HF 3179

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; providing for withholding for 
  1.3             construction specialty trades; providing for a tax 
  1.4             compliance initiative; appropriating money; amending 
  1.5             Minnesota Statutes 2002, section 290.92, by adding a 
  1.6             subdivision. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 290.92, is 
  1.9   amended by adding a subdivision to read: 
  1.10     Subd. 31.  [CONSTRUCTION WORKERS.] Any person engaged in a 
  1.11  trade or business who in the course of such trade or business 
  1.12  makes payments to an individual, who is not an employee of the 
  1.13  person, for work described in industry code numbers 238 through 
  1.14  238990 of the North American Industry Classification System, 
  1.15  shall deduct from the payment and withhold two percent of the 
  1.16  amount as Minnesota withholding tax when the amount paid to that 
  1.17  individual by the same person during the calendar year exceeds 
  1.18  $600.  For purposes of this section, a payment to any person 
  1.19  that is subject to withholding under this subdivision must be 
  1.20  treated as if the payment was a wage paid by an employer to an 
  1.21  employee.  Every individual who is to receive a payment that is 
  1.22  subject to withholding under this subdivision shall furnish the 
  1.23  contracting person with a statement, containing the name, 
  1.24  address, and Social Security number of the person receiving the 
  1.25  payment. 
  1.26     [EFFECTIVE DATE.] This section is effective for payments 
  2.1   made after June 30, 2004. 
  2.2      Sec. 2.  [TAX COMPLIANCE INITIATIVE.] 
  2.3      (a) $2,878,000 is appropriated to the commissioner of 
  2.4   revenue in fiscal year 2005 for additional activities to 
  2.5   identify and collect tax liabilities from individuals and 
  2.6   businesses that currently do not pay all taxes owed.  $120,000 
  2.7   of this amount is considered a onetime appropriation.  The base 
  2.8   for this activity is $2,758,000 per year. 
  2.9      (b) This initiative is expected to result in new general 
  2.10  fund revenues of $16,000,000 for the biennium ending June 30, 
  2.11  2005, and $16,000,000 annually thereafter. 
  2.12     (c) The commissioner must provide written reports to the 
  2.13  chairs of the house Ways and Means and senate Finance 
  2.14  Committees, in compliance with Minnesota Statutes, sections 
  2.15  3.195 and 3.197, by March 1, 2005, and January 15, 2006.  The 
  2.16  reports must address the following performance indicators: 
  2.17     (1) the number of corporations noncompliant with the 
  2.18  corporate tax system each year and the percentage and dollar 
  2.19  amounts of valid tax liabilities collected; 
  2.20     (2) the number of businesses noncompliant with the sales 
  2.21  and use tax system and the percentage and dollar amounts of the 
  2.22  valid tax liabilities collected; and 
  2.23     (3) the number of insurers, agents, or others that are 
  2.24  noncompliant with insurance tax statutes and cases resolved and 
  2.25  the percentage and dollar amounts of valid tax liabilities 
  2.26  collected. 
  2.27     The reports must also identify base level expenditures and 
  2.28  staff positions related to compliance and audit activities, 
  2.29  including baseline information as of January 1, 2002.  The 
  2.30  reports must provide this information at the budget activity 
  2.31  level.