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HF 3507

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/17/2022 02:18pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to taxation; modifying the estate tax; providing for spousal portability of
a deceased spouse's unused exclusion amount; making conforming and technical
changes; amending Minnesota Statutes 2020, sections 289A.10, subdivision 1, by
adding a subdivision; 289A.12, by adding a subdivision; 291.016, subdivision 3;
291.03, subdivision 1.

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

Section 1.

Minnesota Statutes 2020, section 289A.10, subdivision 1, is amended to read:


Subdivision 1.

Return required.

In the case of a decedent who has an interest in property
with a situs in Minnesota, the personal representative must submit a Minnesota estate tax
return to the commissioner, on a form prescribed by the commissioner, if:

(1) a federal estate tax return is required to be filed; or

(2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in
section 2001(b) of the Internal Revenue Code, made within three years of the date of the
decedent's death exceeds deleted text begin$1,200,000 for estates of decedents dying in 2014; $1,400,000 for
estates of decedents dying in 2015; $1,600,000 for estates of decedents dying in 2016;
$2,100,000 for estates of decedents dying in 2017; $2,400,000 for estates of decedents dying
in 2018; $2,700,000 for estates of decedents dying in 2019; and
deleted text end $3,000,000 deleted text beginfor estates of
decedents dying in 2020 and thereafter
deleted text end.

The return must contain a computation of the Minnesota estate tax due. The return must
be signed by the personal representative.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2020, section 289A.10, is amended by adding a subdivision to
read:


new text begin Subd. 1b. new text end

new text begin Election of portability of deceased spousal unused exclusion amounts;
election irrevocable; deemed elections.
new text end

new text begin (a) A personal representative of a decedent's estate
may elect, on a return required under subdivision 1, to allow a decedent's surviving spouse
to take into account the decedent's deceased spousal unused exclusion amount and the
decedent's deceased spousal unused qualified property exclusion amount, as provided in
section 291.016, subdivision 3, paragraph (b).
new text end

new text begin (b) The election under paragraph (a) is irrevocable. By filing a return under subdivision
1, the personal representative is deemed to have elected portability unless the personal
representative states affirmatively on the return that the decedent's estate is not electing
portability. The commissioner may prescribe the form of the election on the return.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after June
1, 2022.
new text end

Sec. 3.

Minnesota Statutes 2020, section 289A.12, is amended by adding a subdivision to
read:


new text begin Subd. 19. new text end

new text begin Election of portability of deceased spousal unused exclusion amounts
when estate tax return not required.
new text end

new text begin A personal representative of a decedent's estate that
is not required to file a return under section 289A.10, subdivision 1, may file a return to
allow a decedent's surviving spouse to take into account the decedent's deceased spousal
unused exclusion amount and the decedent's deceased spousal unused qualified property
exclusion amount, as provided in section 291.016, subdivision 3, paragraph (b). The return
is subject to the same provisions as a return required under section 289A.10, subdivision
1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after June
1, 2022.
new text end

Sec. 4.

Minnesota Statutes 2020, section 291.016, subdivision 3, is amended to read:


Subd. 3.

Subtraction.

(a) deleted text beginFor estates of decedents dying after December 31, 2016,deleted text end A
subtraction is allowed in computing the Minnesota taxable estate, equal to the sum of:

(1) deleted text beginthedeleted text endnew text begin annew text end exclusion amount deleted text beginfor the year of death under paragraph (b)deleted text endnew text begin of $3,000,000new text end;
and

deleted text begin (2) the lesser of:
deleted text end

deleted text begin (i)deleted text endnew text begin (2)new text end the value of qualified small business property under section 291.03, subdivision
9
, and the value of qualified farm property under section 291.03, subdivision 10deleted text begin; ordeleted text endnew text begin, up to
$2,000,000.
new text end

deleted text begin (ii) $5,000,000 minus the exclusion amount for the year of death under paragraph (b).
deleted text end

deleted text begin (b) The following exclusion amounts apply for the year of death:
deleted text end

deleted text begin (1) $2,100,000 for decedents dying in 2017;
deleted text end

deleted text begin (2) $2,400,000 for decedents dying in 2018;
deleted text end

deleted text begin (3) $2,700,000 for decedents dying in 2019; and
deleted text end

deleted text begin (4) $3,000,000 for decedents dying in 2020 and thereafter.
deleted text end

new text begin (b) In the case of a decedent that is a surviving spouse, there is an additional subtraction
allowed in computing the Minnesota taxable estate, equal to the sum of:
new text end

new text begin (1) a deceased spousal unused exclusion amount equal to the lesser of:
new text end

new text begin (i) $3,000,000; or
new text end

new text begin (ii) the excess of $3,000,000 over the amount of the Minnesota taxable estate of the last
deceased spouse of the decedent, but not including in the taxable estate property described
in section 291.03, subdivisions 9 and 10, and computed without regard to the subtractions
in this subdivision, but in no case less than zero; and
new text end

new text begin (2) a deceased spousal unused qualified property exclusion amount equal to the lesser
of:
new text end

new text begin (i) $2,000,000; or
new text end

new text begin (ii) the excess of $2,000,000 over the value of qualified small business property under
section 291.03, subdivision 9, and the value of qualified farm property under section 291.03,
subdivision 10, that were included in the Minnesota taxable estate of the last deceased
spouse of the decedent, computed without regard to the subtractions in this subdivision, but
in no case less than zero.
new text end

(c) The subtraction under this subdivision must not reduce the Minnesota taxable estate
to less than zero.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after June
30, 2022.
new text end

Sec. 5.

Minnesota Statutes 2020, section 291.03, subdivision 1, is amended to read:


Subdivision 1.

Tax amount.

The tax imposed must be computed by applying to the
Minnesota taxable estate the following schedule of rates and thennew text begin multiplyingnew text end the resulting
amount deleted text beginmultiplieddeleted text end by a fraction, not greater than one, the numerator of which is the value
of the Minnesota gross estate plus the value of gifts under section 291.016, subdivision 2,
clause (3), with a Minnesota situs, and the denominator of which is the federal gross estate
plus the value of gifts under section 291.016, subdivision 2, clause (3):

deleted text begin (a) For estates of decedents dying in 2017:
deleted text end

deleted text begin Amount of Minnesota Taxable Estate
deleted text end
deleted text begin Rate of Tax
deleted text end
deleted text begin Not over $5,100,000
deleted text end
deleted text begin 12 percent
deleted text end
deleted text begin Over $5,100,000 but not over $7,100,000
deleted text end
deleted text begin $612,000 plus 12.8 percent of the excess over
$5,100,000
deleted text end
deleted text begin Over $7,100,000 but not over $8,100,000
deleted text end
deleted text begin $868,000 plus 13.6 percent of the excess over
$7,100,000
deleted text end
deleted text begin Over $8,100,000 but not over $9,100,000
deleted text end
deleted text begin $1,004,000 plus 14.4 percent of the excess
over $8,100,000
deleted text end
deleted text begin Over $9,100,000 but not over $10,100,000
deleted text end
deleted text begin $1,148,000 plus 15.2 percent of the excess
over $9,100,000
deleted text end
deleted text begin Over $10,100,000
deleted text end
deleted text begin $1,300,000 plus 16 percent of the excess over
$10,100,000
deleted text end

deleted text begin (b) For estates of decedents dying in 2018 and thereafter:
deleted text end

Amount of Minnesota Taxable Estate
Rate of Tax
Not over $7,100,000
13 percent
Over $7,100,000 but not over $8,100,000
$923,000 plus 13.6 percent of the excess over
$7,100,000
Over $8,100,000 but not over $9,100,000
$1,059,000 plus 14.4 percent of the excess
over $8,100,000
Over $9,100,000 but not over $10,100,000
$1,203,000 plus 15.2 percent of the excess
over $9,100,000
Over $10,100,000
$1,355,000 plus 16 percent of the excess over
$10,100,000

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end