as introduced - 82nd Legislature, 2001 1st Special Session (2001 - 2002) Posted on 12/15/2009 12:00am
|Introduction||Posted on 12/23/2002|
1.1 A bill for an act 1.2 relating to taxation; providing for payment of a sales 1.3 tax rebate; appropriating money. 1.4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.5 Section 1. [STATEMENT OF PURPOSE.] 1.6 (a) The state of Minnesota derives revenues from a variety 1.7 of taxes, fees, and other sources, including the state sales tax. 1.8 (b) It is fair and reasonable to refund the existing state 1.9 budget surplus in the form of a rebate of nonbusiness consumer 1.10 sales taxes paid by individuals in calendar year 1999. 1.11 (c) Information concerning the amount of sales tax paid at 1.12 various income levels is contained in the Minnesota tax 1.13 incidence report, which is written by the commissioner of 1.14 revenue and presented to the legislature according to Minnesota 1.15 Statutes, section 270.0682. 1.16 (d) It is fair and reasonable to use information contained 1.17 in the Minnesota tax incidence report to determine the 1.18 proportionate share of the sales tax rebate due each eligible 1.19 taxpayer since no effective or practical mechanism exists for 1.20 determining the amount of actual sales tax paid by each eligible 1.21 individual. 1.22 Sec. 2. [SALES TAX REBATE.] 1.23 Subdivision 1. [ELIGIBILITY; REBATE BASED ON INCOME.] An 1.24 individual who was a resident of Minnesota for any part of 1999, 2.1 and filed a 1999 Minnesota income tax return on or before 2.2 November 30, 2001, and had a tax liability before refundable 2.3 credits on that return of at least $1 and who was not allowed to 2.4 be claimed as a dependent on a 1999 federal income tax return 2.5 filed by another person is eligible for a sales tax rebate based 2.6 on income under either subdivision 2 or 3. 2.7 Subd. 2. [MARRIED JOINT AND HEAD OF HOUSEHOLD FILERS.] The 2.8 sales tax rebate for taxpayers who qualify under subdivision 1 2.9 and are married filing joint or head of household filers is 2.10 computed according to the following schedule: 2.11 Income Sales Tax Rebate 2.12 less than $2,500 $233 2.13 at least $2,500 but less than $5,000 $289 2.14 at least $5,000 but less than $10,000 $303 2.15 at least $10,000 but less than $15,000 $334 2.16 at least $15,000 but less than $20,000 $379 2.17 at least $20,000 but less than $25,000 $409 2.18 at least $25,000 but less than $30,000 $436 2.19 at least $30,000 but less than $35,000 $474 2.20 at least $35,000 but less than $40,000 $516 2.21 at least $40,000 but less than $45,000 $560 2.22 at least $45,000 but less than $50,000 $595 2.23 at least $50,000 but less than $60,000 $609 2.24 at least $60,000 but less than $70,000 $636 2.25 at least $70,000 but less than $80,000 $692 2.26 at least $80,000 but less than $90,000 $748 2.27 at least $90,000 but less than $100,000 $809 2.28 at least $100,000 but less than $120,000 $877 2.29 at least $120,000 but less than $140,000 $960 2.30 at least $140,000 but less than $160,000 $1,038 2.31 at least $160,000 but less than $180,000 $1,111 2.32 at least $180,000 but less than $200,000 $1,181 2.33 at least $200,000 but less than $400,000 $1,510 2.34 at least $400,000 but less than $600,000 $1,987 2.35 at least $600,000 but less than $800,000 $2,384 2.36 at least $800,000 but less than $1,000,000 $2,733 3.1 $1,000,000 and over $3,250 3.2 Subd. 3. [SINGLE AND MARRIED SEPARATE FILERS.] The sales 3.3 tax rebate for individuals who qualify under subdivision 1 as 3.4 single or married filing separately must be computed according 3.5 to the following schedule: 3.6 Income Sales Tax Rebate 3.7 less than $2,500 $118 3.8 at least $2,500 but less than $5,000 $124 3.9 at least $5,000 but less than $10,000 $165 3.10 at least $10,000 but less than $15,000 $196 3.11 at least $15,000 but less than $20,000 $227 3.12 at least $20,000 but less than $25,000 $253 3.13 at least $25,000 but less than $30,000 $305 3.14 at least $30,000 but less than $40,000 $329 3.15 at least $40,000 but less than $50,000 $363 3.16 at least $50,000 but less than $70,000 $465 3.17 at least $70,000 but less than $100,000 $644 3.18 at least $100,000 but less than $140,000 $776 3.19 at least $140,000 but less than $200,000 $937 3.20 at least $200,000 but less than $400,000 $1,270 3.21 $400,000 and over $1,625 3.22 Subd. 4. [NONRESIDENTS.] Individuals who were not 3.23 residents of Minnesota for any part of 1999 and who paid more 3.24 than $10 in Minnesota sales tax under Minnesota Statutes, 3.25 chapter 297A, on nonbusiness consumer purchases in that year 3.26 qualify for a rebate under this subdivision only. Qualifying 3.27 nonresidents must file a claim for rebate on a form prescribed 3.28 by the commissioner by November 30, 2001. The claim must 3.29 include receipts showing the Minnesota sales tax paid and the 3.30 date of the sale. Taxes paid on purchases allowed in the 3.31 computation of federal taxable income or reimbursed by an 3.32 employer are not eligible for the rebate. The commissioner 3.33 shall determine the qualifying taxes paid and rebate the lesser 3.34 of: 3.35 (1) 40.45 percent of that amount; or 3.36 (2) the maximum amount for which the claimant would have 4.1 been eligible as determined under subdivision 2 if the taxpayer 4.2 filed the 1999 federal income tax return as a married taxpayer 4.3 filing jointly or head of household, or as determined under 4.4 subdivision 3 for other taxpayers. 4.5 Subd. 5. [DEFINITION OF INCOME.] "Income," for purposes of 4.6 this section other than subdivision 4, is taxable income as 4.7 defined in section 63 of the Internal Revenue Code of 1986, as 4.8 amended through December 31, 1998, plus the sum of any additions 4.9 to federal taxable income for the taxpayer under Minnesota 4.10 Statutes, section 290.01, subdivision 19a, and reported on the 4.11 original 1999 income tax return, including subsequent 4.12 adjustments to that return made within the time limits specified 4.13 in subdivision 12. For an individual who was a resident of 4.14 Minnesota for less than the entire year, the sales tax rebate 4.15 equals the sales tax rebate calculated under subdivision 2 or 3 4.16 multiplied by the percentage determined pursuant to Minnesota 4.17 Statutes, section 290.06, subdivision 2c, paragraph (e), as 4.18 calculated on the original 1999 income tax return, including 4.19 subsequent adjustments to that return made within the time 4.20 limits specified in subdivision 12. For purposes of subdivision 4.21 4, "income" is taxable income as defined in section 63 of the 4.22 Internal Revenue Code of 1986, as amended through December 31, 4.23 1998, and reported on the taxpayer's original federal tax return 4.24 for the first taxable year beginning after December 31, 1998. 4.25 Subd. 6. [SOCIAL SECURITY AND PUBLIC PENSION 4.26 RECIPIENTS.] (a) An individual qualifies for a rebate of $118 4.27 under this subdivision if the individual: 4.28 (1) was a resident of Minnesota for all of calendar year 4.29 1999; 4.30 (2) is not eligible for a rebate under subdivision 9; 4.31 (3) attained the age of 18 on or before December 31, 1999; 4.32 and 4.33 (4)(i) received social security benefits as defined in 4.34 section 86(d)(1) of the Internal Revenue Code of 1986, as 4.35 amended through December 31, 2000, in calendar year 1999; or 4.36 (ii) received federal, state, or local public pension or 5.1 disability benefits in calendar year 1999. 5.2 (b) An individual or married couple who qualifies for a 5.3 rebate under both this subdivision and subdivision 1 is eligible 5.4 for the rebate under whichever subdivision provides a larger 5.5 amount. 5.6 (c) If the Social Security Administration, Railroad 5.7 Retirement Board, or the administrator of a public pension is 5.8 paying benefits to a recipient by electronic funds transfers in 5.9 calendar year 2001, the commissioner may pay the rebate under 5.10 this subdivision through electronic funds transfer to the same 5.11 financial institution and into the same account into which those 5.12 benefits are transferred in calendar year 2001. 5.13 (d) For purposes of this subdivision, "public pension plan 5.14 administrator" means (1) a state and local public pension 5.15 administrator, (2) the federal Civil Service Retirement System, 5.16 (3) the United States Department of Defense for the military 5.17 retirement and survivors benefit programs, and (4) the Federal 5.18 Employees Retirement System. 5.19 (e) A state and local public pension administrator is an 5.20 entity paying benefits under a pension plan enumerated in 5.21 Minnesota Statutes, section 356.20, subdivision 2. Each state 5.22 and local pension administrator shall provide to the 5.23 commissioner of revenue, in a form the commissioner prescribes, 5.24 a list of individuals to whom it pays benefits that meet the 5.25 requirements of paragraph (a), clauses (1) and (3). 5.26 Subd. 7. [DEPENDENTS.] An individual who: 5.27 (1) was allowed to be claimed as a dependent on a 1999 5.28 federal income tax return filed by another person; 5.29 (2) would have otherwise been eligible for a rebate under 5.30 subdivision 1; and 5.31 (3) reported earned income as defined in section 5.32 32(c)(2)(A)(i) of the Internal Revenue Code, 5.33 is eligible for a rebate under this subdivision only. The 5.34 rebate under this subdivision equals 35 percent of the amount 5.35 allowed under the schedule in subdivision 3 based on the 5.36 individual's income. For an individual who was a resident of 6.1 Minnesota for less than the entire year, the sales tax rebate 6.2 equals the rebate calculated under this subdivision multiplied 6.3 by the percentage determined pursuant to Minnesota Statutes, 6.4 section 290.06, subdivision 2c, paragraph (e), as calculated on 6.5 the original 1999 income tax return. 6.6 Subd. 8. [CREDIT RECIPIENTS.] An individual who 6.7 (1) was a resident of Minnesota for any part of 1999; 6.8 (2) was not eligible for a rebate under subdivision 1, 6, 6.9 or 9; 6.10 (3) was not allowed to be claimed as a dependent on a 1999 6.11 federal income tax return by another person; and 6.12 (4)(i) claimed and was eligible for a refund under 6.13 Minnesota Statutes, chapter 290A, for property taxes paid in 6.14 2000 or rent constituting property taxes paid in 1999 on or 6.15 before November 30, 2001; or 6.16 (ii) filed a 1999 Minnesota income tax return before 6.17 November 30, 2001, in order to 6.18 (A) claim a credit under Minnesota Statutes, section 6.19 290.067, 290.0671, or 290.0674; 6.20 (B) claim a refund of withheld taxes; or 6.21 (C) claim a refund of estimated taxes, 6.22 is eligible for a rebate under this subdivision only. For 6.23 married couples filing joint returns and heads of households, 6.24 the rebate equals the minimum amount in subdivision 2. For 6.25 single filers and married individuals filing separate returns 6.26 and for rebates based on refunds under Minnesota Statutes, 6.27 chapter 290A, the rebate equals the minimum amount in 6.28 subdivision 3. For individuals who qualify for a rebate under 6.29 clause (4)(i), the rebate equals the minimum amount in 6.30 subdivision 3 unless the property tax refund return is a joint 6.31 return and neither of the joint filers qualifies for a rebate 6.32 under any of the other rebate criteria in which case the rebate 6.33 equals the minimum amount in subdivision 2. For an individual 6.34 who was a resident of Minnesota for less than the entire year, 6.35 the sales tax rebate equals the rebate calculated under this 6.36 subdivision multiplied by the percentage determined under 7.1 Minnesota Statutes, section 290.06, subdivision 2c, paragraph 7.2 (e), as calculated on the original 1999 income tax return. 7.3 Notwithstanding the provisions of Minnesota Statutes, section 7.4 289A.60, subdivision 12, an individual who files a property tax 7.5 refund claim for property taxes paid in 2000 or rent 7.6 constituting property taxes paid in 1999 after August 15, 2001, 7.7 and before November 30, 2001, is eligible for a refund under 7.8 Minnesota Statutes, chapter 290A, and a rebate under this 7.9 subdivision. 7.10 Subd. 9. [CLAIMS BASED ON FEDERAL LIABILITIES.] An 7.11 individual who: 7.12 (1) was a resident of Minnesota for any part of 1999; 7.13 (2) filed 1999 Minnesota and federal income tax returns on 7.14 or before November 30, 2001; 7.15 (3) had federal taxable income on the federal return of at 7.16 least $5; and 7.17 (4) does not qualify for a rebate under subdivision 1 or 7, 7.18 is eligible for a rebate under this subdivision only. 7.19 An individual who was allowed to be claimed as a dependent on a 7.20 1999 federal income tax return filed by another person is 7.21 eligible for a rebate under this subdivision only if the 7.22 individual had in 1999 earned income as defined in section 7.23 32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a 7.24 dependent eligible for a rebate under this subdivision equals 35 7.25 percent of the amount allowed under the schedule in subdivision 7.26 3 based on the individual's income. For all other individuals 7.27 who qualify under this subdivision, the rebate equals the amount 7.28 allowed based on the individual's income under the schedule in 7.29 subdivision 2 for married couples filing joint returns and heads 7.30 of household and the amount allowed based on the individual's 7.31 income under the schedule in subdivision 3 for single filers and 7.32 married individuals filing separately, provided, however, that 7.33 any rebate payable under this subdivision to an individual who 7.34 was a part-year resident of Minnesota in 1998 must be prorated 7.35 according to the formula applicable to part-year residents in 7.36 subdivision 5. 8.1 Subd. 10. [FISCAL YEAR TAXPAYERS.] For a fiscal year 8.2 taxpayer, the dates in subdivisions 1 through 4 are extended one 8.3 month for each month in calendar year 1999 that occurred prior 8.4 to the start of the individual's 1999 fiscal tax year. 8.5 Subd. 11. [PAYMENT DATES; INTEREST.] The commissioner of 8.6 revenue may begin paying sales tax rebates by July 1, 2001. 8.7 Sales tax rebates not paid by January 1, 2002, bear interest at 8.8 the rate specified in Minnesota Statutes, section 270.75. 8.9 Subd. 12. [NO ADJUSTMENTS AFTER PROCESSING.] A sales tax 8.10 rebate may not be adjusted based on changes to a 1999 income tax 8.11 return that are made by order of assessment after the date the 8.12 rebate is processed, or made by the taxpayer that are filed with 8.13 the commissioner of revenue after that date. 8.14 Subd. 13. [JOINT REBATE RULES.] Individuals who filed a 8.15 joint income tax return for 1999 must receive a joint sales tax 8.16 rebate. After the sales tax rebate has been issued, but before 8.17 the check has been cashed, either joint claimant may request a 8.18 separate check for one-half of the joint sales tax rebate. 8.19 Notwithstanding anything in this section to the contrary, if 8.20 prior to payment, the commissioner has been notified that 8.21 persons who filed a joint 1999 income tax return are living at 8.22 separate addresses, as indicated on their 2000 income tax return 8.23 or otherwise, the commissioner may issue separate checks to each 8.24 person. The amount payable to each person is one-half of the 8.25 total joint rebate. 8.26 Subd. 14. [DECEASED INDIVIDUALS.] If a rebate is received 8.27 by the estate of a deceased individual after the probate estate 8.28 has been closed, and if the original rebate check is returned to 8.29 the commissioner with a copy of the decree of descent or final 8.30 account of the estate, social security numbers, and addresses of 8.31 the beneficiaries, the commissioner may issue separate checks in 8.32 proportion to their share in the residuary estate in the names 8.33 of the residuary beneficiaries of the estate. 8.34 Subd. 15. [APPLICATION OF OTHER LAW.] (a) The sales tax 8.35 rebate is a "Minnesota tax law" for purposes of Minnesota 8.36 Statutes, section 270B.01, subdivision 8. 9.1 (b) The sales tax rebate is "an overpayment of any tax 9.2 collected by the commissioner" for purposes of Minnesota 9.3 Statutes, section 270.07, subdivision 5. For purposes of this 9.4 subdivision, a joint sales tax rebate is payable to each spouse 9.5 equally. 9.6 (c) The sales tax rebate is a refund subject to revenue 9.7 recapture under Minnesota Statutes, chapter 270A. The 9.8 commissioner of revenue shall remit the entire refund to the 9.9 claimant agency, which shall, upon the request of the spouse who 9.10 does not owe the debt, refund one-half of the joint sales tax 9.11 rebate to the spouse who does not owe the debt. 9.12 Subd. 16. [LAPSE OF ENTITLEMENT.] If the commissioner of 9.13 revenue cannot locate an individual entitled to a sales tax 9.14 rebate by July 1, 2003, or if an individual to whom a sales tax 9.15 rebate was issued has not cashed the check by July 1, 2003, the 9.16 right to the sales tax rebate lapses and the check must be 9.17 deposited in the general fund. 9.18 Subd. 17. [CLAIMS FOR UNPAID REBATES.] Individuals 9.19 entitled to a sales tax rebate pursuant to subdivision 1, 6, 7, 9.20 8, or 9 but who did not receive one, and individuals who receive 9.21 a sales tax rebate that was not correctly computed, must file a 9.22 claim with the commissioner before July 1, 2002, in a form 9.23 prescribed by the commissioner. These claims must be treated as 9.24 if they are a claim for refund under Minnesota Statutes, section 9.25 289A.50, subdivisions 4 and 7. 9.26 Subd. 18. [APPROPRIATION.] The rebate is a reduction of 9.27 fiscal year 2001 sales tax revenues. The amount necessary to 9.28 make the sales tax rebates and interest provided in this section 9.29 is appropriated from the general fund to the commissioner of 9.30 revenue in fiscal year 2001 and is available until June 30, 2003. 9.31 Subd. 19. [ILLEGALLY CASHED CHECKS.] If a sales tax rebate 9.32 check is cashed by someone other than the payee or payees of the 9.33 check, and the commissioner of revenue determines that the check 9.34 has been forged or improperly endorsed or the commissioner 9.35 determines that a rebate was overstated or erroneously issued, 9.36 the commissioner may issue an order of assessment for the amount 10.1 of the check or the amount the check is overstated against the 10.2 person or persons cashing it. The assessment must be made 10.3 within two years after the check is cashed, but if cashing the 10.4 check constitutes theft under Minnesota Statutes, section 10.5 609.52, or forgery under Minnesota Statutes, section 609.631, 10.6 the assessment can be made at any time. The assessment may be 10.7 appealed administratively and judicially. The commissioner may 10.8 take action to collect the assessment in the same manner as 10.9 provided by Minnesota Statutes, chapter 289A, for any other 10.10 order of the commissioner assessing tax. 10.11 Subd. 20. [AUTHORITY TO CONTRACT WITH VENDOR.] 10.12 Notwithstanding Minnesota Statutes, sections 9.031, 16A.40, 10.13 16B.49, 16B.50, and any other law to the contrary, the 10.14 commissioner of revenue may take whatever actions the 10.15 commissioner deems necessary to pay the rebates required by this 10.16 section, and may, in consultation with the commissioner of 10.17 finance and the state treasurer, contract with a private vendor 10.18 or vendors to process, print, and mail the rebate checks or 10.19 warrants required under this section and receive and disburse 10.20 state funds to pay those checks or warrants. 10.21 Subd. 21. [ELECTRONIC PAYMENT.] The commissioner may pay 10.22 rebates required by this section by electronic funds transfer to 10.23 individuals who requested that their 2000 individual income tax 10.24 refund be paid through electronic funds transfer. The 10.25 commissioner may make the electronic funds transfer payments to 10.26 the same financial institution and into the same account as the 10.27 2000 individual income tax refund. 10.28 Subd. 22. [ADJUSTMENTS.] A sales tax rebate of 10.29 $852,080,000 is authorized for fiscal year 2001. Before 10.30 payment, the commissioner of revenue shall adjust the rebate as 10.31 follows: 10.32 (1) the rebates calculated in subdivisions 2, 3, 4, 6, 7, 10.33 8, and 9 must be proportionately reduced to account for 1999 10.34 income tax returns that are filed on or after January 1, 2001, 10.35 but before June 1, 2001, so that the estimated amount of sales 10.36 tax rebates payable under subdivisions 2, 3, 4, 6, 7, 8, and 9 11.1 on the date the rebate is processed does not exceed the total 11.2 amount available for the rebate; and 11.3 (2) the commissioner of finance shall certify by July 15, 11.4 2001, the preliminary fiscal 2001 general fund net nondedicated 11.5 revenues. The certification shall exclude the impact of any 11.6 legislation enacted during the 2001 regular and special 11.7 sessions. If certified net nondedicated revenues are less than 11.8 the amount forecast in February 2001, the commissioner of 11.9 revenue shall proportionally decrease all rebates under this 11.10 section to rebate the entire amount of the certified net 11.11 nondedicated revenues. The adjustments under this subdivision 11.12 are not a rule subject to Minnesota Statutes, chapter 14. 11.13 Sec. 3. [APPROPRIATIONS.] 11.14 (a) $1,731,600 is appropriated in fiscal year 2001 from the 11.15 general fund to the commissioner of revenue to administer the 11.16 sales tax rebates in section 2. Any unencumbered balance 11.17 remaining on June 30, 2001, does not cancel but is available for 11.18 expenditure by the commissioner of revenue until June 30, 2002. 11.19 Notwithstanding Minnesota Statutes, section 16A.285, the 11.20 commissioner of revenue may not use this appropriation for any 11.21 purpose other than administering the sales tax rebates. This is 11.22 a one-time appropriation and may not be added to the agency's 11.23 budget base. 11.24 (b) $401,000 is appropriated in fiscal year 2001 from the 11.25 general fund to the state treasurer to pay the cost of clearing 11.26 sales tax rebate checks through commercial banks. Any 11.27 unencumbered balance remaining on June 30, 2001, does not cancel 11.28 but is available for expenditure by the state treasurer until 11.29 June 30, 2002. Notwithstanding Minnesota Statutes, section 11.30 16A.285, the state treasurer may not use this appropriation for 11.31 any purpose other than paying the cost of clearing rebate checks. 11.32 [EFFECTIVE DATE.] This section is effective the day 11.33 following final enactment.