HF 1874

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:56am

A bill for an act
relating to taxation; property tax refund; amending Minnesota Statutes 2008,
sections 290A.03, subdivisions 11, 13, by adding subdivisions; 290A.19.

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

Section 1.

Minnesota Statutes 2008, section 290A.03, subdivision 11, is amended to
read:

Subd. 11.

Rent constituting property taxes.

"Rent constituting property taxes"
means deleted text begin 19 percent of the gross rent actually paid in cash, or its equivalent, or the portion of
rent deleted text end new text begin the amount of gross rent actually paid in cash, or its equivalent, which is attributable
(1) to the property tax paid on the unit or (2) to the amount new text end paid in lieu of property taxes,
in any calendar year by a claimant for the right of occupancy of the claimant's Minnesota
homestead in the calendar year, and which rent constitutes the basis, in the succeeding
calendar year of a claim for relief under this chapter by the claimant. new text begin The amount of
rent attributable to property taxes paid or payments in lieu made on the unit must be
determined by multiplying the gross rent paid by the claimant for the calendar year for the
unit by a fraction, the numerator of which is the net tax on the property where the unit
is located and the denominator of which is the total scheduled rent. In no case may the
rent constituting property taxes exceed 50 percent of the gross rent paid by the claimant
during that calendar year. In the case of a claimant who resides in a unit for which (1)
a rent subsidy is paid to, or for, the claimant based on the income of the claimant or
the claimant's family, or (2) a subsidy is paid to a public housing authority that owns or
operates the claimant's rental unit, pursuant to United States Code, title 42, section 1437c,
20 percent of gross rent actually paid in cash or its equivalent shall be the claimant's "rent
constituting property taxes paid." For purposes of this subdivision, "rent subsidy" does not
include any housing assistance received under the Minnesota family investment program,
general assistance, Minnesota supplemental assistance, supplemental security income,
or similar income maintenance programs.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on rent paid in
2009 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2008, section 290A.03, subdivision 13, is amended to read:

Subd. 13.

Property taxes payable.

"Property taxes payable" means the property
tax exclusive of special assessments, penalties, and interest payable on a claimant's
homestead after deductions made under sections 273.135, 273.1384, 273.1391, 273.42,
subdivision 2, and any other state paid property tax credits in any calendar year, and
after any refund claimed and allowable under section 290A.04, subdivision 2h, that is
first payable in the year that the property tax is payable. In the case of a claimant who
makes ground lease payments, "property taxes payable" includes the amount of the
payments directly attributable to the property taxes assessed against the parcel on which
the house is located. No apportionment or reduction of the "property taxes payable" shall
be required for the use of a portion of the claimant's homestead for a business purpose if
the claimant does not deduct any business depreciation expenses for the use of a portion
of the homestead in the determination of federal adjusted gross income. For homesteads
which are manufactured homes as defined in section 273.125, subdivision 8, and for
homesteads which are park trailers taxed as manufactured homes under section 168.012,
subdivision 9, "property taxes payable" shall also include deleted text begin 19 percent deleted text end new text begin the amount new text end of the
gross rent paid in the preceding year for the site on which the homestead is located new text begin , which
is attributable to the net tax paid on the site. The amount attributable to property taxes
must be determined by multiplying the net tax on the parcel by a fraction, the numerator
of which is the gross rent paid for the calendar year for the site and the denominator
of which is the gross rent paid for the calendar year for the parcel new text end . When a homestead
is owned by two or more persons as joint tenants or tenants in common, such tenants
shall determine between them which tenant may claim the property taxes payable on the
homestead. If they are unable to agree, the matter shall be referred to the commissioner of
revenue whose decision shall be final. Property taxes are considered payable in the year
prescribed by law for payment of the taxes.

In the case of a claim relating to "property taxes payable," the claimant must have
owned and occupied the homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead property pursuant to section
273.124, on or before December 15 of the assessment year to which the "property taxes
payable" relate; or (ii) the claimant must provide documentation from the local assessor
that application for homestead classification has been made on or before December 15
of the year in which the "property taxes payable" were payable and that the assessor has
approved the application.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on rent paid in
2009 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2008, section 290A.03, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Total scheduled rent. new text end

new text begin "Total scheduled rent" means the sum of the
monthly rents assigned to the residential rental units in the property multiplied by 12.
The rents must be an arm's-length rental, including garage rents if any, but not including
charges for medical services furnished by the landlord as a part of the rental agreement. In
determining total scheduled rent, no deduction is allowed for vacant units, uncollected
rent, or reduced cash rents in units occupied by employees or agents of the owner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on rent paid in
2009 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2008, section 290A.03, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Net tax. new text end

new text begin "Net tax" means:
new text end

new text begin (1) the property tax, exclusive of special assessments, interest, and penalties, and
after reduction for any state paid property tax credits as required in subdivision 13; or
new text end

new text begin (2) the payments made in lieu of ad valorem taxes, including payments of special
assessments imposed in lieu of ad valorem taxes, for the calendar year in which the rent
was paid. If a portion of the property is occupied as a homestead or is used for other
than rental purposes, the net tax is the amount of tax reduced by the percentage that the
nonrental use comprises the total square footage of the building. If a portion of the
property is used for purposes other than for residential rental and none of the property is
occupied as a homestead, the net tax is the amount of the tax of the parcel multiplied by a
fraction, the numerator of which is the net tax capacity of the residential rental portion
and the denominator of which is the total net tax capacity of the parcel. If a portion of
the property is used for other than rental residential purposes, the county treasurer shall
list on the property tax statement the amount of net tax pertaining to the rental residential
portion of the property.
new text end

new text begin The amount of the net tax must not be reduced by an abatement or a court-ordered
reduction in the property tax on the property made after the certificate of rent paid has
been provided to the renter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on rent paid in
2009 and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2008, section 290A.19, is amended to read:

290A.19 OWNER OR MANAGING AGENT TO FURNISH RENT
CERTIFICATE.

new text begin (a) new text end The owner or managing agent of any property for which rent is paid for
occupancy as a homestead must furnish a certificate of rent paid to a person who is a
renter on December 31, in the form prescribed by the commissioner. If the renter moves
before December 31, the owner or managing agent may give the certificate to the renter
at the time of moving, or mail the certificate to the forwarding address if an address has
been provided by the renter. The certificate must be made available to the renter before
February 1 of the year following the year in which the rent was paid. The owner or
managing agent must retain a duplicate of each certificate or an equivalent record showing
the same information for a period of three years. The duplicate or other record must
be made available to the commissioner upon request. For the purposes of this section,
"owner" includes a park owner as defined under section 327C.01, subdivision 6, and
"property" includes a lot as defined under section 327C.01, subdivision 3.

new text begin (b) If the owner or managing agent fails to provide the renter with a certificate of
rent constituting property taxes, the commissioner shall allocate the net tax on the building
to the unit on a square footage basis or other appropriate basis as the commissioner
determines. The renter shall supply the commissioner with a statement from the county
treasurer that gives the amount of property tax on the parcel, the address and property tax
parcel identification number of the property, and the number of units in the building.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on rent paid in
2009 and thereafter.
new text end