HF 2436

as introduced - 92nd Legislature (2021 - 2022) Posted on 04/09/2021 12:53pm

A bill for an act
relating to taxation; modifying income taxes, sales taxes, and property taxes;
adopting federal rules for Paycheck Protection Program loans; increasing property
tax refunds; creating a sales tax exemption for food service equipment purchases
by certain food service establishments; providing a sales tax exemption for certain
COVID-19-related expenses; establishing the school homestead credit;
appropriating money; amending Minnesota Statutes 2020, sections 273.1392;
273.1393; 275.065, subdivision 3; 276.04, subdivision 2; 297A.68, by adding a
subdivision; proposing coding for new law in Minnesota Statutes, chapter 273.

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

Section 1.

new text begin [273.1388] SCHOOL HOMESTEAD CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin All class 1a property under section 273.13, subdivision 22,
and the portion of class 2a property consisting of the house, garage, and immediately
surrounding one acre of land under section 273.13, subdivision 23, is eligible to receive the
credit under this section.
new text end

new text begin Subd. 2. new text end

new text begin Credit amount. new text end

new text begin For each qualifying property, the school homestead credit is
equal to the credit percent multiplied by the property's referendum market value multiplied
by the portion of the referendum tax rate under section 275.08, subdivision 1b, paragraph
(c), attributable to school district levies. For property taxes payable in 2022 and thereafter,
the credit percent is equal to 50. For the purposes of this section, "referendum market value"
means the market value as defined in section 126C.01, subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Credit reimbursements. new text end

new text begin The county auditor shall determine the tax reductions
allowed under this section within the county for each taxes payable year and shall certify
that amount to the commissioner of revenue under section 270C.85, subdivision 2, clause
(4). Any prior year adjustments shall also be certified. The commissioner shall review the
certifications for accuracy, and may make any changes the commissioner deems necessary,
or return the certification to the county auditor for correction. The credit under this section
must be used to reduce the school district referendum market value based property tax as
provided in section 273.1393.
new text end

new text begin Subd. 4. new text end

new text begin Payment. new text end

new text begin The commissioner of revenue shall certify the total of the tax
reductions granted under this section for each taxes payable year within each school district
to the commissioner of education, who must pay the reimbursement amounts to each school
district as provided in section 273.1392.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to make the payments required by this
section is annually appropriated from the general fund to the commissioner of education.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2022 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2020, section 273.1392, is amended to read:

273.1392 PAYMENT; SCHOOL DISTRICTS.

The amounts of bovine tuberculosis credit reimbursements under section 273.113;
conservation tax credits under section 273.119; disaster or emergency reimbursement under
sections 273.1231 to 273.1235; agricultural credits under sections 273.1384 and 273.1387;
aids and credits under section 273.1398; enterprise zone property credit payments under
section 469.171; deleted text begin and deleted text end metropolitan agricultural preserve reduction under section 473H.10 new text begin ;
and school homestead credits under section 273.1388 new text end for school districts, shall be certified
to the Department of Education by the Department of Revenue. The amounts so certified
shall be paid according to section 127A.45, subdivisions 9, 10, and 13.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with fiscal year 2023.
new text end

Sec. 3.

Minnesota Statutes 2020, section 273.1393, is amended to read:

273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are determined
by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

(7) the school bond credit as provided in section 273.1387;

new text begin (8) the school homestead credit as provided in section 273.1388;
new text end

deleted text begin (8) deleted text end new text begin (9) new text end agricultural credit as provided in section 273.1384;

deleted text begin (9) deleted text end new text begin (10) new text end taconite homestead credit as provided in section 273.135;

deleted text begin (10) deleted text end new text begin (11) new text end supplemental homestead credit as provided in section 273.1391; and

deleted text begin (11) deleted text end new text begin (12) new text end the bovine tuberculosis zone credit, as provided in section 273.113.

The combination of all property tax credits must not exceed the gross tax amount.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2022 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2020, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare and
the county treasurer shall deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed on the county's current year's
assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer,
the treasurer may send the notice in electronic form or by electronic mail instead of on paper
or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes each
taxing authority proposes to collect for taxes payable the following year. In the case of a
town, or in the case of the state general tax, the final tax amount will be its proposed tax.
The notice must clearly state for each city that has a population over 500, county, school
district, regional library authority established under section 134.201, and metropolitan taxing
districts as defined in paragraph (i), the time and place of a meeting for each taxing authority
in which the budget and levy will be discussed and public input allowed, prior to the final
budget and levy determination. The taxing authorities must provide the county auditor with
the information to be included in the notice on or before the time it certifies its proposed
levy under subdivision 1. The public must be allowed to speak at that meeting, which must
occur after November 24 and must not be held before 6:00 p.m. It must provide a telephone
number for the taxing authority that taxpayers may call if they have questions related to the
notice and an address where comments will be received by mail, except that no notice
required under this section shall be interpreted as requiring the printing of a personal
telephone number or address as the contact information for a taxing authority. If a taxing
authority does not maintain public offices where telephone calls can be received by the
authority, the authority may inform the county of the lack of a public telephone number and
the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used for
computing property taxes payable in the following year and for taxes payable in the current
year as each appears in the records of the county assessor on November 1 of the current
year; and, in the case of residential property, whether the property is classified as homestead
or nonhomestead. The notice must clearly inform taxpayers of the years to which the market
values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general
tax, agricultural homestead credit under section 273.1384, school building bond agricultural
credit under section 273.1387, new text begin school homestead credit under section 273.1388, new text end voter
approved school levy, other local school levy, and the sum of the special taxing districts,
and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement district
as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed tax
unless the town changes its levy at a special town meeting under section 365.52. If a school
district has certified under section 126C.17, subdivision 9, that a referendum will be held
in the school district at the November general election, the county auditor must note next
to the school district's proposed amount that a referendum is pending and that, if approved
by the voters, the tax amount may be higher than shown on the notice. In the case of the
city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately
from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for
the St. Paul Library Agency must be listed separately from the remaining amount of the
city's levy. In the case of Ramsey County, any amount levied under section 134.07 may be
listed separately from the remaining amount of the county's levy. In the case of a parcel
where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F
applies, the proposed tax levy on the captured value or the proposed tax levy on the tax
capacity subject to the areawide tax must each be stated separately and not included in the
sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and the
total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under the
senior citizens' property tax deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include the
following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified, including
bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday
in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring
after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value reductions
for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the
county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter,
or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within three
days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of the premises to which the
notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 473.446,
473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the county
of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent of the
county board, include supplemental information with the statement of proposed property
taxes about the impact of state aid increases or decreases on property tax increases or
decreases and on the level of services provided in the affected jurisdiction. This supplemental
information may include information for the following year, the current year, and for as
many consecutive preceding years as deemed appropriate by the governing body of the
county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and local
government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2022 and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2020, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing of
the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. The
amounts due all other special taxing districts, if any, may be aggregated except that any
levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly
under the appropriate county's levy. If the county levy under this paragraph includes an
amount for a lake improvement district as defined under sections 103B.501 to 103B.581,
the amount attributable for that purpose must be separately stated from the remaining county
levy amount. In the case of Ramsey County, if the county levy under this paragraph includes
an amount for public library service under section 134.07, the amount attributable for that
purpose may be separated from the remaining county levy amount. The amount of the tax
on homesteads qualifying under the senior citizens' property tax deferral program under
chapter 290B is the total amount of property tax before subtraction of the deferred property
tax amount. The amount of the tax on contamination value imposed under sections 270.91
to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar
amount of any special assessments, may be rounded to the nearest even whole dollar. For
purposes of this section whole odd-numbered dollars may be adjusted to the next higher
even-numbered dollar. The amount of market value excluded under section 273.11,
subdivision 16, if any, must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures taxed
as personal property shall contain the same information that is required on the tax statements
for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's homestead market value exclusion under section 273.13, subdivision
35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for agricultural properties, the credits under sections 273.1384 and 273.1387;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; new text begin
273.1388; new text end 273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount
of credit received under section 273.135 must be separately stated and identified as "taconite
tax relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current year,
and encouraging taxpayers to attend the hearings. If the county allows notices to be included
in the envelope containing the property tax statement, and if more than one taxing district
relative to a given property decides to include a notice with the tax statement, the county
treasurer or auditor must coordinate the process and may combine the information on a
single announcement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2022 and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2020, section 297A.68, is amended by adding a subdivision to
read:

new text begin Subd. 46. new text end

new text begin Food service establishment equipment. new text end

new text begin (a) The purpose of the exemption
provided by this subdivision is to create parity between the treatment of capital equipment
used in the manufacturing industry and food service equipment used for the production of
prepared food and beverages. The goal is to provide the same exemption for equipment
used by food service establishments in the production of prepared food and furnishing of
beverages, as is provided for capital equipment pursuant to subdivision 5.
new text end

new text begin (b) Food service equipment purchased or leased, and used in this state by a food service
establishment in the production of prepared food or furnishing of beverages, up to the point
the prepared food or beverage is ready for delivery or service to the customer is exempt.
new text end

new text begin (c) For purposes of this subdivision, the following terms have the meanings given:
new text end

new text begin (1) "food service equipment" means machinery, equipment, fixtures, and supplies used
by a food service establishment that are integral to the production of prepared food or the
furnishing of beverages and that meet the standards imposed under Minnesota Rules, chapter
4626. Food service equipment:
new text end

new text begin (i) includes cooking utensils, serving utensils, ovens, grills, coolers, microwave ovens,
freezers, refrigerators and refrigerator stations, holding cabinets, deep fryers, condiment
stations, dishwashers, steamers, coffee machines, ice machines, water heaters, sinks, faucets,
food warmers and warming trays, tabletop chafing equipment, buffets and buffet equipment,
self-service condiment equipment, self-service beverage equipment, beer dispensing systems,
equipment needed for bar service, and any other item that is integral to the production of
prepared food or the furnishing of beverages; and
new text end

new text begin (ii) excludes items used by customers such as linens, paper napkins, glasses, cups, mugs,
utensils, tables, and chairs. Also excluded are delivery vehicles or any motor vehicles
purchased by a food service establishment;
new text end

new text begin (2) "catering service" means a business that prepares food and beverages for service in
support of an event with a predetermined guest list such as a reception, party, luncheon,
conference, ceremony, or trade show;
new text end

new text begin (3) "food service establishment" means a restaurant as defined in section 157.15,
subdivision 12, a mobile food unit as defined in section 157.15, subdivision 9, or a catering
service as defined in clause (2);
new text end

new text begin (4) "furnishing of beverages" means the production of beverages, including alcoholic
beverages, by a bartender, server, caterer, or other person employed by a food service
establishment;
new text end

new text begin (5) "prepared food" has the meaning given in section 297A.61, subdivision 31; and
new text end

new text begin (6) "production" means an operation or series of operations where ingredients are changed
in form, composition, or condition that results in the creation of prepared food or a beverage.
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 December 31, 2019.
new text end

Sec. 7. new text begin SALES TAX EXEMPTION FOR CERTAIN PURCHASES RELATED TO
COVID-19.
new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 298A.50, or any law to the contrary,
any materials, supplies, or equipment purchased or leased and used in this state by a food
service establishment as defined in Minnesota Statutes, section 297A.68, subdivision 46,
to adapt to health guidelines or any executive order related to COVID-19 is exempt.
new text end

new text begin (b) The maximum refund allowed under this section is limited as follows:
new text end

new text begin (1) for food service establishments that are franchise locations of a larger corporate
entity, $1,000 per franchise location;
new text end

new text begin (2) for food service establishments that are owned by a unitary corporate entity or its
subsidiary, $1,000 per entity or subsidiary; and
new text end

new text begin (3) for all other qualifying food service establishments, $1,000 per federal employer
identification number.
new text end

new text begin (c) The tax paid must be refunded in the same manner as provided in Minnesota Statutes,
section 297A.75.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective retroactively from
March 1, 2020, and applies to sales and purchases made after February 29, 2020, and before
January 1, 2022.
new text end

Sec. 8. new text begin EXCLUSION FROM GROSS INCOME FOR FORGIVEN PPP LOANS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin This section applies for the purpose of calculating:
new text end

new text begin (1) net income, as defined in Minnesota Statutes, section 290.01, subdivision 19;
new text end

new text begin (2) income, as defined in Minnesota Statutes, section 290.0674, subdivision 2a;
new text end

new text begin (3) alternative minimum taxable income, as defined in Minnesota Statutes, section
290.091, subdivision 2;
new text end

new text begin (4) alternative minimum taxable income, as defined in Minnesota Statutes, section
290.0921, subdivision 3; and
new text end

new text begin (5) income, as defined in Minnesota Statutes, section 290A.03, subdivision 3.
new text end

new text begin Subd. 2. new text end

new text begin Adopting federal changes related to the paycheck protection
program. new text end

new text begin "Internal Revenue Code" has the meaning given in Minnesota Statutes, section
290.01, subdivision 31, as amended through the date specified in that subdivision, but
including the following amendments:
new text end

new text begin (1) the exclusion from gross income under Public Law 116-136, section 1106(i);
new text end

new text begin (2) section 276 of the COVID-related Tax Relief Act of 2020 in Public Law 116-260;
and
new text end

new text begin (3) all modifications to the Internal Revenue Code in Public Laws 116-142 and 116-147.
new text end

new text begin Subd. 3. new text end

new text begin No denial of deduction. new text end

new text begin Notwithstanding Minnesota Statutes, section 290.10,
the commissioner of revenue must not deny a taxpayer a deduction that is allowed under
section 276 of the COVID-related Tax Relief Act of 2020 in Public Law 116-260.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively at the same time the
provisions of federal law specified in subdivision 2, clauses (1) to (3), were effective for
federal purposes.
new text end

Sec. 9. new text begin RENTER'S CREDIT; ONETIME INCREASE OF $200.
new text end

new text begin (a) The commissioner of revenue shall increase by $200 the amount of any refund of at
least $1 that is otherwise payable under Minnesota Statutes, section 290A.04, subdivision
2a.
new text end

new text begin (b) In adjusting renter property tax refunds under this section, the commissioner is not
required to provide information concerning appeal rights that ordinarily must be provided
whenever the commissioner adjusts refunds payable under Minnesota Statutes, chapter
290A. Taxpayers retain all rights to appeal adjustments under this section.
new text end

new text begin (c) The amount necessary to make the payments required under this section is
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 claims based on rent paid in 2020.
new text end

Sec. 10. new text begin TEMPORARY NONCONFORMITY SUBTRACTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have
the meanings given:
new text end

new text begin (1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0132,
subdivision 1; and
new text end

new text begin (2) "unemployment compensation" has the meaning given in section 85 of the Internal
Revenue Code.
new text end

new text begin Subd. 2. new text end

new text begin Subtraction; unemployment compensation paid in 2020. new text end

new text begin The amount of
unemployment compensation received in the taxable year is a subtraction.
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, 2019, and before January 1, 2022.
new text end