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Minnesota Legislature

Office of the Revisor of Statutes

HF 48

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 01/08/2001

Current Version - as introduced

  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, updated to calendar year 
  1.18  1999, to determine the proportionate share of the sales tax 
  1.19  rebate due each eligible taxpayer since no effective or 
  1.20  practical mechanism exists for determining the amount of actual 
  1.21  sales tax paid by each eligible 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                                $240
  2.13   at least $2,500 but less than $5,000            $310
  2.14   at least $5,000 but less than $10,000           $330
  2.15   at least $10,000 but less than $15,000          $362
  2.16   at least $15,000 but less than $20,000          $393
  2.17   at least $20,000 but less than $25,000          $428
  2.18   at least $25,000 but less than $30,000          $446
  2.19   at least $30,000 but less than $35,000          $483
  2.20   at least $35,000 but less than $40,000          $529
  2.21   at least $40,000 but less than $45,000          $566
  2.22   at least $45,000 but less than $50,000          $596
  2.23   at least $50,000 but less than $60,000          $636
  2.24   at least $60,000 but less than $70,000          $681
  2.25   at least $70,000 but less than $80,000          $749
  2.26   at least $80,000 but less than $90,000          $804
  2.27   at least $90,000 but less than $100,000         $887
  2.28   at least $100,000 but less than $120,000        $961
  2.29   at least $120,000 but less than $140,000      $1,052
  2.30   at least $140,000 but less than $160,000      $1,137
  2.31   at least $160,000 but less than $180,000      $1,218
  2.32   at least $180,000 but less than $200,000      $1,294
  2.33   at least $200,000 but less than $400,000      $1,655
  2.34   at least $400,000 but less than $600,000      $2,177
  2.35   at least $600,000 but less than $800,000      $2,612
  2.36   at least $800,000 but less than $1,000,000    $2,995
  3.1    $1,000,000 and over                           $3,400
  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                               $136
  3.8    at least $2,500 but less than $5,000           $167
  3.9    at least $5,000 but less than $10,000          $196
  3.10   at least $10,000 but less than $15,000         $263
  3.11   at least $15,000 but less than $20,000         $300
  3.12   at least $20,000 but less than $25,000         $326
  3.13   at least $25,000 but less than $30,000         $340
  3.14   at least $30,000 but less than $40,000         $371
  3.15   at least $40,000 but less than $50,000         $415
  3.16   at least $50,000 but less than $70,000         $490
  3.17   at least $70,000 but less than $100,000        $622
  3.18   at least $100,000 but less than $140,000       $749
  3.19   at least $140,000 but less than $200,000       $905
  3.20   at least $200,000 but less than $400,000     $1,227
  3.21   at least $400,000 but less than $600,000     $1,614
  3.22   $600,000 and over                            $1,700
  3.23     Subd. 4.  [NONRESIDENTS.] Individuals who were not 
  3.24  residents of Minnesota for any part of 1999 and who paid more 
  3.25  than $10 in Minnesota sales tax on nonbusiness consumer 
  3.26  purchases in that year qualify for a rebate under this 
  3.27  subdivision only.  Qualifying nonresidents must file a claim for 
  3.28  rebate on a form prescribed by the commissioner by November 30, 
  3.29  2001.  The claim must include receipts showing the Minnesota 
  3.30  sales tax paid and the date of the sale.  Taxes paid on 
  3.31  purchases allowed in the computation of federal taxable income 
  3.32  or reimbursed by an employer are not eligible for the rebate.  
  3.33  The commissioner shall determine the qualifying taxes paid and 
  3.34  rebate the lesser of: 
  3.35     (1) 42.5 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 paragraph (l).  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 paragraph (l).  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 RECIPIENTS.] Individuals who 
  4.26  were residents of Minnesota for all of 1999, were not eligible 
  4.27  for a rebate under subdivision 1, attained the age of 18 on or 
  4.28  before December 31, 1999, and received in 1999 social security 
  4.29  benefits as defined in section 86(d)(1) of the Internal Revenue 
  4.30  Code of 1986, as amended through December 31, 2000, are entitled 
  4.31  to a rebate of $136.  If the Social Security Administration or 
  4.32  Railroad Retirement Board is paying benefits to a recipient by 
  4.33  electronic funds transfers in 2001, the rebate under this 
  4.34  paragraph must be paid by the commissioner through electronic 
  4.35  funds transfer to the same financial institution and into the 
  4.36  same account into which the Social Security Administration or 
  5.1   Railroad Retirement Board transfers social security benefits in 
  5.2   calendar year 2001. 
  5.3      Subd. 7.  [DEPENDENTS.] An individual who: 
  5.4      (1) was allowed to be claimed as a dependent on a 1999 
  5.5   federal income tax return filed by another person; 
  5.6      (2) would have otherwise been eligible for a rebate under 
  5.7   subdivision 1; and 
  5.8      (3) reported earned income as defined in section 
  5.9   32(c)(2)(A)(i) of the Internal Revenue Code, 
  5.10  is eligible for a rebate under this subdivision only.  The 
  5.11  rebate under this subdivision equals 35 percent of the amount 
  5.12  allowed under the schedule in subdivision 3 based on the 
  5.13  individual's income.  For an individual who was a resident of 
  5.14  Minnesota for less than the entire year, the sales tax rebate 
  5.15  equals the rebate calculated under this subdivision multiplied 
  5.16  by the percentage determined pursuant to Minnesota Statutes, 
  5.17  section 290.06, subdivision 2c, paragraph (e), as calculated on 
  5.18  the original 1999 income tax return. 
  5.19     Subd. 8.  [CREDIT RECIPIENTS.] An individual who 
  5.20     (1) was a resident of Minnesota for any part of 1999; 
  5.21     (2) was not eligible for a rebate under subdivision 1 or 7; 
  5.22     (3) was not allowed to be claimed as a dependent on a 1999 
  5.23  federal income tax return by another person; and 
  5.24     (4) claimed a refund under Minnesota Statutes, chapter 290, 
  5.25  for property taxes paid in 1999 or rent constituting property 
  5.26  taxes paid in 1998; or 
  5.27     (5) filed a 1999 Minnesota income tax return before 
  5.28  November 30, 2001, in order to 
  5.29     (i) claim a credit under section 290.067, 290.0671, or 
  5.30  290.0674; 
  5.31     (ii) claim a refund of withheld taxes; or 
  5.32     (iii) claim a refund of estimated taxes, 
  5.33  is eligible for a rebate under this subdivision only.  For 
  5.34  married couples filing joint returns and heads of households, 
  5.35  the rebate equals the minimum amount in subdivision 2.  For 
  5.36  single filers and married individuals filing separate returns 
  6.1   and for rebates based on refunds under Minnesota Statutes, 
  6.2   chapter 290A, the rebate equals the minimum amount in 
  6.3   subdivision 3.  For an individual who was a resident of 
  6.4   Minnesota for less than the entire year, the sales tax rebate 
  6.5   equals the rebate calculated under this subdivision multiplied 
  6.6   by the percentage determined under Minnesota Statutes, section 
  6.7   290.06, subdivision 2c, paragraph (e), as calculated on the 
  6.8   original 1999 income tax return. 
  6.9      Subd. 9.  [FISCAL YEAR TAXPAYERS.] For a fiscal year 
  6.10  taxpayer, the dates in subdivisions 1 through 4 are extended one 
  6.11  month for each month in calendar year 1999 that occurred prior 
  6.12  to the start of the individual's 1999 fiscal tax year. 
  6.13     Subd. 10.  [ADJUSTMENTS.] Before payment, the commissioner 
  6.14  of revenue shall adjust the rebate as follows: 
  6.15     the rebates calculated in subdivisions 2, 3, 4, 6, 7, and 8 
  6.16  must be proportionately reduced to account for (i) rebates under 
  6.17  subdivisions 7 and 8, and (ii) 1999 income tax returns that are 
  6.18  filed on or after January 1, 2001, but before June 1, 2001, so 
  6.19  that the estimated amount of sales tax rebates payable under 
  6.20  subdivisions 2, 3, 4, 6, 7, and 8 on the date the rebate is 
  6.21  processed does not exceed $924,500,000.  The adjustment under 
  6.22  this subdivision is not a rule subject to Minnesota Statutes, 
  6.23  chapter 14. 
  6.24     Subd. 11.  [PAYMENT DATES; INTEREST.] The commissioner of 
  6.25  revenue may begin making sales tax rebates by July 1, 2001.  
  6.26  Sales tax rebates not paid by January 1, 2002, bear interest at 
  6.27  the rate specified in Minnesota Statutes, section 270.75. 
  6.28     Subd. 12.  [NO ADJUSTMENTS AFTER PROCESSING.] A sales tax 
  6.29  rebate may not be adjusted based on changes to a 1999 income tax 
  6.30  return that are made by order of assessment after the date the 
  6.31  rebate is processed, or made by the taxpayer that are filed with 
  6.32  the commissioner of revenue after that date. 
  6.33     Subd. 13.  [JOINT REBATE RULES.] Individuals who filed a 
  6.34  joint income tax return for 1999 must receive a joint sales tax 
  6.35  rebate.  After the sales tax rebate has been issued, but before 
  6.36  the check has been cashed, either joint claimant may request a 
  7.1   separate check for one-half of the joint sales tax rebate.  
  7.2   Notwithstanding anything in this section to the contrary, if 
  7.3   prior to payment, the commissioner has been notified that 
  7.4   persons who filed a joint 1999 income tax return are living at 
  7.5   separate addresses, as indicated on their 2000 income tax return 
  7.6   or otherwise, the commissioner may issue separate checks to each 
  7.7   person.  The amount payable to each person is one-half of the 
  7.8   total joint rebate. 
  7.9      Subd. 14.  [DECEASED INDIVIDUALS.] If a rebate is received 
  7.10  by the estate of a deceased individual after the probate estate 
  7.11  has been closed, and if the original rebate check is returned to 
  7.12  the commissioner with a copy of the decree of descent or final 
  7.13  account of the estate, social security numbers, and addresses of 
  7.14  the beneficiaries, the commissioner may issue separate checks in 
  7.15  proportion to their share in the residuary estate in the names 
  7.16  of the residuary beneficiaries of the estate. 
  7.17     Subd. 15.  [APPLICATION OF OTHER LAW.] (a) The sales tax 
  7.18  rebate is a "Minnesota tax law" for purposes of Minnesota 
  7.19  Statutes, section 270B.01, subdivision 8. 
  7.20     (b) The sales tax rebate is "an overpayment of any tax 
  7.21  collected by the commissioner" for purposes of Minnesota 
  7.22  Statutes, section 270.07, subdivision 5.  For purposes of this 
  7.23  subdivision, a joint sales tax rebate is payable to each spouse 
  7.24  equally. 
  7.25     (c) The sales tax rebate is a refund subject to revenue 
  7.26  recapture under Minnesota Statutes, chapter 270A.  The 
  7.27  commissioner of revenue shall remit the entire refund to the 
  7.28  claimant agency, which shall, upon the request of the spouse who 
  7.29  does not owe the debt, refund one-half of the joint sales tax 
  7.30  rebate to the spouse who does not owe the debt. 
  7.31     Subd. 16.  [LAPSE OF ENTITLEMENT.] If the commissioner of 
  7.32  revenue cannot locate an individual entitled to a sales tax 
  7.33  rebate by July 1, 2003, or if an individual to whom a sales tax 
  7.34  rebate was issued has not cashed the check by July 1, 2003, the 
  7.35  right to the sales tax rebate lapses and the check must be 
  7.36  deposited in the general fund. 
  8.1      Subd. 17.  [CLAIMS FOR UNPAID REBATES.] Individuals 
  8.2   entitled to a sales tax rebate pursuant to subdivision 1, 6, 7, 
  8.3   or 8 but who did not receive one, and individuals who receive a 
  8.4   sales tax rebate that was not correctly computed, must file a 
  8.5   claim with the commissioner before July 1, 2002, in a form 
  8.6   prescribed by the commissioner.  These claims must be treated as 
  8.7   if they are a claim for refund under Minnesota Statutes, section 
  8.8   289A.50, subdivisions 4 and 7. 
  8.9      Subd. 18.  [APPROPRIATION.] The rebate is a reduction of 
  8.10  fiscal year 2001 sales tax revenues.  The amount necessary to 
  8.11  make the sales tax rebates and interest provided in this section 
  8.12  is appropriated from the general fund to the commissioner of 
  8.13  revenue in fiscal year 2001 and is available until June 30, 2003.
  8.14     Subd. 19.  [ILLEGALLY CASHED CHECKS.] If a sales tax rebate 
  8.15  check is cashed by someone other than the payee or payees of the 
  8.16  check, and the commissioner of revenue determines that the check 
  8.17  has been forged or improperly endorsed or the commissioner 
  8.18  determines that a rebate was overstated or erroneously issued, 
  8.19  the commissioner may issue an order of assessment for the amount 
  8.20  of the check or the amount the check is overstated against the 
  8.21  person or persons cashing it.  The assessment must be made 
  8.22  within two years after the check is cashed, but if cashing the 
  8.23  check constitutes theft under Minnesota Statutes, section 
  8.24  609.52, or forgery under Minnesota Statutes, section 609.631, 
  8.25  the assessment can be made at any time.  The assessment may be 
  8.26  appealed administratively and judicially.  The commissioner may 
  8.27  take action to collect the assessment in the same manner as 
  8.28  provided by Minnesota Statutes, chapter 289A, for any other 
  8.29  order of the commissioner assessing tax. 
  8.30     Subd. 20.  [AUTHORITY TO CONTRACT WITH VENDOR.] 
  8.31  Notwithstanding Minnesota Statutes, sections 9.031, 16A.40, 
  8.32  16B.49, 16B.50, and any other law to the contrary, the 
  8.33  commissioner of revenue may take whatever actions the 
  8.34  commissioner deems necessary to pay the rebates required by this 
  8.35  section, and may, in consultation with the commissioner of 
  8.36  finance and the state treasurer, contract with a private vendor 
  9.1   or vendors to process, print, and mail the rebate checks or 
  9.2   warrants required under this section and receive and disburse 
  9.3   state funds to pay those checks or warrants. 
  9.4      Subd. 21.  [ELECTRONIC PAYMENT.] The commissioner may pay 
  9.5   rebates required by this section by electronic funds transfer to 
  9.6   individuals who requested that their 2000 individual income tax 
  9.7   refund be paid through electronic funds transfer.  The 
  9.8   commissioner may make the electronic funds transfer payments to 
  9.9   the same financial institution and into the same account as the 
  9.10  2000 individual income tax refund. 
  9.11     Sec. 3.  [APPROPRIATIONS.] 
  9.12     (a) $....... is appropriated from the general fund to the 
  9.13  commissioner of revenue to administer the sales tax rebates for 
  9.14  fiscal year 2001.  Any unencumbered balance remaining on June 
  9.15  30, 2001, does not cancel but is available for expenditure by 
  9.16  the commissioner of revenue until June 30, 2002.  
  9.17  Notwithstanding Minnesota Statutes, section 16A.285, the 
  9.18  commissioner of revenue may not use this appropriation for any 
  9.19  purpose other than administering the sales tax rebates.  This is 
  9.20  a one-time appropriation and may not be added to the agency's 
  9.21  budget base. 
  9.22     (b) $....... is appropriated from the general fund to the 
  9.23  state treasurer to pay the cost of clearing sales tax rebate 
  9.24  checks through commercial banks. 
  9.25     Sec. 4.  [EFFECTIVE DATE.] 
  9.26     Sections 1 to 3 are effective the day following final 
  9.27  enactment.