
Sec. 4: City aid base provision language
modified.
Sec. 5: City aid distribution provision language modified.
Sec.
6: 2010 city aid reduction provided.
Sec. 7: City and county aid reductions
provided.
Sec. 8: Cities aid provision language modified.
Sec. 9: Fiscal
stabilization account appropriation provided.
Sec. 10: Repealer.
Article
8: Seasonal recreational property tax deferral program provided.
Sec. 1: Act
citation provided as the "seasonal recreational property tax deferral
program."
Sec. 2: Terms and language provided.
Sec. 3: Qualifications for
deferral provided.
Sec. 4: Application for deferral procedure
provided.
Sec. 5: Calculation of deferred property tax amount
provided.
Sec. 6: Lien created.
Sec. 7: Conditions of deferral termination
provided, and payment of deferred taxes required.
Sec. 8: State reimbursement
payment determination provision provided.
Sec. 9: Effective
date.
Article 10: Special taxes provisions provided.
Sec. 1: Liquor
retailer tax imposed and increased to five percent of gross receipts from retail
sales.
Sec. 2: Moist snuff definition provided.
Sec. 3: Cigarette tax rate
provision language modified.
Sec. 4: Tobacco products tax rate provision
language modified.
Sec. 5: Tobacco products use or storage tax provision
language modified.
Sec. 6: Annual moist snuff inflation adjustment
authorized.
Sec. 7: Distilled spirits and wine excise tax general rates
increase provided.
Sec. 8: Fermented malt beverages excise tax rate increase
provided.
Sec. 9: Floor stock cigarette tax imposed.
Sec. 10: Adjustment
of cigarette sales tax provided.
Article 10: Sales and use tax provisions
provided.
Sec. 1: Snowmobile purchaser's certificate and proof of sales tax
payment registration requirement language modified.
Sec. 2: All-terrain
vehicle purchaser's certificate and proof of sales tax payment registration
requirement language modified.
Sec. 3: Watercraft purchaser's certificate and
proof of sales tax payment registration requirement language modified.
Sec.
4: Sales and use taxes notification requirements provided.
Sec. 5: Return
requirement language modified.
Sec. 6: Sales and use tax provision language
modified; Persons allowed to remit payments by mail when religious beliefs
prohibit electronic payment.
Sec. 7: Sale and purchase definitions modified
to include digital products.
Sec. 8: Retail sale definition modified to
include digital products.
Sec. 9: Storage definition modified to include
digital products.
Sec. 10: Use definition modified to include digital
products.
Sec. 11: Tangible personal property definition modified to include
digital
products.
Sec. 12: Lease or rental definition modified to include
digital products.
Sec. 13: Delivered electronically definition modified to
include online computer software delivery.
Sec. 14: Normal course of business
definition modified to include digital products.
Sec. 15: Bundled transaction
definition modified to include digital products.
Sec. 16: Digital audio
visual work definition provided.
Sec. 17: Digital audio work definition
provided.
Sec. 18: Digital book definition provided.
Sec. 19: Digital code
definition provided.
Sec. 20: Specified digital products definition
provided.
Sec. 21: Transferred electronically definition provided.
Sec.
22: Other digital products definition provided.
Sec. 23: Constitutionally
required sales tax increase imposed.
Sec. 24: Use tax on tangible personal
property and specified digital products
provision language modified.
Sec.
25: Fee imposed on leases or rentals of vehicles provision language
modified to
exempt nonprofit corporations.
Sec. 26: Definitions modified.
Sec. 27:
Solicitor definition provided.
Sec. 28: Residential heating fuels exemption
language modified.
Sec. 29: Occasional sales provision language
modified.
Sec. 30: Motor vehicle lease sales tax revenue provision language
modified.
Sec. 31: Commissioner's discretion provision language
modified.
Sec. 32: Deposit of revenues provision language modified.
Sec.
33: Compensating use tax provision language extended to
digital
products.
Sec. 34: Excise tax rate on the purchase price of a motor
vehicle purchased or acquired outside of Minnesota language modified.
Sec.
35: Property tax revenue use provision language modified.
Sec. 36:
Minneapolis downtown and neighborhood projects funding through
excess revenue
authorized.
Sec. 37: Downtown taxing area provision language
modified.
Sec. 38: Revenue use provision language modified.
Sec. 39:
Revenue use provision language modified.
Sec. 40: Unexpended funds and
interest apportionment provided.
Sec. 41: Little Falls; Food sales tax
provision expanded to include a tax on the sale of alcoholic beverages.
Sec.
42: St. Paul sales tax revenue dedicated to neighborhood investments provision
language added.
Sec. 43: Rochester lodging tax provision language
modified.
Sec. 44: Tax revenue use provision for transportation projects
included in the 2004 U.S. Highway 14-Owatonna Beltline Study provision language
modified.
Sec. 45: Authorized tax proceeds use for the operation and
maintenance of the Riverfront 2000 provision language modified.
Sec. 46:
Department of Revenue sales and local lodging taxes collection
authorized.
Sec. 47: Rochester food and beverage tax authorized for
restaurants and places of refreshment.
Sec. 48: Repealer.
Article 11:
Local development provisions provided.
Sec. 1: Tourism facility definition
modified.
Sec. 2: Tax increment financing plan contents requirements language
modified.
Sec. 3: Annual financial reporting requirement for tax increment
financing districts language modified.
Sec. 4: Administrative expenses
limitation provision language modified.
Sec. 5: Increments use authorized to
offset state aid reductions.
Sec. 6: Required action provision language
added.
Sec. 7: Tax increment financing district expenditures outside of
district
provision language modified.
Sec. 8: Five-year rule language
added.
Sec. 9: Interfund loans authorization provision language
modified.
Sec. 10: Authority definition modified.
Sec. 11: Housing
replacement projects provision language modified;
Brooklyn Park
included.
Sec. 12: Oakdale; Original tax capacity provision language
modified.
Sec. 13: South St. Paul; Housing and redevelopment authority
authorized to
establish a redevelopment tax increment financing
district.
Sec. 14: Minnetonka; Economic authority authorized to extend the
maximum duration of the Glenhaven Tax Increment Financing District.
Sec. 15:
Arden Hills; Authorized to establish a redevelopment tax increment financing
district.
Sec. 16: St. Paul; Authority provided to exercise special law
authority.
Sec. 17: Sauk Rapids; Tax increment financing district
authorized.
Sec. 18: Duluth; Seaway Port Authority of Duluth authorized to
adopt a tax
increment financing plan, special rules provided.
Sec. 19:
Mankato; Authorized to expend increments generated from the South Riverfront tax
increment financing district for improvements under
the Sibley Parkway
Plan.
Sec. 20: Faribault; Authorized to extend the duration of a job
opportunity building zone.
Article 12: Minerals provisions
provided.
Sec. 1: Nonferrous minerals assistance areas provided.
Sec. 2:
Tax proceeds allocation within nonferrous minerals assistance areas
provision
language modified.
Sec. 3: Tax proceeds allocation outside nonferrous
minerals assistance areas provision language modified.
Sec. 4: Segregation of
funds provided.
Sec. 5: Taconite economic development fund provision language
modified.
Sec. 6: Imposed iron ore concentrates tax rate provision language
modified.
Sec. 7: Taxable ton of merchantable iron ore concentrate allocated
to the
mining city or town where it was quarried or produced, provision
language
modified.
Sec. 8: Taconite environmental fund requirement
provided.
Sec. 9: Proceeds remainder allocation after distribution and
payment
provision language modified.
Article 13: Miscellaneous provisions
provided.
Sec. 1: Bovine tuberculosis testing grants authorized for corporate
owners of cattle.
Sec. 2: Bovine tuberculosis split state grants authorized
for owners of cattle.
Sec. 3: Tax information sample data coordinating
committee duration provided.
Sec. 4: Tax preparation services provider scope
provision language modified.
Sec. 5: Procedure for liability assessment and
claims for refunds provision language modified.
Sec. 6: Recertification due
to unallotment authorized.
Sec. 7: Special levies definition and provision
language modified.
Sec. 8: Adjusted levy limit base provision language
modified.
Sec. 9: Tax payment requirements and receipts provision language
modified.
Sec. 10: Net debt definition modified.
Sec. 11: Municipality
bonds purpose provision language modified.
Sec. 12: Electors approval and
exceptions provision language modified.
Sec. 13: Authorization and sale of
emergency certificates of indebtedness
authorized.
Sec. 14: Budget reserve
transfer provided.
Sec. 15: Appropriations provided; Bovine tuberculosis
grants and basic sliding fee child care included.
ERS, 5/5/09