HF 4188

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; increasing the maximum property tax refund; decreasing
the income threshold for homeowners' property tax refund; allowing a second
exemption amount for married claimants who are both 65 or older or disabled;
amending Minnesota Statutes 2006, sections 290A.03, subdivision 3; 290A.04,
subdivision 2.

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

Section 1.

Minnesota Statutes 2006, section 290A.03, subdivision 3, is amended to
read:

Subd. 3.

Income.

(1) "Income" means the sum of the following:

(a) federal adjusted gross income as defined in the Internal Revenue Code; and

(b) the sum of the following amounts to the extent not included in clause (a):

(i) all nontaxable income;

(ii) the amount of a passive activity loss that is not disallowed as a result of section
469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal Revenue Code;

(iii) an amount equal to the total of any discharge of qualified farm indebtedness
of a solvent individual excluded from gross income under section 108(g) of the Internal
Revenue Code;

(iv) cash public assistance and relief;

(v) any pension or annuity (including railroad retirement benefits, all payments
received under the federal Social Security Act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or spouse, or which was
funded exclusively by the claimant or spouse and which funding payments were excluded
from federal adjusted gross income in the years when the payments were made;

(vi) interest received from the federal or a state government or any instrumentality
or political subdivision thereof;

(vii) workers' compensation;

(viii) nontaxable strike benefits;

(ix) the gross amounts of payments received in the nature of disability income or
sick pay as a result of accident, sickness, or other disability, whether funded through
insurance or otherwise;

(x) a lump sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;

(xi) contributions made by the claimant to an individual retirement account,
including a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
of the Internal Revenue Code; or deferred compensation plan under section 457 of the
Internal Revenue Code;

(xii) nontaxable scholarship or fellowship grants;

(xiii) the amount of deduction allowed under section 199 of the Internal Revenue
Code; and

(xiv) the amount of deduction allowed under section 220 or 223 of the Internal
Revenue Code.

In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" shall mean federal adjusted gross income reflected
in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.

(2) "Income" does not include:

(a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and
102;

(b) amounts of any pension or annuity which was exclusively funded by the claimant
or spouse and which funding payments were not excluded from federal adjusted gross
income in the years when the payments were made;

(c) surplus food or other relief in kind supplied by a governmental agency;

(d) relief granted under this chapter;

(e) child support payments received under a temporary or final decree of dissolution
or legal separation; or

(f) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
2001, Public Law 107-16.

(3) The sum of the following amounts may be subtracted from income:

(a) for the claimant's first dependent, the exemption amount multiplied by 1.4;

(b) for the claimant's second dependent, the exemption amount multiplied by 1.3;

(c) for the claimant's third dependent, the exemption amount multiplied by 1.2;

(d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;

(e) for the claimant's fifth dependent, the exemption amount; deleted text begin and
deleted text end

(f) if the claimant deleted text begin or claimant's spouse deleted text end was disabled or attained the age of 65
on or before December 31 of the year for which the taxes were levied or rent paid, the
exemption amount new text begin ; and
new text end

new text begin (g) if the claimant's spouse was disabled or attained the age of 65 on or before
December 31 of the year for which the taxes were levied or rent paid, the exemption
amount new text end .

For purposes of this subdivision, the "exemption amount" means the exemption
amount under section 151(d) of the Internal Revenue Code for the taxable year for which
the income is reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on taxes payable in
2009 and following years, and for claims based on rent paid in 2008 and following years.
new text end

Sec. 2.

Minnesota Statutes 2006, section 290A.04, subdivision 2, is amended to read:

Subd. 2.

Homeowners.

A claimant whose property taxes payable are in excess
of the percentage of the household income stated below shall pay an amount equal to
the percent of income shown for the appropriate household income level along with the
percent to be paid by the claimant of the remaining amount of property taxes payable.
The state refund equals the amount of property taxes payable that remain, up to the state
refund amount shown below.

Household Income

Percent of Income

Percent Paid by Claimant

Maximum State Refund

$0 to 1,189	1.0 percent	15 percent	deleted text begin $1,450 deleted text end new text begin $1,740 new text end
1,190 to 2,379	1.1 percent	15 percent	deleted text begin $1,450 deleted text end new text begin $1,740 new text end
2,380 to 3,589	1.2 percent	15 percent	deleted text begin $1,410 deleted text end new text begin $1,690 new text end
3,590 to 4,789	1.3 percent	20 percent	deleted text begin $1,410 deleted text end new text begin $1,690 new text end
4,790 to 5,979	1.4 percent	20 percent	deleted text begin $1,360 deleted text end new text begin $1,630 new text end
5,980 to 8,369	1.5 percent	20 percent	deleted text begin $1,360 deleted text end new text begin $1,630 new text end
8,370 to 9,559	1.6 percent	25 percent	deleted text begin $1,310 deleted text end new text begin $1,570 new text end
9,560 to 10,759	1.7 percent	25 percent	deleted text begin $1,310 deleted text end new text begin $1,570 new text end
10,760 to 11,949	1.8 percent	25 percent	deleted text begin $1,260 deleted text end new text begin $1,510 new text end
11,950 to 13,139	1.9 percent	30 percent	deleted text begin $1,260 deleted text end new text begin $1,510 new text end
13,140 to 14,349	2.0 percent	30 percent	deleted text begin $1,210 deleted text end new text begin $1,450 new text end
14,350 to 16,739	2.1 percent	30 percent	deleted text begin $1,210 deleted text end new text begin $1,450 new text end
16,740 to 17,929	2.2 percent	35 percent	deleted text begin $1,160 deleted text end new text begin $1,390 new text end
17,930 to 19,119	2.3 percent	35 percent	deleted text begin $1,160 deleted text end new text begin $1,390 new text end
19,120 to 20,319	2.4 percent	35 percent	deleted text begin $1,110 deleted text end new text begin $1,330 new text end
20,320 to 25,099	2.5 percent	40 percent	deleted text begin $1,110 deleted text end new text begin $1,330 new text end
25,100 to 28,679	2.6 percent	40 percent	deleted text begin $1,070 deleted text end new text begin $1,280 new text end
28,680 to 35,849	2.7 percent	40 percent	deleted text begin $1,070 deleted text end new text begin $1,280 new text end
35,850 to 41,819	2.8 percent	45 percent	deleted text begin $ 970 deleted text end new text begin $1,160 new text end
41,820 to 47,799	3.0 percent	45 percent	deleted text begin $ 970 deleted text end new text begin $1,160 new text end
47,800 to 53,779	3.2 percent	45 percent	deleted text begin $ 870 deleted text end new text begin $1,040 new text end
53,780 to 59,749	3.5 percent	50 percent	deleted text begin $ 780 deleted text end new text begin $940 new text end
59,750 to 65,729	deleted text begin 4.0 deleted text end new text begin 3.75 new text end percent	50 percent	deleted text begin $ 680 deleted text end new text begin $820 new text end
65,730 to 69,319	deleted text begin 4.0 deleted text end new text begin 3.75 new text end percent	50 percent	deleted text begin $ 580 deleted text end new text begin $700 new text end
69,320 to 71,719	deleted text begin 4.0 deleted text end new text begin 3.75 new text end percent	50 percent	deleted text begin $ 480 deleted text end new text begin $580 new text end
71,720 to 74,619	deleted text begin 4.0 deleted text end new text begin 3.75 new text end percent	50 percent	deleted text begin $ 390 deleted text end new text begin $470 new text end
74,620 to 77,519	deleted text begin 4.0 deleted text end new text begin 3.75 new text end percent	50 percent	deleted text begin $ 290 deleted text end new text begin $350 new text end

The payment made to a claimant shall be the amount of the state refund calculated
under this subdivision. No payment is allowed if the claimant's household income is
$77,520 or more.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with refunds based on
property taxes payable in 2009.
new text end