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Minnesota Legislature

Office of the Revisor of Statutes

HF 2380

as introduced - 91st Legislature (2019 - 2020) Posted on 03/11/2019 02:53pm

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

Bill Text Versions

Engrossments
Introduction Posted on 03/11/2019

Current Version - as introduced

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A bill for an act
relating to taxation; modifying provisions related to gross revenues taxes, income
taxes, and health insurance; providing for an insurance premium credit for
individuals and advanced payment of the credit; providing for disclosure of certain
taxpayer data; providing an addition for certain deducted health insurance
premiums; making changes to taxpayer nexus for the health care provider tax;
repealing the sunset of the MinnesotaCare provider taxes; clarifying payment of
interest on overpayments; making technical changes; appropriating money;
amending Minnesota Statutes 2018, sections 270B.12, by adding a subdivision;
290.0131, by adding a subdivision; 295.51, subdivision 1a; 295.52, subdivision
8; 295.57, subdivision 3; proposing coding for new law in Minnesota Statutes,
chapters 62V; 290; repealing Laws 2011, First Special Session chapter 9, article
6, section 97, subdivision 6.

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

Section 1.

new text begin[62V.12] ADVANCED PAYMENT OF STATE-BASED HEALTH
INSURANCE PREMIUM TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Determination of eligibility for advanced payment of state-based
health insurance premium tax credit.
new text end

new text begin (a) The Board of Directors of MNsure shall assess
an individual's eligibility for an advanced payment of the state-based health insurance tax
credit under section 290.0693 when an individual applies for an eligibility determination
through MNsure, basing the eligibility determination upon income for the relevant tax year
as projected by the individual. MNsure shall equally divide the value of the potential
state-based tax credit across the monthly premiums to be charged to the individual. If the
individual selects a plan through MNsure, MNsure shall notify the relevant health carrier
of the amount of the advanced payment of the state-based insurance premium tax credit
amount and direct the health carrier to deduct the amount from the eligible individual's
premiums.
new text end

new text begin (b) An individual is eligible for an advanced payment of the state-based health insurance
premium tax credit if they are a Minnesota resident who:
new text end

new text begin (1) had at least one month of coverage by a qualified health plan offered through MNsure
during the tax year;
new text end

new text begin (2) was not enrolled in public program coverage under section 256B.055 or 256L.04
during the months of coverage by the qualified health plan; and
new text end

new text begin (3) is eligible for the health insurance tax credit in section 290.0693.
new text end

new text begin (c) To be eligible for an advanced payment of the state-based health insurance premium
tax credit, the individual must attest that the individual will file a state tax return in order
to reconcile any advanced payment of the credit and will file a joint tax return with their
spouse, if married.
new text end

new text begin (d) An individual is not eligible for an advanced payment of the state-based health
insurance premium tax credit for the taxable year if MNsure is notified by the commissioner
of revenue that the individual received an advanced payment in a prior tax year and has not
filed a tax return for the relevant tax year and has not fully paid any amount necessary to
reconcile the advanced payment.
new text end

new text begin Subd. 2. new text end

new text begin Payments to health carriers. new text end

new text begin The board shall make payments to health carriers
equal to the amount of the advance state-based health insurance premium tax credit amounts
provided to eligible individuals effectuating coverage for the months in which the individual
has paid the net premium amount to the health carrier.
new text end

new text begin Subd. 3. new text end

new text begin Health carrier responsibilities. new text end

new text begin A health carrier that receives notice from
MNsure that an individual enrolled in the health carrier's qualified health plan is eligible
for an advanced payment of the state-based health insurance premium tax credit shall:
new text end

new text begin (1) reduce the portion of the premium charged to the individual for the applicable months
by the amount of the state-based health insurance tax credit determined by MNsure;
new text end

new text begin (2) include the amount of advanced state-based health insurance premium tax credit
determined by MNsure on each billing statement for which an advanced state-based health
insurance tax credit has been applied; and
new text end

new text begin (3) reconcile advanced payments of state-based health insurance premium tax credits
with MNsure at least once a month.
new text end

new text begin Subd. 4. new text end

new text begin Appeals. new text end

new text begin MNsure appeals are available for Minnesota residents for initial
determinations and redeterminations made by MNsure of eligibility for and level of an
advanced payment of the state-based health insurance premium tax credit. The appeals must
follow the procedures enumerated in Minnesota Rules, chapter 7700.
new text end

new text begin Subd. 5. new text end

new text begin Data practices. new text end

new text begin The data classifications in section 62V.06, subdivision 3, apply
to data on individuals applying for or receiving a state-based health insurance tax credit
pursuant to this subdivision.
new text end

new text begin Subd. 6. new text end

new text begin Data sharing. new text end

new text begin Notwithstanding any law to the contrary, the board is permitted
to share or disseminate data in subdivision 5 as described in section 62V.06, subdivision 5.
new text end

new text begin Subd. 7. new text end

new text begin Appropriations. new text end

new text begin Beginning in fiscal year 2021 and each fiscal year thereafter
an amount sufficient to make advanced payments of the state-based health insurance tax
credit is appropriated from the health care access fund to the board for payment of advanced
state-based health insurance premium tax credits under this section
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for advanced payment of the state-based
health insurance premium tax credit applied to premiums for plan year 2021.
new text end

Sec. 2.

Minnesota Statutes 2018, section 270B.12, is amended by adding a subdivision to
read:


new text begin Subd. 15. new text end

new text begin Board of Directors of MNsure. new text end

new text begin The commissioner may disclose return
information to the extent necessary to the Board of Directors of MNsure to determine
eligibility under section 62V.12, subdivision 1.
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, 2020.
new text end

Sec. 3.

Minnesota Statutes 2018, section 290.0131, is amended by adding a subdivision
to read:


new text begin Subd. 15. new text end

new text begin Health insurance premiums. new text end

new text begin The amount of health insurance premiums
deducted on the taxpayer's federal return, to the extent used to calculate the credit under
section 290.0693, 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, 2020.
new text end

Sec. 4.

new text begin [290.0693] HEALTH INSURANCE PREMIUM CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual who is a resident of Minnesota is
allowed a credit against the tax due under this chapter if the individual would be allowed a
credit under section 36B of the Internal Revenue Code, except that the individual's household
income, as defined in section 36B(d)(2) of the Internal Revenue Code, exceeds 400 percent
of the poverty line for the individual's family size as defined in section 36B(d)(3) of the
Internal Revenue Code.
new text end

new text begin (b) In the determination of "coverage month" under section 36B(c)(2) of the Internal
Revenue Code, section 36B(c)(2)(B) and (C) must not apply.
new text end

new text begin (c) The credit is equal to what the credit would have been under section 36B of the
Internal Revenue Code, except the applicable percentage for purposes of section
36B(b)(2)(B)(ii) of the Internal Revenue Code, is the highest premium percentage in section
36B(b)(3)(A) of the Internal Revenue Code.
new text end

new text begin (d) The amount of monthly premiums taken into account under section 36B(b)(2)(A) of
the Internal Revenue Code must be reduced by the amount of premium subsidy made by
MNsure and applied to the gross premium.
new text end

new text begin Subd. 2. new text end

new text begin Advanced payment of credit. new text end

new text begin (a) An individual may claim the credit on the
individual's tax return or have the credit paid in advance pursuant to section 62V.12.
new text end

new text begin (b) If an individual elects to have the credit paid in advance, the credit claimed under
subdivision 1 must be reduced by the amount of the advanced payments. If the amount of
the advance payments exceeds the amount of credit the individual is eligible for, the tax
imposed by this chapter for the taxable year must be increased by the amount of the excess.
new text end

new text begin (c) If the amount of credit that the individual is allowed under subdivision 1, after
subtracting any advanced payments, exceeds the individual's tax liability under this chapter,
the commissioner shall refund the excess to the individual.
new text end

new text begin (d) By January 31 of each year, the Board of Directors of MNsure must provide to each
individual who applied for assistance and enrolled in a qualified health plan and to the
commissioner a statement containing information on the preceding year necessary to reconcile
the credit with the advance payments. The Board of Directors of MNsure and the
commissioner must consult to develop the form and manner of the report.
new text end

new text begin (e) Each year, 60 days prior to MNsure's open enrollment, the commissioner shall provide
information to MNsure about which individuals received an advanced payment of the
state-based health insurance tax credit under section 62V.12 in a prior taxable year and did
not file a return and reconcile the payments for that taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Reporting requirements. new text end

new text begin (a) If the individual has a change in eligibility status
determination by MNsure, after the taxable year is complete, the individual and MNsure
must notify the commissioner of the change in eligibility within six months of the change.
new text end

new text begin (b) Notwithstanding any law to the contrary, the commissioner may recompute the tax
due based on the determination of eligibility.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin (a) An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the health care access fund.
new text end

new text begin (b) $1,037,000 in fiscal year 2022 and $880,000 in each fiscal year thereafter are
appropriated from the general fund to the commissioner of revenue for administering this
act.
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, 2020.
new text end

Sec. 5.

Minnesota Statutes 2018, section 295.51, subdivision 1a, is amended to read:


Subd. 1a.

Nexus in Minnesota.

new text begin(a) To the extent allowed by the United States
Constitution and the laws of the United States, a person who is
new text enda wholesale drug distributor
deleted text begin has nexus in Minnesota if its contacts with or presence in Minnesota is sufficient to satisfy
the requirements of the United States Constitution.
deleted text endnew text begin, a person who receives legend drugs for
resale or use in Minnesota other than from a wholesale drug distributor that is subject to
tax, or a person who sells or repairs hearing aids and related equipment or prescription
eyewear is subject to the taxes imposed by this chapter if the person:
new text end

new text begin (1) has or maintains within this state, directly or by a subsidiary or an affiliate, an office,
place of distribution, sales, storage, or sample room or place, warehouse, or other place of
business, including the employment of a resident of this state who works from a home office
in this state;
new text end

new text begin (2) has a representative, including but not limited to an employee, affiliate, agent,
salesperson, canvasser, solicitor, independent contractor, or other third party operating in
this state under the person's authority or the authority of the person's subsidiary, for any
purpose, including the repairing, selling, delivering, installing, facilitating sales, processing
sales, or soliciting of orders for the person's goods or services, or the leasing of tangible
personal property located in this state, whether the place of business or the agent,
representative, affiliate, salesperson, canvasser, or solicitor is located in the state permanently
or temporarily, or whether or not the person, subsidiary, or affiliate is authorized to do
business in this state;
new text end

new text begin (3) owns or leases real property that is located in this state; or
new text end

new text begin (4) owns or leases tangible personal property that is present in this state, including but
not limited to mobile property.
new text end

new text begin (b) To the extent allowed by the United States Constitution and the laws of the United
States, a person who is a wholesale drug distributor, or a person who receives legend drugs
for resale or use in Minnesota other than from a wholesale drug distributor that is subject
to tax, is subject to the taxes imposed by this chapter if the person:
new text end

new text begin (1) conducts a trade or business not described in paragraph (a) and sells, delivers, or
distributes legend drugs from outside this state to a destination within this state by common
carrier or otherwise; and
new text end

new text begin (2) meets one of the following thresholds:
new text end

new text begin (i) makes 100 or more sales, deliveries, or distributions described in clause (1) during
any taxable year;
new text end

new text begin (ii) the gross revenues of a wholesale drug distributor that sells or distributes legend
drugs as described in clause (1) totals more than $100,000 during any taxable year; or
new text end

new text begin (iii) the price paid by a person who receives legend drugs for resale or use in Minnesota
other than from a wholesale drug distributor that is subject to tax for legend drugs as
described in clause (1) totals more than $100,000 during any taxable year.
new text end

new text begin (c) To the extent allowed by the United States Constitution and the laws of the United
States, a person who sells or repairs hearing aids and related equipment or prescription
eyewear is subject to the taxes imposed by this chapter if the person:
new text end

new text begin (1) conducts a trade or business not described in paragraph (a), and:
new text end

new text begin (i) sells, delivers, or distributes hearing aids or prescription eyewear from outside of this
state to a destination within this state by common carrier or otherwise; or
new text end

new text begin (ii) repairs hearing aids or prescription eyewear outside of this state and delivers or
distributes the hearing aids or prescription eyewear to a destination within this state by
common carrier or otherwise; and
new text end

new text begin (2) meets one of the following thresholds:
new text end

new text begin (i) makes 100 or more sales, deliveries, distributions, or repairs described in clause (1)
during any taxable year; or
new text end

new text begin (ii) the gross revenues of the person who sells, delivers, distributes, or repairs hearing
aids or prescription eyewear described in clause (1) totals more than $100,000 during any
taxable year.
new text end

new text begin (d) Once a taxpayer has established nexus with Minnesota under paragraph (b) or (c),
the taxpayer must continue to file an annual return and remit taxes for subsequent years. A
taxpayer who has established nexus under paragraph (b) or (c) is no longer required to file
an annual return and remit taxes if the taxpayer:
new text end

new text begin (1) ceases to engage in the activities, or no longer meets any of the applicable thresholds,
in paragraph (b) or (c) for an entire taxable year; and
new text end

new text begin (2) notifies the commissioner by March 15 of the following calendar year, in a manner
prescribed by the commissioner, that the taxpayer no longer engages in any of the activities,
or no longer meets any of the applicable thresholds, in paragraph (b) or (c).
new text end

new text begin (e) If, after notifying the commissioner pursuant to paragraph (d), the taxpayer
subsequently engages in any of the activities, and meets any of the applicable thresholds,
in paragraph (b) or (c), the taxpayer shall again comply with the applicable requirements
of paragraphs (b), (c), and (d).
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin (a) This section is effective the day following
final enactment.
new text end

new text begin (b) In enacting this section, the legislature confirms that the United States Supreme Court
decision in South Dakota v. Wayfair, Inc. et al., Dkt. No. 17-494 (June 21, 2018); 138 S.
Ct. 2080 (2018), applied upon the date of that decision to provide Minnesota with jurisdiction
over persons described in paragraphs (b) and (c) for purposes of imposing tax under chapter
295 to the extent allowed by the United States Constitution and the laws of the United States.
new text end

Sec. 6.

Minnesota Statutes 2018, section 295.52, subdivision 8, is amended to read:


Subd. 8.

Contingent reduction in tax rate.

(a) By December 1 of each year, beginning
in 2011, the commissioner of management and budget shall determine the projected balance
in the health care access fund for the biennium.

(b) If the commissioner of management and budget determines that the projected balance
in the health care access fund for the biennium reflects a ratio of revenues to expenditures
and transfers greater than 125 percent, and if the actual cash balance in the fund is adequate,
as determined by the commissioner of management and budget, the commissioner, in
consultation with the commissioner of revenue, shall reduce the tax rates levied under
subdivisions 1, 1a, 2, 3, and 4, for the subsequent calendar year sufficient to reduce the
structural balance in the fund. The rate may be reduced to the extent that the projected
revenues for the biennium do not exceed 125 percent of expenditures and transfers. The
new rate shall be rounded to the nearest one-tenth of one percent. The rate reduction under
this paragraph expires at the end of each calendar year and is subject to an annual
redetermination by the commissioner of management and budget.

(c) For purposes of the analysis defined in paragraph (b), the commissioner of
management and budget shall include projected revenuesdeleted text begin, notwithstanding the repeal of the
tax imposed under this section effective January 1, 2020
deleted 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. 7.

Minnesota Statutes 2018, section 295.57, subdivision 3, is amended to read:


Subd. 3.

Interest on overpayments.

Interest must be paid on an overpayment refunded
or credited to the taxpayer deleted text beginfrom the date of payment of the tax until the date the refund is
paid or credited. For purposes of this subdivision, the date of payment is the due date of the
return or the date of actual payment of the tax, whichever is later
deleted text endnew text begin in the manner provided
in section 289A.56, subdivision 2
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for overpayments made on or after
January 1, 2020.
new text end

Sec. 8. new text beginAPPROPRIATION; MNSURE.
new text end

new text begin In addition to the amounts appropriated in Minnesota Statutes, section 62V.12, $1,241,000
in fiscal year 2020 and $4,539,000 in fiscal year 2021 are appropriated from the health care
access fund to the Board of Directors of MNsure for technology and program development
and administration related to the management and implementation of the advanced state-based
health insurance premium tax credit. This is a onetime appropriation.
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. 9. new text beginREPEALER.
new text end

new text begin Laws 2011, First Special Session chapter 9, article 6, section 97, subdivision 6, new text end new text begin 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

APPENDIX

Repealed Minnesota Session Laws: 19-3546

Laws 2011, First Special Session chapter 9, article 6, section 97, subdivision 6

Sec. 97. new text begin REPEALER.new text end

new text begin Subd. 6. new text end

new text begin MinnesotaCare provider taxes. new text end

new text begin Minnesota Statutes 2010, sections 13.4967, subdivision 3; 295.50, subdivisions 1, 1a, 2, 2a, 3, 4, 6, 6a, 7, 9b, 9c, 10a, 10b, 12b, 13, 14, and 15; 295.51, subdivisions 1 and 1a; 295.52, subdivisions 1, 1a, 2, 3, 4, 4a, 5, 6, and 7; 295.53, subdivisions 1, 2, 3, and 4a; 295.54; 295.55; 295.56; 295.57; 295.58; 295.581; 295.582; and 295.59, new text end new text begin are repealed effective for gross revenues received after December 31, 2019. new text end