HF 3388

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; providing a sales tax rebate; 
  1.3             appropriating money. 
  1.4   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.5      Section 1.  [STATEMENT OF PURPOSE.] 
  1.6      (a) The state of Minnesota derives revenues from a variety 
  1.7   of taxes, fees, and other sources, including the state sales tax.
  1.8      (b) It is fair and reasonable to refund the existing state 
  1.9   budget surplus in the form of a rebate of nonbusiness consumer 
  1.10  sales taxes paid by individuals in calendar year 1998. 
  1.11     (c) Information concerning the amount of sales tax paid at 
  1.12  various income levels is contained in the Minnesota tax 
  1.13  incidence report, which is written by the commissioner of 
  1.14  revenue and presented to the legislature according to Minnesota 
  1.15  Statutes, section 270.0682. 
  1.16     (d) It is fair and reasonable to use information contained 
  1.17  in the Minnesota tax incidence report, updated to calendar year 
  1.18  1998, to determine the proportionate share of the sales tax 
  1.19  rebate due each eligible taxpayer since no effective or 
  1.20  practical mechanism exists for determining the amount of actual 
  1.21  sales tax paid by each eligible individual. 
  1.22     Sec. 2.  [SALES TAX REBATE.] 
  1.23     (a) An individual who: 
  1.24     (1) was eligible for a credit under Laws 1998, chapter 389, 
  2.1   article 1, section 1, and who filed for or received that credit 
  2.2   on or before June 15, 2000; or 
  2.3      (2) was a resident of Minnesota for any part of 1998, and 
  2.4   filed a 1998 Minnesota income tax return on or before June 15, 
  2.5   2000, and had a tax liability before refundable credits on that 
  2.6   return of at least $1 but did not file the claim for credit 
  2.7   authorized under Laws 1998, chapter 389, article 1, section 1, 
  2.8   as amended, and who was not allowed to be claimed as a dependent 
  2.9   on a 1998 federal income tax return filed by another person; or 
  2.10     (3) had the property taxes payable on his or her homestead 
  2.11  abated to zero under Laws 1998, chapter 383, section 20, shall 
  2.12  receive a sales tax rebate. 
  2.13     (b) The sales tax rebate for taxpayers who qualify under 
  2.14  paragraph (a) as married filing joint or head of household must 
  2.15  be computed according to the following schedule: 
  2.16       Income                                Sales Tax Rebate
  2.17   less than $2,500                                $140
  2.18   at least $2,500 but less than $5,000            $180
  2.19   at least $5,000 but less than $10,000           $192
  2.20   at least $10,000 but less than $15,000          $211
  2.21   at least $15,000 but less than $20,000          $229
  2.22   at least $20,000 but less than $25,000          $249
  2.23   at least $25,000 but less than $30,000          $260
  2.24   at least $30,000 but less than $35,000          $281
  2.25   at least $35,000 but less than $40,000          $308
  2.26   at least $40,000 but less than $45,000          $330
  2.27   at least $45,000 but less than $50,000          $347
  2.28   at least $50,000 but less than $60,000          $370
  2.29   at least $60,000 but less than $70,000          $396
  2.30   at least $70,000 but less than $80,000          $436
  2.31   at least $80,000 but less than $90,000          $468
  2.32   at least $90,000 but less than $100,000         $517
  2.33   at least $100,000 but less than $120,000        $559
  2.34   at least $120,000 but less than $140,000        $613
  2.35   at least $140,000 but less than $160,000        $662
  2.36   at least $160,000 but less than $180,000        $709
  3.1    at least $180,000 but less than $200,000        $753
  3.2    at least $200,000 but less than $400,000        $964
  3.3    at least $400,000 but less than $600,000      $1,268
  3.4    at least $600,000 but less than $800,000      $1,521
  3.5    at least $800,000 but less than $1,000,000    $1,744
  3.6    $1,000,000 and over                           $2,000
  3.7      (c) The sales tax rebate for individuals who qualify under 
  3.8   paragraph (a) as single or married filing separately must be 
  3.9   computed according to the following schedule: 
  3.10   Income                                    Sales Tax Rebate
  3.11   less than $2,500                                $79
  3.12   at least $2,500 but less than $5,000            $97
  3.13   at least $5,000 but less than $10,000          $114
  3.14   at least $10,000 but less than $15,000         $153
  3.15   at least $15,000 but less than $20,000         $175
  3.16   at least $20,000 but less than $25,000         $190
  3.17   at least $25,000 but less than $30,000         $198
  3.18   at least $30,000 but less than $40,000         $216
  3.19   at least $40,000 but less than $50,000         $242
  3.20   at least $50,000 but less than $70,000         $285
  3.21   at least $70,000 but less than $100,000        $362
  3.22   at least $100,000 but less than $140,000       $436
  3.23   at least $140,000 but less than $200,000       $527
  3.24   at least $200,000 but less than $400,000       $714
  3.25   at least $400,000 but less than $600,000       $940
  3.26   $600,000 and over                            $1,000
  3.27     (d) Individuals who were not residents of Minnesota for any 
  3.28  part of 1998 and who paid more than $10 in Minnesota sales tax 
  3.29  on nonbusiness consumer purchases in that year qualify for a 
  3.30  rebate under this paragraph only.  Qualifying nonresidents must 
  3.31  file a claim for rebate on a form prescribed by the commissioner 
  3.32  before the later of June 15, 2000, or 30 days after the date of 
  3.33  enactment of this act.  The claim must include receipts showing 
  3.34  the Minnesota sales tax paid and the date of the sale.  Taxes 
  3.35  paid on purchases allowed in the computation of federal taxable 
  3.36  income or reimbursed by an employer are not eligible for the 
  4.1   rebate.  The commissioner shall determine the qualifying taxes 
  4.2   paid and rebate the lesser of: 
  4.3      (1) 24.75 percent of that amount; or 
  4.4      (2) the maximum amount for which the claimant would have 
  4.5   been eligible as determined under paragraph (b) if the taxpayer 
  4.6   filed the 1998 federal income tax return as a married taxpayer 
  4.7   filing jointly or head of household, or as determined under 
  4.8   paragraph (c) for other taxpayers. 
  4.9      (e) "Income," for purposes of this section other than 
  4.10  paragraph (d), is taxable income as defined in section 63 of the 
  4.11  Internal Revenue Code of 1986, as amended through December 31, 
  4.12  1997, plus the sum of any additions to federal taxable income 
  4.13  for the taxpayer under Minnesota Statutes, section 290.01, 
  4.14  subdivision 19a, and reported on the original 1998 income tax 
  4.15  return, including subsequent adjustments to that return made 
  4.16  within the time limits specified in paragraph (i).  For an 
  4.17  individual who was a resident of Minnesota for less than the 
  4.18  entire year, the sales tax rebate equals the sales tax rebate 
  4.19  calculated under paragraph (b) or (c) multiplied by the 
  4.20  percentage determined pursuant to Minnesota Statutes, section 
  4.21  290.06, subdivision 2c, paragraph (e), as calculated on the 
  4.22  original 1998 income tax return, including subsequent 
  4.23  adjustments to that return made within the time limits specified 
  4.24  in paragraph (i).  For purposes of paragraph (d), "income" is 
  4.25  taxable income as defined in section 63 of the Internal Revenue 
  4.26  Code of 1986, as amended through December 31, 1997, and reported 
  4.27  on the taxpayer's original federal tax return for the first 
  4.28  taxable year beginning after December 31, 1997. 
  4.29     (f) For a fiscal year taxpayer, the June 15, 2000, dates in 
  4.30  paragraphs (a) through (d) are extended one month for each month 
  4.31  in calendar year 1998 that occurred prior to the start of the 
  4.32  individual's 1998 fiscal tax year. 
  4.33     (g) Before payment, the commissioner of revenue shall 
  4.34  adjust the rebate as follows: 
  4.35     the rebates calculated in paragraphs (b), (c), and (d) must 
  4.36  be proportionately reduced to account for 1998 income tax 
  5.1   returns that are filed on or after January 1, 2000, but before 
  5.2   July 1, 2000, so that the amount of sales tax rebates payable 
  5.3   under paragraphs (b), (c), and (d) does not exceed 
  5.4   $497,000,000.  The adjustment under this paragraph is not a rule 
  5.5   subject to Minnesota Statutes, chapter 14. 
  5.6      (h) The commissioner of revenue may begin making sales tax 
  5.7   rebates by August 1, 2000.  Sales tax rebates not paid by 
  5.8   September 1, 2000, bear interest at the rate specified in 
  5.9   Minnesota Statutes, section 270.75. 
  5.10     (i) A sales tax rebate shall not be adjusted based on 
  5.11  changes to a 1998 income tax return that are made by order of 
  5.12  assessment after June 15, 2000, or made by the taxpayer that are 
  5.13  filed with the commissioner of revenue after June 15, 2000. 
  5.14     (j) Individuals who filed a joint income tax return for 
  5.15  1998 shall receive a joint sales tax rebate.  After the sales 
  5.16  tax rebate has been issued, but before the check has been 
  5.17  cashed, either joint claimant may request a separate check for 
  5.18  one-half of the joint sales tax rebate.  Notwithstanding 
  5.19  anything in this section to the contrary, if prior to payment, 
  5.20  the commissioner has been notified that persons who filed a 
  5.21  joint 1998 income tax return are living at separate addresses, 
  5.22  as indicated on their 1999 income tax return or otherwise, the 
  5.23  commissioner may issue separate checks to each person.  The 
  5.24  amount payable to each person is one-half of the total joint 
  5.25  rebate. 
  5.26     (k) If a rebate is received by the estate of a deceased 
  5.27  individual after the probate estate has been closed, and if the 
  5.28  original rebate check is returned to the commissioner with a 
  5.29  copy of the decree of descent or final account of the estate, 
  5.30  social security numbers, and addresses of the beneficiaries, the 
  5.31  commissioner may issue separate checks in proportion to their 
  5.32  share in the residuary estate in the names of the residuary 
  5.33  beneficiaries of the estate. 
  5.34     (l) The sales tax rebate is a "Minnesota tax law" for 
  5.35  purposes of Minnesota Statutes, section 270B.01, subdivision 8. 
  5.36     (m) The sales tax rebate is "an overpayment of any tax 
  6.1   collected by the commissioner" for purposes of Minnesota 
  6.2   Statutes, section 270.07, subdivision 5.  For purposes of this 
  6.3   paragraph, a joint sales tax rebate is payable to each spouse 
  6.4   equally. 
  6.5      (n) If the commissioner of revenue cannot locate an 
  6.6   individual entitled to a sales tax rebate by July 1, 2002, or if 
  6.7   an individual to whom a sales tax rebate was issued has not 
  6.8   cashed the check by July 1, 2002, the right to the sales tax 
  6.9   rebate lapses and the check must be deposited in the general 
  6.10  fund. 
  6.11     (o) Individuals entitled to a sales tax rebate pursuant to 
  6.12  paragraph (a), but who did not receive one, and individuals who 
  6.13  receive a sales tax rebate that was not correctly computed, must 
  6.14  file a claim with the commissioner before July 1, 2001, in a 
  6.15  form prescribed by the commissioner.  These claims must be 
  6.16  treated as if they are a claim for refund under Minnesota 
  6.17  Statutes, section 289A.50, subdivisions 4 and 7. 
  6.18     (p) The sales tax rebate is a refund subject to revenue 
  6.19  recapture under Minnesota Statutes, chapter 270A.  The 
  6.20  commissioner of revenue shall remit the entire refund to the 
  6.21  claimant agency, which shall, upon the request of the spouse who 
  6.22  does not owe the debt, refund one-half of the joint sales tax 
  6.23  rebate to the spouse who does not owe the debt. 
  6.24     (q) The rebate is a reduction of fiscal year 2000 sales tax 
  6.25  revenues.  The amount necessary to make the sales tax rebates 
  6.26  and interest provided in this section is appropriated from the 
  6.27  general fund to the commissioner of revenue in fiscal year 2000 
  6.28  and is available until June 30, 2002. 
  6.29     (r) If a sales tax rebate check is cashed by someone other 
  6.30  than the payee or payees of the check, and the commissioner of 
  6.31  revenue determines that the check has been forged or improperly 
  6.32  endorsed or the commissioner determines that a rebate was 
  6.33  overstated or erroneously issued, the commissioner may issue an 
  6.34  order of assessment for the amount of the check or the amount 
  6.35  the check is overstated against the person or persons cashing 
  6.36  it.  The assessment must be made within two years after the 
  7.1   check is cashed, but if cashing the check constitutes theft 
  7.2   under Minnesota Statutes, section 609.52, or forgery under 
  7.3   Minnesota Statutes, section 609.631, the assessment can be made 
  7.4   at any time.  The assessment may be appealed administratively 
  7.5   and judicially.  The commissioner may take action to collect the 
  7.6   assessment in the same manner as provided by Minnesota Statutes, 
  7.7   chapter 289A, for any other order of the commissioner assessing 
  7.8   tax. 
  7.9      (s) Notwithstanding Minnesota Statutes, sections 9.031, 
  7.10  16A.40, 16B.49, 16B.50, and any other law to the contrary, the 
  7.11  commissioner of revenue may take whatever actions the 
  7.12  commissioner deems necessary to pay the rebates required by this 
  7.13  section, and may, in consultation with the commissioner of 
  7.14  finance and the state treasurer, contract with a private vendor 
  7.15  or vendors to process, print, and mail the rebate checks or 
  7.16  warrants required under this section and receive and disburse 
  7.17  state funds to pay those checks or warrants. 
  7.18     (t) The commissioner may pay rebates required by this 
  7.19  section by electronic funds transfer to individuals who 
  7.20  requested that their 1999 individual income tax refund be paid 
  7.21  through electronic funds transfer.  The commissioner may make 
  7.22  the electronic funds transfer payments to the same financial 
  7.23  institution and into the same account as the 1999 individual 
  7.24  income tax refund. 
  7.25     Sec. 3.  [APPROPRIATION.] 
  7.26     $....... is appropriated from the general fund to the 
  7.27  commissioner of revenue to administer the sales tax rebate for 
  7.28  fiscal year 2000.  Any unencumbered balance remaining on June 
  7.29  30, 2000, does not cancel but is available for expenditure by 
  7.30  the commissioner of revenue until June 30, 2002.  This is a 
  7.31  one-time appropriation and may not be added to the agency's 
  7.32  budget base. 
  7.33     Sec. 4.  [EFFECTIVE DATE.] 
  7.34     Sections 1 to 3 are effective the day following final 
  7.35  enactment.