HF 2983

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/03/2022 04:33pm

A bill for an act
relating to taxation; providing for a temporary landlord rental income tax credit
for unpaid rent during an eviction moratorium due to COVID-19.

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

Section 1. LANDLORD RENTAL CREDIT FOR UNPAID RENT DURING
EVICTION MORATORIUM.

Subdivision 1.

Purpose; landlord rental credit.

The purpose of this section is to provide
income tax relief to landlords for months in which a landlord was not paid rent and could
not bring an eviction action against a tenant for nonpayment of rent during any local, state,
or federal eviction moratorium due to COVID-19.

Subd. 2.

Definitions.

(a) For the purposes of this section, the following terms have the
meanings given them.

(b) "Eligible landlord" means a landlord who leases property where, during an eviction
moratorium:

(1) a tenant has not paid the full amount of rent agreed upon in the lease or other written
agreement; or

(2) a tenant vacated the property during the eviction moratorium and has not paid the
full amount of rent that was past due to the landlord.

(c) "Eligible year" means any year in which a landlord could not bring an eviction action
against a tenant for nonpayment of rent due to an eviction moratorium.

(d) "Eviction moratorium" means any local, state, or federal eviction suspension based
on COVID-19 and that applied to Minnesota.

(e) "Landlord" has the meaning given in Minnesota Statutes, section 504B.001,
subdivision 7.

(f) "State fiscal recovery federal fund" means funds received by the state from the state
fiscal recovery fund in the American Rescue Plan Act, Public Law 117-2.

Subd. 3.

Credit amount; credit refundable; appropriation.

(a) An eligible landlord
may take a credit against the tax due under Minnesota Statutes, chapter 290. The credit
equals 65 percent of the total amount of rent not paid in an eligible year.

(b) If the amount of credit that the eligible landlord is entitled to receive under this
section exceeds the eligible landlord's tax liability under Minnesota Statutes, chapter 290,
the commissioner of revenue shall refund the excess to the eligible landlord.

(c) An amount necessary to pay the claims for the refunds provided in this section is
appropriated from the general fund to the commissioner of revenue.

(d) If the commissioner of management and budget determines that the refundable portion
of this credit is an eligible use of the state fiscal recovery federal fund, the amount necessary
to pay the claims for the refunds provided in this section is appropriated from the state fiscal
recovery federal fund to the commissioner of revenue and the appropriation in paragraph
(c) is canceled. The commissioner of management and budget must determine whether this
appropriation is eligible consistent with Public Law 117-2 and its corresponding guidance
for use of the state fiscal recovery federal fund.

Subd. 4.

Application.

(a) To receive the credit, an eligible landlord must apply to the
commissioner of revenue. The landlord must certify the amount of rent not paid in an eligible
year to the commissioner. The commissioner must prescribe the form and manner to certify
and apply for the credit.

(b) Minnesota Statutes, chapters 270C, 289A, and 290, apply to the credit under this
section.

Subd. 5.

Partnerships; multiple owners.

Credits granted to a partnership, a limited
liability company taxed as a partnership, an S corporation, or multiple owners of property
are passed through to the partners, members, shareholders, or owners, respectively, pro rata
to each partner, member, shareholder, or owner based on their share of the entity's assets
or as specially allocated in their organizational documents or any other executed agreement
as of the last day of the taxable year.

EFFECTIVE DATE; APPLICATION.

This section is effective retroactively for
taxable years beginning after December 31, 2019, and before January 1, 2022, and applies
to months of unpaid rent owed during any local, state, or federal eviction moratorium in
2020 and 2021.