HF 2311

as introduced - 89th Legislature (2015 - 2016) Posted on 05/07/2015 09:25am

A bill for an act
relating to economic development; establishing a tax refund program for
restaurant and hotel renovations or repair; proposing coding for new law in
Minnesota Statutes, chapter 469.

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

Section 1.

new text begin [469.50] RESTAURANT AND HOTEL RENOVATION TAX REFUND
PROGRAM.
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 (a) "Actual project costs" means costs attributable to a project that are incurred by
a qualified applicant between the commencement and completion dates specified by the
commissioner under subdivision 4, paragraph (b), clause (2).
new text end

new text begin (b) "Applicant" means a person, corporation, or other entity that owns and operates a
hotel or restaurant.
new text end

new text begin (c) "Baseline tax amount" means the average annual amount of sales and use tax
remitted to the commissioner by sales tax dealers at the location of a project during the
36-month period immediately preceding commencement of the project. The baseline tax
amount shall be calculated using records submitted to the commissioner under subdivision
4, paragraph (c).
new text end

new text begin (d) "Commissioner" means the commissioner of employment and economic
development.
new text end

new text begin (e) "Hotel" means a public lodging establishment that is licensed under chapter 157.
new text end

new text begin (f) "Project" means the renovation, improvement, repair, or upgrade of an existing
hotel or restaurant. Project does not include new construction.
new text end

new text begin (g) "Qualified applicant" means an applicant who has been issued a certificate by the
commissioner under subdivision 4.
new text end

new text begin (h) "Restaurant" means a food and beverage service establishment licensed under
chapter 157.
new text end

new text begin Subd. 2. new text end

new text begin Administration. new text end

new text begin The commissioner shall develop, implement, and
administer a restaurant and hotel renovation tax refund program. The commissioner is
authorized to adopt rules necessary to administer and enforce this section.
new text end

new text begin Subd. 3. new text end

new text begin Tax refund. new text end

new text begin (a) An applicant may receive an annual refund of the tax
imposed by chapter .... in an amount certified by the commissioner under subdivision 4,
paragraph (e), if the applicant completes a project that is:
new text end

new text begin (1) a renovation, improvement, repair, or upgrade of guest rooms, suites, or common
areas of a hotel, including exterior upgrades to signage, landscaping, and facades, with at
least $10,000 in expenditures for each guest room or suite and total expenditures of at
least $2,000,000; or
new text end

new text begin (2) a renovation, improvement, repair, or upgrade of dining areas, restrooms,
kitchens, or common areas of a restaurant, including upgrades to signage, landscaping,
and facades, with at least $10,000 in expenditures for upgrades or repairs to one or more
areas used primarily for food preparation and total expenditures of at least $100,000.
new text end

new text begin (b) A qualified applicant meeting the requirements of this section shall receive an
annual tax refund equal to 50 percent of the difference between the baseline tax amount
and the annual amount of sales and use taxes remitted by sales tax dealers at the location
of the qualified applicant's completed project.
new text end

new text begin (c) The aggregate amount of refund payments that a qualified applicant receives
under this section must not exceed 20 percent of the qualified applicant's actual project
costs. Expansions, enlargements, or additional investments made by a qualified applicant
that are outside the scope of the application approved under subdivision 4, paragraph (a),
must not increase authorized refund payments.
new text end

new text begin Subd. 4. new text end

new text begin Application process. new text end

new text begin (a) An applicant seeking a tax refund under this
section must submit an application to the commissioner before the project commences.
The application must include:
new text end

new text begin (1) plans for the proposed project and estimated project costs; and
new text end

new text begin (2) a detailed description of the proposed project, including estimated
commencement and completion dates.
new text end

new text begin (b) The commissioner shall review each submitted application for completeness and
provide preliminary approval or disapproval within 60 days after receiving the application.
The commissioner shall issue a certificate to each preliminarily approved applicant that:
new text end

new text begin (1) designates the applicant as a qualified applicant eligible to receive a tax refund
under this section; and
new text end

new text begin (2) specifies project commencement and completion dates. The period between the
commencement and completion dates specified by the commissioner must not exceed 36
months for a proposed project described in subdivision 3, paragraph (a), clause (1), or 12
months for a proposed project described in subdivision 3, paragraph (a), clause (2).
new text end

new text begin (c) Each qualified applicant shall, within 60 days after commencement of the
applicant's project, submit to the commissioner a record of all sales and use taxes
remitted by sales tax dealers at the location of the project for the 36 months immediately
preceding commencement of the project. This information is subject to verification by
the commissioner.
new text end

new text begin (d) Each qualified applicant shall, upon completion of the applicant's project,
provide documentation to the commissioner demonstrating actual project costs. These
costs shall be verified, at the expense of the qualified applicant, by an independent certified
public accountant licensed in this state. The commissioner shall verify that actual project
costs meet the expenditure requirements provided in subdivision 3, paragraph (a). A
qualified applicant who fails to meet the expenditure requirements provided in subdivision
3, paragraph (a), must not receive a tax refund under this section.
new text end

new text begin (e) Each qualified applicant shall, beginning with the 12-month period immediately
after completion of the applicant's project, submit to the commissioner a record of the
annual sales and use taxes remitted by sales tax dealers at the location of the completed
project. The commissioner shall verify this information, calculate the amount of any tax
refund due, and certify the refund amount. The commissioner shall issue tax refunds
within 30 days after determining the certified amount.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end