Minnesota Legislature
HF 1938
as introduced - 93rd Legislature (2023 - 2024) Posted on 02/21/2023 10:29am
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A bill for an act
relating to taxation; modifying individual income and corporate franchise taxes,
sales and use taxes, property taxes, local government aids, and other miscellaneous
taxes and tax provisions; modifying income tax additions, subtractions, and credits;
modifying taxes on capital gains; proposing a child tax credit; proposing an advance
payment and one-time refundable tax credit; modifying cannabis-related sales and
use tax provisions; proposing sales tax exemptions for certain entities; modifying
eligibility for certain property tax programs; modifying the formula and adding
definitions for the calculation of local government aids; proposing new forms of
local government aids; appropriating money; amending Minnesota Statutes 2022,
sections 116J.8737, subdivisions 5, 12; 270C.52, subdivision 2; 273.124,
subdivisions 6, 13, 13a, 13c, 13d, 14; 273.1245, subdivision 1; 273.1315,
subdivision 2; 273.1387, subdivision 2; 289A.08, subdivisions 7, as amended, 7a,
as amended; 290.0131, by adding a subdivision; 290.0132, subdivision 26; 290.06,
subdivision 2c, as amended; 290.067; 290.0671, subdivision 1; 290.0674,
subdivisions 2, 2a, by adding a subdivision; 290.0677, subdivision 1; 290.0681,
subdivisions 3, 10; 290.091, subdivision 2, as amended; 290B.03, subdivision 1;
290B.04, subdivisions 3, 4; 290B.05, subdivision 1; 297A.61, by adding
subdivisions; 297A.67, subdivisions 2, 7; 297A.70, subdivisions 2, 4, 18; 297A.71,
by adding a subdivision; 297A.75, subdivisions 1, 2, 3; 477A.011, subdivision 34,
by adding subdivisions; 477A.0124, subdivision 2; 477A.013, subdivisions 8, 9;
477A.03, subdivisions 2a, 2b; Laws 2006, chapter 259, article 11, section 3, as
amended; Laws 2023, chapter 1, section 15; proposing coding for new law in
Minnesota Statutes, chapters 290; 477A; repealing Minnesota Statutes 2022,
sections 290.0132, subdivision 33; 477A.011, subdivisions 30a, 38, 42, 45;
477A.013, subdivision 13.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES
Section 1.
Minnesota Statutes 2022, section 116J.8737, subdivision 5, is amended to read:
Subd. 5.
Credit allowed.
(a) A qualified investor or qualified fund is eligible for a credit
equal to 25 percent of the qualified investment in a qualified small business. Investments
made by a pass-through entity qualify for a credit only if the entity is a qualified fund. The
commissioner must not allocate to qualified investors or qualified funds more than the dollar
amount in credits allowed for the taxable years listed in paragraph (i). For each taxable year,
50 percent must be allocated to credits for qualified investments in qualified greater
Minnesota businesses and minority-owned, women-owned, or veteran-owned qualified
small businesses in Minnesota. Any portion of a taxable year's credits that is reserved for
qualified investments in greater Minnesota businesses and minority-owned, women-owned,
or veteran-owned qualified small businesses in Minnesota that is not allocated by September
30 of the taxable year is available for allocation to other credit applications beginning on
October 1. Any portion of a taxable year's credits that is not allocated by the commissioner
does not cancel and may be carried forward to subsequent taxable years until all credits
have been allocated.
(b) The commissioner may not allocate more than a total maximum amount in credits
for a taxable year to a qualified investor for the investor's cumulative qualified investments
as an individual qualified investor and as an investor in a qualified fund; for married couples
filing joint returns the maximum is $250,000, and for all other filers the maximum is
$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits
over all taxable years for qualified investments in any one qualified small business.
(c) The commissioner may not allocate a credit to a qualified investor either as an
individual qualified investor or as an investor in a qualified fund if, at the time the investment
is proposed:
(1) the investor is an officer or principal of the qualified small business; or
(2) the investor, either individually or in combination with one or more members of the
investor's family, owns, controls, or holds the power to vote 20 percent or more of the
outstanding securities of the qualified small business.
A member of the family of an individual disqualified by this paragraph is not eligible for a
credit under this section. For a married couple filing a joint return, the limitations in this
paragraph apply collectively to the investor and spouse. For purposes of determining the
ownership interest of an investor under this paragraph, the rules under section 267(c) and
267(e) of the Internal Revenue Code apply.
(d) Applications for tax credits must be made available on the department's website by
November 1 of the preceding year.
(e) Qualified investors and qualified funds must apply to the commissioner for tax credits.
Tax credits must be allocated to qualified investors or qualified funds in the order that the
tax credit request applications are filed with the department. The commissioner must approve
or reject tax credit request applications within 15 days of receiving the application. The
investment specified in the application must be made within 60 days of the allocation of
the credits. If the investment is not made within 60 days, the credit allocation is canceled
and available for reallocation. A qualified investor or qualified fund that fails to invest as
specified in the application, within 60 days of allocation of the credits, must notify the
commissioner of the failure to invest within five business days of the expiration of the
60-day investment period.
(f) All tax credit request applications filed with the department on the same day must
be treated as having been filed contemporaneously. If two or more qualified investors or
qualified funds file tax credit request applications on the same day, and the aggregate amount
of credit allocation claims exceeds the aggregate limit of credits under this section or the
lesser amount of credits that remain unallocated on that day, then the credits must be allocated
among the qualified investors or qualified funds who filed on that day on a pro rata basis
with respect to the amounts claimed. The pro rata allocation for any one qualified investor
or qualified fund is the product obtained by multiplying a fraction, the numerator of which
is the amount of the credit allocation claim filed on behalf of a qualified investor and the
denominator of which is the total of all credit allocation claims filed on behalf of all
applicants on that day, by the amount of credits that remain unallocated on that day for the
taxable year.
(g) A qualified investor or qualified fund, or a qualified small business acting on their
behalf, must notify the commissioner when an investment for which credits were allocated
has been made, and the taxable year in which the investment was made. A qualified fund
must also provide the commissioner with a statement indicating the amount invested by
each investor in the qualified fund based on each investor's share of the assets of the qualified
fund at the time of the qualified investment. After receiving notification that the investment
was made, the commissioner must issue credit certificates for the taxable year in which the
investment was made to the qualified investor or, for an investment made by a qualified
fund, to each qualified investor who is an investor in the fund. The certificate must state
that the credit is subject to revocation if the qualified investor or qualified fund does not
hold the investment in the qualified small business for at least three years, consisting of the
calendar year in which the investment was made and the two following years. The three-year
holding period does not apply if:
(1) the investment by the qualified investor or qualified fund becomes worthless before
the end of the three-year period;
(2) 80 percent or more of the assets of the qualified small business is sold before the end
of the three-year period;
(3) the qualified small business is sold before the end of the three-year period;
(4) the qualified small business's common stock begins trading on a public exchange
before the end of the three-year period; or
(5) the qualified investor dies before the end of the three-year period.
(h) The commissioner must notify the commissioner of revenue of credit certificates
issued under this section.
(i) The credit allowed under this subdivision is effective as follows:
(1) $10,000,000 for taxable years beginning after December 31, 2020, and before January
1, 2022; deleted text begin and
deleted text end
(2) $5,000,000 for taxable years beginning after December 31, 2021, and before January
1, 2023deleted text begin .deleted text end new text begin ; and
new text end
new text begin
(3) $10,000,000 for taxable years beginning after December 31, 2022, and before January
1, 2031.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 2.
Minnesota Statutes 2022, section 116J.8737, subdivision 12, is amended to read:
Subd. 12.
Sunset.
This section expires for taxable years beginning after December 31,
deleted text begin 2022deleted text end new text begin 2030new text end , except that reporting requirements under subdivision 6 and revocation of credits
under subdivision 7 remain in effect through deleted text begin 2024deleted text end new text begin 2032new text end for qualified investors and qualified
funds, and through deleted text begin 2026deleted text end new text begin 2034new text end for qualified small businesses, reporting requirements under
subdivision 9 remain in effect through deleted text begin 2022deleted text end new text begin 2030new text end , and the appropriation in subdivision 11
remains in effect through deleted text begin 2026deleted text end new text begin 2034new 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
Sec. 3.
Minnesota Statutes 2022, section 289A.08, subdivision 7, as amended by Laws
2023, chapter 1, section 2, is amended to read:
Subd. 7.
Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.
(a) The commissioner may allow a partnership with nonresident partners to
file a composite return and to pay the tax on behalf of nonresident partners who have no
other Minnesota source income. This composite return must include the names, addresses,
Social Security numbers, income allocation, and tax liability for the nonresident partners
electing to be covered by the composite return.
(b) The computation of a partner's tax liability must be determined by multiplying the
income allocated to that partner by the highest rate used to determine the tax liability for
individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
deductions, or personal exemptions are not allowed.new text begin The computation of a partner's
preferential rate income tax liability must be computed under section 290.055.
new text end
(c) The partnership must submit a request to use this composite return filing method for
nonresident partners. The requesting partnership must file a composite return in the form
prescribed by the commissioner of revenue. The filing of a composite return is considered
a request to use the composite return filing method.
(d) The electing partner must not have any Minnesota source income other than the
income from the partnership, other electing partnerships, and other qualifying entities
electing to file and pay the pass-through entity tax under subdivision 7a. If it is determined
that the electing partner has other Minnesota source income, the inclusion of the income
and tax liability for that partner under this provision will not constitute a return to satisfy
the requirements of subdivision 1. The tax paid for the individual as part of the composite
return is allowed as a payment of the tax by the individual on the date on which the composite
return payment was made. If the electing nonresident partner has no other Minnesota source
income, filing of the composite return is a return for purposes of subdivision 1.
(e) This subdivision does not negate the requirement that an individual pay estimated
tax if the individual's liability would exceed the requirements set forth in section 289A.25.
The individual's liability to pay estimated tax is, however, satisfied when the partnership
pays composite estimated tax in the manner prescribed in section 289A.25.
(f) If an electing partner's share of the partnership's gross income from Minnesota sources
is less than the filing requirements for a nonresident under this subdivision, the tax liability
is zero. However, a statement showing the partner's share of gross income must be included
as part of the composite return.
(g) The election provided in this subdivision is only available to a partner who has no
other Minnesota source income and who is either (1) a full-year nonresident individual or
(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the
Internal Revenue Code.
(h) A corporation defined in section 290.9725 and its nonresident shareholders may
make an election under this paragraph. The provisions covering the partnership apply to
the corporation and the provisions applying to the partner apply to the shareholder.
(i) Estates and trusts distributing current income only and the nonresident individual
beneficiaries of the estates or trusts may make an election under this paragraph. The
provisions covering the partnership apply to the estate or trust. The provisions applying to
the partner apply to the beneficiary.
(j) For the purposes of this subdivision, "income" means the partner's share of federal
adjusted gross income from the partnership modified by the additions provided in section
290.0131, subdivisions 8 to 10, 16, and 17, and the subtractions provided in: (1) section
290.0132, subdivisions 9, 27, 28, and 31, to the extent the amount is assignable or allocable
to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction
allowed under section 290.0132, subdivision 9, is only allowed on the composite tax
computation to the extent the electing partner would have been allowed the subtraction.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 4.
Minnesota Statutes 2022, section 289A.08, subdivision 7a, as amended by Laws
2023, chapter 1, section 3, is amended to read:
Subd. 7a.
Pass-through entity tax.
(a) For the purposes of this subdivision, the following
terms have the meanings given:
(1) "income" has the meaning given in subdivision 7, paragraph (j), modified by the
addition provided in section 290.0131, subdivision 5, and the subtraction provided in section
290.0132, subdivision 3, except that the provisions that apply to a partnership apply to a
qualifying entity and the provisions that apply to a partner apply to a qualifying owner. The
income of both a resident and nonresident qualifying owner is allocated and assigned to
this state as provided for nonresident partners and shareholders under sections 290.17,
290.191, and 290.20;
(2) "qualifying entity" means a partnership, limited liability company, or S corporation
including a qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the
Internal Revenue Code. Qualifying entity does not include a partnership, limited liability
company, or corporation that has a partnership, limited liability company other than a
disregarded entity, or corporation as a partner, member, or shareholder; and
(3) "qualifying owner" means:
(i) a resident or nonresident individual or estate that is a partner, member, or shareholder
of a qualifying entity; or
(ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an
S corporation.
(b) For taxable years beginning after December 31, 2020, in which the taxes of a
qualifying owner are limited under section 164(b)(6)(B) of the Internal Revenue Code, a
qualifying entity may elect to file a return and pay the pass-through entity tax imposed under
paragraph (c). The election:
(1) must be made on or before the due date or extended due date of the qualifying entity's
pass-through entity tax return;
(2) may only be made by qualifying owners who collectively hold more than a 50 percent
ownership interest in the qualifying entity;
(3) is binding on all qualifying owners who have an ownership interest in the qualifying
entity; and
(4) once made is irrevocable for the taxable year.
(c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a
qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.
(d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount
of the qualifying owner's income multiplied by the highest tax rate for individuals under
section 290.06, subdivision 2c. When making this determination:
(1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed;
and
(2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.
(e) The amount of each credit and deduction used to determine a qualifying owner's tax
liability under paragraph (d) must also be used to determine that qualifying owner's income
tax liability under chapter 290.
(f) This subdivision does not negate the requirement that a qualifying owner pay estimated
tax if the qualifying owner's tax liability would exceed the requirements set forth in section
289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's
tax liability as determined under paragraph (d) is, however, satisfied when the qualifying
entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated
tax.
(g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the
treatment of distributions, is determined as if the election to pay the pass-through entity tax
under paragraph (b) is not made.
(h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a
pass-through entity tax return must be treated as a composite return and a qualifying entity
filing a pass-through entity tax return must be treated as a partnership filing a composite
return.
(i) The provisions of subdivision 17 apply to the election to pay the pass-through entity
tax under this subdivision.
(j) If a nonresident qualifying owner of a qualifying entity making the election to file
and pay the tax under this subdivision has no other Minnesota source income, filing of the
pass-through entity tax return is a return for purposes of subdivision 1, provided that the
nonresident qualifying owner must not have any Minnesota source income other than the
income from the qualifying entity, other electing qualifying entities, and other partnerships
electing to file a composite return under subdivision 7. If it is determined that the nonresident
qualifying owner has other Minnesota source income, the inclusion of the income and tax
liability for that owner under this provision will not constitute a return to satisfy the
requirements of subdivision 1. The tax paid for the qualifying owner as part of the
pass-through entity tax return is allowed as a payment of the tax by the qualifying owner
on the date on which the pass-through entity tax return payment was made.
(k) Once a credit is claimed by a qualifying owner under section 290.06, subdivision
40, a qualifying entity cannot receive a refund for tax paid under this subdivision for any
amounts claimed under that section by the qualifying owners. Once a credit is claimed under
section 290.06, subdivision 40, any refund must be claimed in conjunction with a return
filed by the qualifying owner.
new text begin
(l) The computation of a partner's preferential rate income tax liability must be computed
under section 290.055.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 5.
Minnesota Statutes 2022, section 290.0131, is amended by adding a subdivision
to read:
new text begin Subd. 21. new text end
new text begin Dependent flexible spending accounts. new text end
new text begin
For a taxpayer who claims the credit
under section 290.067 or for a married taxpayer filing a separate return whose spouse claims
the credit under section 290.067, the amount of dependent care assistance that is excluded
from gross income under section 129 of the Internal Revenue Code is an addition.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 6.
Minnesota Statutes 2022, section 290.0132, subdivision 26, is amended to read:
Subd. 26.
Social Security benefits.
(a) A portion of deleted text begin taxabledeleted text end Social Security benefits is
allowed as a subtraction. The subtraction equals the lesser of deleted text begin taxabledeleted text end Social Security benefits
or a maximum subtraction subject to the limits deleted text begin underdeleted text end new text begin innew text end paragraphs (b)deleted text begin , (c), anddeleted text end new text begin tonew text end (d).
(b) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction equals deleted text begin $5,150deleted text end new text begin $10,000new text end . The maximum subtraction is reduced by 20 percent of
provisional income over deleted text begin $78,180deleted text end new text begin $120,000new text end . In no case is the subtraction less than zero.
(c) For single or head-of-household taxpayers, the maximum subtraction equals deleted text begin $4,020deleted text end new text begin
$7,800new text end . The maximum subtraction is reduced by 20 percent of provisional income over
deleted text begin $61,080deleted text end new text begin $93,600new text end . In no case is the subtraction less than zero.
(d) For married taxpayers filing separate returns, the maximum subtraction equals
one-half the maximum subtraction for joint returns under paragraph (b). The maximum
subtraction is reduced by 20 percent of provisional income over one-half the threshold
amount specified in paragraph (b). In no case is the subtraction less than zero.
(e) For purposes of this subdivision, "provisional income" means modified adjusted
gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
the taxable Social Security benefits received during the taxable year, and "Social Security
benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
(f) The commissioner shall adjust the maximum subtraction and threshold amounts in
paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year deleted text begin 2019deleted text end new text begin
2023new text end . The maximum subtraction and threshold amounts as adjusted must be rounded to the
nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
amount.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 7.
new text begin
[290.055] CAPITAL GAINS TAX.
new text end
new text begin
(a) For purposes of this subdivision, "preferential rate income" means the sum of net
long-term capital gain income as defined in section 1222 of the Internal Revenue Code, and
qualified dividend income as defined in section 1(h)(11)(B) of the Internal Revenue Code.
new text end
new text begin
(b) In addition to the tax computed under section 290.06, subdivision 2c, an additional
amount of tax is imposed on the preferential rate income of individuals, estates, and trusts
applying the following schedule of rates:
new text end
new text begin
(1) On all preferential rate income over $500,000, but not over $1,000,000, 1.5 percent;
new text end
new text begin
(2) On all preferential rate income over $1,000,000, four percent;
new text end
new text begin
(3) For an individual that is not a Minnesota resident for the entire taxable year, the tax
under this subdivision must be calculated as if the individual is a Minnesota resident for the
entire year, and that amount must be multiplied by a fraction in which:
new text end
new text begin
(i) the numerator is preferential rate income allocable under section 290.17 to Minnesota;
and
new text end
new text begin
(ii) the denominator is the total amount of preferential rate income for the taxable year;
new text end
new text begin
(4) For an estate or trust, the tax on preferential rate income must be computed by
multiplying the preferential rate income tax liability by a fraction, the numerator of which
is the amount of the estate or trust's preferential rate income allocated to the state pursuant
to the provisions of sections 290.17, 290.191, and 290.20, and the denominator of which is
the taxpayer's total preferential rate income.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 8.
Minnesota Statutes 2022, section 290.06, subdivision 2c, as amended by Laws
2023, chapter 1, section 15, is amended to read:
Subd. 2c.
Schedules of rates for individuals, estates, and trusts.
(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:
(1) On the first $38,770, 5.35 percent;
(2) On all over $38,770, but not over $154,020, 6.8 percent;
(3) On all over $154,020, but not over $269,010, 7.85 percent;
(4) On all over $269,010, 9.85 percent.
Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts after the adjustment required in subdivision 2d.
(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first $26,520, 5.35 percent;
(2) On all over $26,520, but not over $87,110, 6.8 percent;
(3) On all over $87,110, but not over $161,720, 7.85 percent;
(4) On all over $161,720, 9.85 percent.
(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first $32,650, 5.35 percent;
(2) On all over $32,650, but not over $131,190, 6.8 percent;
(3) On all over $131,190, but not over $214,980, 7.85 percent;
(4) On all over $214,980, 9.85 percent.
(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:
(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by:
(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text begin anddeleted text end
17,new text begin 19, and 20,new text end and 290.0137, paragraph (a); and reduced by
(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9, 10, 14, 15, 17, 18, 27, deleted text begin anddeleted text end 31,new text begin and 32,new text end and 290.0137, paragraph (c), after
applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17;
and
(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by:
(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text begin anddeleted text end
17,new text begin 19, and 20,new text end and 290.0137, paragraph (a); and reduced by
(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27,
deleted text begin anddeleted text end 31,new text begin and 32,new text end and 290.0137, paragraph (c).
(f) If an individual who is not a Minnesota resident for the entire year is a qualifying
owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
7a, paragraph (b), the individual must compute the individual's Minnesota income tax as
provided in paragraph (e), and also must include, to the extent attributed to the electing
qualifying entity:
(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
addition under section 290.0131, subdivision 5; and
(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
subtraction under section 290.0132, subdivision 3.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for taxable years beginning
after December 31, 2018.
new text end
Sec. 9.
Minnesota Statutes 2022, section 290.067, is amended to read:
290.067 deleted text begin DEPENDENTdeleted text end new text begin GREAT START CHILD CARE AND DEPENDENTnew text end CARE
CREDIT.
Subdivision 1.
Amount of credit.
(a) A taxpayer may take as a credit against the tax
due from the taxpayer and a spouse, if any, under this chapter an amount equal to deleted text begin the
dependent care credit for which the taxpayer is eligible pursuant to the provisions of section
21 of the Internal Revenue Code except that in determining whether the child qualified as
a dependent, income received as a Minnesota family investment program grant or allowance
to or on behalf of the child must not be taken into account in determining whether the child
received more than half of the child's support from the taxpayerdeleted text end new text begin the taxpayer's eligible
dependent care expenses, as determined under subdivisions 1a and 1b, multiplied by the
taxpayer's credit percentage, as determined under subdivision 1cnew text end .
deleted text begin
(b) If a child who has not attained the age of six years at the close of the taxable year is
cared for at a licensed family day care home operated by the child's parent, the taxpayer is
deemed to have paid employment-related expenses. If the child is 16 months old or younger
at the close of the taxable year, the amount of expenses deemed to have been paid equals
the maximum limit for one qualified individual under section 21(c) and (d) of the Internal
Revenue Code. If the child is older than 16 months of age but has not attained the age of
six years at the close of the taxable year, the amount of expenses deemed to have been paid
equals the amount the licensee would charge for the care of a child of the same age for the
same number of hours of care.
deleted text end
deleted text begin
(c) If a married couple:
deleted text end
deleted text begin
(1) has a child who has not attained the age of one year at the close of the taxable year;
deleted text end
deleted text begin
(2) files a joint tax return for the taxable year; and
deleted text end
deleted text begin
(3) does not participate in a dependent care assistance program as defined in section 129
of the Internal Revenue Code, in lieu of the actual employment related expenses paid for
that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of (i)
the combined earned income of the couple or (ii) the amount of the maximum limit for one
qualified individual under section 21(c) and (d) of the Internal Revenue Code will be deemed
to be the employment related expense paid for that child. The earned income limitation of
section 21(d) of the Internal Revenue Code shall not apply to this deemed amount. These
deemed amounts apply regardless of whether any employment-related expenses have been
paid.
deleted text end
deleted text begin
(d) If the taxpayer is not required and does not file a federal individual income tax return
for the tax year, no credit is allowed for any amount paid to any person unless:
deleted text end
deleted text begin
(1) the name, address, and taxpayer identification number of the person are included on
the return claiming the credit; or
deleted text end
deleted text begin
(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue
Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name
and address of the person are included on the return claiming the credit.
deleted text end
deleted text begin
In the case of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence
in attempting to provide the information required.
deleted text end
deleted text begin (e)deleted text end new text begin (b)new text end In the case of a nonresident, part-year resident, or a person who has earned income
not subject to tax under this chapter deleted text begin including earned income excluded pursuant to section
290.0132, subdivision 10deleted text end , the credit determined under deleted text begin section 21 of the Internal Revenue
Codedeleted text end new text begin this sectionnew text end must be allocated deleted text begin based on the ratio by which the earned income of the
claimant and the claimant's spouse from Minnesota sources bears to the total earned income
of the claimant and the claimant's spousedeleted text end new text begin using the percentage calculated in section 290.06,
subdivision 2c, paragraph (e)new text end .
new text begin
(c) For the purposes of this section, the following terms have the meanings given:
new text end
new text begin
(1) "employment-related expenses" has the meaning given in section 21(b)(2) of the
Internal Revenue Code;
new text end
new text begin
(2) "qualifying individual" has the meaning given in section 21(b)(1) of the Internal
Revenue Code, except that in determining whether the child qualified as a dependent, income
received as a Minnesota family investment program grant or allowance to or on behalf of
the child must not be taken into account in determining whether the child received more
than half of the child's support from the taxpayer; and
new text end
new text begin
(3) "young child" means a qualifying individual who had not attained the age of five by
December 31 of the taxable year.
new text end
deleted text begin
(f) For residents of Minnesota, the subtractions for military pay under section 290.0132,
subdivisions 11 and 12, are not considered "earned income not subject to tax under this
chapter."
deleted text end
deleted text begin
(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the
Internal Revenue Code is not considered "earned income not subject to tax under this
chapter."
deleted text end
deleted text begin
(h) For taxpayers with federal adjusted gross income in excess of $52,230, the credit is
equal to the lesser of the credit otherwise calculated under this subdivision, or the amount
equal to $600 minus five percent of federal adjusted gross income in excess of $52,230 for
taxpayers with one qualified individual, or $1,200 minus five percent of federal adjusted
gross income in excess of $52,230 for taxpayers with two or more qualified individuals,
but in no case is the credit less than zero.
deleted text end
new text begin Subd. 1a. new text end
new text begin Eligible dependent care expenses. new text end
new text begin
(a) A taxpayer's eligible dependent care
expenses equals the amount of employment-related expenses incurred during the taxable
year, subject to the limitations in paragraph (b) and subdivision 1b.
new text end
new text begin
(b) Except as provided in subdivision 1b, a taxpayer's eligible dependent care expenses
are limited to:
new text end
new text begin
(1) $3,000 if there was one qualifying individual with respect to the taxpayer; or
new text end
new text begin
(2) $6,000 if there were two or more qualifying individuals with respect to the taxpayer.
new text end
new text begin Subd. 1b. new text end
new text begin Eligible expenses for taxpayers with young children. new text end
new text begin
For taxable years
beginning after December 31, 2022, and before January 1, 2031, for a taxpayer with a young
child, the limit in subdivision 1a, paragraph (b), is increased as follows:
new text end
new text begin
(1) for a taxpayer with one young child with respect to the taxpayer, the limit is increased
by $5,000;
new text end
new text begin
(2) for a taxpayer with two young children with respect to the taxpayer, the limit is
increased by $10,000; and
new text end
new text begin
(3) for a taxpayer with three or more young children with respect to the taxpayer, the
limit is increased by $15,000.
new text end
new text begin Subd. 1c. new text end
new text begin Credit percentage. new text end
new text begin
(a) The credit percentage equals 50 percent, subject to
the reductions in paragraphs (b) and (c).
new text end
new text begin
(b) A taxpayer's credit percentage is reduced by one percentage point for each $800, or
fraction thereof, by which the taxpayer's adjusted gross income exceeds $200,000.
new text end
new text begin
(c) For a married taxpayer filing a separate return, the credit percentage must be calculated
under paragraphs (a) and (b), except the adjusted gross income thresholds are one-half the
amounts for other married filers, as adjusted for inflation under subdivision 2b.
new text end
Subd. 2b.
Inflation adjustment.
The commissioner shall annually adjust the dollar
amount of the income threshold at which the deleted text begin maximumdeleted text end credit new text begin percentage new text end begins to be
reduced under subdivision deleted text begin 1deleted text end new text begin 1cnew text end as provided in section 270C.22. The statutory year is taxable
year deleted text begin 2019deleted text end new text begin 2023new text end .
new text begin Subd. 2c. new text end
new text begin Deemed expenses. new text end
new text begin
(a) If a child who has not attained the age of six years at
the close of the taxable year is cared for at a licensed family day care home operated by the
child's parent, the taxpayer is deemed to have paid employment-related expenses. The
amount of expenses deemed to have been paid equals the amount the licensee would charge
for the care of a child of the same age for the same number of hours of care up to the
maximum eligible expenses allowed, as determined under subdivisions 1a and 1b.
new text end
new text begin
(b) If a taxpayer, regardless of filing status:
new text end
new text begin
(1) has a qualifying individual who has not attained the age of one year at the close of
the taxable year; and
new text end
new text begin
(2) used the deemed amount under paragraph (a) in lieu of the actual employment-related
expenses paid for that child, the amount of deemed employment-related expenses equals
the lesser of:
new text end
new text begin
(i) the earned income of the taxpayer; or
new text end
new text begin
(ii) the amount of the maximum limit for one qualified individual under subdivision 1a,
as increased by subdivision 1b.
new text end
new text begin
The earned income limitation of section 21(d) of the Internal Revenue Code shall not apply
to this deemed amount. These deemed amounts apply regardless of whether any
employment-related expenses have been paid.
new text end
Subd. 3.
Credit to be refundable.
If the amount of credit which a claimant would be
eligible to receive pursuant to this subdivision exceeds the claimant's tax liability under
chapter 290, the excess amount of the credit shall be refunded to the claimant by the
commissioner of revenue.new text begin An amount sufficient to pay the refunds required by this section
is appropriated to the commissioner from the general fund.
new text end
Subd. 4.
Right to file claim.
The right to file a claim under this section shall be personal
to the claimant and shall not survive death, but such right may be exercised on behalf of a
claimant by the claimant's legal guardian or attorney-in-fact. When a claimant dies after
having filed a timely claim the amount thereof shall be disbursed to another member of the
household as determined by the commissioner of revenue. If the claimant was the only
member of a household, the claim may be paid to the claimant's personal representative,
but if neither is appointed and qualified within two years of the filing of the claim, the
amount of the claim shall escheat to the state.
new text begin Subd. 5. new text end
new text begin Employment-related expenses. new text end
new text begin
For the purposes of determining
employment-related expenses, the provisions of section 21(d) of the Internal Revenue Code
apply.
new text end
new text begin Subd. 6. new text end
new text begin Special rules. new text end
new text begin
For purposes of this section, the special rules of section 21(e)
of the Internal Revenue Code apply, except the special rule in section 21(e)(2) of the Internal
Revenue Code, requiring married couples to file a joint return, does not apply.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 10.
Minnesota Statutes 2022, section 290.0671, subdivision 1, is amended to read:
Subdivision 1.
Credit allowed.
(a) An individual who is a resident of Minnesota is
allowed a credit against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code, except that:
(1) a taxpayer with no qualifying children who has attained the age of 19, but not attained
age 65 before the close of the taxable year and is otherwise eligible for a credit under section
32 of the Internal Revenue Code may also receive a credit; deleted text begin and
deleted text end
(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal
Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted
gross income exceeds the income limitation under section 32 of the Internal Revenue Codedeleted text begin .deleted text end new text begin ;
and
new text end
new text begin
(3) the requirements of section 32(m) of the Internal Revenue Code do not apply.
new text end
(b) For individuals with no qualifying children, the credit equals 3.9 percent of the first
$7,150 of earned income. The credit is reduced by 2.0 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.
(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first
$11,950 of earned income. The credit is reduced by 6.0 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.
(d) For individuals with two qualifying children, the credit equals 11 percent of the first
$19,600 of earned income. The credit is reduced by 10.5 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.
(e) For individuals with three or more qualifying children, the credit equals 12.5 percent
of the first $20,000 of earned income. The credit is reduced by 10.5 percent of earned income
or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in
no case is the credit less than zero.
(f) For a part-year resident, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).
(g) For a person who was a resident for the entire tax year and has earned income not
subject to tax under this chapter, including income excluded under section 290.0132,
subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross
income reduced by the earned income not subject to tax under this chapter over federal
adjusted gross income. For purposes of this paragraph, the following clauses are not
considered "earned income not subject to tax under this chapter":
(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
(3) income derived from an Indian reservation by an enrolled member of the reservation
while living on the reservation.
(h) For the purposes of this section, the phaseout threshold equals:
(1) $14,570 for married taxpayers filing joint returns with no qualifying children;
(2) $8,730 for all other taxpayers with no qualifying children;
(3) $28,610 for married taxpayers filing joint returns with one qualifying child;
(4) $22,770 for all other taxpayers with one qualifying child;
(5) $32,840 for married taxpayers filing joint returns with two qualifying children;
(6) $27,000 for all other taxpayers with two qualifying children;
(7) $33,140 for married taxpayers filing joint returns with three or more qualifying
children; and
(8) $27,300 for all other taxpayers with three or more qualifying children.
(i) The commissioner shall construct tables showing the amount of the credit at various
income levels and make them available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may graduate the transition
between income brackets.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 11.
Minnesota Statutes 2022, section 290.0674, subdivision 2, is amended to read:
Subd. 2.
Limitations.
(a) For claimants with income not greater than deleted text begin $33,500deleted text end new text begin $59,210new text end ,
the maximum credit allowed for a family is $1,000 multiplied by the number of qualifying
children in kindergarten through grade 12 in the family. The maximum credit for families
with one qualifying child in kindergarten through grade 12 is reduced by $1 for each $4 of
deleted text begin householddeleted text end income over deleted text begin $33,500deleted text end new text begin $59,210new text end , and the maximum credit for families with two or
more qualifying children in kindergarten through grade 12 is reduced by $2 for each $4 of
deleted text begin householddeleted text end income over deleted text begin $33,500deleted text end new text begin $59,210new text end , but in no case is the credit less than zero.
(b) In the case of a married claimant, a credit is not allowed unless a joint income tax
return is filed.
(c) For a nonresident or part-year resident, the credit determined under subdivision 1
and the maximum credit amount in paragraph (a) must be allocated using the percentage
calculated in section 290.06, subdivision 2c, paragraph (e).
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 12.
Minnesota Statutes 2022, section 290.0674, subdivision 2a, is amended to read:
Subd. 2a.
Income.
deleted text begin (a)deleted text end For purposes of this section, "income" means deleted text begin the sum of the
following:
deleted text end
deleted text begin (1)deleted text end federal adjusted gross income as defined in section 62 of the Internal Revenue Codedeleted text begin ;
anddeleted text end new text begin .
new text end
deleted text begin
(2) the sum of the following amounts to the extent not included in clause (1):
deleted text end
deleted text begin
(i) all nontaxable income;
deleted text end
deleted text begin
(ii) the amount of a passive activity loss that is not disallowed as a result of section 469,
paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss
carryover allowed under section 469(b) of the Internal Revenue Code;
deleted text end
deleted text begin
(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a
solvent individual excluded from gross income under section 108(g) of the Internal Revenue
Code;
deleted text end
deleted text begin
(iv) cash public assistance and relief;
deleted text end
deleted text begin
(v) any pension or annuity (including railroad retirement benefits, all payments received
under the federal Social Security Act, Supplemental Security Income, and veterans benefits),
which was not exclusively funded by the claimant or spouse, or which was funded exclusively
by the claimant or spouse and which funding payments were excluded from federal adjusted
gross income in the years when the payments were made;
deleted text end
deleted text begin
(vi) interest received from the federal or a state government or any instrumentality or
political subdivision thereof;
deleted text end
deleted text begin
(vii) workers' compensation;
deleted text end
deleted text begin
(viii) nontaxable strike benefits;
deleted text end
deleted text begin
(ix) the gross amounts of payments received in the nature of disability income or sick
pay as a result of accident, sickness, or other disability, whether funded through insurance
or otherwise;
deleted text end
deleted text begin
(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;
deleted text end
deleted text begin
(xi) contributions made by the claimant to an individual retirement account, including
a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of
the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal
Revenue Code;
deleted text end
deleted text begin
(xii) nontaxable scholarship or fellowship grants;
deleted text end
deleted text begin
(xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;
deleted text end
deleted text begin
(xiv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue
Code;
deleted text end
deleted text begin
(xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue
Code; and
deleted text end
deleted text begin
(xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code.
deleted text end
In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" means federal adjusted gross income reflected in the
fiscal year ending in the next calendar year. Federal adjusted gross income may not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.
deleted text begin
(b) "Income" does not include:
deleted text end
deleted text begin
(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
deleted text end
deleted text begin
(2) amounts of any pension or annuity that were exclusively funded by the claimant or
spouse if the funding payments were not excluded from federal adjusted gross income in
the years when the payments were made;
deleted text end
deleted text begin
(3) surplus food or other relief in kind supplied by a governmental agency;
deleted text end
deleted text begin
(4) relief granted under chapter 290A;
deleted text end
deleted text begin
(5) child support payments received under a temporary or final decree of dissolution or
legal separation; and
deleted text end
deleted text begin
(6) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001,
Public Law 107-16.
deleted text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 13.
Minnesota Statutes 2022, section 290.0674, is amended by adding a subdivision
to read:
new text begin Subd. 2b. new text end
new text begin Inflation adjustment. new text end
new text begin
The commissioner shall annually adjust the dollar
amount of the income threshold at which the maximum credit begins to be reduced under
subdivision 2 as provided in section 270C.22. The statutory year is taxable year 2023.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2023.
new text end
Sec. 14.
Minnesota Statutes 2022, section 290.0677, subdivision 1, is amended to read:
Subdivision 1.
Credit allowed; current military service.
(a) An individual is allowed
a credit against the tax due under this chapter equal to $59 for each month or portion thereof
that the individual was in active military service in a designated area after September 11,
2001, and before January 1, 2009, while a Minnesota domiciliary.
(b) An individual is allowed a credit against the tax due under this chapter equal to $120
for each month or portion thereof that the individual was in active military service in a
designated area after December 31, 2008, while a Minnesota domiciliary.
(c) For active service performed after September 11, 2001, and before December 31,
2006, the individual may claim the credit in the taxable year beginning after December 31,
2005, and before January 1, 2007.
(d) For active service performed after December 31, 2006, the individual may claim the
credit for the deleted text begin taxabledeleted text end new text begin calendarnew text end year in which the active service was performed.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 15.
Minnesota Statutes 2022, section 290.0681, subdivision 3, is amended to read:
Subd. 3.
Applications; allocations.
(a) To qualify for a credit or grant under this section,
the developer of a project must apply to the office before the rehabilitation begins. The
application must contain the information and be in the form prescribed by the office. The
office may collect a fee for application of up to 0.5 percent of qualified rehabilitation
expenditures, up to $40,000, based on estimated qualified rehabilitation expenditures, to
offset costs associated with personnel and administrative expenses related to administering
thenew text begin state or federalnew text end credit and preparing the economic impact report in subdivision 9.
Application fees are deposited in the account. The application must indicate if the application
is for a credit or a grant in lieu of the credit or a combination of the two and designate the
taxpayer qualifying for the credit or the recipient of the grant.
(b) Upon approving an application for credit, the office shall issue allocation certificates
that:
(1) verify eligibility for the credit or grant;
(2) state the amount of credit or grant anticipated with the project, with the credit amount
equal to 100 percent and the grant amount equal to 90 percent of the federal credit anticipated
in the application;
(3) state that the credit or grant allowed may increase or decrease if the federal credit
the project receives at the time it is placed in service is different than the amount anticipated
at the time the allocation certificate is issued; and
(4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer or
grant recipient is entitled to receive one-fifth of the total amount of either the credit or the
grant at the time the project is placed in service, provided that date is within three calendar
years following the issuance of the allocation certificate.
(c) The office, in consultation with the commissioner, shall determine if the project is
eligible for a credit or a grant under this section and must notify the developer in writing
of its determination. Eligibility for the credit is subject to review and audit by the
commissioner.
(d) The federal credit recapture and repayment requirements under section 50 of the
Internal Revenue Code do not apply to the credit allowed under this section.
(e) Any decision of the office under paragraph (c) may be challenged as a contested case
under chapter 14. The contested case proceeding must be initiated within 45 days of the
date of written notification by the office.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2023.
new text end
Sec. 16.
Minnesota Statutes 2022, section 290.0681, subdivision 10, is amended to read:
Subd. 10.
Sunset.
This section expires after fiscal year deleted text begin 2022deleted text end new text begin 2031new text end , except that the office's
authority to issue credit certificates under subdivision 4 based on allocation certificates that
were issued before fiscal year deleted text begin 2023deleted text end new text begin 2032new text end remains in effect through deleted text begin 2025deleted text end new text begin 2035new text end , and the
reporting requirements in subdivision 9 remain in effect through the year following the year
in which all allocation certificates have either been canceled or resulted in issuance of credit
certificates, or deleted text begin 2026deleted text end new text begin 2036new text end , whichever is earlier.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2023.
new text end
Sec. 17.
new text begin
[290.0687] MINNESOTA CHILD TAX CREDIT.
new text end
new text begin Subdivision 1. new text end
new text begin Definitions. new text end
new text begin
For purposes of this section, the following terms have the
meanings given:
new text end
new text begin
(1) "child" means a qualifying child, as defined in section 152(c) of the Internal Revenue
Code, who was under 18 years of age at the end of the taxable year;
new text end
new text begin
(2) "credit" means the Minnesota Child Tax Credit allowed by this section;
new text end
new text begin
(3) "disabled adult child" means a qualifying child, as defined in section 152(c) of the
Internal Revenue Code, who was:
new text end
new text begin
(i) at least 18 years of age at the end of the taxable year; and
new text end
new text begin
(ii) at any time during the taxable year was permanently and totally disabled, as defined
in section 22(e)(3) of the Internal Revenue Code; and
new text end
new text begin
(4) "threshold amount" means:
new text end
new text begin
(i) $33,300 for individuals who are not married;
new text end
new text begin
(ii) $50,000 for married taxpayers filing a joint return; and
new text end
new text begin
(iii) $25,000 for married taxpayers filing separate returns.
new text end
new text begin Subd. 2. new text end
new text begin Credit allowed. new text end
new text begin
Residents and part-year residents are allowed a credit against
the tax due under this chapter in an amount equal to $1,000 per child or disabled adult child.
new text end
new text begin Subd. 3. new text end
new text begin Limitations. new text end
new text begin
(a) The maximum total credit allowed to a taxpayer for the taxable
year is $3,000.
new text end
new text begin
(b) The maximum credit, as determined in paragraph (a), is reduced by $100 for each
$1,000 by which the taxpayer's adjusted gross income exceeds the threshold amount. In no
case is the credit less than zero.
new text end
new text begin
(c) For part-year residents, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).
new text end
new text begin
(d) For purposes of this subdivision, marital status is determined under section 7703 of
the Internal Revenue Code.
new text end
new text begin Subd. 4. new text end
new text begin Credit refundable. new text end
new text begin
If the amount of credit which the claimant is eligible to
receive under this section exceeds the claimant's tax liability under this chapter, the
commissioner shall refund the excess to the claimant.
new text end
new text begin Subd. 5. new text end
new text begin Inflation adjustment. new text end
new text begin
The commissioner must annually adjust the credit amount
under subdivision 2, the dollar amount of the income threshold at which the maximum credit
begins to be reduced under subdivision 3, and the maximum credit, as provided in section
270C.22. The statutory year is taxable year 2023.
new text end
new text begin Subd. 6. new text end
new text begin Appropriation. new text end
new text begin
An amount sufficient to pay the refunds required by this section
is appropriated to the commissioner from the general fund.
new text end
new text begin Subd. 7. new text end
new text begin Sunset. new text end
new text begin
This section expires for taxable years beginning after December 31,
2030. The expiration of this section does not affect the commissioner's authority to audit
or power of examination and assessment for credits claimed under this section.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 18.
Minnesota Statutes 2022, section 290.091, subdivision 2, as amended by Laws
2023, chapter 1, section 18, is amended to read:
Subd. 2.
Definitions.
For purposes of the tax imposed by this section, the following
terms have the meanings given.
(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:
(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(1)(D) of the Internal Revenue Code;
(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:
(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a person with a disability;
(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);
(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);
(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2;
(6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;
(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
not included in the addition required under clause (6); and
(8) to the extent not included in federal alternative minimum taxable income, the amount
of foreign-derived intangible income deducted under section 250 of the Internal Revenue
Code;
less the sum of the amounts determined under the following:
(i) interest income as defined in section 290.0132, subdivision 2;
(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;
(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;
(iv) amounts subtracted from federal taxable or adjusted gross income as provided by
section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, 26 to 29, and 31;
(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c); and
(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
subdivision 7.
In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
taxable income must be increased by the addition in section 290.0131, subdivision 16.
(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.
(c) "Net minimum tax" means the minimum tax imposed by this section.
(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and deleted text begin sectiondeleted text end new text begin sectionsnew text end 290.032new text begin and 290.055new text end ), reduced by the sum of the
nonrefundable credits allowed under this chapter.
(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 19.
Laws 2023, chapter 1, section 15, the effective date, is amended to read:
EFFECTIVE DATE.
This section is effectivenew text begin retroactivelynew text end for taxable years beginning
after December 31, deleted text begin 2022deleted text end new text begin 2019new 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
Sec. 20. new text begin HISTORIC STRUCTURE REHABILITATION CREDIT; SPECIAL
PROVISION.
new text end
new text begin
For the purposes of the credit under Minnesota Statutes, section 290.0681, projects that
have started rehabilitation work after June 30, 2022, and before July 1, 2023, that otherwise
meet all other requirements of Minnesota Statutes, section 290.0681, subdivision 3, may
be eligible for the credit if the application is received within 60 days of July 1, 2023.
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
Sec. 21. new text begin REVIVAL AND REENACTMENT OF EXPIRED PROVISIONS.
new text end
new text begin
(a) The expired provisions of Minnesota Statutes, section 116J.8737, subdivisions 1 to
9, 11, and 12, as amended by Laws 2021, First Special Session chapter 14, article 1, sections
1 and 2, and sections 1 and 2 of this article, are revived and reenacted.
new text end
new text begin
(b) The expired provisions of Minnesota Statutes, section 290.0692, are revived and
reenacted.
new text end
new text begin
(c) The expired provisions of Minnesota Statutes, section 290.0681, subdivisions 1 to
10, as amended by Laws 2021, First Special Session chapter 14, article 1, section 11, and
sections 13 to 18 of this article, are revived and reenacted.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
Paragraphs (a) and (b) are effective retroactively for taxable years
beginning after December 31, 2022. Paragraph (c) is effective for applications for allocation
certificates submitted beginning July 1, 2023.
new text end
Sec. 22. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2022, section 290.0132, subdivision 33,
new text end
new text begin
as added by Laws 2023,
chapter 1, section 12, is repealed.
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
ARTICLE 2
ADVANCE PAYMENT AND ONE-TIME REFUNDABLE CREDIT
Section 1. new text begin 2023 ADVANCE PAYMENT AND ONE-TIME REFUNDABLE CREDIT.
new text end
new text begin Subdivision 1. new text end
new text begin Credit allowed; eligibility. new text end
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(a) An individual is allowed a credit against
the tax imposed under Minnesota Statutes, chapter 290. The credit equals $1,000 for an
individual who files an income tax return as a single person or as a married person who
files a married filing separate income tax return and $2,000 for all other income tax filers.
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new text begin
(b) For an individual, or a married couple filing a joint income tax return, with a
dependent, as defined in sections 151 and 152 of the Internal Revenue Code, the credit is
increased by $200 per dependent up to a maximum additional credit of $600.
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new text begin
(c) The maximum combined credit under this subdivision is $1,600 for an individual
who files an income tax return as a single person or as a married individual who files a
married filing separate income tax return and $2,600 for all other income tax filers.
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(d) The credit is not available to an individual who:
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(1) is not a resident of Minnesota, as defined in Minnesota Statutes, section 290.01,
subdivision 7, during any part of 2023;
new text end
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(2) is a dependent, as defined in sections 151 and 152 of the Internal Revenue Code, for
2023; and
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new text begin
(3) has adjusted gross income, as defined in Minnesota Statutes, section 290.01,
subdivision 21a, for 2023 greater than:
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(i) $75,000 for an individual who files an income tax return as a single person or as a
married person who files a married filing separate income tax return; and
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(ii) $150,000 for all other income tax filers.
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(e) For an individual who was a Minnesota resident for only part of 2023, or for a married
couple filing a joint return where one or both individuals were Minnesota residents for only
part of 2023, the credit equals the credit allowed under paragraph (a) times the percentage
calculated under Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e).
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new text begin
(f) If the amount of the credit under this subdivision exceeds the individual's or the
married couple's liability for tax under Minnesota Statutes, chapter 290, the commissioner
shall refund the excess to the taxpayer.
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new text begin
(g) The credit applies to taxable years beginning after December 31, 2022, and before
January 1, 2024.
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new text begin Subd. 2. new text end
new text begin Advance payment of credit. new text end
new text begin
(a) The commissioner of revenue may issue a
taxpayer an advance payment of the credit provided in subdivision 1. To be eligible for an
advance payment, the commissioner must reasonably believe the taxpayer will be eligible
for the credit, and the taxpayer must have filed, before January 1, 2023:
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(1) an individual income tax return for tax year 2021; or
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(2) a property tax refund return under Minnesota Statutes, chapter 290A, based on
property taxes payable in 2022 or rent constituting property taxes paid in 2021.
new text end
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(b) The commissioner may contract with a third party to implement all or part of the
payment process.
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(c) The commissioner must not issue an advance payment to any taxpayer who:
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(1) was not a resident of Minnesota on December 31, 2021;
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new text begin
(2) was a dependent, as defined in sections 151 and 152 of the Internal Revenue Code,
for 2021;
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new text begin
(3) had adjusted gross income, as defined in Minnesota Statutes, section 290.01,
subdivision 21a, for 2021 greater than (i) $50,000 for an individual who filed an income
tax return as a single person or as a married individual who filed a married filing separate
income tax return, or (ii) $100,000 for all other income tax filers; or
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(4) died before January 1, 2023.
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new text begin
(d) The advance payment under this section shall be paid by the commissioner of revenue
based on information available in the commissioner's records, and individuals are not
required to file a claim with the commissioner. The decision of the commissioner to not
make an advance payment to a taxpayer is not appealable.
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new text begin
(e) The commissioner of revenue must make a joint advance payment to individuals
who filed a joint income tax return for 2021. If individuals who receive a joint advance
payment do not file a joint tax return with each other for 2023, each spouse is deemed to
have received an advance payment equal to one-half of the joint payment.
new text end
new text begin Subd. 3. new text end
new text begin Payments to taxpayers who do not receive an advance payment. new text end
new text begin
(a) A
taxpayer may claim any amount of unpaid credit on an individual income tax return for
2023 if the taxpayer was eligible for:
new text end
new text begin
(1) the credit under subdivision 1 and did not receive an advance payment under
subdivision 2; or
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new text begin
(2) the additional credit under subdivision 1, paragraph (a), clause (2), and did not receive
an advance payment for the full amount of the credit.
new text end
new text begin
(b) The credit allowed to a taxpayer under this subdivision is reduced by any advance
payment received under subdivision 2. The credit allowed for married taxpayers who file
a joint return in 2023 is reduced by any advance payment received under subdivision 2 by
either spouse.
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new text begin
(c) No credit under paragraph (a), clause (2), is allowed unless the TIN of the dependent,
as defined in section 7701(a)(41) of the Internal Revenue Code, is included on the tax return
that lists the individual as a dependent.
new text end
new text begin Subd. 4. new text end
new text begin Repayment of advance payment. new text end
new text begin
(a) An individual or married couple who
receives an advance payment under subdivision 2 but who does not meet eligibility for the
credit under subdivision 1, paragraph (a), or does not meet eligibility for the amount of the
advance payment of the credit allowed under subdivision (1), paragraph (b), must repay the
amount of the overpayment to the commissioner of revenue. Repayment is due on April
15, 2024.
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new text begin
(b) All provisions not inconsistent with this section under Minnesota Statutes, chapters
270C and 289A, relating to collection, audit, assessment, refunds, penalty, interest,
enforcement, collection remedies, appeal, and administration of individual income tax apply
to this section.
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new text begin
(c) The commissioner may issue an order of assessment under Minnesota Statutes,
section 270C.33, to recover an advance payment made under subdivision 2 that is issued
to a person not eligible for the credit. The assessment must be made within the period for
assessing tax for the 2023 individual income tax under Minnesota Statutes, section 289A.38.
new text end
new text begin Subd. 5. new text end
new text begin Internal Revenue Code. new text end
new text begin
References to the Internal Revenue Code in this
section are to the Internal Revenue Code of 1986, as amended, that is in effect under
Minnesota Statutes, section 290.01, for the taxable year to which the reference relates.
new text end
new text begin Subd. 6. new text end
new text begin Data classification. new text end
new text begin
Data classified as nonpublic data or private data on
individuals, including return information, as defined in Minnesota Statutes, section 270B.01,
subdivision 3, may be shared or disclosed between the commissioner of revenue and any
third-party vendor contracted with under this section, to the extent necessary to administer
advance payments under this section.
new text end
new text begin Subd. 7. new text end
new text begin Advance payment not subject to set off. new text end
new text begin
The commissioner of revenue must
not apply, and must not certify to another agency to apply, an advance payment to any
unpaid tax or nontax debt.
new text end
new text begin Subd. 8. new text end
new text begin Not income. new text end
new text begin
(a) An advance payment or refund of a credit under this section
is not considered income in determining Minnesota income tax, Minnesota income tax
credits, the Minnesota property tax refund, or the Minnesota senior citizen property tax
deferral.
new text end
new text begin
(b) Notwithstanding any law to the contrary, the advance payment or credit under this
section must not be considered income, assets, or personal property for purposes of
determining eligibility or recertifying eligibility for:
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(1) child care assistance programs under Minnesota Statutes, chapter 119B;
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(2) general assistance, Minnesota supplemental aid, and food support under Minnesota
Statutes, chapter 256D;
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(3) housing support under Minnesota Statutes, chapter 256I;
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(4) the Minnesota family investment program and diversionary work program under
Minnesota Statutes, chapter 256J; and
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(5) economic assistance programs under Minnesota Statutes, chapter 256P.
new text end
new text begin
(c) The commissioner of human services must not consider an advance payment or credit
under this section as income or assets under Minnesota Statutes, section 256B.056,
subdivisions 1a, paragraph (a); 3; or 3c, or for persons with eligibility determined under
Minnesota Statutes, section 256B.057, subdivisions 3, 3a, or 3b.
new text end
new text begin Subd. 9. new text end
new text begin Procurement. new text end
new text begin
The commissioner of revenue is exempt from the requirements
of Minnesota Statutes, section 16A.15, subdivision 3; 16B.97; and 16B.98, subdivisions 5,
7, and 8; and chapter 16C, and any other state procurement laws and procedures in
administering this section.
new text end
new text begin Subd. 10. new text end
new text begin Appropriation. new text end
new text begin
The amount necessary to make the advance payments and
refunds payable under this section is appropriated to the commissioner of revenue from 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.
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ARTICLE 3
SALES AND USE TAXES
Section 1.
Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision
to read:
new text begin Subd. 59. new text end
new text begin Cannabis. new text end
new text begin
"Cannabis" means any species of the genus cannabis plant, or any
mixture or preparation of any species of the genus cannabis plant, including whole plant
extracts and resins.
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
Sec. 2.
Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision to
read:
new text begin Subd. 60. new text end
new text begin Adult-use cannabis. new text end
new text begin
"Adult-use cannabis" means cannabis, including cannabis
extracts and resins, that produces or is advertised as producing intoxicating or mood-altering
effects when consumed by any route of administration. Adult-use cannabis does not include
a product dispensed by a registered medical cannabis manufacturer under sections 152.22
to 152.37.
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
Sec. 3.
Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision to
read:
new text begin Subd. 61. new text end
new text begin Adult-use cannabis product. new text end
new text begin
"Adult-use cannabis product" means a cannabis
product that produces or is advertised as producing intoxicating or mood-altering effects
when consumed by any route of administration. Adult-use cannabis product does not include
a product dispensed by a registered medical cannabis manufacturer under sections 152.22
to 152.37.
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
Sec. 4.
Minnesota Statutes 2022, section 297A.67, subdivision 2, is amended to read:
Subd. 2.
Food and food ingredients.
Except as otherwise provided in this subdivision,
food and food ingredients are exempt. For purposes of this subdivision, "food" and "food
ingredients" mean substances, whether in liquid, concentrated, solid, frozen, dried, or
dehydrated form, that are sold for ingestion or chewing by humans and are consumed for
their taste or nutritional value. Food and food ingredients exempt under this subdivision do
not include candy, soft drinks, dietary supplements, and prepared foods. Food and food
ingredients do not include alcoholic beverages and tobacco. new text begin Food and food ingredients do
not include adult-use cannabis and adult-use cannabis products. new text end For purposes of this
subdivision, "alcoholic beverages" means beverages that are suitable for human consumption
and contain one-half of one percent or more of alcohol by volume. For purposes of this
subdivision, "tobacco" means cigarettes, cigars, chewing or pipe tobacco, or any other item
that contains tobacco. For purposes of this subdivision, "dietary supplements" means any
product, other than tobacco, intended to supplement the diet that:
(1) contains one or more of the following dietary ingredients:
(i) a vitamin;
(ii) a mineral;
(iii) an herb or other botanical;
(iv) an amino acid;
(v) a dietary substance for use by humans to supplement the diet by increasing the total
dietary intake; and
(vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
described in items (i) to (v);
(2) is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form,
or if not intended for ingestion in such form, is not represented as conventional food and is
not represented for use as a sole item of a meal or of the diet; and
(3) is required to be labeled as a dietary supplement, identifiable by the supplement facts
box found on the label and as required pursuant to Code of Federal Regulations, title 21,
section 101.36.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 5.
Minnesota Statutes 2022, section 297A.67, subdivision 7, is amended to read:
Subd. 7.
Drugs; medical devices.
(a) Sales of the following drugs and medical devices
for human use are exempt:
(1) drugs, including over-the-counter drugs;
(2) single-use finger-pricking devices for the extraction of blood and other single-use
devices and single-use diagnostic agents used in diagnosing, monitoring, or treating diabetes;
(3) insulin and medical oxygen for human use, regardless of whether prescribed or sold
over the counter;
(4) prosthetic devices;
(5) durable medical equipment for home use only;
(6) mobility enhancing equipment;
(7) prescription corrective eyeglasses; and
(8) kidney dialysis equipment, including repair and replacement parts.
(b) Items purchased in transactions covered by:
(1) Medicare as defined under title XVIII of the Social Security Act, United States Code,
title 42, section 1395, et seq.; or
(2) Medicaid as defined under title XIX of the Social Security Act, United States Code,
title 42, section 1396, et seq.
(c) For purposes of this subdivision:
(1) "Drug" means a compound, substance, or preparation, and any component of a
compound, substance, or preparation, other than food and food ingredients, dietary
supplements, new text begin adult-use cannabis, adult-use cannabis products, new text end or alcoholic beverages that
is:
(i) recognized in the official United States Pharmacopoeia, official Homeopathic
Pharmacopoeia of the United States, or official National Formulary, and supplement to any
of them;
(ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease;
or
(iii) intended to affect the structure or any function of the body.
(2) "Durable medical equipment" means equipment, including repair and replacement
parts, including single-patient use items, but not including mobility enhancing equipment,
that:
(i) can withstand repeated use;
(ii) is primarily and customarily used to serve a medical purpose;
(iii) generally is not useful to a person in the absence of illness or injury; and
(iv) is not worn in or on the body.
For purposes of this clause, "repair and replacement parts" includes all components or
attachments used in conjunction with the durable medical equipment, including repair and
replacement parts which are for single patient use only.
(3) "Mobility enhancing equipment" means equipment, including repair and replacement
parts, but not including durable medical equipment, that:
(i) is primarily and customarily used to provide or increase the ability to move from one
place to another and that is appropriate for use either in a home or a motor vehicle;
(ii) is not generally used by persons with normal mobility; and
(iii) does not include any motor vehicle or equipment on a motor vehicle normally
provided by a motor vehicle manufacturer.
(4) "Over-the-counter drug" means a drug that contains a label that identifies the product
as a drug as required by Code of Federal Regulations, title 21, section 201.66. The label
must include a "drug facts" panel or a statement of the active ingredients with a list of those
ingredients contained in the compound, substance, or preparation. Over-the-counter drugs
do not include grooming and hygiene products, regardless of whether they otherwise meet
the definition. "Grooming and hygiene products" are soaps, cleaning solutions, shampoo,
toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
(5) "Prescribed" and "prescription" means a direction in the form of an order, formula,
or recipe issued in any form of oral, written, electronic, or other means of transmission by
a duly licensed health care professional.
(6) "Prosthetic device" means a replacement, corrective, or supportive device, including
repair and replacement parts, worn on or in the body to:
(i) artificially replace a missing portion of the body;
(ii) prevent or correct physical deformity or malfunction; or
(iii) support a weak or deformed portion of the body.
Prosthetic device does not include corrective eyeglasses.
(7) "Kidney dialysis equipment" means equipment that:
(i) is used to remove waste products that build up in the blood when the kidneys are not
able to do so on their own; and
(ii) can withstand repeated use, including multiple use by a single patient, notwithstanding
the provisions of clause (2).
(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of the
item purchased in the transaction is paid for or reimbursed by the federal government or
the state of Minnesota pursuant to the Medicare or Medicaid program, by a private insurance
company administering the Medicare or Medicaid program on behalf of the federal
government or the state of Minnesota, or by a managed care organization for the benefit of
a patient enrolled in a prepaid program that furnishes medical services in lieu of conventional
Medicare or Medicaid coverage pursuant to agreement with the federal government or the
state of Minnesota.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 6.
Minnesota Statutes 2022, section 297A.70, subdivision 2, is amended to read:
Subd. 2.
Sales to government.
(a) All sales, except those listed in paragraph (b), to the
following governments and political subdivisions, or to the listed agencies or instrumentalities
of governments and political subdivisions, are exempt:
(1) the United States and its agencies and instrumentalities;
(2) school districts, local governments, the University of Minnesota, state universities,
community colleges, technical colleges, state academies, the Perpich Minnesota Center for
Arts Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;
(3) hospitals and nursing homes owned and operated by political subdivisions of the
state of tangible personal property and taxable services used at or by hospitals and nursing
homes;
(4) notwithstanding paragraph (d), the sales and purchases by the Metropolitan Council
of vehicles and repair parts to equip operations provided for in section 473.4051 are exempt
through December 31, 2016;
(5) other states or political subdivisions of other states, if the sale would be exempt from
taxation if it occurred in that state; and
(6) public libraries, public library systems, multicounty, multitype library systems as
defined in section 134.001, county law libraries under chapter 134A, state agency libraries,
the state library under section 480.09, and the Legislative Reference Library.
(b) This exemption does not apply to the sales of the following products and services:
(1) building, construction, or reconstruction materials purchased by a contractor or a
subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed
maximum price covering both labor and materials for use in the construction, alteration, or
repair of a building or facility;
(2) construction materials purchased by tax exempt entities or their contractors to be
used in constructing buildings or facilities which will not be used principally by the tax
exempt entities;
(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
for leases entered into by the United States or its agencies or instrumentalities;
(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2),
and prepared food, candy, soft drinks, deleted text begin anddeleted text end alcoholic beverages as defined in section 297A.67,
subdivision 2, new text begin adult-use cannabis, and adult-use cannabis products new text end except for lodging,
prepared food, candy, soft drinks, deleted text begin anddeleted text end alcoholic beveragesnew text begin , adult-use cannabis, and adult-use
cannabis productsnew text end purchased directly by the United States or its agencies or instrumentalities;
or
(5) goods or services purchased by a local government as inputs to a liquor store, gas
or electric utility, solid waste hauling service, solid waste recycling service, landfill, golf
course, marina, campground, cafe, or laundromat.
(c) As used in this subdivision, "school districts" means public school entities and districts
of every kind and nature organized under the laws of the state of Minnesota, and any
instrumentality of a school district, as defined in section 471.59.
(d) For purposes of the exemption granted under this subdivision, "local governments"
has the following meaning:
(1) for the period prior to January 1, 2017, local governments means statutory or home
rule charter cities, counties, and townships; and
(2) beginning January 1, 2017, local governments means statutory or home rule charter
cities, counties, and townships; special districts as defined under section 6.465; any
instrumentality of a statutory or home rule charter city, county, or township as defined in
section 471.59; and any joint powers board or organization created under section 471.59.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for sales and purchases made after June
30, 2023.
new text end
Sec. 7.
Minnesota Statutes 2022, section 297A.70, subdivision 4, is amended to read:
Subd. 4.
Sales to nonprofit groups.
(a) All sales, except those listed in paragraph (b),
to the following "nonprofit organizations" are exempt:
(1) a corporation, society, association, foundation, or institution organized and operated
exclusively for charitable, religious, or educational purposes if the item purchased is used
in the performance of charitable, religious, or educational functions;
(2) any senior citizen group or association of groups that:
(i) in general limits membership to persons who are either age 55 or older, or persons
with a physical disability;
(ii) is organized and operated exclusively for pleasure, recreation, and other nonprofit
purposes, not including housing, no part of the net earnings of which inures to the benefit
of any private shareholders; and
(iii) is an exempt organization under section 501(c) of the Internal Revenue Code; and
(3) an organization that qualifies for an exemption for memberships under subdivision
12 if the item is purchased and used in the performance of the organization's mission.
For purposes of this subdivision, charitable purpose includes the maintenance of a cemetery
owned by a religious organization.
(b) This exemption does not apply to the following sales:
(1) building, construction, or reconstruction materials purchased by a contractor or a
subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed
maximum price covering both labor and materials for use in the construction, alteration, or
repair of a building or facility;
(2) construction materials purchased by tax-exempt entities or their contractors to be
used in constructing buildings or facilities that will not be used principally by the tax-exempt
entities;
(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2),
and prepared food, candy, soft drinks, deleted text begin anddeleted text end alcoholic beverages as defined in section 297A.67,
subdivision 2, except wine purchased by an established religious organization for sacramental
purposes or as allowed under subdivision 9anew text begin , adult-use cannabis, and adult-use cannabis
productsnew text end ; and
(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as
provided in paragraph (c).
(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01,
subdivision 11, only if the vehicle is:
(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
passenger automobile, as defined in section 168.002, if the automobile is designed and used
for carrying more than nine persons including the driver; and
(2) intended to be used primarily to transport tangible personal property or individuals,
other than employees, to whom the organization provides service in performing its charitable,
religious, or educational purpose.
(d) A limited liability company also qualifies for exemption under this subdivision if
(1) it consists of a sole member that would qualify for the exemption, and (2) the items
purchased qualify for the exemption.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for sales and purchases made after June
30, 2023.
new text end
Sec. 8.
Minnesota Statutes 2022, section 297A.70, subdivision 18, is amended to read:
Subd. 18.
Nursing homes and boarding care homes.
(a) All sales, except those listed
in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding care home
certified as a nursing facility under title 19 of the Social Security Act are exempt if the
facility:
(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the Internal
Revenue Code; and
(2) is certified to participate in the medical assistance program under title 19 of the Social
Security Act, or certifies to the commissioner that it does not discharge residents due to the
inability to pay.
(b) This exemption does not apply to the following sales:
(1) building, construction, or reconstruction materials purchased by a contractor or a
subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed
maximum price covering both labor and materials for use in the construction, alteration, or
repair of a building or facility;
(2) construction materials purchased by tax-exempt entities or their contractors to be
used in constructing buildings or facilities that will not be used principally by the tax-exempt
entities;
(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2),
and prepared food, candy, soft drinks, deleted text begin anddeleted text end alcoholic beverages as defined in section 297A.67,
subdivision 2new text begin , adult-use cannabis, and adult-use cannabis productsnew text end ; and
(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as
provided in paragraph (c).
(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01,
subdivision 11, only if the vehicle is:
(1) a truck, as defined in section 168.002; a bus, as defined in section 168.002; or a
passenger automobile, as defined in section 168.002, if the automobile is designed and used
for carrying more than nine persons including the driver; and
(2) intended to be used primarily to transport tangible personal property or residents of
the nursing home or boarding care home.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for sales and purchases made after June
30, 2023.
new text end
Sec. 9.
Minnesota Statutes 2022, section 297A.71, is amended by adding a subdivision to
read:
new text begin Subd. 54. new text end
new text begin
Construction materials purchased by contractors; exemption for certain
entities.
new text end
new text begin
(a) Materials and supplies used or consumed in and equipment incorporated into
the construction, reconstruction, repair, maintenance, or improvement of buildings or
facilities used principally by the following entities are exempt if purchased after June 30,
2021, and before January 1, 2025:
new text end
new text begin
(1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c);
new text end
new text begin
(2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d);
new text end
new text begin
(3) hospitals and nursing homes owned and operated by political subdivisions of the
state, as described under section 297A.70, subdivision 2, paragraph (a), clause (3);
new text end
new text begin
(4) county law libraries under chapter 134A and public libraries, regional public library
systems, and multicounty, multitype library systems, as defined in section 134.001;
new text end
new text begin
(5) nonprofit groups, as defined under section 297A.70, subdivision 4;
new text end
new text begin
(6) hospitals, outpatient surgical centers, and critical access dental providers, as defined
under section 297A.70, subdivision 7; and
new text end
new text begin
(7) nursing homes and boarding care homes, as defined under section 297A.70,
subdivision 18.
new text end
new text begin
(b) Materials and supplies used or consumed in and equipment incorporated into the
construction, reconstruction, repair, maintenance, or improvement of public infrastructure
of any kind, including but not limited to roads, bridges, culverts, drinking water facilities,
and wastewater facilities, purchased by a contractor, subcontractor, or builder as part of a
contract with the following entities are exempt if purchased after June 30, 2021, and before
January 1, 2025:
new text end
new text begin
(1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c); or
new text end
new text begin
(2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d).
new text end
new text begin
(c) The tax on purchases exempt under this subdivision must be imposed and collected
as if the rate under section 297A.62, subdivision 1, applied, and then refunded in the manner
provided in section 297A.75. Claims for refund for sales tax paid on eligible purchases must
be filed by February 28, 2025. Refunds for eligible purchases must not be issued after June
30, 2025.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for sales and purchases
made after June 30, 2021, and before January 1, 2025.
new text end
Sec. 10.
Minnesota Statutes 2022, section 297A.75, subdivision 1, is amended to read:
Subdivision 1.
Tax collected.
The tax on the gross receipts from the sale of the following
exempt items must be imposed and collected as if the sale were taxable and the rate under
section 297A.62, subdivision 1, applied. The exempt items include:
(1) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;
(2) building materials for mineral production facilities exempt under section 297A.71,
subdivision 14;
(3) building materials for correctional facilities under section 297A.71, subdivision 3;
(4) building materials used in a residence for veterans with a disability exempt under
section 297A.71, subdivision 11;
(5) elevators and building materials exempt under section 297A.71, subdivision 12;
(6) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23;
(7) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;
(8) equipment and materials used for the generation, transmission, and distribution of
electrical energy and an aerial camera package exempt under section 297A.68, subdivision
37;
(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph
(a), clause (10);
(10) materials, supplies, and equipment for construction or improvement of projects and
facilities under section 297A.71, subdivision 40;
(11) materials, supplies, and equipment for construction, improvement, or expansion of
a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 45;
(12) enterprise information technology equipment and computer software for use in a
qualified data center exempt under section 297A.68, subdivision 42;
(13) materials, supplies, and equipment for qualifying capital projects under section
297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);
(14) items purchased for use in providing critical access dental services exempt under
section 297A.70, subdivision 7, paragraph (c);
(15) items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision
44;
(16) building materials, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51;
(17) building materials, equipment, and supplies for qualifying capital projects under
section 297A.71, subdivision 52; deleted text begin and
deleted text end
(18) building materials, equipment, and supplies for constructing, remodeling, expanding,
or improving a fire station, police station, or related facilities exempt under section 297A.71,
subdivision 53deleted text begin .deleted text end new text begin ; and
new text end
new text begin
(19) building construction or reconstruction materials, supplies, and equipment exempt
under section 297A.71, subdivision 54.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for sales and purchases
made after June 30, 2021, and before January 1, 2025.
new text end
Sec. 11.
Minnesota Statutes 2022, section 297A.75, subdivision 2, is amended to read:
Subd. 2.
Refund; eligible persons.
Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must
be paid to the applicant. Only the following persons may apply for the refund:
(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;
(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;
(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;
(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;
(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;
(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a
joint venture of municipal electric utilities;
(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying
business;
(8) for subdivision 1, clauses (9), (10), (13), (17), and (18), the applicant must be the
governmental entity that owns or contracts for the project or facility; deleted text begin and
deleted text end
(9) for subdivision 1, clause (16), the applicant must be the owner or developer of the
building or projectdeleted text begin .deleted text end new text begin ; and
new text end
new text begin
(10) for subdivision 1, clause (19), the applicant must be the entity:
new text end
new text begin
(i) listed in section 297A.71, subdivision 54, paragraph (a), that principally uses the
building or facility; or
new text end
new text begin
(ii) listed in section 297A.71, subdivision 54, paragraph (b), that contracts with a
contractor, subcontractor, or builder for the public infrastructure project.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for sales and purchases
made after June 30, 2021, and before January 1, 2025.
new text end
Sec. 12.
Minnesota Statutes 2022, section 297A.75, subdivision 3, is amended to read:
Subd. 3.
Application.
(a) The application must include sufficient information to permit
the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor,
or builder, under subdivision 1, clauses (3) to (13) or (15) to deleted text begin (18)deleted text end new text begin (19)new text end , the contractor,
subcontractor, or builder must furnish to the refund applicant a statement including the cost
of the exempt items and the taxes paid on the items unless otherwise specifically provided
by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under
this section.
(b) An applicant may not file more than two applications per calendar year for refunds
for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for sales and purchases
made after June 30, 2021, and before January 1, 2025.
new text end
ARTICLE 4
PROPERTY TAXES, AIDS, AND CREDITS
Section 1.
Minnesota Statutes 2022, section 273.124, subdivision 6, is amended to read:
Subd. 6.
Leasehold cooperatives.
When one or more dwellings or one or more buildings
which each contain several dwelling units is owned by a nonprofit corporation subject to
the provisions of chapter 317A and qualifying under section 501(c)(3) or 501(c)(4) of the
Internal Revenue Code, or a limited partnership which corporation or partnership operates
the property in conjunction with a cooperative association, and has received public financing,
homestead treatment may be claimed by the cooperative association on behalf of the members
of the cooperative for each dwelling unit occupied by a member of the cooperative. The
cooperative association must provide the assessor with the Social Security numbers new text begin or
individual taxpayer identification numbers new text end of those members. To qualify for the treatment
provided by this subdivision, the following conditions must be met:
(a) the cooperative association must be organized under chapter 308A or 308B and all
voting members of the board of directors must be resident tenants of the cooperative and
must be elected by the resident tenants of the cooperative;
(b) the cooperative association must have a lease for occupancy of the property for a
term of at least 20 years, which permits the cooperative association, while not in default on
the lease, to participate materially in the management of the property, including material
participation in establishing budgets, setting rent levels, and hiring and supervising a
management agent;
(c) to the extent permitted under state or federal law, the cooperative association must
have a right under a written agreement with the owner to purchase the property if the owner
proposes to sell it; if the cooperative association does not purchase the property it is offered
for sale, the owner may not subsequently sell the property to another purchaser at a price
lower than the price at which it was offered for sale to the cooperative association unless
the cooperative association approves the sale;
(d) a minimum of 40 percent of the cooperative association's members must have incomes
at or less than 60 percent of area median gross income as determined by the United States
Secretary of Housing and Urban Development under section 142(d)(2)(B) of the Internal
Revenue Code. For purposes of this clause, "member income" means the income of a member
existing at the time the member acquires cooperative membership;
(e) if a limited partnership owns the property, it must include as the managing general
partner a nonprofit organization operating under the provisions of chapter 317A and
qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code and the limited
partnership agreement must provide that the managing general partner have sufficient powers
so that it materially participates in the management and control of the limited partnership;
(f) prior to becoming a member of a leasehold cooperative described in this subdivision,
a person must have received notice that (1) describes leasehold cooperative property in plain
language, including but not limited to the effects of classification under this subdivision on
rents, property taxes and tax credits or refunds, and operating expenses, and (2) states that
copies of the articles of incorporation and bylaws of the cooperative association, the lease
between the owner and the cooperative association, a sample sublease between the
cooperative association and a tenant, and, if the owner is a partnership, a copy of the limited
partnership agreement, can be obtained upon written request at no charge from the owner,
and the owner must send or deliver the materials within seven days after receiving any
request;
(g) if a dwelling unit of a building was occupied on the 60th day prior to the date on
which the unit became leasehold cooperative property described in this subdivision, the
notice described in paragraph (f) must have been sent by first class mail to the occupant of
the unit at least 60 days prior to the date on which the unit became leasehold cooperative
property. For purposes of the notice under this paragraph, the copies of the documents
referred to in paragraph (f) may be in proposed version, provided that any subsequent
material alteration of those documents made after the occupant has requested a copy shall
be disclosed to any occupant who has requested a copy of the document. Copies of the
articles of incorporation and certificate of limited partnership shall be filed with the secretary
of state after the expiration of the 60-day period unless the change to leasehold cooperative
status does not proceed;
(h) the county attorney of the county in which the property is located must certify to the
assessor that the property meets the requirements of this subdivision;
(i) the public financing received must be from at least one of the following sources:
(1) tax increment financing proceeds used for the acquisition or rehabilitation of the
building or interest rate write-downs relating to the acquisition of the building;
(2) government issued bonds exempt from taxes under section 103 of the Internal Revenue
Code, the proceeds of which are used for the acquisition or rehabilitation of the building;
(3) programs under section 221(d)(3), 202, or 236, of Title II of the National Housing
Act;
(4) rental housing program funds under Section 8 of the United States Housing Act of
1937, as amended, or the market rate family graduated payment mortgage program funds
administered by the Minnesota Housing Finance Agency that are used for the acquisition
or rehabilitation of the building;
(5) low-income housing credit under section 42 of the Internal Revenue Code;
(6) public financing provided by a local government used for the acquisition or
rehabilitation of the building, including grants or loans from (i) federal community
development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued
under chapter 474A; or
(7) other rental housing program funds provided by the Minnesota Housing Finance
Agency for the acquisition or rehabilitation of the building;
(j) at the time of the initial request for homestead classification or of any transfer of
ownership of the property, the governing body of the municipality in which the property is
located must hold a public hearing and make the following findings:
(1) that the granting of the homestead treatment of the apartment's units will facilitate
safe, clean, affordable housing for the cooperative members that would otherwise not be
available absent the homestead designation;
(2) that the owner has presented information satisfactory to the governing body showing
that the savings garnered from the homestead designation of the units will be used to reduce
tenant's rents or provide a level of furnishing or maintenance not possible absent the
designation; and
(3) that the requirements of paragraphs (b), (d), and (i) have been met.
Homestead treatment must be afforded to units occupied by members of the cooperative
association and the units must be assessed as provided in subdivision 3, provided that any
unit not so occupied shall be classified and assessed pursuant to the appropriate class. No
more than three acres of land may, for assessment purposes, be included with each dwelling
unit that qualifies for homestead treatment under this subdivision.
When dwelling units no longer qualify under this subdivision, the current owner must
notify the assessor within 60 days. Failure to notify the assessor within 60 days shall result
in the loss of benefits under this subdivision for taxes payable in the year that the failure is
discovered. For these purposes, "benefits under this subdivision" means the difference in
the net tax capacity of the units which no longer qualify as computed under this subdivision
and as computed under the otherwise applicable law, times the local tax rate applicable to
the building for that taxes payable year. Upon discovery of a failure to notify, the assessor
shall inform the auditor of the difference in net tax capacity for the building or buildings in
which units no longer qualify, and the auditor shall calculate the benefits under this
subdivision. Such amount, plus a penalty equal to 100 percent of that amount, shall then be
demanded of the building's owner. The property owner may appeal the county's determination
by serving copies of a petition for review with county officials as provided in section 278.01
and filing a proof of service as provided in section 278.01 with the Minnesota Tax Court
within 60 days of the date of the notice from the county. The appeal shall be governed by
the Tax Court procedures provided in chapter 271, for cases relating to the tax laws as
defined in section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and
278.03, but including section 278.05, subdivision 2. If the amount of the benefits under this
subdivision and penalty are not paid within 60 days, and if no appeal has been filed, the
county auditor shall certify the amount of the benefit and penalty to the succeeding year's
tax list to be collected as part of the property taxes on the affected buildings.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end
Sec. 2.
Minnesota Statutes 2022, section 273.124, subdivision 13, is amended to read:
Subd. 13.
Homestead application.
(a) A person who meets the homestead requirements
under subdivision 1 must file a homestead application with the county assessor to initially
obtain homestead classification.
(b) The commissioner shall prescribe the content, format, and manner of the homestead
application required to be filed under this chapter pursuant to section 270C.30. The
application must clearly inform the taxpayer that this application must be signed by all
owners who occupy the property or by the qualifying relative and returned to the county
assessor in order for the property to receive homestead treatment.
(c) Every property owner applying for homestead classification must furnish to the
county assessor the Social Security number new text begin or individual taxpayer identification number new text end of
each occupant who is listed as an owner of the property on the deed of record, the name
and address of each owner who does not occupy the property, and the name and Social
Security number new text begin or individual taxpayer identification number new text end of the spouse of each occupying
owner. The application must be signed by each owner who occupies the property and by
each owner's spouse who occupies the property, or, in the case of property that qualifies as
a homestead under subdivision 1, paragraph (c), by the qualifying relative.
If a property owner occupies a homestead, the property owner's spouse may not claim
another property as a homestead unless the property owner and the property owner's spouse
file with the assessor an affidavit or other proof required by the assessor stating that the
property qualifies as a homestead under subdivision 1, paragraph (e).
Owners or spouses occupying residences owned by their spouses and previously occupied
with the other spouse, either of whom fail to include the other spouse's name and Social
Security number new text begin or individual taxpayer identification number new text end on the homestead application
or provide the affidavits or other proof requested, will be deemed to have elected to receive
only partial homestead treatment of their residence. The remainder of the residence will be
classified as nonhomestead residential. When an owner or spouse's name and Social Security
number new text begin or individual taxpayer identification number new text end appear on homestead applications for
two separate residences and only one application is signed, the owner or spouse will be
deemed to have elected to homestead the residence for which the application was signed.
(d) If residential real estate is occupied and used for purposes of a homestead by a relative
of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in order for
the property to receive homestead status, a homestead application must be filed with the
assessor. The Social Security number new text begin or individual taxpayer identification number new text end of each
relative occupying the property and the name and Social Security number new text begin or individual
taxpayer identification number new text end of the spouse of a relative occupying the property shall be
required on the homestead application filed under this subdivision. If a different relative of
the owner subsequently occupies the property, the owner of the property must notify the
assessor within 30 days of the change in occupancy. The Social Security number new text begin or individual
taxpayer identification number new text end of a relative occupying the property or the spouse of a relative
occupying the property is private data on individuals as defined by section 13.02, subdivision
12, but may be disclosed to the commissioner of revenue, or, for the purposes of proceeding
under the Revenue Recapture Act to recover personal property taxes owing, to the county
treasurer.
(e) The homestead application shall also notify the property owners that if the property
is granted homestead status for any assessment year, that same property shall remain
classified as homestead until the property is sold or transferred to another person, or the
owners, the spouse of the owner, or the relatives no longer use the property as their
homestead. Upon the sale or transfer of the homestead property, a certificate of value must
be timely filed with the county auditor as provided under section 272.115. Failure to notify
the assessor within 30 days that the property has been sold, transferred, or that the owner,
the spouse of the owner, or the relative is no longer occupying the property as a homestead,
shall result in the penalty provided under this subdivision and the property will lose its
current homestead status.
(f) If a homestead application has not been filed with the county by December 31, the
assessor shall classify the property as nonhomestead for the current assessment year for
taxes payable in the following year, provided that the owner may be entitled to receive the
homestead classification by proper application under section 375.192.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end
Sec. 3.
Minnesota Statutes 2022, section 273.124, subdivision 13a, is amended to read:
Subd. 13a.
Occupant list.
At the request of the commissioner, each county must give
the commissioner a list that includes the name and Social Security number new text begin or individual
taxpayer identification number new text end of each occupant of homestead property who is the property
owner, property owner's spouse, qualifying relative of a property owner, or a spouse of a
qualifying relative. The commissioner shall use the information provided on the lists as
appropriate under the law, including for the detection of improper claims by owners, or
relatives of owners, under chapter 290A.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for homestead data provided to the
commissioner in 2024 and thereafter.
new text end
Sec. 4.
Minnesota Statutes 2022, section 273.124, subdivision 13c, is amended to read:
Subd. 13c.
Property lists.
In addition to lists of homestead properties, the commissioner
may ask the counties to furnish lists of all properties and the record owners. The Social
Security numbersnew text begin , individual taxpayer identification numbers,new text end and federal identification
numbers that are maintained by a county or city assessor for property tax administration
purposes, and that may appear on the lists retain their classification as private or nonpublic
data; but may be viewed, accessed, and used by the county auditor or treasurer of the same
county for the limited purpose of assisting the commissioner in the preparation of microdata
samples under section 270C.12. The commissioner shall use the information provided on
the lists as appropriate under the law, including for the detection of improper claims by
owners, or relatives of owners, under chapter 290A.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for homestead data provided to the
commissioner in 2024 and thereafter.
new text end
Sec. 5.
Minnesota Statutes 2022, section 273.124, subdivision 13d, is amended to read:
Subd. 13d.
Homestead data.
On or before April 30 each year beginning in 2007, each
county must provide the commissioner with the following data for each parcel of homestead
property by electronic means as defined in section 289A.02, subdivision 8:
(1) the property identification number assigned to the parcel for purposes of taxes payable
in the current year;
(2) the name and Social Security number new text begin or individual taxpayer identification number
new text end of each occupant of homestead property who is the property owner or qualifying relative
of a property owner, and the spouse of the property owner who occupies homestead property
or spouse of a qualifying relative of a property owner who occupies homestead property;
(3) the classification of the property under section 273.13 for taxes payable in the current
year and in the prior year;
(4) an indication of whether the property was classified as a homestead for taxes payable
in the current year because of occupancy by a relative of the owner or by a spouse of a
relative;
(5) the property taxes payable as defined in section 290A.03, subdivision 13, for the
current year and the prior year;
(6) the market value of improvements to the property first assessed for tax purposes for
taxes payable in the current year;
(7) the assessor's estimated market value assigned to the property for taxes payable in
the current year and the prior year;
(8) the taxable market value assigned to the property for taxes payable in the current
year and the prior year;
(9) whether there are delinquent property taxes owing on the homestead;
(10) the unique taxing district in which the property is located; and
(11) such other information as the commissioner decides is necessary.
The commissioner shall use the information provided on the lists as appropriate under
the law, including for the detection of improper claims by owners, or relatives of owners,
under chapter 290A.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for homestead data provided to the
commissioner in 2024 and thereafter.
new text end
Sec. 6.
Minnesota Statutes 2022, section 273.124, subdivision 14, is amended to read:
Subd. 14.
Agricultural homesteads; special provisions.
(a) Real estate of less than ten
acres that is the homestead of its owner must be classified as class 2a under section 273.13,
subdivision 23, paragraph (a), if:
(1) the parcel on which the house is located is contiguous on at least two sides to (i)
agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
Service, or (iii) land administered by the Department of Natural Resources on which in lieu
taxes are paid under sections 477A.11 to 477A.14 or section 477A.17;
(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 20
acres;
(3) the noncontiguous land is located not farther than four townships or cities, or a
combination of townships or cities from the homestead; and
(4) the agricultural use value of the noncontiguous land and farm buildings is equal to
at least 50 percent of the market value of the house, garage, and one acre of land.
Homesteads initially classified as class 2a under the provisions of this paragraph shall
remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
properties, as long as the homestead remains under the same ownership, the owner owns a
noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
value qualifies under clause (4). Homestead classification under this paragraph is limited
to property that qualified under this paragraph for the 1998 assessment.
(b)(i) Agricultural property shall be classified as the owner's homestead, to the same
extent as other agricultural homestead property, if all of the following criteria are met:
(1) the agricultural property consists of at least 40 acres including undivided government
lots and correctional 40's;
(2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the owner
or of the owner's spouse, is actively farming the agricultural property, either on the person's
own behalf as an individual or on behalf of a partnership operating a family farm, family
farm corporation, joint family farm venture, or limited liability company of which the person
is a partner, shareholder, or member;
(3) both the owner of the agricultural property and the person who is actively farming
the agricultural property under clause (2), are Minnesota residents;
(4) neither the owner nor the spouse of the owner claims another agricultural homestead
in Minnesota; and
(5) neither the owner nor the person actively farming the agricultural property lives
farther than four townships or cities, or a combination of four townships or cities, from the
agricultural property, except that if the owner or the owner's spouse is required to live in
employer-provided housing, the owner or owner's spouse, whichever is actively farming
the agricultural property, may live more than four townships or cities, or combination of
four townships or cities from the agricultural property.
The relationship under this paragraph may be either by blood or marriage.
(ii) Property containing the residence of an owner who owns qualified property under
clause (i) shall be classified as part of the owner's agricultural homestead, if that property
is also used for noncommercial storage or drying of agricultural crops.
(iii) As used in this paragraph, "agricultural property" means class 2a property and any
class 2b property that is contiguous to and under the same ownership as the class 2a property.
(c) Noncontiguous land shall be included as part of a homestead under section 273.13,
subdivision 23, paragraph (a), only if the homestead is classified as class 2a and the detached
land is located in the same township or city, or not farther than four townships or cities or
combination thereof from the homestead. Any taxpayer of these noncontiguous lands must
notify the county assessor that the noncontiguous land is part of the taxpayer's homestead,
and, if the homestead is located in another county, the taxpayer must also notify the assessor
of the other county.
(d) Agricultural land used for purposes of a homestead and actively farmed by a person
holding a vested remainder interest in it must be classified as a homestead under section
273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, any other
dwellings on the land used for purposes of a homestead by persons holding vested remainder
interests who are actively engaged in farming the property, and up to one acre of the land
surrounding each homestead and reasonably necessary for the use of the dwelling as a home,
must also be assessed class 2a.
(e) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain classified as
agricultural homesteads for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the April 1997 floods;
(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, or
Wilkin;
(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 1997 assessment year and continue to be used for
agricultural purposes;
(4) the dwelling occupied by the owner is located in Minnesota and is within 30 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and
(5) the owner notifies the county assessor that the relocation was due to the 1997 floods,
and the owner furnishes the assessor any information deemed necessary by the assessor in
verifying the change in dwelling. Further notifications to the assessor are not required if the
property continues to meet all the requirements in this paragraph and any dwellings on the
agricultural land remain uninhabited.
(f) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain classified
agricultural homesteads for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by a March 29, 1998, tornado;
(2) the property is located in the county of Blue Earth, Brown, Cottonwood, Le Sueur,
Nicollet, Nobles, or Rice;
(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 1998 assessment year;
(4) the dwelling occupied by the owner is located in this state and is within 50 miles of
one of the parcels of agricultural land that is owned by the taxpayer; and
(5) the owner notifies the county assessor that the relocation was due to a March 29,
1998, tornado, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
owner must notify the assessor by December 1, 1998. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph and
any dwellings on the agricultural land remain uninhabited.
(g) Agricultural property of a family farm corporation, joint family farm venture, family
farm limited liability company, or partnership operating a family farm as described under
subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead
property, if all of the following criteria are met:
(1) the property consists of at least 40 acres including undivided government lots and
correctional 40's;
(2) a shareholder, member, or partner of that entity is actively farming the agricultural
property;
(3) that shareholder, member, or partner who is actively farming the agricultural property
is a Minnesota resident;
(4) neither that shareholder, member, or partner, nor the spouse of that shareholder,
member, or partner claims another agricultural homestead in Minnesota; and
(5) that shareholder, member, or partner does not live farther than four townships or
cities, or a combination of four townships or cities, from the agricultural property.
Homestead treatment applies under this paragraph even if:
(i) the shareholder, member, or partner of that entity is actively farming the agricultural
property on the shareholder's, member's, or partner's own behalf; or
(ii) the family farm is operated by a family farm corporation, joint family farm venture,
partnership, or limited liability company other than the family farm corporation, joint family
farm venture, partnership, or limited liability company that owns the land, provided that:
(A) the shareholder, member, or partner of the family farm corporation, joint family
farm venture, partnership, or limited liability company that owns the land who is actively
farming the land is a shareholder, member, or partner of the family farm corporation, joint
family farm venture, partnership, or limited liability company that is operating the farm;
and
(B) more than half of the shareholders, members, or partners of each family farm
corporation, joint family farm venture, partnership, or limited liability company are persons
or spouses of persons who are a qualifying relative under section 273.124, subdivision 1,
paragraphs (c) and (d).
Homestead treatment applies under this paragraph for property leased to a family farm
corporation, joint farm venture, limited liability company, or partnership operating a family
farm if legal title to the property is in the name of an individual who is a member, shareholder,
or partner in the entity.
(h) To be eligible for the special agricultural homestead under this subdivision, an initial
full application must be submitted to the county assessor where the property is located.
Owners and the persons who are actively farming the property shall be required to complete
only a one-page abbreviated version of the application in each subsequent year provided
that none of the following items have changed since the initial application:
(1) the day-to-day operation, administration, and financial risks remain the same;
(2) the owners and the persons actively farming the property continue to live within the
four townships or city criteria and are Minnesota residents;
(3) the same operator of the agricultural property is listed with the Farm Service Agency;
(4) a Schedule F or equivalent income tax form was filed for the most recent year;
(5) the property's acreage is unchanged; and
(6) none of the property's acres have been enrolled in a federal or state farm program
since the initial application.
The owners and any persons who are actively farming the property must include the
appropriate Social Security numbersnew text begin or individual taxpayer identification numbersnew text end , and sign
and date the application. If any of the specified information has changed since the full
application was filed, the owner must notify the assessor, and must complete a new
application to determine if the property continues to qualify for the special agricultural
homestead. The commissioner of revenue shall prepare a standard reapplication form for
use by the assessors.
(i) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain classified
agricultural homesteads for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by the August 2007 floods;
(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, Steele,
Wabasha, or Winona;
(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 2007 assessment year;
(4) the dwelling occupied by the owner is located in this state and is within 50 miles of
one of the parcels of agricultural land that is owned by the taxpayer; and
(5) the owner notifies the county assessor that the relocation was due to the August 2007
floods, and the owner furnishes the assessor any information deemed necessary by the
assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the
owner must notify the assessor by December 1, 2008. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph and
any dwellings on the agricultural land remain uninhabited.
(j) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain classified as
agricultural homesteads for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the March 2009 floods;
(2) the property is located in the county of Marshall;
(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 2008 assessment year and continue to be used for
agricultural purposes;
(4) the dwelling occupied by the owner is located in Minnesota and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and
(5) the owner notifies the county assessor that the relocation was due to the 2009 floods,
and the owner furnishes the assessor any information deemed necessary by the assessor in
verifying the change in dwelling. Further notifications to the assessor are not required if the
property continues to meet all the requirements in this paragraph and any dwellings on the
agricultural land remain uninhabited.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end
Sec. 7.
Minnesota Statutes 2022, section 273.1245, subdivision 1, is amended to read:
Subdivision 1.
Private or nonpublic data.
The following data are private or nonpublic
data as defined in section 13.02, subdivisions 9 and 12, when they are submitted to a county
or local assessor under section 273.124, 273.13, or another section, to support a claim for
the property tax homestead classification under section 273.13, or other property tax
classification or benefit:
(1) Social Security numbers;
new text begin
(2) individual taxpayer identification numbers;
new text end
deleted text begin (2)deleted text end new text begin (3)new text end copies of state or federal income tax returns; and
deleted text begin (3)deleted text end new text begin (4)new text end state or federal income tax return information, including the federal income tax
schedule F.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end
Sec. 8.
Minnesota Statutes 2022, section 273.1315, subdivision 2, is amended to read:
Subd. 2.
Class 1b homestead declaration 2009 and thereafter.
(a) Any property owner
seeking classification and assessment of the owner's homestead as class 1b property pursuant
to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file with the
county assessor a class 1b homestead declaration, on a form prescribed by the commissioner
of revenue. The declaration must contain the following information:
(1) the information necessary to verify that, on or before June 30 of the filing year, the
property owner or the owner's spouse satisfies the requirements of section 273.13, subdivision
22, paragraph (b), for class 1b classification; and
(2) any additional information prescribed by the commissioner.
(b) The declaration must be filed on or before October 1 to be effective for property
taxes payable during the succeeding calendar year. The Social Security numbersnew text begin , individual
taxpayer identification numbers,new text end and income and medical information received from the
property owner pursuant to this subdivision are private data on individuals as defined in
section 13.02. If approved by the assessor, the declaration remains in effect until the property
no longer qualifies under section 273.13, subdivision 22, paragraph (b). Failure to notify
the assessor within 30 days that the property no longer qualifies under that paragraph because
of a sale, change in occupancy, or change in the status or condition of an occupant shall
result in the penalty provided in section 273.124, subdivision 13b, computed on the basis
of the class 1b benefits for the property, and the property shall lose its current class 1b
classification.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end
Sec. 9.
Minnesota Statutes 2022, section 273.1387, subdivision 2, is amended to read:
Subd. 2.
Credit amount.
For each qualifying property, the school building bond
agricultural credit is equal to the credit percent multiplied by the property's eligible net tax
capacity multiplied by the school debt tax rate determined under section 275.08, subdivision
1b. For property taxes payable prior to 2020, the credit percent is equal to 40 percent. For
property taxes payable in 2020, the credit percent is equal to 50 percent. For property taxes
payable in 2021, the credit percent is equal to 55 percent. For property taxes payable in
2022, the credit percent is equal to 60 percent. For property taxes payable in 2023 and
deleted text begin thereafterdeleted text end new text begin 2024new text end , the credit percent is equal to 70 percent.new text begin For property taxes payable in 2025
and thereafter, the credit percent is equal to 80 percent.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective beginning with property taxes payable
in 2025 and thereafter.
new text end
Sec. 10.
Minnesota Statutes 2022, section 290B.03, subdivision 1, is amended to read:
Subdivision 1.
Program qualifications.
The qualifications for the senior citizens'
property tax deferral program are as follows:
(1) the property must be owned and occupied as a homestead by a person 65 years of
age or older. In the case of a married couple, at least one of the spouses must be at least 65
years old at the time the first property tax deferral is granted, regardless of whether the
property is titled in the name of one spouse or both spouses, or titled in another way that
permits the property to have homestead status, and the other spouse must be at least 62 years
of age;
(2) the total household income of the qualifying homeowners, as defined in section
290A.03, subdivision 5, for the calendar year preceding the year of the initial application
may not exceed deleted text begin $60,000deleted text end new text begin $75,000new text end ;
(3) the homestead must have been owned and occupied as the homestead of at least one
of the qualifying homeowners for at least deleted text begin 15deleted text end new text begin fivenew text end years prior to the year the initial application
is filed;
(4) there are no state or federal tax liens or judgment liens on the homesteaded property;
(5) there are no mortgages or other liens on the property that secure future advances,
except for those subject to credit limits that result in compliance with clause (6); and
(6) the total unpaid balances of debts secured by mortgages and other liens on the
property, including unpaid and delinquent special assessments and interest and any delinquent
property taxes, penalties, and interest, but not including property taxes payable during the
year or debts secured by a residential PACE lien, as defined in section 216C.435, subdivision
10d, does not exceed 75 percent of the assessor's estimated market value for the year.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for the deferral of taxes payable in 2024
and thereafter.
new text end
Sec. 11.
Minnesota Statutes 2022, section 290B.04, subdivision 3, is amended to read:
Subd. 3.
Excess-income certification by taxpayer.
A taxpayer whose initial application
has been approved under subdivision 2 shall notify the commissioner of revenue in writing
by July 1 if the taxpayer's household income for the preceding calendar year exceeded
deleted text begin $60,000deleted text end new text begin $75,000new text end . The certification must state the homeowner's total household income for
the previous calendar year. No property taxes may be deferred under this chapter in any
year following the year in which a program participant filed or should have filed an
excess-income certification under this subdivision, unless the participant has filed a
resumption of eligibility certification as described in subdivision 4.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for the deferral of taxes payable in 2024
and thereafter.
new text end
Sec. 12.
Minnesota Statutes 2022, section 290B.04, subdivision 4, is amended to read:
Subd. 4.
Resumption of eligibility certification by taxpayer.
A taxpayer who has
previously filed an excess-income certification under subdivision 3 may resume program
participation if the taxpayer's household income for a subsequent year is deleted text begin $60,000deleted text end new text begin $75,000new text end
or less. If the taxpayer chooses to resume program participation, the taxpayer must notify
the commissioner of revenue in writing by July 1 of the year following a calendar year in
which the taxpayer's household income is deleted text begin $60,000deleted text end new text begin $75,000new text end or less. The certification must
state the taxpayer's total household income for the previous calendar year. Once a taxpayer
resumes participation in the program under this subdivision, participation will continue until
the taxpayer files a subsequent excess-income certification under subdivision 3 or until
participation is terminated under section 290B.08, subdivision 1.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for the deferral of taxes payable in 2024
and thereafter.
new text end
Sec. 13.
Minnesota Statutes 2022, section 290B.05, subdivision 1, is amended to read:
Subdivision 1.
Determination by commissioner.
The commissioner shall determine
each qualifying homeowner's "annual maximum property tax amount" following approval
of the homeowner's initial application and following the receipt of a resumption of eligibility
certification. The "annual maximum property tax amount" equals three percent of the
homeowner's total household income for the year preceding either the initial application or
the resumption of eligibility certification, whichever is applicable. Following approval of
the initial application, the commissioner shall determine the qualifying homeowner's
"maximum allowable deferral." No tax may be deferred relative to the appropriate assessment
year for any homeowner whose total household income for the previous year exceeds
deleted text begin $60,000deleted text end new text begin $75,000new text end . No tax shall be deferred in any year in which the homeowner does not
meet the program qualifications in section 290B.03. The maximum allowable total deferral
is equal to 75 percent of the assessor's estimated market value for the year, less the balance
of any mortgage loans and other amounts secured by liens against the property at the time
of application, including any unpaid and delinquent special assessments and interest and
any delinquent property taxes, penalties, and interest, but not including property taxes
payable during the year.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for the deferral of taxes payable in 2024
and thereafter.
new text end
Sec. 14.
Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision
to read:
new text begin Subd. 3b. new text end
new text begin Population age 65 and over. new text end
new text begin
"Population age 65 and over" means the
population age 65 and over established as of July 15 in an aid calculation year by the most
recent federal census, by a special census conducted under contract with the United States
Bureau of the Census, by a population estimate made by the Metropolitan Council, or by a
population estimate of the state demographer made pursuant to section 4A.02, whichever
is the most recent as to the stated date of the count or estimate for the preceding calendar
year and which has been certified to the commissioner of revenue on or before July 15 of
the aid calculation year. A revision to an estimate or count is effective for these purposes
only if certified to the commissioner on or before July 15 of the aid calculation year. Clerical
errors in the certification or use of estimates and counts established as of July 15 in the aid
calculation year are subject to correction within the time periods allowed under section
477A.014.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 15.
Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision
to read:
new text begin Subd. 3c. new text end
new text begin Transformed population. new text end
new text begin
"Transformed population" means the logarithm to
the base 10 of the population.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 16.
Minnesota Statutes 2022, section 477A.011, subdivision 34, is amended to read:
Subd. 34.
City revenue need.
(a) For a city with a population equal to or greater than
10,000, "city revenue need" is 1.15 times the sum of (1) deleted text begin 4.59deleted text end new text begin 8.559new text end times the pre-1940
housing percentage; plus (2) deleted text begin 0.622 times the percent of housing built between 1940 and
1970deleted text end new text begin 7.629 times the city age indexnew text end ; plus (3) deleted text begin 169.415 times the jobs per capitadeleted text end new text begin 5.461 times
the commercial industrial utility percentagenew text end ; plus (4) deleted text begin the sparsity adjustmentdeleted text end new text begin 8.481 times
peak population declinenew text end ; plus (5) deleted text begin 307.664deleted text end new text begin 297.789new text end .
(b) For a city with a population equal to or greater than 2,500 and less than 10,000, "city
revenue need" is 1.15 times the sum of (1) deleted text begin 572.62deleted text end new text begin 502.094new text end ; plus (2) deleted text begin 5.026deleted text end new text begin 4.285new text end times the
pre-1940 housing percentage; deleted text begin minusdeleted text end new text begin plusnew text end (3) deleted text begin 53.768 times household sizedeleted text end new text begin 6.699 times the
commercial industrial utility percentagenew text end ; plus (4) deleted text begin 14.022deleted text end new text begin 17.645new text end times peak population
declinedeleted text begin ; plus (5) the sparsity adjustmentdeleted text end .
(c) For a city with a population less than 2,500, "city revenue need" is the sum of (1)
deleted text begin 410deleted text end new text begin 79.351new text end ; plus (2) deleted text begin 0.367deleted text end new text begin 246.428new text end times the city's new text begin transformed new text end population deleted text begin over 100; plus
(3) the sparsity adjustment. The city revenue need for a city under this paragraph shall not
exceed 630 plus the city's sparsity adjustmentdeleted text end .
(d) For a city with a population of at least 2,500 but less than 3,000, the "city revenue
need" equals (1) the transition factor times the city's revenue need calculated in paragraph
(b); plus (2) deleted text begin 630deleted text end new text begin the city's revenue need calculated under the formula in paragraph (c)new text end times
the difference between one and the transition factor. For a city with a population of at least
10,000 but less than 11,000, the "city revenue need" equals (1) the transition factor times
the city's revenue need calculated in paragraph (a); plus (2) the city's revenue need calculated
under the formula in paragraph (b) times the difference between one and the transition
factor. For purposes of the first sentence of this paragraph "transition factor" is 0.2 percent
times the amount that the city's population exceeds the minimum threshold. For purposes
of the second sentence of this paragraph, "transition factor" is 0.1 percent times the amount
that the city's population exceeds the minimum threshold.
(e) The city revenue need cannot be less than zero.
(f) For calendar year deleted text begin 2015deleted text end new text begin 2024new text end and subsequent years, the city revenue need for a city,
as determined in paragraphs (a) to (e), is multiplied by the ratio of the annual implicit price
deflator for government consumption expenditures and gross investment for state and local
governments as prepared by the United States Department of Commerce, for the most
recently available year to the deleted text begin 2013deleted text end new text begin 2020new text end implicit price deflator for state and local government
purchases.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 17.
Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision
to read:
new text begin Subd. 46. new text end
new text begin City age index. new text end
new text begin
"City age index" means 100 times the ratio of (1) the population
age 65 and over within the city, to (2) the population of the city.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 18.
Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision
to read:
new text begin Subd. 47. new text end
new text begin Commercial industrial utility percentage. new text end
new text begin
The "commercial industrial utility
percentage" for a city is 100 times the ratio of (1) the sum of the estimated market values
of all real and personal property in the city classified as class 3 under section 273.13,
subdivision 24, to (2) the total market value of all taxable real and personal property in the
city. The market values are the amounts computed before any adjustments for fiscal
disparities under section 276A.06 or 473F.08. The market values used for this subdivision
are not equalized.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 19.
Minnesota Statutes 2022, section 477A.0124, subdivision 2, is amended to read:
Subd. 2.
Definitions.
(a) For the purposes of this section, the following terms have the
meanings given them.
(b) "County program aid" means the sum of "county need aid," "county tax base
equalization aid," and "county transition aid."
(c) "Age-adjusted population" means a county's population multiplied by the county age
index.
(d) "County age index" means the percentage of the population age 65 and over within
the county divided by the percentage of the population age 65 and over within the state,
except that the age index for any county may not be greater than 1.8 nor less than 0.8.
(e) "Population age 65 and over" deleted text begin means the population age 65 and over established as
of July 15 in an aid calculation year by the most recent federal census, by a special census
conducted under contract with the United States Bureau of the Census, by a population
estimate made by the Metropolitan Council, or by a population estimate of the state
demographer made pursuant to section 4A.02, whichever is the most recent as to the stated
date of the count or estimate for the preceding calendar year and which has been certified
to the commissioner of revenue on or before July 15 of the aid calculation year. A revision
to an estimate or count is effective for these purposes only if certified to the commissioner
on or before July 15 of the aid calculation year. Clerical errors in the certification or use of
estimates and counts established as of July 15 in the aid calculation year are subject to
correction within the time periods allowed under section 477A.014deleted text end new text begin has the meaning given
in section 477A.011, subdivision 3bnew text end .
(f) "Part I crimes" means the three-year average annual number of Part I crimes reported
for each county by the Department of Public Safety for the most recent years available. By
July 1 of each year, the commissioner of public safety shall certify to the commissioner of
revenue the number of Part I crimes reported for each county for the three most recent
calendar years available.
(g) "Households receiving Supplemental Nutrition Assistance Program (SNAP) benefits"
means the average monthly number of households receiving SNAP benefits for the three
most recent years for which data is available. By July 1 of each year, the commissioner of
human services must certify to the commissioner of revenue the average monthly number
of households in the state and in each county that receive SNAP benefits, for the three most
recent calendar years available.
(h) "County net tax capacity" means the county's adjusted net tax capacity under section
273.1325.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 20.
Minnesota Statutes 2022, section 477A.013, subdivision 8, is amended to read:
Subd. 8.
City formula aid.
(a) For aids payable in deleted text begin 2018deleted text end new text begin 2024new text end and thereafter, the formula
aid for a city is equal to the product of (1) the difference between its unmet need and its
certified aid in the previous year deleted text begin and before any aid adjustment under subdivision 13deleted text end , and
(2) the aid gap percentage.
(b) The applicable aid gap percentage must be calculated by the Department of Revenue
so that the total of the aid under subdivision 9 equals the total amount available for aid under
section 477A.03. The aid gap percentage must be the same for all cities subject to paragraph
(a). Data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be
the most recently available data as of January 1 in the year in which the aid is calculated.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 21.
Minnesota Statutes 2022, section 477A.013, subdivision 9, is amended to read:
Subd. 9.
City aid distribution.
(a) In calendar year deleted text begin 2018deleted text end new text begin 2024new text end and thereafter, if a city's
certified aid deleted text begin before any aid adjustment under subdivision 13deleted text end for the previous year is less
than its current unmet need, the city shall receive an aid distribution equal to the sum of (1)
its certified aid in the previous year deleted text begin before any aid adjustment under subdivision 13deleted text end , new text begin and
new text end (2) the city formula aid under subdivision 8deleted text begin , and (3) its aid adjustment under subdivision
13deleted text end .
(b) deleted text begin For aids payable in 2020 only, no city's aid amount before any adjustment under
subdivision 13 may be less than its pay 2019 certified aid amount, less any aid adjustment
under subdivision 13 for that year.deleted text end For aids payable in deleted text begin 2020deleted text end new text begin 2024new text end and thereafter, if a city's
certified aid deleted text begin before any aid adjustment under subdivision 13deleted text end for the previous year is equal
to or greater than its current unmet need, the total aid for a city is equal to the greater of (1)
its unmet need deleted text begin plus any aid adjustment under subdivision 13deleted text end , or (2) the amount it was
certified to receive in the previous year minus the deleted text begin sum of (i) any adjustment under subdivision
13 that was paid in the previous year but has expired, and (ii) thedeleted text end lesser of new text begin (i) new text end $10 multiplied
by its population, or new text begin (ii) new text end five percent of its net levy in the year prior to the aid distribution.
No city may have a total aid amount less than $0.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 22.
Minnesota Statutes 2022, section 477A.03, subdivision 2a, is amended to read:
Subd. 2a.
Cities.
deleted text begin For aids payable in 2016 and 2017, the total aid paid under section
477A.013, subdivision 9, is $519,398,012. For aids payable in 2018 and 2019, the total aid
paid under section 477A.013, subdivision 9, is $534,398,012. For aids payable in 2020, the
total aid paid under section 477A.013, subdivision 9, is $560,398,012.deleted text end For aids payable in
2021 deleted text begin and thereafterdeleted text end new text begin through 2023new text end , the total aid payable under section 477A.013, subdivision
9, is $564,398,012.new text begin For aids payable in 2024 and thereafter, the total aid payable under
section 477A.013, subdivision 9, is $594,398,012.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 23.
Minnesota Statutes 2022, section 477A.03, subdivision 2b, is amended to read:
Subd. 2b.
Counties.
(a) deleted text begin For aids payable in 2018 and 2019, the total aid payable under
section 477A.0124, subdivision 3, is $103,795,000, of which $3,000,000 shall be allocated
as required under Laws 2014, chapter 150, article 4, section 6. For aids payable in 2020,
the total aid payable under section 477A.0124, subdivision 3, is $116,795,000, of which
$3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section
6.deleted text end For aids payable in 2021 through deleted text begin 2024deleted text end new text begin 2023new text end , the total aid payable under section
477A.0124, subdivision 3, is $118,795,000, of which $3,000,000 shall be allocated as
required under Laws 2014, chapter 150, article 4, section 6.new text begin For aids payable in 2024, the
total aid payable under section 477A.0124, subdivision 3, is $132,070,770, of which
$3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section
6.new text end For aids payable in 2025 and thereafter, the total aid payable under section 477A.0124,
subdivision 3, is deleted text begin $115,795,000deleted text end new text begin $129,070,770new text end . On or before the first installment date provided
in section 477A.015, paragraph (a), $500,000 of this appropriation shall be transferred each
year by the commissioner of revenue to the Board of Public Defense for the payment of
services under section 611.27. Any transferred amounts not expended or encumbered in a
fiscal year shall be certified by the Board of Public Defense to the commissioner of revenue
on or before October 1new text begin ,new text end and shall be included in the next certification of county need aid.
(b) For aids payable in 2018 and 2019, the total aid under section 477A.0124, subdivision
4, is deleted text begin $130,873,444. For aids payable in 2020, the total aid under section 477A.0124,
subdivision 4, isdeleted text end $143,873,444. For aids payable in 2021 deleted text begin and thereafterdeleted text end new text begin through 2023new text end , the
total aid under section 477A.0124, subdivision 4, is $145,873,444.new text begin For aids payable in 2024
and thereafter, the total aid under section 477A.0124, subdivision 4, is $162,597,674.new text end The
commissioner of revenue shall transfer to the Legislative Budget Office $207,000 annually
for the cost of preparation of local impact notes as required by section 3.987, and other local
government activities. The commissioner of revenue shall transfer to the commissioner of
education $7,000 annually for the cost of preparation of local impact notes for school districts
as required by section 3.987. The commissioner of revenue shall deduct the amounts
transferred under this paragraph from the appropriation under this paragraph. The amounts
transferred are appropriated to the Legislative Coordinating Commission and the
commissioner of education respectively.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 24.
new text begin
[477A.23] SOIL AND WATER CONSERVATION DISTRICT AID.
new text end
new text begin Subdivision 1. new text end
new text begin Definitions. new text end
new text begin
For purposes of this section, the following terms have the
meanings given:
new text end
new text begin
(1) "nonpublic land" means tract, lot, parcel, and piece or parcel of land as defined by
section 272.03, subdivision 6, that is not owned by the federal government, the state, or a
local government unit; and
new text end
new text begin
(2) "soil and water conservation district" means a district under chapter 103C that is
implementing the duties under that chapter as determined by the Board of Water and Soil
Resources as of the date the board provides the certification to the commissioner of revenue
required by subdivision 4.
new text end
new text begin Subd. 2. new text end
new text begin Purpose. new text end
new text begin
The purpose of this section is to provide ongoing financial support
to soil and water conservation districts to aid in the execution of chapter 103C and other
duties and services prescribed by statute.
new text end
new text begin Subd. 3. new text end
new text begin Distribution. new text end
new text begin
The Board of Water and Soil Resources must calculate the amount
of aid to be distributed to the certified soil and water conservation districts from the
appropriation in subdivision 7 as follows:
new text end
new text begin
(1) 70 percent of the appropriation must be distributed equally among the districts; and
new text end
new text begin
(2) 30 percent of the appropriation must be distributed proportionally among the districts
according to the amount of nonpublic land located in a district as compared to the amount
of nonpublic land in the state.
new text end
new text begin Subd. 4. new text end
new text begin Certification to commissioner. new text end
new text begin
On or before June 1 each year, the Board of
Water and Soil Resources must certify to the commissioner of revenue the soil and water
conservation districts that will receive a payment under this section and the amount of each
payment.
new text end
new text begin Subd. 5. new text end
new text begin Use of proceeds. new text end
new text begin
(a) Notwithstanding section 103C.401, subdivision 2, a soil
and water conservation district that receives a distribution under this section must use the
proceeds to implement chapter 103C and other duties and services prescribed by statute.
new text end
new text begin
(b) The board of each soil and water conservation district must establish, by resolution,
annual guidelines for using payments received under this section. Current year guidelines
and guidelines from the year immediately prior must be posted on the district website.
new text end
new text begin
(c) A soil and water conservation district that receives a payment under this section may
appropriate any portion of the payment to a governmental unit with which the district has
a cooperative agreement under section 103C.231. Any payment received under this section
and appropriated by the district must be used as required by this section.
new text end
new text begin Subd. 6. new text end
new text begin Payments. new text end
new text begin
The commissioner of revenue must distribute soil and water
conservation district aid in the same manner and at the same times as aid payments provided
under section 477A.015.
new text end
new text begin Subd. 7. new text end
new text begin Appropriation. new text end
new text begin
$12,000,000 is annually appropriated from the general fund
to the commissioner of revenue to make the payments required under his section.
new text end
new text begin Subd. 8. new text end
new text begin Aid amount corrections. new text end
new text begin
If, due to a clerical error, the amount certified by the
Board of Soil and Water Resources to the commissioner of revenue is less than the amount
to which the district is entitled under this section, the Board of Water and Soil Resources
shall recertify the correct amount to the commissioner of revenue and communicate the
error and the corrected amount to the affected soil and water conservation district as soon
as practical after the error is discovered.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective beginning with aids payable in calendar
year 2023 and thereafter.
new text end
Sec. 25.
new text begin
[477A.31] MAHNOMEN PROPERTY TAX REIMBURSEMENT AID.
new text end
new text begin Subdivision 1. new text end
new text begin Aid appropriation. new text end
new text begin
(a) The commissioner of revenue shall make
reimbursement aid payments to compensate for the loss of property tax revenue related to
the trust conversion application of the Shooting Star Casino. The commissioner shall pay
the county of Mahnomen, $900,000; the city of Mahnomen, $320,000; and Independent
School District No. 432, Mahnomen, $140,000.
new text end
new text begin
(b) The payments shall be made annually on July 20.
new text end
new text begin Subd. 2. new text end
new text begin Appropriation. new text end
new text begin
An amount sufficient to pay reimbursement aid under this
section is annually appropriated from the general fund to the commissioner of revenue.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 26.
Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008, chapter
154, article 1, section 4, and Laws 2013, chapter 143, article 2, section 33, is amended to
read:
Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT,
PROPERTY TAX REIMBURSEMENT.
Subdivision 1.
Aid appropriation.
new text begin (a) new text end $1,200,000 is appropriated annually from the
general fund to the commissioner of revenue to be used to make payments to compensate
for the loss of property tax revenue related to the trust conversion application of the Shooting
Star Casino. The commissioner shall pay the county of Mahnomen, $900,000; the city of
Mahnomen, $160,000; and Independent School District No. 432, Mahnomen, $140,000.
The payments shall be made on July 20, of 2013 and each subsequent year.
new text begin
(b) This section expires after aids payable year 2023.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
Sec. 27. new text begin PUBLIC SAFETY AID.
new text end
new text begin Subdivision 1. new text end
new text begin Definitions. new text end
new text begin
For purposes of this section, the following terms have the
meanings given:
new text end
new text begin
(1) "City" means a statutory or home rule charter city that directly employs at least one
peace officer as defined by section 477C.01, subdivision 7, clauses (1) and (3) to (4).
new text end
new text begin
(2) "City per capita aid amount" equals the amount appropriated to every city by
subdivision 7, divided by the total population of every city.
new text end
new text begin
(3) "County per capita aid amount" equals the amount appropriated to counties and
Tribal governments by subdivision 7, divided by the sum of the total population of every
county plus the total Tribal population but excluding the total population of every city.
new text end
new text begin
(4) "Population" means population estimates made or conducted by the United States
Bureau of the Census, the Metropolitan Council pursuant to section 473.24, or by the state
demographer pursuant to section 4A.02, paragraph (d), whichever is the most recent estimate
and available as of January 1, 2023.
new text end
new text begin
(5) "Tribal governments" has the meaning given to "Minnesota Tribal governments" in
section 10.65, subdivision 2.
new text end
new text begin
(6) "Tribal population" means population estimates made or conducted by the United
States Bureau of the Census of the federally recognized American Indian reservations and
off-reservation trust lands in Minnesota, whichever is the most recent estimate and available
as of January 1, 2023.
new text end
new text begin Subd. 2. new text end
new text begin Distribution. new text end
new text begin
The commissioner of revenue will distribute payments under this
section as follows:
new text end
new text begin
(1) A county's public safety aid amount equals:
new text end
new text begin
(i) the county's population minus the total population of every city located in that county,
times;
new text end
new text begin
(ii) the county per capita aid amount.
new text end
new text begin
(2) A Tribal government's public safety aid amount equals:
new text end
new text begin
(i) the Tribe's population, times;
new text end
new text begin
(ii) the county per capita aid amount.
new text end
new text begin
(3) A city's public safety aid amount equals:
new text end
new text begin
(i) the city's population, times;
new text end
new text begin
(ii) the city per capita aid amount.
new text end
new text begin Subd. 3. new text end
new text begin Certifications to commissioner. new text end
new text begin
The commissioner of public safety must
certify to the commissioner of revenue, on or before July 1, 2023, each city that meets the
definition of city in subdivision 1 as of January 1, 2023.
new text end
new text begin Subd. 4. new text end
new text begin Use of proceeds. new text end
new text begin
(a) Counties, Tribal governments, and cities that receive a
distribution under this section must use the proceeds to provide public safety. Use of proceeds
may include, but is not limited to, paying personnel and equipment costs.
new text end
new text begin
(b) Counties must consult with their county sheriff in determining how to use the
proceeds.
new text end
new text begin
(c) Counties, Tribal governments, and cities that receive a distribution under this section
may not apply the proceeds toward:
new text end
new text begin
(1) their employer contribution to the public employees police and fire fund, if that
county, Tribal government, or city received police state aid under chapter 477C in the year
immediately prior to a distribution under this section; or
new text end
new text begin
(2) any costs associated with alleged wrongdoing or misconduct.
new text end
new text begin Subd. 5. new text end
new text begin Payments. new text end
new text begin
The commissioner shall certify the amount to be paid in 2023 to
each county, Tribal government, and city by August 1, 2023, and the full 2023 payment to
the counties, Tribal governments, and cities must be made by December 26, 2023.
new text end
new text begin Subd. 6. new text end
new text begin Appropriation. new text end
new text begin
$300,000,000 is appropriated from the general fund to the
commissioner of revenue to make payments required under this section as follows: (1)
$90,000,000 to counties and Tribal governments; and (2) $210,000,000 to cities.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in 2023.
new text end
Sec. 28. new text begin TRIBAL NATION HOUSING AND HOMELESSNESS AID.
new text end
new text begin
(a) $44,000,000 in fiscal year 2024 is appropriated from the general fund to the
commissioner of revenue for direct aid to Tribal Nations for homelessness prevention,
emergency shelter, and other needs related to housing instability and homelessness.
new text end
new text begin
(b) The commissioner of revenue may pay aid under this section to the governing body
of the:
new text end
new text begin
(1) Fond du Lac Band;
new text end
new text begin
(2) Grand Portage Band;
new text end
new text begin
(3) Mille Lacs Band;
new text end
new text begin
(4) White Earth Band;
new text end
new text begin
(5) Bois Forte Band;
new text end
new text begin
(6) Leech Lake Band;
new text end
new text begin
(7) Red Lake Nation;
new text end
new text begin
(8) Upper Sioux Community;
new text end
new text begin
(9) Lower Sioux Community;
new text end
new text begin
(10) Shakopee Mdewakanton Sioux Community; and
new text end
new text begin
(11) Prairie Island Mdewakanton Dakota Community.
new text end
new text begin
(c) To receive aid under this section, a Tribal Nation must apply in writing to the
commissioner of revenue on or before July 1, 2023. As part of the application, the Tribal
Nation must agree to spend the aid money for homelessness prevention, emergency shelter,
and other needs related to housing instability and homelessness.
new text end
new text begin
(d) Each Tribal Nation must be paid an amount equal to the amount appropriated in
paragraph (a) divided by the number of Tribal Nations that timely applied for aid. The
commissioner of revenue shall certify the amount of aid payable to each Tribal Nation on
or before August 1, 2023.
new text end
new text begin
(e) The commissioner of revenue must distribute all aid payable under this section on
December 26, 2023.
new text end
new text begin
(f) On or before February 1, 2024, a recipient of aid under this section must provide a
report to the commissioner of revenue in the form prescribed by the commissioner of revenue.
The commissioner of revenue must compile and provide the reports to the chairs and ranking
minority members of the legislative committees with jurisdiction over taxes.
new text end
new text begin
(g) The appropriation under this section is onetime.
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
Sec. 29. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2022, sections 477A.011, subdivisions 30a, 38, 42, and 45; and
477A.013, subdivision 13,
new text end
new text begin
are repealed.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for aids payable in calendar year 2024
and thereafter.
new text end
ARTICLE 5
MISCELLANEOUS
Section 1.
Minnesota Statutes 2022, section 270C.52, subdivision 2, is amended to read:
Subd. 2.
Payment agreements.
(a) When any portion of any tax payable to the
commissioner together with interest and penalty thereon, if any, has not been paid, the
commissioner may extend the time for payment for a further period. When the authority of
this section is invoked, the extension shall be evidenced by written agreement signed by
the taxpayer and the commissioner, stating the amount of the tax with penalty and interest,
if any, and providing for the payment of the amount in installments.
(b) The agreement may contain a confession of judgment for the amount and for any
unpaid portion thereof. If the agreement contains a confession of judgment, the confession
of judgment must provide that the commissioner may enter judgment against the taxpayer
in the district court of the county of residence as shown upon the taxpayer's tax return for
the unpaid portion of the amount specified in the extension agreement.
(c) The agreement shall provide that it can be terminated, after notice by the
commissioner, if information provided by the taxpayer prior to the agreement was inaccurate
or incomplete, collection of the tax covered by the agreement is in jeopardy, there is a
subsequent change in the taxpayer's financial condition, the taxpayer has failed to make a
payment due under the agreement, or the taxpayer has failed to pay any other tax or file a
tax return coming due after the agreement.
(d) The notice must be given at least 14 calendar days prior to termination, and shall
advise the taxpayer of the right to request a reconsideration from the commissioner of
whether termination is reasonable and appropriate under the circumstances. A request for
reconsideration does not stay collection action beyond the 14-day notice period. If the
commissioner has reason to believe that collection of the tax covered by the agreement is
in jeopardy, the commissioner may proceed under section 270C.36 and terminate the
agreement without regard to the 14-day period.
(e) The commissioner may accept other collateral the commissioner considers appropriate
to secure satisfaction of the tax liability. The principal sum specified in the agreement shall
bear interest at the rate specified in section 270C.40 on all unpaid portions thereof until the
same has been fully paid or the unpaid portion thereof has been entered as a judgment. The
judgment shall bear interest at the rate specified in section 270C.40.
(f) If it appears to the commissioner that the tax reported by the taxpayer is in excess of
the amount actually owing by the taxpayer, the extension agreement or the judgment entered
pursuant thereto shall be corrected. If after making the extension agreement or entering
judgment with respect thereto, the commissioner determines that the tax as reported by the
taxpayer is less than the amount actually due, the commissioner shall assess a further tax
in accordance with the provisions of law applicable to the tax.
(g) The authority granted to the commissioner by this section is in addition to any other
authority granted to the commissioner by law to extend the time of payment or the time for
filing a return and shall not be construed in limitation thereof.
deleted text begin
(h) The commissioner shall charge a fee for entering into payment agreements. The fee
is set at $50 and is charged for entering into a payment agreement, for entering into a new
payment agreement after the taxpayer has defaulted on a prior agreement, and for entering
into a new payment agreement as a result of renegotiation of the terms of an existing
agreement. The fee is paid to the commissioner before the payment agreement becomes
effective and does not reduce the amount of the liability.
deleted text end
new text begin EFFECTIVE DATE; APPLICATION. new text end
new text begin
This section is effective the day following
final enactment and applies to payment plans entered into 30 days after that date.
new text end
Sec. 2. new text begin ADMINISTRATIVE APPROPRIATION.
new text end
new text begin
$2,589,000 in fiscal year 2023, $20,085,000 in fiscal year 2024, and $4,548,000 in fiscal
year 2025 are appropriated from the general fund to the commissioner of revenue to
administer this act. The base funding is $335,000 in fiscal year 2026 and $192,000 in fiscal
year 2027.
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
APPENDIX
Repealed Minnesota Statutes: 23-00320
290.0132 INDIVIDUALS, ESTATES, AND TRUSTS; SUBTRACTIONS FROM FEDERAL TAXABLE INCOME OR FEDERAL ADJUSTED GROSS INCOME.
No active language found for: 290.0132.33
477A.011 DEFINITIONS.
Subd. 30a.
Percent of housing built between 1940 and 1970.
"Percent of housing built between 1940 and 1970" is equal to 100 times the most recent count by the United States Bureau of the Census of all housing units in the city built after 1939 but before 1970, divided by the total number of all housing units in the city. Housing units includes both occupied and vacant housing units as defined by the federal census.
Subd. 38.
Household size.
"Household size" means the average number of persons per household in the jurisdiction as most recently estimated and reported by the state demographer and Metropolitan Council as of July 15 of the aid calculation year. A revision to an estimate or enumeration is effective for these purposes only if it is certified to the commissioner on or before July 15 of the aid calculation year. Clerical errors in the certification or use of estimates and counts established as of July 15 in the aid calculation year are subject to correction within the time periods allowed under section 477A.014.
Subd. 42.
Jobs per capita in the city.
"Jobs per capita in the city" means (1) the average annual number of employees in the city based on the data from the Quarterly Census of Employment and Wages, as reported by the Department of Employment and Economic Development, for the most recent calendar year available November 1 of every odd-numbered year, divided by (2) the city's population for the same calendar year as the employment data. The commissioner of the Department of Employment and Economic Development shall certify to the city the average annual number of employees for each city by January 1 of every even-numbered year beginning with January 1, 2014. A city may challenge an estimate under this paragraph by filing its specific objection, including the names of employers that it feels may have misreported data, in writing with the commissioner by December 1 of every odd-numbered year. The commissioner shall make every reasonable effort to address the specific objection and adjust the data as necessary. The commissioner shall certify the estimates of the annual employment to the commissioner of revenue by January 1 of all even-numbered years, including any estimates still under objection.
Subd. 45.
Sparsity adjustment.
For a city with a population of 10,000 or more, the sparsity adjustment is 100 for any city with an average population density less than 150 per square mile, according to the most recent federal census. For a city with a population less than 10,000, the sparsity adjustment is 200 for any city with an average population density less than 30 per square mile, according to the most recent federal census. The sparsity adjustment is zero for all other cities.
477A.013 MUNICIPAL GOVERNMENT DISTRIBUTIONS.
Subd. 13.
Certified aid adjustments.
(a) A city that received an aid base increase under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids payable in 2014 through 2018.
(b) A city that received an aid base increase under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (r), shall have its total aid under subdivision 9 increased by an amount equal to $160,000 for aids payable in 2014 and thereafter.
(c) A city that received a temporary aid increase under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (o), shall have its total aid under subdivision 9 increased by an amount equal to $1,000,000 for aids payable in 2014 only.