HF 3096

as introduced - 88th Legislature (2013 - 2014) Posted on 03/17/2014 01:53pm

A bill for an act
relating to taxation; income; requiring update of a study; requiring the
commissioner of revenue to initiate negotiations for a reciprocity agreement;
amending Laws 2011, First Special Session chapter 7, article 1, sections 9; 11; 12.

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

Section 1.

Laws 2011, First Special Session chapter 7, article 1, section 9, is amended
to read:

Sec. 9. INCOME TAX RECIPROCITY BENCHMARK STUDY.

(a) The Department of Revenue, in conjunction with the Wisconsin Department of
Revenue, must, provided the conditions of paragraph (d) are satisfied, conduct a study to
determine at least the following:

(1) the number of residents of each state who earn income from personal services in
the other state;

(2) the total amount of income earned by residents of each state who earn income
from personal services in the other state; and

(3) the change in tax revenue in each state if an income tax reciprocity arrangement
were resumed between the two states under which the taxpayers were required to pay
income taxes on the income only in their state of residence.

(b) The study must use information obtained from each state's income tax returns for
tax year 2011 2013, and from any other source of information the departments determine
is necessary to complete the study.

(c) No later than March 1, 2013 2015, the Department of Revenue must submit a
report containing the results of the study to the governor and to the chairs and ranking
minority members of the legislative committees having jurisdiction over taxes, in
compliance with Minnesota Statutes, sections 3.195 and 3.197.

(d) The department shall conduct the study only if the commissioner of revenue
receives notice from the secretary of revenue that the Wisconsin Department of Revenue
will fully participate in the study.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Laws 2011, First Special Session chapter 7, article 1, section 11, is amended to
read:

Sec. 11. NEW RECIPROCITY AGREEMENT WITH WISCONSIN.

(a) The commissioner of revenue shall initiate negotiations with the secretary of
revenue of Wisconsin, with the objective of entering into an income tax reciprocity
agreement effective for tax years beginning after December 31, 2011 2013, wherein
Minnesota and Wisconsin must assume equal shares of the amount resulting from any
discrepancy in the amount determined under section 9, paragraph (a), clause (3).

(b) At least 30 days before entering a final income tax reciprocity agreement with
Wisconsin, the commissioner of revenue shall provide a copy of the proposed agreement
and any supporting documentation, including an estimate of the impact of the agreement
on state revenues, to the chairs and ranking minority members of the committees of the
house of representatives and senate with jurisdiction over taxes. The commissioner shall
consider any comments on the proposed agreement provided by the chairs or ranking
minority members.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Laws 2011, First Special Session chapter 7, article 1, section 12, is amended to
read:

Sec. 12. APPROPRIATIONS.

$291,000 $...... in fiscal year 2012 2014 and $314,000 $...... in fiscal year 2013 2015
are appropriated from the general fund to the commissioner of revenue for the income
reciprocity benchmark study required under section 9. The appropriations under this
section are onetime and are not added to the agency's base budget.

EFFECTIVE DATE.

This section is effective the day following final enactment.