1st Unofficial Engrossment - 90th Legislature (2017 - 2018) Posted on 05/04/2018 10:03am
A bill for an act
relating to taxation; making modifications to individual income, corporate franchise,
property, sales and use, estate, mineral and tobacco taxes, and other tax provisions;
providing for certain conformity and nonconformity to federal provisions;
modifying the property tax refund; extending the small business investment credit;
specifying the application of tobacco taxes to vapor products; modifying
classification provisions; making minor policy, technical, and clarifying changes
to individual income and corporate franchise taxes, sales and use taxes, tobacco
taxes, property taxes, and other miscellaneous tax provisions; authorizing fire
protection special taxing districts; providing exemptions from the state general
levy; modifying watershed project levies; modifying wind energy production tax;
modifying veteran with a disability market value exclusion; authorizing early
termination from metropolitan agricultural preserve program; requiring study;
increasing the estate tax exclusion amount; providing for adjustment of certain tax
rates; clarifying application of tax to captive insurance companies; modifying the
stillbirth credit; modifying certain local lodging tax authority; establishing certain
sales tax exemptions; prohibiting imposition of certain excise taxes or fees;
modifying certain MNsure funding and authority provisions; modifying certain
estate property ownership requirements; amending Minnesota Statutes 2016,
sections 16A.152, by adding a subdivision; 62V.05, subdivisions 2, 5, 10; 62V.08;
103D.905, subdivision 9; 103E.611, subdivision 2; 116J.8737, subdivisions 5, 12;
138.053; 162.145, subdivision 3; 197.603, subdivision 2; 270.41, subdivision 3;
270B.08, subdivision 2; 270C.85, subdivision 2; 270C.89, subdivision 2; 270C.91;
272.02, subdivisions 27, 81, by adding a subdivision; 273.032; 273.061, subdivision
9; 273.113, subdivision 3; 273.119, subdivision 2; 273.1231, subdivision 3; 273.124,
subdivision 3a; 273.1245, subdivision 2; 273.136, subdivision 2; 273.1384,
subdivision 3; 273.18; 274.14; 274.16; 275.066; 287.21, subdivision 1; 289A.08,
subdivisions 1, 6, 7; 289A.25, subdivision 1; 289A.31, subdivision 2; 289A.37,
subdivision 6; 289A.38, subdivisions 7, 10; 289A.42; 289A.60, subdivision 24;
290.01, subdivisions 22, 29a, by adding subdivisions; 290.0131, subdivisions 1,
3, 12, 13, by adding subdivisions; 290.0132, subdivisions 1, 7, 20, by adding
subdivisions; 290.0133, by adding a subdivision; 290.0134, by adding subdivisions;
290.06, subdivisions 2c, 2d; 290.067, subdivision 2a; 290.0671, subdivision 7;
290.0672, subdivision 2; 290.0681, subdivisions 3, 4; 290.0685, subdivision 1;
290.0802, subdivisions 2, 3; 290.091, subdivision 3; 290.0921, subdivision 3;
290.0922, subdivision 1; 290.095, subdivision 4; 290.21, subdivision 4; 290.34,
by adding a subdivision; 290.92, subdivisions 1, 28; 290A.03, subdivisions 4, 12;
290A.05; 290A.08; 290A.09; 290B.09, subdivision 1; 291.03, subdivisions 8, 10;
297A.61, subdivision 18; 297A.67, subdivision 12; 297A.68, subdivisions 17, 25,
44; 297A.70, subdivisions 3, 16; 297A.71, subdivisions 22, 45, by adding
subdivisions; 297A.77, by adding a subdivision; 297A.84; 297A.85; 297B.01,
subdivision 14; 297B.03; 297F.01, subdivisions 19, 23, by adding a subdivision;
297F.17, subdivision 6; 297G.16, subdivision 7; 298.28, subdivision 9a; 469.177,
subdivision 1; 469.316, subdivision 1; 469.319, subdivision 4; 471.831, subdivision
1; 473H.08, subdivisions 1, 4, by adding a subdivision; 474A.02, subdivision 22b;
475.521, subdivision 1; 477A.016; Minnesota Statutes 2017 Supplement, sections
270A.03, subdivision 5; 270C.445, subdivision 6; 270C.89, subdivision 1; 272.029,
subdivision 2; 272.115, subdivision 1; 273.0755; 273.13, subdivisions 22, 25, 34;
273.1384, subdivision 2; 273.1387, subdivision 3; 275.025, subdivisions 1, 2;
289A.02, subdivision 7; 289A.10, subdivision 1; 289A.12, subdivision 14; 289A.31,
subdivision 1; 289A.35; 289A.37, subdivision 2; 290.01, subdivisions 4a, 19, 31;
290.0131, subdivision 10; 290.0132, subdivisions 21, 26; 290.0133, subdivision
12; 290.0137; 290.05, subdivision 1; 290.067, subdivisions 1, 2b; 290.0671,
subdivision 1; 290.0672, subdivision 1; 290.0681, subdivisions 1, 2; 290.0684,
subdivision 2; 290.091, subdivision 2; 290.17, subdivisions 2, 4; 290.31, subdivision
1; 290A.03, subdivisions 3, 8, 13, 15; 291.005, subdivision 1; 291.016, subdivision
3; 291.03, subdivisions 1, 9, 11; 297A.61, subdivision 3; 297A.67, subdivision 6;
297A.70, subdivision 4; 297A.75, subdivision 1; 297B.01, subdivision 16; 298.17;
298.227; 298.28, subdivision 7a; 462D.03, subdivision 2; 462D.06, subdivisions
1, 2; Laws 1986, chapter 396, section 5, as amended; Laws 1986, chapter 462,
section 31, as amended; Laws 2008, chapter 366, article 5, section 33, as amended;
Laws 2009, chapter 88, article 2, section 46; Laws 2015, chapter 71, article 12,
section 8; Laws 2017, First Special Session chapter 1, article 4, section 31; article
8, section 3; article 10, section 4; proposing coding for new law in Minnesota
Statutes, chapters 289A; 290; proposing coding for new law as Minnesota Statutes,
chapter 299O; repealing Minnesota Statutes 2016, sections 275.29; 289A.10,
subdivision 1a; 289A.12, subdivision 18; 289A.18, subdivision 3a; 289A.20,
subdivision 3a; 289A.38, subdivisions 7, 8, 9; 290.0131, subdivisions 7, 11;
290.0133, subdivisions 13, 14; 290.10, subdivision 2; 291.03, subdivisions 8, 10;
Minnesota Statutes 2017 Supplement, section 291.03, subdivisions 9, 11.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Minnesota Statutes 2017 Supplement, section 270A.03, subdivision 5, is
amended to read:
(a) "Debt" means a legal obligation of a natural person to pay a fixed and
certain amount of money, which equals or exceeds $25 and which is due and payable to a
claimant agency. The term includes criminal fines imposed under section 609.10 or 609.125,
fines imposed for petty misdemeanors as defined in section 609.02, subdivision 4a, and
restitution. A debt may arise under a contractual or statutory obligation, a court order, or
other legal obligation, but need not have been reduced to judgment.
A debt includes any legal obligation of a current recipient of assistance which is based
on overpayment of an assistance grant where that payment is based on a client waiver or
an administrative or judicial finding of an intentional program violation; or where the debt
is owed to a program wherein the debtor is not a client at the time notification is provided
to initiate recovery under this chapter and the debtor is not a current recipient of food support,
transitional child care, or transitional medical assistance.
(b) A debt does not include any legal obligation to pay a claimant agency for medical
care, including hospitalization if the income of the debtor at the time when the medical care
was rendered does not exceed the following amount:
(1) for an unmarried debtor, an income of deleted text begin $12,560deleted text end new text begin $13,180 new text end or less;
(2) for a debtor with one dependent, an income of deleted text begin $16,080deleted text end new text begin $16,878 new text end or less;
(3) for a debtor with two dependents, an income of deleted text begin $19,020deleted text end new text begin $19,959 new text end or less;
(4) for a debtor with three dependents, an income of deleted text begin $21,580deleted text end new text begin $22,643 new text end or less;
(5) for a debtor with four dependents, an income of deleted text begin $22,760deleted text end new text begin $23,887 new text end or less; and
(6) for a debtor with five or more dependents, an income of deleted text begin $23,730deleted text end new text begin $24,900 new text end or less.
For purposes of this paragraph, "debtor" means the individual whose income, together
with the income of the individual's spouse, other than a separated spouse, brings the
individual within the income provisions of this paragraph. For purposes of this paragraph,
a spouse, other than a separated spouse, shall be considered a dependent.
(c) The commissioner shall adjust the income amounts in paragraph (b) by the percentage
determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
that in section 1(f)(3)(B) the word deleted text begin "2014"deleted text end new text begin "2017" new text end shall be substituted for the word deleted text begin "1992."
deleted text end deleted text begin For 2016, the commissioner shall then determine the percent change from the 12 months
ending on August 31, 2014, to the 12 months ending on August 31, 2015, and in each
subsequent year, from the 12 months ending on August 31, 2014, to the 12 months ending
on August 31 of the year preceding the taxable year.deleted text end new text begin "2016."new text end The determination of the
commissioner pursuant to this subdivision shall not be considered a "rule" and shall not be
subject to the Administrative Procedure Act contained in chapter 14. The income amount
as adjusted must be rounded to the nearest $10 amount. If the amount ends in $5, the amount
is rounded up to the nearest $10 amount.
(d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of the
dollar amount of the premium authorized under section 256L.15, subdivision 1a.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 289A.02, subdivision 7, is amended
to read:
Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text begin December
16, 2016deleted text end new text begin March 31, 2018new text end .
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 289A.08, subdivision 1, is amended to read:
(a) A taxpayer must file a return for each taxable
year the taxpayer is required to file a return under section 6012 of the Internal Revenue
Codenew text begin or meets the requirements under paragraph (d) to file a returnnew text end , except that:
(1) an individual who is not a Minnesota resident for any part of the year is not required
to file a Minnesota income tax return if the individual's gross income derived from Minnesota
sources as determined under sections 290.081, paragraph (a), and 290.17, is less than the
filing requirements for a single individual who is a full year resident of Minnesota; deleted text begin and
deleted text end
(2) an individual who is a Minnesota resident is not required to file a Minnesota income
tax return if the individual's gross income derived from Minnesota sources as determined
under section 290.17, less the subtractions allowed under section 290.0132, subdivisions
12 and 15, is less than the filing requirements for a single individual who is a full-year
resident of Minnesota.
(b) The decedent's final income tax return, and other income tax returns for prior years
where the decedent had gross income in excess of the minimum amount at which an
individual is required to file and did not file, must be filed by the decedent's personal
representative, if any. If there is no personal representative, the return or returns must be
filed by the transferees, as defined in section 270C.58, subdivision 3, who receive property
of the decedent.
(c) The term "gross income," as it is used in this section, has the same meaning given it
in section 290.01, subdivision 20.
new text begin
(d) The commissioner of revenue shall annually determine the gross income levels at
which individuals are required to file a return for each taxable year based on the amounts
that may be deducted under section 290.0803 and the personal and dependent exemptions
under section 290.0138.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 289A.08, subdivision 7, is amended to read:
(a) The commissioner may allow a partnership with nonresident partners to
file a composite return and to pay the tax on behalf of nonresident partners who have no
other Minnesota source income. This composite return must include the names, addresses,
Social Security numbers, income allocation, and tax liability for the nonresident partners
electing to be covered by the composite return.
(b) The computation of a partner's tax liability must be determined by multiplying the
income allocated to that partner by the highest rate used to determine the tax liability for
individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
deductions, or personal exemptions are not allowed.
(c) The partnership must submit a request to use this composite return filing method for
nonresident partners. The requesting partnership must file a composite return in the form
prescribed by the commissioner of revenue. The filing of a composite return is considered
a request to use the composite return filing method.
(d) The electing partner must not have any Minnesota source income other than the
income from the partnership and other electing partnerships. If it is determined that the
electing partner has other Minnesota source income, the inclusion of the income and tax
liability for that partner under this provision will not constitute a return to satisfy the
requirements of subdivision 1. The tax paid for the individual as part of the composite return
is allowed as a payment of the tax by the individual on the date on which the composite
return payment was made. If the electing nonresident partner has no other Minnesota source
income, filing of the composite return is a return for purposes of subdivision 1.
(e) This subdivision does not negate the requirement that an individual pay estimated
tax if the individual's liability would exceed the requirements set forth in section 289A.25.
The individual's liability to pay estimated tax is, however, satisfied when the partnership
pays composite estimated tax in the manner prescribed in section 289A.25.
(f) If an electing partner's share of the partnership's gross income from Minnesota sources
is less than the filing requirements for a nonresident under this subdivision, the tax liability
is zero. However, a statement showing the partner's share of gross income must be included
as part of the composite return.
(g) The election provided in this subdivision is only available to a partner who has no
other Minnesota source income and who is either (1) a full-year nonresident individual or
(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the
Internal Revenue Code.
(h) A corporation defined in section 290.9725 and its nonresident shareholders may
make an election under this paragraph. The provisions covering the partnership apply to
the corporation and the provisions applying to the partner apply to the shareholder.
(i) Estates and trusts distributing current income only and the nonresident individual
beneficiaries of the estates or trusts may make an election under this paragraph. The
provisions covering the partnership apply to the estate or trust. The provisions applying to
the partner apply to the beneficiary.
(j) For the purposes of this subdivision, "income" means the partner's share of federal
adjusted gross income from the partnership modified by the additions provided in section
290.0131, subdivisions 8 to deleted text begin 11deleted text end new text begin 10 and 17new text end , and the subtractions provided in: (1) section
290.0132, subdivision 9, to the extent the amount is assignable or allocable to Minnesota
under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed
under section 290.0132, subdivision 9, is only allowed on the composite tax computation
to the extent the electing partner would have been allowed the subtraction.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 289A.12, subdivision 14, is amended
to read:
(a) A regulated
investment company paying $10 or more in exempt-interest dividends to an individual who
is a resident of Minnesota, or any person receiving $10 or more of exempt interest or
exempt-interest dividends and paying as nominee to an individual who is a resident of
Minnesota, must make a return indicating the amount of the exempt interest or
exempt-interest dividends, the name, address, and Social Security number of the recipient,
and any other information that the commissioner specifies. The return must be provided to
the recipient by February 15 of the year following the year of the payment. The return
provided to the recipient must include a clear statement, in the form prescribed by the
commissioner, that the exempt interest or exempt-interest dividends must be included in
the computation of Minnesota taxable income. By June 1 of each year, the payer must file
a copy of the return with the commissioner.
(b) For purposes of this subdivision, the following definitions apply.
(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in section
852(b)(5) of the Internal Revenue Code, but does not include the portion of exempt-interest
dividends that are not required to be added to federal deleted text begin taxabledeleted text end new text begin adjusted grossnew text end income under
section 290.0131, subdivision 2, paragraph (b).
(2) "Regulated investment company" means regulated investment company as defined
in section 851(a) of the Internal Revenue Code or a fund of the regulated investment company
as defined in section 851(g) of the Internal Revenue Code.
(3) "Exempt interest" means income on obligations of any state other than Minnesota,
or a political or governmental subdivision, municipality, or governmental agency or
instrumentality of any state other than Minnesota, and exempt from federal income taxes
under the Internal Revenue Code or any other federal statute.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 289A.35, is amended to read:
(a) The commissioner may audit and adjust the taxpayer's computation of new text begin federal adjusted
gross income, new text end federal taxable income, items of federal tax preferences, or federal credit
amounts to make them conform with the provisions of chapter 290 or section 298.01. If a
return has been filed, the commissioner shall enter the liability reported on the return and
may make any audit or investigation that is considered necessary.
(b) Upon petition by a taxpayer, and when the commissioner determines that it is in the
best interest of the state, the commissioner may allow S corporations and partnerships to
receive orders of assessment issued under section 270C.33, subdivision 4, on behalf of their
owners, and to pay liabilities shown on such orders. In such cases, the owners' liability must
be calculated using the method provided in section 289A.08, subdivision 7, paragraph (b).
(c) A taxpayer may petition the commissioner for the use of the method described in
paragraph (b) after the taxpayer is notified that an audit has been initiated and before an
order of assessment has been issued.
(d) A determination of the commissioner under paragraph (b) to grant or deny the petition
of a taxpayer cannot be appealed to the Tax Court or any other court.
(e) The commissioner may audit and adjust the taxpayer's computation of tax under
chapter 291. In the case of a return filed pursuant to section 289A.10, the commissioner
shall notify the estate no later than nine months after the filing date, as provided by section
289A.38, subdivision 2, whether the return is under examination or the return has been
processed as filed.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to
read:
new text begin
The term "surviving spouse" means an individual who is
a surviving spouse under section 2(a) of the Internal Revenue Code for the taxable year.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.01, subdivision 19, is amended
to read:
new text begin (a) For a corporation taxable under section 290.02, and an estate
or a trust taxable under section 290.03, new text end the term "net income" means the federal taxable
income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through
the date named in this subdivision, incorporating the federal effective dates of changes to
the Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in sections 290.0131 to 290.0136.
new text begin
(b) For an individual, the term "net income" means federal adjusted gross income with
the modifications provided in sections 290.0131 and 290.0132.
new text end
new text begin (c) new text end In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:
(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;
(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
and
(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.
new text begin (d) new text end The net income of a real estate investment trust as defined and limited by section
856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
new text begin (e) new text end The net income of a designated settlement fund as defined in section 468B(d) of the
Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
Revenue Code.
new text begin (f) new text end The Internal Revenue Code of 1986, as amended through deleted text begin December 16, 2016deleted text end new text begin March
31, 2018new text end , shall be in effect for taxable years beginning after December 31, 1996.
new text begin (g) new text end Except as otherwise provided, references to the Internal Revenue Code in this
subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of
determining net income for the applicable year.
new text begin
This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes and the changes amending the new paragraph
(a) and adding paragraph (b) are effective for taxable years beginning after December 31,
2017.
new text end
Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to
read:
new text begin
The terms "adjusted
gross income" and "federal adjusted gross income" mean adjusted gross income, as defined
in section 62 of the Internal Revenue Code, as amended through the date named in
subdivision 19, incorporating the federal effective date of changes to the Internal Revenue
Code and any elections made by the taxpayer under the Internal Revenue Code in determining
federal adjusted gross income for federal income tax purposes.
new text end
new text begin
This section is effective the day following final enactment.
new text end
Minnesota Statutes 2016, section 290.01, subdivision 22, is amended to read:
For tax years beginning after December 31, deleted text begin 1986deleted text end new text begin 2017new text end ,
the term "taxable net income" means:
(1) for resident individuals deleted text begin the same asdeleted text end new text begin ,new text end net incomenew text begin less the deductions allowed under
section 290.0803new text end ;
(2) for individuals who were deleted text begin notdeleted text end residents of Minnesota for new text begin less than new text end the entire year, deleted text begin the
same asdeleted text end net incomenew text begin less the deductions allowed under section 290.0803,new text end except that the tax
is imposed only on the Minnesota apportioned share of that income as determined pursuant
to section 290.06, subdivision 2c, paragraph (e);
(3) for all other taxpayers, the part of net income that is allocable to Minnesota by
assignment or apportionment under one or more of sections 290.17, 290.191, 290.20, and
290.36new text begin , except that for nonresident individuals net income is reduced by the amount of the
standard deduction allowable under section 290.0803, subdivision 2, before allocation of
net income to Minnesotanew text end .
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.01, subdivision 29a, is amended to read:
"State itemized deduction" means federal itemized
deductions, as defined in section 63(d) of the Internal Revenue Code, disregarding any
deleted text begin limitation under section 68 of the Internal Revenue Code, and reduced by the amount of
the addition required under section 290.0131, subdivision 13deleted text end new text begin changes to itemized deductions
made by Public Law 115-97 other than the changes made by section 11028, and disregarding
the federal itemized deduction of income or sales taxes under section 164 of the Internal
Revenue Codenew text end .
new text begin
For taxable years beginning after December 31, 2017, the amount that would have been
allowable as interest under section 163(h)(3)(E) of the Internal Revenue Code, disregarding
subparagraph 163(h)(3)(E)(iv), is allowed as a state itemized deduction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to
read:
new text begin
"State standard deduction" means the federal
standard deduction computed under section 63(c) and (f) of the Internal Revenue Code, as
amended through December 16, 2016, except that for purposes of adjusting the amounts
under this subdivision, the provisions of section 1(f) of the Internal Revenue Code, as
amended through March 31, 2018, apply.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.01, subdivision 31, is amended
to read:
Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text begin December
16, 2016deleted text end new text begin March 31, 2018new text end . Internal Revenue Code also includes any uncodified provision
in federal law that relates to provisions of the Internal Revenue Code that are incorporated
into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as
amended through March 18, 2010.
new text begin
This section is effective the day following final enactment and
applies to the same taxable years as the changes incorporated by federal changes are effective
for federal purposes, including any provisions that are retroactive to taxable years beginning
after December 31, 2016.
new text end
Minnesota Statutes 2016, section 290.0131, subdivision 1, is amended to read:
(a) For the purposes of this section, "addition" means
an amount that must be added to federal deleted text begin taxabledeleted text end new text begin adjusted grossnew text end incomenew text begin , or for estates and
trusts, federal taxable income,new text end in computing net income for the taxable year to which the
amounts relate.
(b) The additions in this section apply to individuals, estates, and trusts.
(c) Unless specifically indicated or unless the context clearly indicates otherwise, only
amounts that were deducted or excluded in computing federal deleted text begin taxabledeleted text end new text begin adjusted grossnew text end incomenew text begin ,
or for estates and trusts, federal taxable income,new text end are an addition under this section.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0131, subdivision 3, is amended to read:
deleted text begin (a)deleted text end new text begin For trusts
and estates,new text end the amount of income, sales and use, motor vehicle sales, or excise taxes paid
or accrued within the taxable year under this chapter and the amount of taxes based on net
income, sales and use, motor vehicle sales, or excise taxes paid to any other state or to any
province or territory of Canada is an addition to the extent deducted under section 63(d) of
the Internal Revenue Code.
deleted text begin
(b) The addition under paragraph (a) may not be more than the amount by which the
state itemized deduction exceeds the amount of the standard deduction as defined in section
63(c) of the Internal Revenue Code. For the purpose of this subdivision, income, sales and
use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed under
subdivision 12.
deleted text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.0131, subdivision 10, is amended
to read:
new text begin Effective for property placed in service in taxable
years beginning before January 1, 2019, new text end 80 percent of the amount by which the deduction
allowed under the dollar limits of section 179 of the Internal Revenue Code exceeds the
deduction allowable by section 179 of the Internal Revenue Code, as amended through
December 31, 2003, is an addition.
new text begin
This section is effective for taxable years beginning after December
31, 2018.
new text end
Minnesota Statutes 2016, section 290.0131, subdivision 12, is amended to read:
(a) The amount of disallowed itemized
deductions is an addition. The amount of disallowed itemized deductionsdeleted text begin , plus the addition
required under subdivision 3,deleted text end may not be more than the amount by which thenew text begin statenew text end itemized
deductionsdeleted text begin , as allowed under section 63(d) of the Internal Revenue Code,deleted text end exceeds the amount
of the new text begin state new text end standard deduction deleted text begin as defined in section 63(c) of the Internal Revenue Codedeleted text end .
(b) The amount of disallowed itemized deductions is equal to the lesser of:
(1) three percent of the excess of the taxpayer's federal adjusted gross income over the
applicable amount; or
(2) 80 percent of the amount of the new text begin state new text end itemized deductions otherwise allowable to the
taxpayer under the Internal Revenue Code for the taxable year.
(c) "Applicable amount" means $100,000, or $50,000 for a married individual filing a
separate return. Each dollar amount is increased by an amount equal to:
(1) that dollar amount, multiplied by
(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue
Code for the calendar year in which the taxable year begins, by substituting deleted text begin "calendar year
1990" for "calendar year 1992" in subparagraph (B) of section 1(f)(3)deleted text end new text begin "1990" for "2016" in
section 1(f)(3)(B)(ii) of the Internal Revenue Codenew text end .
(d) "Itemized deductions" excludes:
(1) the deduction for medical expenses under section 213 of the Internal Revenue Code;
(2) any deduction for investment interest as defined in section 163(d) of the Internal
Revenue Code; and
(3) the deduction under section 165(a) of the Internal Revenue Code for casualty or theft
losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue Code or
for losses described in section 165(d) of the Internal Revenue Code.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0131, subdivision 13, is amended to read:
(a) The amount of disallowed
personal exemptions for taxpayers with federal adjusted gross income over the threshold
amount is an addition.
(b) The disallowed personal exemption amount is equal to the deleted text begin number ofdeleted text end personal
deleted text begin exemptionsdeleted text end new text begin and dependent exemption subtractionnew text end allowed under section deleted text begin 151(b) and (c) of
the Internal Revenue Codedeleted text end new text begin 290.0132, subdivision 20,new text end multiplied by the deleted text begin dollar amount for
personal exemptions under section 151(d)(1) and (2) of the Internal Revenue Code, as
adjusted for inflation by section 151(d)(4) of the Internal Revenue Code, and by thedeleted text end
applicable percentage.
(c) For a married individual filing a separate return, "applicable percentage" means two
percentage points for each $1,250, or fraction of that amount, by which the taxpayer's federal
adjusted gross income for the taxable year exceeds the threshold amount. For all other filers,
applicable percentage means two percentage points for each $2,500, or fraction of that
amount, by which the taxpayer's federal adjusted gross income for the taxable year exceeds
the threshold amount. The applicable percentage must not exceed 100 percent.
(d) "Threshold amount" means:
(1) $150,000 for a joint return or a surviving spouse;
(2) $125,000 for a head of a household;
(3) $100,000 for an individual who is not married and who is not a surviving spouse or
head of a household; and
(4) $75,000 for a married individual filing a separate return.
(e) The thresholds must be increased by an amount equal to:
(1) the threshold dollar amount, multiplied by
(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue
Code for the calendar year in which the taxable year begins, by substituting deleted text begin "calendar year
1990" for "calendar year 1992" in subparagraph (B) of section 1(f)(3)deleted text end new text begin "1990" for "2016" in
section 1(f)(3)(B)(ii) of the Internal Revenue Codenew text end .
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision
to read:
new text begin
For a trust or estate, the amount deducted
under section 199A of the Internal Revenue Code in computing the federal taxable income
of the trust or estate is an addition.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision
to read:
new text begin
The amount of foreign-derived intangible
income deducted under section 250 of the Internal Revenue Code for the taxable year is an
addition.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0132, subdivision 1, is amended to read:
(a) For the purposes of this section, "subtraction"
means an amount that deleted text begin shalldeleted text end new text begin is allowed tonew text end be subtracted from federal deleted text begin taxabledeleted text end new text begin adjusted grossnew text end
incomenew text begin , or for estates and trusts, federal taxable income,new text end in computing net income for the
taxable year to which the amounts relate.
(b) The subtractions in this section apply to individuals, estates, and trusts.
(c) Unless specifically indicated or unless the context clearly indicates otherwise, no
amount deducted, subtracted, or otherwise excluded in computing federal deleted text begin taxabledeleted text end new text begin adjusted
grossnew text end incomenew text begin , or for estates and trusts, federal taxable income,new text end is a subtraction under this
section.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0132, subdivision 7, is amended to read:
deleted text begin To the extent
not deducted or not deductible under section 408(d)(8)(E) of the Internal Revenue Code in
determining federal taxable income bydeleted text end new text begin Fornew text end an individual who does not itemize deductions
deleted text begin for federal income tax purposesdeleted text end new text begin under section 290.0803new text end for the taxable year, an amount
equal to 50 percent of the excess of charitable contributions over $500 allowable as a new text begin state
itemized new text end deduction for the taxable year deleted text begin under section 170(a) of the Internal Revenue Codedeleted text end
is a subtraction.new text begin The subtraction under this subdivision must not include a distribution that
is excluded from federal adjusted gross income and that is not deductible under section
408(d)(8)(E) of the Internal Revenue Code.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0132, subdivision 20, is amended to read:
deleted text begin
The amount of the phaseout
of personal exemptions under section 151(d) of the Internal Revenue Code is a subtraction.
deleted text end
new text begin
The amount of personal and dependent exemptions calculated under section 290.0138 is a
subtraction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.0132, subdivision 21, is amended
to read:
To the extent included in federal
deleted text begin taxabledeleted text end new text begin adjusted grossnew text end income, compensation received from a pension or other retirement
pay from the federal government for service in the military, as computed under United
States Code, title 10, sections 1401 to 1414, 1447 to 1455, and 12733, is a subtraction. The
subtraction is limited to individuals who do not claim the credit under section 290.0677.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.0132, subdivision 26, is amended
to read:
(a) A portion of Social Security benefits is allowed
as a subtraction. The subtraction equals the lesser of Social Security benefits or a maximum
subtraction subject to the limits under paragraphs (b), (c), and (d).
(b) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction equals deleted text begin $4,500deleted text end new text begin $4,590new text end . The maximum subtraction is reduced by 20 percent of
provisional income over deleted text begin $77,000deleted text end new text begin $78,530new text end . In no case is the subtraction less than zero.
(c) For single or head-of-household taxpayers, the maximum subtraction equals deleted text begin $3,500deleted text end new text begin
$3,570new text end . The maximum subtraction is reduced by 20 percent of provisional income over
deleted text begin $60,200deleted text end new text begin $61,400new text end . In no case is the subtraction less than zero.
(d) For married taxpayers filing separate returns, the maximum subtraction equals deleted text begin $2,250deleted text end new text begin
one-half the maximum subtraction for joint returns under paragraph (b)new text end . The maximum
subtraction is reduced by 20 percent of provisional income over deleted text begin $38,500deleted text end new text begin one-half the
maximum subtraction for joint returns under paragraph (b)new text end . In no case is the subtraction
less than zero.
(e) For purposes of this subdivision, "provisional income" means modified adjusted
gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
the Social Security benefits received during the taxable year, and "Social Security benefits"
has the meaning given in section 86(d)(1) of the Internal Revenue Code.
(f) The commissioner shall adjust the maximum subtraction and threshold amounts in
paragraphs (b) to (d) by the percentage determined pursuant to the provisions of section
1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) of the Internal Revenue
Code the word deleted text begin "2016"deleted text end new text begin "2017"new text end shall be substituted for the word deleted text begin "1992." For 2018, the
commissioner shall then determine the percentage change from the 12 months ending on
August 31, 2016, to the 12 months ending on August 31, 2017, and in each subsequent year,
from the 12 months ending on August 31, 2016, to the 12 months ending on August 31 of
the year preceding the taxable year.deleted text end new text begin "2016." new text end The determination of the commissioner pursuant
to this subdivision must not be considered a rule and is not subject to the Administrative
Procedure Act contained in chapter 14, including section 14.386. The maximum subtraction
and threshold amounts as adjusted must be rounded to the nearest $10 amount. If the amount
ends in $5, the amount is rounded up to the nearest $10 amount.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:
new text begin
Expenses that qualify as a deduction under section 217(a)
through (f) of the Internal Revenue Code, disregarding paragraph (k), and only to the extent
the expenses are not deducted in computing federal taxable income is a subtraction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:
new text begin
The taxpayer's global intangible
low-taxed income included under section 951A of the Internal Revenue Code for the taxable
year is a subtraction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:
new text begin
The amount of deferred foreign income recognized
because of section 965 of the Internal Revenue Code, and before any deduction under section
965(c) of the Internal Revenue Code, is a subtraction.
new text end
new text begin
This section is effective retroactively for taxable years beginning
after December 31, 2016, and before January 1, 2019.
new text end
Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:
new text begin
The amount allowed under section 290.0803
is a subtraction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:
new text begin
The amount that would have been allowable under
section 222 of the Internal Revenue Code, disregarding paragraph (e) and only to the extent
the amount is not deducted in computing federal adjusted gross income is a subtraction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2018.
new text end
Minnesota Statutes 2017 Supplement, section 290.0133, subdivision 12, is amended
to read:
new text begin Effective for property placed in service in taxable
years beginning before January 1, 2019, new text end 80 percent of the amount by which the deduction
allowed under the dollar limits of section 179 of the Internal Revenue Code exceeds the
deduction allowable by section 179 of the Internal Revenue Code, as amended through
December 31, 2003, is an addition.
new text begin
This section is effective for taxable years beginning after December
31, 2018.
new text end
Minnesota Statutes 2016, section 290.0133, is amended by adding a subdivision
to read:
new text begin
The amount of foreign-derived intangible
income deducted under section 250 of the Internal Revenue Code for the taxable year is an
addition.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0134, is amended by adding a subdivision
to read:
new text begin
The taxpayer's global intangible
low-taxed income included under section 951A of the Internal Revenue Code for the taxable
year is a subtraction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0134, is amended by adding a subdivision
to read:
new text begin
The amount of deferred foreign income recognized
because of section 965 of the Internal Revenue Code, and before any deduction under section
965(c) of the Internal Revenue Code, is a subtraction.
new text end
new text begin
(a) A taxpayer is allowed (1) a
personal exemption in the amount of $4,150, and in the case of a married couple filing a
joint return an additional personal exemption of $4,150; plus (2) a dependent exemption of
$4,150 multiplied by the number of dependents of the taxpayer, as defined under sections
151 and 152 of the Internal Revenue Code.
new text end
new text begin
(b) The personal and dependent exemptions are not allowed to an individual who is
eligible to be claimed as a dependent, as defined in sections 151 or 152 of the Internal
Revenue Code, by another taxpayer.
new text end
new text begin
For taxable years beginning after December 31,
2018, the commissioner shall annually adjust the amounts in subdivision 1 by the percentage
determined pursuant to the provisions of section 1(f) of the Internal Revenue Code as
amended through December 16, 2016, except that in section 1(f)(3)(B), the word "2017"
shall be substituted for the word "1992." The exemption amount as adjusted for inflation
must be rounded to the nearest $50. If the amount is not a multiple of $50, the commissioner
shall round down to the next lowest multiple of $50. The determination of the commissioner
under this subdivision is not a rule under the Administrative Procedure Act.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.06, subdivision 2c, is amended to read:
(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
deleted text begin as defined in section 2(a) of the Internal Revenue Codedeleted text end must be computed by applying to
their taxable net income the following schedule of rates:
(1) On the first deleted text begin $35,480deleted text end new text begin $37,850new text end , deleted text begin 5.35deleted text end new text begin 5.1new text end percent;
(2) On all over deleted text begin $35,480deleted text end new text begin $37,850new text end , but not over deleted text begin $140,960deleted text end new text begin $150,380new text end , 7.05 percent;
(3) On all over deleted text begin $140,960deleted text end new text begin $150,380new text end , but not over deleted text begin $250,000deleted text end new text begin $266,700new text end , 7.85 percent;
(4) On all over deleted text begin $250,000deleted text end new text begin $266,700new text end , 9.85 percent.
Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts.
(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first deleted text begin $24,270deleted text end new text begin $25,890new text end , deleted text begin 5.35deleted text end new text begin 5.1new text end percent;
(2) On all over deleted text begin $24,270deleted text end new text begin $25,890new text end , but not over deleted text begin $79,730deleted text end new text begin $85,060new text end , 7.05 percent;
(3) On all over deleted text begin $79,730deleted text end new text begin $85,060new text end , but not over deleted text begin $150,000deleted text end new text begin $160,020new text end , 7.85 percent;
(4) On all over deleted text begin $150,000deleted text end new text begin $160,020new text end , 9.85 percent.
(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first deleted text begin $29,880deleted text end new text begin $31,880new text end , deleted text begin 5.35deleted text end new text begin 5.1new text end percent;
(2) On all over deleted text begin $29,880deleted text end new text begin $31,880new text end , but not over deleted text begin $120,070deleted text end new text begin $128,090new text end , 7.05 percent;
(3) On all over deleted text begin $120,070deleted text end new text begin $128,090new text end , but not over deleted text begin $200,000deleted text end new text begin $213,360new text end , 7.85 percent;
(4) On all over deleted text begin $200,000deleted text end new text begin $213,360new text end , 9.85 percent.
(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:
(1) the numerator is the individual's Minnesota source federal adjusted gross income deleted text begin as
defined in section 62 of the Internal Revenue Codedeleted text end and increased by the additions required
under section 290.0131, subdivisions 2 and 6 to deleted text begin 11deleted text end new text begin 10new text end , and reduced by the Minnesota
assignable portion of the subtraction for United States government interest under section
290.0132, subdivision 2, and the subtractions under section 290.0132, subdivisions 9, 10,
14, 15, 17, deleted text begin anddeleted text end 18, new text begin and 27 to 29, new text end after applying the allocation and assignability provisions
of section 290.081, clause (a), or 290.17; and
(2) the denominator is the individual's federal adjusted gross income deleted text begin as defined in section
62 of the Internal Revenue Codedeleted text end , increased by the amounts specified in section 290.0131,
subdivisions 2 and 6 to deleted text begin 11deleted text end new text begin 10new text end , and reduced by the amounts specified in section 290.0132,
subdivisions 2, 9, 10, 14, 15, 17, deleted text begin anddeleted text end 18new text begin , and 27 to 29new text end .
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.06, subdivision 2d, is amended to read:
(a) For taxable years beginning after
December 31, 2013, the minimum and maximum dollar amounts for each rate bracket for
which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage
determined under paragraph (b). deleted text begin For the purpose of making the adjustment as provided in
this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets
as they existed for taxable years beginning after December 31, 2012, and before January 1,
2014.deleted text end The rate applicable to any rate bracket must not be changed. The dollar amounts
setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
$5, it must be rounded up to the nearest $10 amount.
(b) The commissioner shall adjust the rate brackets and by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B) the word deleted text begin "2012"deleted text end new text begin "2017"new text end shall be substituted for the word deleted text begin "1992." For 2014, the
commissioner shall then determine the percent change from the 12 months ending on August
31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent year, from
the 12 months ending on August 31, 2012, to the 12 months ending on August 31 of the
year preceding the taxable year.deleted text end new text begin "2016."new text end The determination of the commissioner pursuant
to this subdivision shall not be considered a "rule" and shall not be subject to the
Administrative Procedure Act contained in chapter 14.
No later than December 15 of each year, the commissioner shall announce the specific
percentage that will be used to adjust the tax rate brackets.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.067, subdivision 1, is amended
to read:
(a) A taxpayer may take as a credit against the tax
due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
dependent care credit for which the taxpayer is eligible pursuant to the provisions of section
21 of the Internal Revenue Code except that in determining whether the child qualified as
a dependent, income received as a Minnesota family investment program grant or allowance
to or on behalf of the child must not be taken into account in determining whether the child
received more than half of the child's support from the taxpayer, and the provisions of
section 32(b)(1)(D) of the Internal Revenue Code do not apply.
(b) If a child who has not attained the age of six years at the close of the taxable year is
cared for at a licensed family day care home operated by the child's parent, the taxpayer is
deemed to have paid employment-related expenses. If the child is 16 months old or younger
at the close of the taxable year, the amount of expenses deemed to have been paid equals
the maximum limit for one qualified individual under section 21(c) and (d) of the Internal
Revenue Code. If the child is older than 16 months of age but has not attained the age of
six years at the close of the taxable year, the amount of expenses deemed to have been paid
equals the amount the licensee would charge for the care of a child of the same age for the
same number of hours of care.
(c) If a married couple:
(1) has a child who has not attained the age of one year at the close of the taxable year;
(2) files a joint tax return for the taxable year; and
(3) does not participate in a dependent care assistance program as defined in section 129
of the Internal Revenue Code, in lieu of the actual employment related expenses paid for
that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of (i)
the combined earned income of the couple or (ii) the amount of the maximum limit for one
qualified individual under section 21(c) and (d) of the Internal Revenue Code will be deemed
to be the employment related expense paid for that child. The earned income limitation of
section 21(d) of the Internal Revenue Code shall not apply to this deemed amount. These
deemed amounts apply regardless of whether any employment-related expenses have been
paid.
(d) If the taxpayer is not required and does not file a federal individual income tax return
for the tax year, no credit is allowed for any amount paid to any person unless:
(1) the name, address, and taxpayer identification number of the person are included on
the return claiming the credit; or
(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue
Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name
and address of the person are included on the return claiming the credit.
In the case of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence
in attempting to provide the information required.
(e) In the case of a nonresident, part-year resident, or a person who has earned income
not subject to tax under this chapter including earned income excluded pursuant to section
290.0132, subdivision 10, the credit determined under section 21 of the Internal Revenue
Code must be allocated based on the ratio by which the earned income of the claimant and
the claimant's spouse from Minnesota sources bears to the total earned income of the claimant
and the claimant's spouse.
(f) For residents of Minnesota, the subtractions for military pay under section 290.0132,
subdivisions 11 and 12, are not considered "earned income not subject to tax under this
chapter."
(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the
Internal Revenue Code is not considered "earned income not subject to tax under this
chapter."
(h) For taxpayers with federal adjusted gross income in excess of deleted text begin $50,000deleted text end new text begin $50,990new text end , the
credit is equal to the lesser of the credit otherwise calculated under this subdivision, or the
amount equal to $600 minus five percent of federal adjusted gross income in excess of
deleted text begin $50,000deleted text end new text begin $50,990new text end for taxpayers with one qualified individual, or $1,200 minus five percent
of federal adjusted gross income in excess of deleted text begin $50,000deleted text end new text begin $50,990new text end for taxpayers with two or
more qualified individuals, but in no case is the credit less than zero.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.067, subdivision 2a, is amended to read:
(a) For purposes of this section, "income" means the sum of the
following:
(1) federal adjusted gross income deleted text begin as defined in section 62 of the Internal Revenue Codedeleted text end ;
and
(2) the sum of the following amounts to the extent not included in clause (1):
(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;
deleted text begin
(xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;
deleted text end
deleted text begin (xiv)deleted text end new text begin (xiii) new text end the amount of deduction allowed under section 220 or 223 of the Internal
Revenue Code;
deleted text begin (xv)deleted text end new text begin (xiv)new text end the amount deducted for tuition expenses under section 222 of the Internal
Revenue Code; deleted text begin and
deleted text end
deleted text begin (xvi)deleted text end new text begin (xv)new text end the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Codedeleted text begin .deleted text end new text begin ; and
new text end
new text begin
(xvi) alimony received to the extent not included in the recipient's income.
new text end
In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" means federal adjusted gross income reflected in the
fiscal year ending in the next calendar year. Federal adjusted gross income may 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.
(b) "Income" does not include:
(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
(2) amounts of any pension or annuity that were exclusively funded by the claimant or
spouse if the funding payments were not excluded from federal adjusted gross income in
the years when the payments were made;
(3) surplus food or other relief in kind supplied by a governmental agency;
(4) relief granted under chapter 290A;
(5) child support payments received under a temporary or final decree of dissolution or
legal separation; and
(6) 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.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.067, subdivision 2b, is amended
to read:
The commissioner shall adjust the dollar amount of
the income threshold at which the maximum credit begins to be reduced under subdivision
1 by the percentage determined pursuant to the provisions of section 1(f) of the Internal
Revenue Code, except that in section 1(f)(3)(B) the word deleted text begin "2016"deleted text end new text begin "2017"new text end shall be substituted
for the word deleted text begin "1992." For 2018, the commissioner shall then determine the percent change
from the 12 months ending on August 31, 2016, to the 12 months ending on August 31,
2017, and in each subsequent year, from the 12 months ending on August 31, 2016, to the
12 months ending on August 31 of the year preceding the taxable year.deleted text end new text begin "2016."new text end The
determination of the commissioner pursuant to this subdivision must not be considered a
"rule" and is not subject to the Administrative Procedure Act contained in chapter 14. The
threshold amount as adjusted must be rounded to the nearest $10 amount. If the amount
ends in $5, the amount is rounded up to the nearest $10 amount.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.0671, subdivision 1, is amended
to read:
(a) An individual who is a resident of Minnesota is
allowed a credit against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code, except that a taxpayer with no qualifying children who has attained
the age of 21, but not attained age 65 before the close of the taxable year and is otherwise
eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit.
(b) For individuals with no qualifying children, the credit equals 2.10 percent of the first
deleted text begin $6,180deleted text end new text begin $6,480new text end of earned income. The credit is reduced by 2.01 percent of earned income
or adjusted gross income, whichever is greater, in excess of deleted text begin $8,130deleted text end new text begin $8,530new text end , but in no case
is the credit less than zero.
(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first
deleted text begin $11,120deleted text end new text begin $11,670new text end of earned income. The credit is reduced by 6.02 percent of earned income
or adjusted gross income, whichever is greater, in excess of deleted text begin $21,190deleted text end new text begin $22,340new text end , but in no case
is the credit less than zero.
(d) For individuals with two or more qualifying children, the credit equals 11 percent
of the first deleted text begin $18,240deleted text end new text begin $19,130 new text end of earned income. The credit is reduced by 10.82 percent of
earned income or adjusted gross income, whichever is greater, in excess of deleted text begin $25,130deleted text end new text begin $26,360new text end ,
but in no case is the credit less than zero.
(e) For a part-year resident, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).
(f) For a person who was a resident for the entire tax year and has earned income not
subject to tax under this chapter, including income excluded under section 290.0132,
subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross
income reduced by the earned income not subject to tax under this chapter over federal
adjusted gross income. For purposes of this paragraph, the following clauses are not
considered "earned income not subject to tax under this chapter":
(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
(3) income derived from an Indian reservation by an enrolled member of the reservation
while living on the reservation.
(g) For tax years beginning after December 31, deleted text begin 2013deleted text end new text begin 2018new text end , the deleted text begin $8,130deleted text end new text begin $8,530new text end in paragraph
(b), deleted text begin the $21,190deleted text end new text begin $22,230new text end in paragraph (c), and the deleted text begin $25,130deleted text end new text begin $26,360new text end in paragraph (d), after
being adjusted for inflation under subdivision 7, are each increased by deleted text begin $5,000deleted text end new text begin $5,700 new text end for
married taxpayers filing joint returns. For tax years beginning after December 31, deleted text begin 2013deleted text end new text begin
2018new text end , the commissioner shall annually adjust the deleted text begin $5,000deleted text end new text begin $5,700new text end by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B), the word deleted text begin "2008"deleted text end new text begin "2017"new text end shall be substituted for the word deleted text begin "1992." For 2014, the
commissioner shall then determine the percent change from the 12 months ending on August
31, 2008, to the 12 months ending on August 31, 2013, and in each subsequent year, from
the 12 months ending on August 31, 2008, to the 12 months ending on August 31 of the
year preceding the taxable year.deleted text end new text begin "2016."new text end The earned income thresholds as adjusted for
inflation must be rounded to the nearest $10. If the amount ends in $5, the amount is rounded
up to the nearest $10. The determination of the commissioner under this subdivision is not
a rule under the Administrative Procedure Act.
(h) The commissioner shall construct tables showing the amount of the credit at various
income levels and make them available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may graduate the transition
between income brackets.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0671, subdivision 7, is amended to read:
The earned income amounts used to calculate the credit
and the income thresholds at which the maximum credit begins to be reduced in subdivision
1 must be adjusted for inflation. The commissioner shall adjust by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B) the word deleted text begin "2013"deleted text end new text begin "2017"new text end shall be substituted for the word deleted text begin "1992." For 2015, the
commissioner shall then determine the percent change from the 12 months ending on August
31, 2013, to the 12 months ending on August 31, 2014, and in each subsequent year, from
the 12 months ending on August 31, 2013, to the 12 months ending on August 31 of the
year preceding the taxable year.deleted text end new text begin "2016."new text end The earned income thresholds as adjusted for
inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount
is rounded up to the nearest $10 amount. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.0672, subdivision 1, is amended
to read:
(a) For purposes of this section, the following terms have
the meanings given.
(b) "Long-term care insurance" means a policy that:
(1) qualifies for a deduction under section 213 of the Internal Revenue Code, disregarding
the adjusted gross income test; or meets the requirements given in section 62A.46; or provides
similar coverage issued under the laws of another jurisdiction; and
(2) has a lifetime long-term care benefit limit of not less than $100,000; and
(3) has been offered in compliance with the inflation protection requirements of section
62S.23.
(c) "Qualified beneficiary" means the taxpayer or the taxpayer's spouse.
(d) "Premiums deducted in determining deleted text begin federaldeleted text end taxablenew text begin netnew text end income" means the lesser of
(1) long-term care insurance premiums that qualify as deductions under section 213 of the
Internal Revenue Code; and (2) the total amount deductible for medical deleted text begin caredeleted text end new text begin expensesnew text end under
section 213 of the Internal Revenue Code.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0672, subdivision 2, is amended to read:
A taxpayer is allowed a credit against the tax imposed by this chapter
for long-term care insurance policy premiums paid during the tax year. The credit for each
policy equals 25 percent of premiums paid to the extent not deducted in determining deleted text begin federaldeleted text end
taxablenew text begin netnew text end income. A taxpayer may claim a credit for only one policy for each qualified
beneficiary. A maximum of $100 applies to each qualified beneficiary. The maximum total
credit allowed per year is $200 for married couples filing joint returns and $100 for all other
filers. For a nonresident or part-year resident, the credit determined under this section must
be allocated based on the percentage calculated under section 290.06, subdivision 2c,
paragraph (e).
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.0681, subdivision 1, is amended
to read:
(a) For purposes of this section, the following terms have
the meanings given.
(b) "Account" means the historic credit administration account in the special revenue
fund.
(c) "Office" means the State Historic Preservation Office of the Department of
Administration.
(d) "Project" means rehabilitation of a certified historic structure, as defined in section
47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is allowed a
federal credit.
(e) "Federal credit" means the credit allowed under section deleted text begin 47(a)(2)deleted text end new text begin 47(a)new text end of the Internal
Revenue Codenew text begin , except that the amount allowed is deemed to be allocated in the taxable year
that the project is placed in servicenew text end .
(f) "Placed in service" has the meaning used in section 47 of the Internal Revenue Code.
(g) "Qualified rehabilitation expenditures" has the meaning given in section 47 of the
Internal Revenue Code.
new text begin
This section is effective for applications for allocation certificates
submitted after December 31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.0681, subdivision 2, is amended
to read:
(a) A credit is allowed
against the tax imposed under this chapter equal to not more than 100 percent of the credit
allowed under section deleted text begin 47(a)(2)deleted text end new text begin 47(a)new text end of the Internal Revenue Code for a project. new text begin The credit
is payable in an amount equal to one-fifth of the total credit amount allowed in the five
taxable years beginning with the year the project is placed in service. new text end To qualify for the
credit:
(1) the project must receive Part 3 certification and be placed in service during the taxable
year; and
(2) the taxpayer must be allowed the federal credit and be issued a credit certificate for
the taxable year as provided in subdivision 4.
(b) The commissioner of administration may pay a grant in lieu of the credit. The grant
equals 90 percent of the credit that would be allowed for the project.new text begin The grant is payable
in an amount equal to one-fifth of 90 percent of the credit that would be allowed for the
project in the five taxable years beginning with the year the project is placed in service.
new text end
(c) In lieu of the credit under paragraph (a), an insurance company may claim a credit
against the insurance premiums tax imposed under chapter 297I.
new text begin
This section is effective for applications for allocation certificates
submitted after December 31, 2017.
new text end
Minnesota Statutes 2016, section 290.0681, subdivision 3, is amended to read:
(a) To qualify for a credit or grant under this section,
the developer of a project must apply to the office before the rehabilitation begins. The
application must contain the information and be in the form prescribed by the office. The
office may collect a fee for application of up to 0.5 percent of qualified rehabilitation
expenditures, up to $40,000, based on estimated qualified rehabilitation expenditures, to
offset costs associated with personnel and administrative expenses related to administering
the credit and preparing the economic impact report in subdivision 9. Application fees are
deposited in the account. The application must indicate if the application is for a credit or
a grant in lieu of the credit or a combination of the two and designate the taxpayer qualifying
for the credit or the recipient of the grant.
(b) Upon approving an application for credit, the office shall issue allocation certificates
that:
(1) verify eligibility for the credit or grant;
(2) state the amount of credit or grant anticipated with the project, with the credit amount
equal to 100 percent and the grant amount equal to 90 percent of the federal credit anticipated
in the application;
(3) state that the credit or grant allowed may increase or decrease if the federal credit
the project receives at the time it is placed in service is different than the amount anticipated
at the time the allocation certificate is issued; and
(4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer or
grant recipient is entitled to receive new text begin one-fifth of the total amount of either new text end the credit or new text begin the
new text end grant at the time the project is placed in service, provided that date is within three calendar
years following the issuance of the allocation certificate.
(c) The office, in consultation with the commissioner, shall determine if the project is
eligible for a credit or a grant under this section and must notify the developer in writing
of its determination. Eligibility for the credit is subject to review and audit by the
commissioner.
(d) The federal credit recapture and repayment requirements under section 50 of the
Internal Revenue Code do not apply to the credit allowed under this section.
(e) Any decision of the office under paragraph (c) may be challenged as a contested case
under chapter 14. The contested case proceeding must be initiated within 45 days of the
date of written notification by the office.
new text begin
This section is effective for applications for allocation certificates
submitted after December 31, 2017.
new text end
Minnesota Statutes 2016, section 290.0681, subdivision 4, is amended to read:
(a)(1) The developer of a project for which the
office has issued an allocation certificate must notify the office when the project is placed
in service. Upon verifying that the project has been placed in service, and was allowed a
federal credit, the office must issue a credit certificate to the taxpayer designated in the
application or must issue a grant to the recipient designated in the application. The credit
certificate must state the amount of the credit.
(2) The credit amount equals the federal credit allowed for the project.
(3) The grant amount equals 90 percent of the federal credit allowed for the project.
(b) The recipient of a credit certificate may assign the certificate to another taxpayernew text begin
before the first one-fifth payment is claimednew text end , which is then allowed the credit under this
section or section 297I.20, subdivision 3. An assignment is not valid unless the assignee
notifies the commissioner within 30 days of the date that the assignment is made. The
commissioner shall prescribe the forms necessary for notifying the commissioner of the
assignment of a credit certificate and for claiming a credit by assignment.
(c) Credits passed through to partners, members, shareholders, or owners pursuant to
subdivision 5 are not an assignment of a credit certificate under this subdivision.
(d) A grant agreement between the office and the recipient of a grant may allow the
grant to be issued to another individual or entity.
new text begin
This section is effective for applications for allocation certificates
submitted after December 31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.0684, subdivision 2, is amended
to read:
(a) An individual who is a resident of Minnesota is allowed a
credit against the tax imposed by this chapter. The credit is not allowed to an individual
who is eligible to be claimed as a dependent, as defined in sections 151 and 152 of the
Internal Revenue Code. The credit may not exceed the liability for tax under this chapter.
(b) The amount of the credit allowed equals 50 percent of contributions for the taxable
year. The maximum credit is $500, subject to the phaseout in paragraphs (c) and (d). In no
case is the credit less than zero.
(c) For individual filers, the maximum credit is reduced by two percent of adjusted gross
income in excess of deleted text begin $75,000deleted text end new text begin $76,490new text end .
(d) For married couples filing a joint return, the maximum credit is phased out as follows:
(1) for married couples with adjusted gross income in excess of deleted text begin $75,000deleted text end new text begin $76,490new text end , but
not more than deleted text begin $100,000deleted text end new text begin $101,990new text end , the maximum credit is reduced by one percent of adjusted
gross income in excess of deleted text begin $75,000deleted text end new text begin $76,490new text end ;
(2) for married couples with adjusted gross income in excess of deleted text begin $100,000deleted text end new text begin $101,990new text end , but
not more than deleted text begin $135,000deleted text end new text begin $137,680new text end , the maximum credit is $250; and
(3) for married couples with adjusted gross income in excess of deleted text begin $135,000deleted text end new text begin $137,680new text end , the
maximum credit is $250, reduced by one percent of adjusted gross income in excess of
deleted text begin $135,000deleted text end new text begin $137,680new text end .
(e) The income thresholds in paragraphs (c) and (d) used to calculate the maximum
credit must be adjusted for inflation. The commissioner shall adjust the income thresholds
by the percentage determined under the provisions of section 1(f) of the Internal Revenue
Code, except that in section 1(f)(3)(B) the word deleted text begin "2016"deleted text end new text begin "2017"new text end is substituted for the word
deleted text begin "1992." For 2018, the commissioner shall then determine the percent change from the 12
months ending on August 31, 2016, to the 12 months ending on August 31, 2017, and in
each subsequent year, from the 12 months ending on August 31, 2016, to the 12 months
ending on August 31 of the year preceding the taxable year.deleted text end new text begin "2016."new text end The income thresholds
as adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends in
$5, the amount is rounded up to the nearest $10 amount. The determination of the
commissioner under this subdivision is not subject to chapter 14, including section 14.386.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0802, subdivision 2, is amended to read:
(a) A qualified individual is allowed a subtraction from federal
deleted text begin taxabledeleted text end new text begin adjusted grossnew text end income of the individual's subtraction base amount. The excess of
the subtraction base amount over the taxable net income computed without regard to the
subtraction for the elderly or disabled under section 290.0132, subdivision 5, may be used
to reduce the amount of a lump sum distribution subject to tax under section 290.032.
(b)(1) The initial subtraction base amount equals
(i) $12,000 for a married taxpayer filing a joint return if a spouse is a qualified individual,
(ii) $9,600 for a single taxpayer, and
(iii) $6,000 for a married taxpayer filing a separate federal return.
(2) The qualified individual's initial subtraction base amount, then, must be reduced by
the sum of nontaxable retirement and disability benefits and one-half of the amount of
adjusted gross income in excess of the following thresholds:
(i) $18,000 for a married taxpayer filing a joint return if both spouses are qualified
individuals,
(ii) $14,500 for a single taxpayer or for a married couple filing a joint return if only one
spouse is a qualified individual, and
(iii) $9,000 for a married taxpayer filing a separate federal return.
(3) In the case of a qualified individual who is under the age of 65, the maximum amount
of the subtraction base may not exceed the taxpayer's disability income.
(4) The resulting amount is the subtraction base amount.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
new text begin
An individual may elect to claim a state standard deduction in
lieu of state itemized deductions. However, in the case of a married individual filing a
separate return, if one spouse elects to claim state itemized deductions, the other spouse is
not allowed a state standard deduction.
new text end
new text begin
Based on the election under subdivision 1, individuals are allowed
to subtract from federal adjusted gross income the state standard deduction or the state
itemized deduction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended
to read:
For purposes of the tax imposed by this section, the following
terms have the meanings given.
(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:
(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;
(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:
(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;new text begin
and
new text end
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled person;
(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);
(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);
(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2; and
(6) the amount of addition required by section 290.0131, subdivisions 9 deleted text begin to 11deleted text end new text begin , 10, and
16new text end ;
new text begin
(7) the deduction allowed under section 199A of the Internal Revenue Code;
new text end
less the sum of the amounts determined under the following:
(i) interest income as defined in section 290.0132, subdivision 2;
(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;
(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;
(iv) amounts subtracted from federal deleted text begin taxabledeleted text end new text begin adjusted grossnew text end income as provided by
section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26new text begin to 29new text end ; deleted text begin and
deleted text end
(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c)new text begin ; and
new text end
new text begin (vi) the amount which would have been an allowable deduction under section 165(h) of
the Internal Revenue Code, as amended through December 16, 2016, and which was taken
as a Minnesota itemized deduction under section 290.01, subdivision 29new text end .
In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Codenew text begin , except that alternative minimum
taxable income must be increased by the amount of the addition under section 290.0131,
subdivision 15new text end .
(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.
(c) "Net minimum tax" means the minimum tax imposed by this section.
(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.
(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.091, subdivision 3, is amended to read:
(a) For purposes of computing the alternative minimum
tax, the exemption amount isdeleted text begin , for taxable years beginning after December 31, 2005, $60,000deleted text end new text begin
$75,760new text end for married couples filing joint returns, deleted text begin $30,000deleted text end new text begin $37,880new text end for married individuals
filing separate returns, estates, and trusts, and deleted text begin $45,000deleted text end new text begin $56,820new text end for unmarried individuals.
(b) The exemption amount determined under this subdivision is subject to the phase out
under section deleted text begin 55(d)(3)deleted text end new text begin 55(d)(2)new text end of the Internal Revenue Code, except that alternative
minimum taxable income as determined under this section must be substituted in the
computation of the phase out.
(c) For taxable years beginning after December 31, deleted text begin 2006deleted text end new text begin 2018new text end , the exemption amount
under paragraph (a) must be adjusted for inflation. The commissioner shall adjust the
exemption amount by the percentage determined pursuant to the provisions of section 1(f)
of the Internal Revenue Code, except that in section 1(f)(3)(B) the word deleted text begin "2005"deleted text end new text begin "2017"new text end
shall be substituted for the word deleted text begin "1992." For 2007, the commissioner shall then determine
the percent change from the 12 months ending on August 31, 2005, to the 12 months ending
on August 31, 2006, and in each subsequent year, from the 12 months ending on August
31, 2005, to the 12 months ending on August 31 of the year preceding the taxable year.deleted text end new text begin
"2016."new text end The exemption amount as adjusted must be rounded to the nearest $10. If the amount
ends in $5, it must be rounded up to the nearest $10 amount. The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0922, subdivision 1, is amended to read:
(a) In addition to the tax imposed by this chapter without
regard to this section, the franchise tax imposed on a corporation required to file under
section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation under
section 290.9725 for the taxable year includes a tax equal to the following amounts:
If the sum of the corporation's Minnesota property, payrolls, and sales or receipts is: |
the tax equals: |
||||||||
less than |
$ |
deleted text begin
930,000 deleted text end new text begin 990,000 new text end |
$ |
0 |
|||||
$ |
deleted text begin
930,000 deleted text end new text begin 990,000 new text end |
to |
$ |
deleted text begin
1,869,999 deleted text end new text begin 1,989,999 new text end |
$ |
deleted text begin
190 deleted text end new text begin 200 new text end |
|||
$ |
deleted text begin
1,870,000 deleted text end new text begin 1,990,000 new text end |
to |
$ |
deleted text begin
9,339,999 deleted text end new text begin 9,959,999 new text end |
$ |
deleted text begin
560 deleted text end new text begin 600 new text end |
|||
$ |
deleted text begin
9,340,000 deleted text end new text begin 9,960,000 new text end |
to |
$ |
deleted text begin
18,679,999 deleted text end new text begin 19,929,999 new text end |
$ |
deleted text begin
1,870 deleted text end new text begin 1,990 new text end |
|||
$ |
deleted text begin
18,680,000 deleted text end new text begin 19,930,000 new text end |
to |
$ |
deleted text begin
37,359,999 deleted text end new text begin 39,859,999 new text end |
$ |
deleted text begin
3,740 deleted text end new text begin 3,990 new text end |
|||
$ |
deleted text begin
37,360,000 deleted text end new text begin 39,860,000 new text end |
or |
more |
$ |
deleted text begin
9,340 deleted text end new text begin 9,960 new text end |
(b) A tax is imposed for each taxable year on a corporation required to file a return under
section 289A.12, subdivision 3, that is treated as an "S" corporation under section 290.9725
and on a partnership required to file a return under section 289A.12, subdivision 3, other
than a partnership that derives over 80 percent of its income from farming. The tax imposed
under this paragraph is due on or before the due date of the return for the taxpayer due under
section 289A.18, subdivision 1. The commissioner shall prescribe the return to be used for
payment of this tax. The tax under this paragraph is equal to the following amounts:
If the sum of the S corporation's or partnership's Minnesota property, payrolls, and sales or receipts is: |
the tax equals: |
||||||||
less than |
$ |
deleted text begin
930,000 deleted text end new text begin 990,000 new text end |
$ |
0 |
|||||
$ |
deleted text begin
930,000 deleted text end new text begin 990,000 new text end |
to |
$ |
deleted text begin
1,869,999 deleted text end new text begin 1,989,999 new text end |
$ |
deleted text begin
190 deleted text end new text begin 200 new text end |
|||
$ |
deleted text begin
1,870,000 deleted text end new text begin 1,990,000 new text end |
to |
$ |
deleted text begin
9,339,999 deleted text end new text begin 9,959,999 new text end |
$ |
deleted text begin
560 deleted text end new text begin 600 new text end |
|||
$ |
deleted text begin
9,340,000 deleted text end new text begin 9,960,000 new text end |
to |
$ |
deleted text begin
18,679,999 deleted text end new text begin 19,929,999 new text end |
$ |
deleted text begin
1,870 deleted text end new text begin 1,990 new text end |
|||
$ |
deleted text begin
18,680,000 deleted text end new text begin 19,930,000 new text end |
to |
$ |
deleted text begin
37,359,999 deleted text end new text begin 39,859,999 new text end |
$ |
deleted text begin
3,740 deleted text end new text begin 3,990 new text end |
|||
$ |
deleted text begin
37,360,000 deleted text end new text begin 39,860,000 new text end |
or |
more |
$ |
deleted text begin
9,340 deleted text end new text begin 9,960 new text end |
(c) The commissioner shall adjust the dollar amounts of both the tax and the property,
payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage
determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
that in section 1(f)(3)(B) the word deleted text begin "2012"deleted text end new text begin "2017"new text end must be substituted for the word deleted text begin "1992."
For 2014, the commissioner shall determine the percentage change from the 12 months
ending on August 31, 2012, to the 12 months ending on August 31, 2013, and in each
subsequent year, from the 12 months ending on August 31, 2012, to the 12 months ending
on August 31 of the year preceding the taxable year.deleted text end new text begin "2016."new text end The determination of the
commissioner pursuant to this subdivision is not a "rule" subject to the Administrative
Procedure Act contained in chapter 14. The tax amounts as adjusted must be rounded to the
nearest $10 amount and the threshold amounts must be adjusted to the nearest $10,000
amount. For tax amounts that end in $5, the amount is rounded up to the nearest $10 amount
and for the threshold amounts that end in $5,000, the amount is rounded up to the nearest
$10,000.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.095, subdivision 4, is amended to read:
The following modifications shall be made
in computing a net operating loss in any taxable year and also in computing the taxable net
income for any taxable year before a net operating loss deduction shall be allowed:
(a) No deduction shall be allowed for or with respect to losses connected with income
producing activities if the income therefrom would not be required to be either assignable
to this state or included in computing the taxpayer's taxable net income.
(b) A net operating loss deduction shall not be allowed.
(c) The amount deductible on account of losses from sales or exchanges of capital assets
shall not exceed the amount includable on account of gains from sales or exchanges of
capital assets.
(d) Renegotiation of profits for a prior taxable year under the renegotiation laws of the
United States of America, including renegotiation of the profits with a subcontractor, shall
not enter into the computation.
(e) Federal income and excess profits taxes shall not be allowed as a deduction.
new text begin
(f) The 80-percent limitation under section 172(a)(2) of the Internal Revenue Code does
not apply to the computations for corporate taxpayers under this section.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.17, subdivision 2, is amended
to read:
The income of a
taxpayer subject to the allocation rules that is not derived from the conduct of a trade or
business must be assigned in accordance with paragraphs (a) to (f):
(a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in section
3401(a) deleted text begin anddeleted text end new text begin ,new text end (f)new text begin , and (i)new text end of the Internal Revenue Code is assigned to this state if, and to the
extent that, the work of the employee is performed within it; all other income from such
sources is treated as income from sources without this state.
Severance pay shall be considered income from labor or personal or professional services.
(2) In the case of an individual who is a nonresident of Minnesota and who is an athlete
or entertainer, income from compensation for labor or personal services performed within
this state shall be determined in the following manner:
(i) the amount of income to be assigned to Minnesota for an individual who is a
nonresident salaried athletic team employee shall be determined by using a fraction in which
the denominator contains the total number of days in which the individual is under a duty
to perform for the employer, and the numerator is the total number of those days spent in
Minnesota. For purposes of this paragraph, off-season training activities, unless conducted
at the team's facilities as part of a team imposed program, are not included in the total number
of duty days. Bonuses earned as a result of play during the regular season or for participation
in championship, play-off, or all-star games must be allocated under the formula. Signing
bonuses are not subject to allocation under the formula if they are not conditional on playing
any games for the team, are payable separately from any other compensation, and are
nonrefundable; and
(ii) the amount of income to be assigned to Minnesota for an individual who is a
nonresident, and who is an athlete or entertainer not listed in item (i), for that person's athletic
or entertainment performance in Minnesota shall be determined by assigning to this state
all income from performances or athletic contests in this state.
(3) For purposes of this section, amounts received by a nonresident as "retirement income"
as defined in section (b)(1) of the State Income Taxation of Pension Income Act, Public
Law 104-95, are not considered income derived from carrying on a trade or business or
from wages or other compensation for work an employee performed in Minnesota, and are
not taxable under this chapter.
(b) Income or gains from tangible property located in this state that is not employed in
the business of the recipient of the income or gains must be assigned to this state.
(c) Income or gains from intangible personal property not employed in the business of
the recipient of the income or gains must be assigned to this state if the recipient of the
income or gains is a resident of this state or is a resident trust or estate.
Gain on the sale of a partnership interest is allocable to this state in the ratio of the
original cost of partnership tangible property in this state to the original cost of partnership
tangible property everywhere, determined at the time of the sale. If more than 50 percent
of the value of the partnership's assets consists of intangibles, gain or loss from the sale of
the partnership interest is allocated to this state in accordance with the sales factor of the
partnership for its first full tax period immediately preceding the tax period of the partnership
during which the partnership interest was sold.
Gain on the sale of an interest in a single member limited liability company that is
disregarded for federal income tax purposes is allocable to this state as if the single member
limited liability company did not exist and the assets of the limited liability company are
personally owned by the sole member.
Gain on the sale of goodwill or income from a covenant not to compete that is connected
with a business operating all or partially in Minnesota is allocated to this state to the extent
that the income from the business in the year preceding the year of sale was allocable to
Minnesota under subdivision 3.
When an employer pays an employee for a covenant not to compete, the income allocated
to this state is in the ratio of the employee's service in Minnesota in the calendar year
preceding leaving the employment of the employer over the total services performed by the
employee for the employer in that year.
(d) Income from winnings on a bet made by an individual while in Minnesota is assigned
to this state. In this paragraph, "bet" has the meaning given in section 609.75, subdivision
2, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3).
(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the
taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
(f) For the purposes of this section, working as an employee shall not be considered to
be conducting a trade or business.
new text begin
This section is effective for wages paid after December 31, 2017.
new text end
Minnesota Statutes 2016, section 290.21, subdivision 4, is amended to read:
(a)(1) Eighty percent of
dividends received by a corporation during the taxable year from another corporation, in
which the recipient owns 20 percent or more of the stock, by vote and value, not including
stock described in section 1504(a)(4) of the Internal Revenue Code when the corporate
stock with respect to which dividends are paid does not constitute the stock in trade of the
taxpayer or would not be included in the inventory of the taxpayer, or does not constitute
property held by the taxpayer primarily for sale to customers in the ordinary course of the
taxpayer's trade or business, or when the trade or business of the taxpayer does not consist
principally of the holding of the stocks and the collection of the income and gains therefrom;
and
(2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
an affiliated company transferred in an overall plan of reorganization and the dividend is
eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as amended
through December 31, 1989;
(ii) the remaining 20 percent of dividends if the dividends are received from a corporation
which is subject to tax under section 290.36 and which is a member of an affiliated group
of corporations as defined by the Internal Revenue Code and the dividend is eliminated in
consolidation under Treasury Department Regulation 1.1502-14(a), as amended through
December 31, 1989, or is deducted under an election under section 243(b) of the Internal
Revenue Code; or
(iii) the remaining 20 percent of the dividends if the dividends are received from a
property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
member of an affiliated group of corporations as defined by the Internal Revenue Code and
either: (A) the dividend is eliminated in consolidation under Treasury Regulation
1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
under an election under section 243(b) of the Internal Revenue Code.
(b) Seventy percent of dividends received by a corporation during the taxable year from
another corporation in which the recipient owns less than 20 percent of the stock, by vote
or value, not including stock described in section 1504(a)(4) of the Internal Revenue Code
when the corporate stock with respect to which dividends are paid does not constitute the
stock in trade of the taxpayer, or does not constitute property held by the taxpayer primarily
for sale to customers in the ordinary course of the taxpayer's trade or business, or when the
trade or business of the taxpayer does not consist principally of the holding of the stocks
and the collection of income and gain therefrom.
(c) The dividend deduction provided in this subdivision shall be allowed only with
respect to dividends that are included in a corporation's Minnesota taxable net income for
the taxable year.
The dividend deduction provided in this subdivision does not apply to a dividend from
a corporation which, for the taxable year of the corporation in which the distribution is made
or for the next preceding taxable year of the corporation, is a corporation exempt from tax
under section 501 of the Internal Revenue Code.
The dividend deduction provided in this subdivision does not apply to a dividend received
from a real estate investment trust as defined in section 856 of the Internal Revenue Code.
The dividend deduction provided in this subdivision applies to the amount of regulated
investment company dividends only to the extent determined under section 854(b) of the
Internal Revenue Code.
The dividend deduction provided in this subdivision shall not be allowed with respect
to any dividend for which a deduction is not allowed under the provisions of section 246(c)new text begin
or 246Anew text end of the Internal Revenue Code.
(d) If dividends received by a corporation that does not have nexus with Minnesota under
the provisions of Public Law 86-272 are included as income on the return of an affiliated
corporation permitted or required to file a combined report under section 290.17, subdivision
4, or 290.34, subdivision 2, then for purposes of this subdivision the determination as to
whether the trade or business of the corporation consists principally of the holding of stocks
and the collection of income and gains therefrom shall be made with reference to the trade
or business of the affiliated corporation having a nexus with Minnesota.
(e) The deduction provided by this subdivision does not apply if the dividends are paid
by a FSC as defined in section 922 of the Internal Revenue Code.
(f) If one or more of the members of the unitary group whose income is included on the
combined report received a dividend, the deduction under this subdivision for each member
of the unitary business required to file a return under this chapter is the product of: (1) 100
percent of the dividends received by members of the group; (2) the percentage allowed
pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business income
apportionable to this state for the taxable year under section 290.191 or 290.20.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.34, is amended by adding a subdivision to
read:
new text begin
To be consistent with the
federal treatment of the interest expense limitation under section 163(j) of the Internal
Revenue Code for an affiliated group that includes an insurance company taxable under
chapter 297I and exempt from taxation under section 290.05, subdivision 1, clause (c), the
rules under this subdivision apply. In that case, the interest expense limitation under section
163(j) must be computed for the corporation subject to tax under this chapter using the
adjusted taxable income of the insurance companies that are part of the affiliated group and
taxed under chapter 297I.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.92, subdivision 1, is amended to read:
(1) Wages. For purposes of this section, the term "wages"
means the same as that term is defined in section 3401(a) deleted text begin anddeleted text end new text begin ,new text end (f)new text begin , and (i)new text end of the Internal
Revenue Code.
(2) Payroll period. For purposes of this section the term "payroll period" means a period
for which a payment of wages is ordinarily made to the employee by the employee's
employer, and the term "miscellaneous payroll period" means a payroll period other than a
daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual payroll
period.
(3) Employee. For purposes of this section the term "employee" means any resident
individual performing services for an employer, either within or without, or both within and
without the state of Minnesota, and every nonresident individual performing services within
the state of Minnesota, the performance of which services constitute, establish, and determine
the relationship between the parties as that of employer and employee. As used in the
preceding sentence, the term "employee" includes an officer of a corporation, and an officer,
employee, or elected official of the United States, a state, or any political subdivision thereof,
or the District of Columbia, or any agency or instrumentality of any one or more of the
foregoing.
(4) Employer. For purposes of this section the term "employer" means any person,
including individuals, fiduciaries, estates, trusts, partnerships, limited liability companies,
and corporations transacting business in or deriving any income from sources within the
state of Minnesota for whom an individual performs or performed any service, of whatever
nature, as the employee of such person, except that if the person for whom the individual
performs or performed the services does not have control of the payment of the wages for
such services, the term "employer," except for purposes of paragraph (1), means the person
having control of the payment of such wages. As used in the preceding sentence, the term
"employer" includes any corporation, individual, estate, trust, or organization which is
exempt from taxation under section 290.05 and further includes, but is not limited to, officers
of corporations who have control, either individually or jointly with another or others, of
the payment of the wages.
(5) Number of withholding exemptions claimed. For purposes of this section, the term
"number of withholding exemptions claimed" means the number of withholding exemptions
claimed in a withholding exemption certificate in effect under subdivision 5, except that if
no such certificate is in effect, the number of withholding exemptions claimed shall be
considered to be zero.
new text begin
This section is effective for wages paid after July 1, 2018.
new text end
Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 3, is amended
to read:
(a) "Income" means the sum of the following:
(1) federal adjusted gross income as defined in the Internal Revenue Code; and
(2) the sum of the following amounts to the extent not included in clause (1):
(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, to the extent the sum of amounts exceeds the retirement base amount for
the claimant and spouse;
(xii) to the extent not included in federal adjusted gross income, distributions received
by the claimant or spouse from a traditional or Roth style retirement account or plan;
(xiii) nontaxable scholarship or fellowship grants;
(xiv) deleted text begin the amount of deduction allowed under section 199 of the Internal Revenue Codedeleted text end new text begin
alimony received to the extent not included in the recipient's incomenew text end ;
(xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue
Code;
(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue
Code; deleted text begin and
deleted text end
(xvii) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Codenew text begin ;
new text end
new text begin
(xviii) the amount excluded from federal adjusted gross income for qualified moving
expense reimbursements under section 132(a)(6) of the Internal Revenue Code, as amended
through December 16, 2016; and
new text end
new text begin (xix) the amount deducted from federal adjusted gross income for moving expenses
under section 217 of the Internal Revenue Code, as amended through December 16, 2016new text end .
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.
(b) "Income" does not include:
(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
(2) 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;
(3) to the extent included in federal adjusted gross income, amounts contributed by the
claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed
the retirement base amount reduced by the amount of contributions excluded from federal
adjusted gross income, but not less than zero;
(4) surplus food or other relief in kind supplied by a governmental agency;
(5) relief granted under this chapter;
(6) child support payments received under a temporary or final decree of dissolution or
legal separation; or
(7) 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.
(c) The sum of the following amounts may be subtracted from income:
(1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
(2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
(3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
(4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
(5) for the claimant's fifth dependent, the exemption amount; and
(6) if the claimant or 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.
(d)new text begin (1)new text end For purposes of this subdivision, the "exemption amount" means deleted text begin the exemption
amount under section 151(d) of the Internal Revenue Code for the taxable year for which
the income is reported; "retirement base amount" means the deductible amount for the
taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal Revenue
Code, adjusted for inflation as provided in section 219(b)(5)(C) of the Internal Revenue
Code, without regard to whether the claimant or spouse claimed a deduction; and "traditional
or Roth style retirement account or plan" means retirement plans under sections 401, 403,
408, 408A, and 457 of the Internal Revenue Code.deleted text end new text begin : $4,150. For taxable years beginning
after December 31, 2018, the commissioner shall annually adjust the $4,150 by the percentage
determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, as
amended through March 31, 2018. The exemption amount as adjusted for inflation must be
rounded to the nearest $10. The determination of the commissioner under this subdivision
is not a rule under the Administrative Procedure Act, including section 14.386; and
new text end
new text begin
(2) "retirement base amount" means the deductible amount for the taxable year for the
claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for
inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard
to whether the claimant or spouse claimed a deduction, and "traditional or Roth-style
retirement account or plan" means retirement plans under sections 401, 403, 408, 408A,
and 457 of the Internal Revenue Code.
new text end
new text begin
This section is effective for property tax refunds based on property
taxes payable after December 31, 2018, and rent constituting property taxes payable after
December 31, 2017.
new text end
Minnesota Statutes 2016, section 290A.03, subdivision 12, is amended to read:
(a) "Gross rent" means rental paid for the right of occupancy, at
arm's length, of a homestead, exclusive of charges for any medical services furnished by
the landlord as a part of the rental agreement, whether expressly set out in the rental
agreement or not.
(b) The gross rent of a resident of a nursing home or intermediate care facility is deleted text begin $350deleted text end new text begin
$490new text end per month. The gross rent of a resident of an adult foster care home is deleted text begin $550deleted text end new text begin $760new text end per
month. Beginning for rent paid in deleted text begin 2002deleted text end new text begin 2019new text end , the commissioner shall annually adjust for
inflation the gross rent amounts stated in this paragraph. The adjustment must be made in
accordance with section 1(f) of the Internal Revenue Code, except that for purposes of this
paragraph the percentage increase shall be determined from the year ending on June 30,
deleted text begin 2001deleted text end new text begin 2017new text end , to the year ending on June 30 of the year in which the rent is paid. The
commissioner shall round the gross rents to the nearest $10 amount. If the amount ends in
$5, the commissioner shall round it up to the next $10 amount. The determination of the
commissioner under this paragraph is not a rule under the Administrative Procedure Act.
(c) If the landlord and tenant have not dealt with each other at arm's length and the
commissioner determines that the gross rent charged was excessive, the commissioner may
adjust the gross rent to a reasonable amount for purposes of this chapter.
(d) Any amount paid by a claimant residing in property assessed pursuant to section
273.124, subdivision 3, 4, 5, or 6 for occupancy in that property shall be excluded from
gross rent for purposes of this chapter. However, property taxes imputed to the homestead
of the claimant or the dwelling unit occupied by the claimant that qualifies for homestead
treatment pursuant to section 273.124, subdivision 3, 4, 5, or 6 shall be included within the
term "property taxes payable" as defined in subdivision 13, notwithstanding the fact that
ownership is not in the name of the claimant.
new text begin
This section is effective for refunds based on rent paid after
December 31, 2017, and property taxes payable after December 31, 2018.
new text end
Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 15, is amended
to read:
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended through deleted text begin December 16, 2016deleted text end new text begin March 31, 2018new text end .
new text begin
This section is effective for property tax refunds based on property
taxes payable after December 31, 2018, and rent paid after December 31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 291.005, subdivision 1, is amended
to read:
Unless the context otherwise clearly requires, the following terms
used in this chapter shall have the following meanings:
(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.
(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
increased by the value of any property in which the decedent had a qualifying income interest
for life and for which an election was made under section 291.03, subdivision 1d, for
Minnesota estate tax purposes, but was not made for federal estate tax purposes.
(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,
as amended through deleted text begin December 16, 2016deleted text end new text begin March 31, 2018new text end .
(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included in the estate which has its situs outside Minnesota,
and (b) including any property omitted from the federal gross estate which is includable in
the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.
(5) "Nonresident decedent" means an individual whose domicile at the time of death
was not in Minnesota.
(6) "Personal representative" means the executor, administrator or other person appointed
by the court to administer and dispose of the property of the decedent. If there is no executor,
administrator or other person appointed, qualified, and acting within this state, then any
person in actual or constructive possession of any property having a situs in this state which
is included in the federal gross estate of the decedent shall be deemed to be a personal
representative to the extent of the property and the Minnesota estate tax due with respect
to the property.
(7) "Resident decedent" means an individual whose domicile at the time of death was
in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply
to determinations of domicile under this chapter.
(8) "Situs of property" means, with respect to:
(i) real property, the state or country in which it is located;
(ii) tangible personal property, the state or country in which it was normally kept or
located at the time of the decedent's death or for a gift of tangible personal property within
three years of death, the state or country in which it was normally kept or located when the
gift was executed;
(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and
(iv) intangible personal property, the state or country in which the decedent was domiciled
at death or for a gift of intangible personal property within three years of death, the state or
country in which the decedent was domiciled when the gift was executed.
For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent. If
the pass-through entity is owned by a person or persons in addition to the decedent, ownership
of the property is attributed to the decedent in proportion to the decedent's capital ownership
share of the pass-through entity.
(9) "Pass-through entity" includes the following:
(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;
(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
(iii) a single-member limited liability company or similar entity, regardless of whether
it is taxed as an association or is disregarded for federal income tax purposes under Code
of Federal Regulations, title 26, section 301.7701-3; or
(iv) a trust to the extent the property is includible in the decedent's federal gross estate;
but excludes
(v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under section
6 of the Securities Exchange Act, United States Code, title 15, section 78f.
new text begin
This section is effective retroactively for estates of decedents
dying after December 31, 2017.
new text end
Minnesota Statutes 2016, section 297A.68, subdivision 25, is amended to read:
(a) The sale of tangible personal
property primarily used in a trade or business is exempt if the sale is not made in the normal
course of business of selling that kind of property and if one of the following conditions is
satisfied:
(1) the sale occurs in a transaction subject to or described in section 118, 331, 332, 336,
337, 338, 351, 355, 368, 721, 731, 1031, or 1033 of the Internal Revenue Codenew text begin , as amended
through December 16, 2016new text end ;
(2) the sale is between members of a controlled group as defined in section 1563(a) of
the Internal Revenue Code;
(3) the sale is a sale of farm machinery;
(4) the sale is a farm auction sale;
(5) the sale is a sale of substantially all of the assets of a trade or business; or
(6) the total amount of gross receipts from the sale of trade or business property made
during the calendar month of the sale and the preceding 11 calendar months does not exceed
$1,000.
The use, storage, distribution, or consumption of tangible personal property acquired as
a result of a sale exempt under this subdivision is also exempt.
(b) For purposes of this subdivision, the following terms have the meanings given.
(1) A "farm auction" is a public auction conducted by a licensed auctioneer if substantially
all of the property sold consists of property used in the trade or business of farming and
property not used primarily in a trade or business.
(2) "Trade or business" includes the assets of a separate division, branch, or identifiable
segment of a trade or business if, before the sale, the income and expenses attributable to
the separate division, branch, or identifiable segment could be separately ascertained from
the books of account or record (the lease or rental of an identifiable segment does not qualify
for the exemption).
(3) A "sale of substantially all of the assets of a trade or business" must occur as a single
transaction or a series of related transactions within the 12-month period beginning on the
date of the first sale of assets intended to qualify for the exemption provided in paragraph
(a), clause (5).
new text begin
This section is effective retroactively for sales and purchases
made after December 31, 2017.
new text end
Minnesota Statutes 2016, section 297B.03, is amended to read:
There is specifically exempted from the provisions of this chapter and from computation
of the amount of tax imposed by it the following:
(1) purchase or use, including use under a lease purchase agreement or installment sales
contract made pursuant to section 465.71, of any motor vehicle by the United States and its
agencies and instrumentalities and by any person described in and subject to the conditions
provided in section 297A.67, subdivision 11;
(2) purchase or use of any motor vehicle by any person who was a resident of another
state or country at the time of the purchase and who subsequently becomes a resident of
Minnesota, provided the purchase occurred more than 60 days prior to the date such person
began residing in the state of Minnesota and the motor vehicle was registered in the person's
name in the other state or country;
(3) purchase or use of any motor vehicle by any person making a valid election to be
taxed under the provisions of section 297A.90;
(4) purchase or use of any motor vehicle previously registered in the state of Minnesota
when such transfer constitutes a transfer within the meaning of section 118, 331, 332, 336,
337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal Revenue Codenew text begin ,
as amended through December 16, 2016new text end ;
(5) purchase or use of any vehicle owned by a resident of another state and leased to a
Minnesota-based private or for-hire carrier for regular use in the transportation of persons
or property in interstate commerce provided the vehicle is titled in the state of the owner or
secured party, and that state does not impose a sales tax or sales tax on motor vehicles used
in interstate commerce;
(6) purchase or use of a motor vehicle by a private nonprofit or public educational
institution for use as an instructional aid in automotive training programs operated by the
institution. "Automotive training programs" includes motor vehicle body and mechanical
repair courses but does not include driver education programs;
(7) purchase of a motor vehicle by an ambulance service licensed under section 144E.10
when that vehicle is equipped and specifically intended for emergency response or for
providing ambulance service;
(8) purchase of a motor vehicle by or for a public library, as defined in section 134.001,
subdivision 2, as a bookmobile or library delivery vehicle;
(9) purchase of a ready-mixed concrete truck;
(10) purchase or use of a motor vehicle by a town for use exclusively for road
maintenance, including snowplows and dump trucks, but not including automobiles, vans,
or pickup trucks;
(11) purchase or use of a motor vehicle by a corporation, society, association, foundation,
or institution organized and operated exclusively for charitable, religious, or educational
purposes, except a public school, university, or library, but only if the vehicle is:
(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
passenger automobile, as defined in section 168.002, if the automobile is designed and used
for carrying more than nine persons including the driver; and
(ii) intended to be used primarily to transport tangible personal property or individuals,
other than employees, to whom the organization provides service in performing its charitable,
religious, or educational purpose;
(12) purchase of a motor vehicle for use by a transit provider exclusively to provide
transit service is exempt if the transit provider is either (i) receiving financial assistance or
reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29,
473.388, or 473.405;
(13) purchase or use of a motor vehicle by a qualified business, as defined in section
469.310, located in a job opportunity building zone, if the motor vehicle is principally
garaged in the job opportunity building zone and is primarily used as part of or in direct
support of the person's operations carried on in the job opportunity building zone. The
exemption under this clause applies to sales, if the purchase was made and delivery received
during the duration of the job opportunity building zone. The exemption under this clause
also applies to any local sales and use tax;
(14) purchase of a leased vehicle by the lessee who was a participant in a lease-to-own
program from a charitable organization that is:
(i) described in section 501(c)(3) of the Internal Revenue Code; and
(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4; and
(15) purchase of a motor vehicle used exclusively as a mobile medical unit for the
provision of medical or dental services by a federally qualified health center, as defined
under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget
Reconciliation Act of 1990.
new text begin
This section is effective retroactively for sales and purchases
made after December 31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 462D.06, subdivision 1, is amended
to read:
(a) As provided in section 290.0132, subdivision 25, an
account holder is allowed a subtraction from deleted text begin thedeleted text end federal deleted text begin taxabledeleted text end new text begin adjusted grossnew text end income equal
to interest or dividends earned on the first-time home buyer savings account during the
taxable year.
(b) The subtraction under paragraph (a) is allowed each year for the taxable years
including and following the taxable year in which the account was established. No person
other than the account holder is allowed a subtraction under this section.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 462D.06, subdivision 2, is amended
to read:
(a) As provided in section 290.0131, subdivision 14, an account
holder must add to federal deleted text begin taxabledeleted text end new text begin adjusted grossnew text end income the following amounts:
(1) the amount in excess of the total contributions for all taxable years that is withdrawn
and used for other than eligible costs, or for a transfer permitted under section 462D.04,
subdivision 2; and
(2) the amount remaining in the first-time home buyer savings account at the close of
the tenth taxable year that exceeds the total contributions to the account for all taxable years.
(b) For an account that received a transfer under section 462D.04, subdivision 2, the
ten-year period under paragraph (a), clause (2), ends at the close of the earliest taxable year
that applies to either account under that clause.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 469.316, subdivision 1, is amended to read:
An individual, estate, or trust operating a trade or business
in a job opportunity building zone, and an individual, estate, or trust making a qualifying
investment in a qualified business operating in a job opportunity building zone qualifies for
the exemptions from taxes imposed under chapter 290, as provided in this section. The
exemptions provided under this section apply only to the extent that the income otherwise
would be taxable under chapter 290. Subtractions under this section from new text begin federal adjusted
gross income, new text end federal taxable income, alternative minimum taxable income, or any other
base subject to tax are limited to the amount that otherwise would be included in the tax
base absent the exemption under this section. This section applies only to taxable years
beginning during the duration of the job opportunity building zone.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
new text begin
Minnesota Statutes 2016, sections 290.0131, subdivisions 7 and 11; 290.0133,
subdivisions 13 and 14; and 290.10, subdivision 2,
new text end
new text begin
are repealed.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 16A.152, is amended by adding a subdivision
to read:
new text begin
(a) The commissioner of revenue must make reductions
to the individual income tax rates and the corporate franchise tax rate in section 290.06,
subdivisions 1 and 2c, and the alternative minimum tax rates in sections 290.091 and
290.0921, by one-tenth of one percentage point if, on the basis of a November forecast of
general fund revenues and expenditures, the commissioner of management and budget
determines that the following conditions have been met:
new text end
new text begin
(1) the provisions of subdivision 2, paragraph (a), clauses (1) to (4), are satisfied; and
new text end
new text begin
(2) for a forecast occurring in an even-numbered year, revenues exceed expenditures,
excluding any carryforward amounts, at the close of the next biennium and the subsequent
biennium by an amount greater than the revenue reduction resulting from the corresponding
rate cuts defined in this paragraph, as estimated by the commissioner of revenue; or
new text end
new text begin
(3) for a forecast occurring in an odd-numbered year, revenues exceed expenditures,
excluding any carryforward amounts, at the close of the current biennium and the subsequent
biennium by an amount greater than the revenue reduction resulting from the corresponding
rate cuts defined in this paragraph, as estimated by the commissioner of revenue.
new text end
new text begin
(b) Rate reductions under this subdivision resulting from a November forecast in an
even-numbered year are effective for all taxable years beginning with the taxable year that
begins one year after January 1 of the year immediately following the forecast year.
new text end
new text begin
(c) Rate reductions under this subdivision resulting from a November forecast in an
odd-numbered year are effective for all taxable years beginning with the taxable year that
begins on January 1 of the year immediately following the forecast year.
new text end
new text begin
(d) Reductions enacted under this subdivision shall not exceed one percentage point for
each rate.
new text end
new text begin
(e) Rate reductions under this subdivision shall occur before calculating any transfers
to the budget reserve account under subdivision 1b, paragraph (b).
new text end
new text begin
(f) The commissioner of revenue shall publish the new tax rates in the State Register as
soon as is practicable. After the commissioner of revenue publishes the new tax rates in the
State Register, the revisor of statutes must update the tax rates in sections 290.06,
subdivisions 1 and 2c, 290.091, and 290.0921, in the next edition of Minnesota Statutes.
new text end
new text begin
This section is effective July 1, 2018.
new text end
Minnesota Statutes 2016, section 116J.8737, subdivision 5, is amended to read:
(a)(1) A qualified investor or qualified fund is eligible for a
credit equal to 25 percent of the qualified investment in a qualified small business.
Investments made by a pass-through entity qualify for a credit only if the entity is a qualified
fund. The commissioner must not allocate more than deleted text begin $15,000,000deleted text end new text begin $5,000,000new text end in credits to
qualified investors or qualified funds for taxable years beginning after December 31, deleted text begin 2013deleted text end new text begin
2017new text end , and before January 1, deleted text begin 2017, and must not allocate more than $10,000,000 in credits
to qualified investors or qualified funds for taxable years beginning after December 31,
2016, and before January 1, 2018deleted text end new text begin 2019new text end ; and
(2) deleted text begin for taxable years beginning after December 31, 2014, and before January 1, 2018,
deleted text end 50 percent must be allocated to credits for qualifying investments in qualified greater
Minnesota businesses and minority- or women-owned qualified small businesses in
Minnesota. Any portion of a taxable year's credits that is reserved for qualifying investments
in greater Minnesota businesses and minority- or women-owned qualified small businesses
in Minnesota that is not allocated by September 30 of the taxable year is available for
allocation to other credit applications beginning on October 1. Any portion of a taxable
year's credits that is not allocated by the commissioner does not cancel and may be carried
forward to subsequent taxable years until all credits have been allocated.
(b) The commissioner may not allocate more than a total maximum amount in credits
for a taxable year to a qualified investor for the investor's cumulative qualified investments
as an individual qualified investor and as an investor in a qualified fund; for married couples
filing joint returns the maximum is $250,000, and for all other filers the maximum is
$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits
over all taxable years for qualified investments in any one qualified small business.
(c) The commissioner may not allocate a credit to a qualified investor either as an
individual qualified investor or as an investor in a qualified fund if, at the time the investment
is proposed:
(1) the investor is an officer or principal of the qualified small business; or
(2) the investor, either individually or in combination with one or more members of the
investor's family, owns, controls, or holds the power to vote 20 percent or more of the
outstanding securities of the qualified small business.
A member of the family of an individual disqualified by this paragraph is not eligible for a
credit under this section. For a married couple filing a joint return, the limitations in this
paragraph apply collectively to the investor and spouse. For purposes of determining the
ownership interest of an investor under this paragraph, the rules under section 267(c) and
267(e) of the Internal Revenue Code apply.
(d) Applications for tax credits for 2010 must be made available on the department's
Web site by deleted text begin September 1, 2010, and the department must begin accepting applications by
September 1, 2010. Applications for subsequent years must be made available bydeleted text end November
1 of the preceding year.
(e) Qualified investors and qualified funds must apply to the commissioner for tax credits.
Tax credits must be allocated to qualified investors or qualified funds in the order that the
tax credit request applications are filed with the department. The commissioner must approve
or reject tax credit request applications within 15 days of receiving the application. The
investment specified in the application must be made within 60 days of the allocation of
the credits. If the investment is not made within 60 days, the credit allocation is canceled
and available for reallocation. A qualified investor or qualified fund that fails to invest as
specified in the application, within 60 days of allocation of the credits, must notify the
commissioner of the failure to invest within five business days of the expiration of the
60-day investment period.
(f) All tax credit request applications filed with the department on the same day must
be treated as having been filed contemporaneously. If two or more qualified investors or
qualified funds file tax credit request applications on the same day, and the aggregate amount
of credit allocation claims exceeds the aggregate limit of credits under this section or the
lesser amount of credits that remain unallocated on that day, then the credits must be allocated
among the qualified investors or qualified funds who filed on that day on a pro rata basis
with respect to the amounts claimed. The pro rata allocation for any one qualified investor
or qualified fund is the product obtained by multiplying a fraction, the numerator of which
is the amount of the credit allocation claim filed on behalf of a qualified investor and the
denominator of which is the total of all credit allocation claims filed on behalf of all
applicants on that day, by the amount of credits that remain unallocated on that day for the
taxable year.
(g) A qualified investor or qualified fund, or a qualified small business acting on their
behalf, must notify the commissioner when an investment for which credits were allocated
has been made, and the taxable year in which the investment was made. A qualified fund
must also provide the commissioner with a statement indicating the amount invested by
each investor in the qualified fund based on each investor's share of the assets of the qualified
fund at the time of the qualified investment. After receiving notification that the investment
was made, the commissioner must issue credit certificates for the taxable year in which the
investment was made to the qualified investor or, for an investment made by a qualified
fund, to each qualified investor who is an investor in the fund. The certificate must state
that the credit is subject to revocation if the qualified investor or qualified fund does not
hold the investment in the qualified small business for at least three years, consisting of the
calendar year in which the investment was made and the two following years. The three-year
holding period does not apply if:
(1) the investment by the qualified investor or qualified fund becomes worthless before
the end of the three-year period;
(2) 80 percent or more of the assets of the qualified small business is sold before the end
of the three-year period;
(3) the qualified small business is sold before the end of the three-year period;
(4) the qualified small business's common stock begins trading on a public exchange
before the end of the three-year period; or
(5) the qualified investor dies before the end of the three-year period.
(h) The commissioner must notify the commissioner of revenue of credit certificates
issued under this section.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 116J.8737, subdivision 12, is amended to read:
This section expires for taxable years beginning after December 31,
deleted text begin 2017deleted text end new text begin 2018new text end , except that reporting requirements under subdivision 6 and revocation of credits
under subdivision 7 remain in effect through deleted text begin 2019deleted text end new text begin 2020new text end for qualified investors and qualified
funds, and through deleted text begin 2021deleted text end new text begin 2022new text end for qualified small businesses, reporting requirements under
subdivision 9 remain in effect through deleted text begin 2022deleted text end new text begin 2023new text end , and the appropriation in subdivision 11
remains in effect through deleted text begin 2021deleted text end new text begin 2022new text end .
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 289A.10, subdivision 1, is amended
to read:
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;deleted text end $2,400,000 for estates of decedents dying
in 2018deleted text begin ; $2,700,000deleted text end new text begin and $5,000,000new text end for estates of decedents dying in 2019deleted text begin ; and $3,000,000
for estates of decedents dying in 2020deleted text end and thereafter.
The return must contain a computation of the Minnesota estate tax due. The return must
be signed by the personal representative.
new text begin
This section is effective retroactively for estates of decedents
dying after December 31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.01, subdivision 4a, is amended
to read:
(a) "Financial institution" means:
(1) any corporation or other business entity registered (i) under state law as a bank
holding company; (ii) under the federal Bank Holding Company Act of 1956, as amended;
or (iii) as a savings and loan holding company under the federal National Housing Act, as
amended;
(2) a national bank organized and existing as a national bank association pursuant to the
provisions of United States Code, title 12, chapter 2;
(3) a savings association or federal savings bank as defined in United States Code, title
12, section 1813(b)(1);
(4) any bank or thrift institution incorporated or organized under the laws of any state;
(5) any corporation organized under United States Code, title 12, sections 611 to 631;
(6) any agency or branch of a foreign depository as defined under United States Code,
title 12, section 3101;
(7) any corporation or other business entity that is more than 50 percent owned, directly
or indirectly, by any person or business entity described in clauses (1) to (6), other than an
insurance company taxable under chapter 297I;
(8) a corporation or other business entity that derives more than 50 percent of its total
gross income for financial accounting purposes from finance leases. For the purposes of
this clause, "gross income" means the average from the current tax year and immediately
preceding two years and excludes gross income from incidental or occasional transactions.
For purposes of this clause, "finance lease" means any lease transaction that is the functional
equivalent of an extension of credit and that transfers substantially all the benefits and risks
incident to the ownership of property, including any direct financing lease or leverage lease
that meets the criteria of Financial Accounting Standards Board Statement No. 13, accounting
for leases, or any other lease that is accounted for as financing by a lessor under generally
accepted accounting principles; or
(9) any other person or business entity, other than an insurance company deleted text begin taxable under
chapter 297Ideleted text end , that derives more than 50 percent of its gross income from activities that an
entity described in clauses (2) to (6) or (8) is authorized to transact. For the purposes of this
clause, gross income does not include income from nonrecurring, extraordinary items.
(b) The commissioner is authorized to exclude any person from the application of
paragraph (a), clause (9), if the person proves by clear and convincing evidence that the
person's income-producing activity is not in substantial competition with any person described
in paragraph (a), clauses (2) to (6) or (8).
new text begin
This section is effective retroactively for taxable years beginning
after December 31, 2016.
new text end
Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to
read:
new text begin
(a) "Disqualified captive insurance
company" means an insurance company that:
new text end
new text begin
(1)(i) is licensed as a captive insurance company under the laws of any state or foreign
country; or
new text end
new text begin
(ii) derives 80 percent or more of its total premiums for the taxable year from entities
that are members of the unitary business, as that term is used in section 290.17; and
new text end
new text begin
(2)(i) receives less than 50 percent of its gross receipts for the taxable year from
premiums; or
new text end
new text begin
(ii) pays less than 0.25 percent of its total premiums for the taxable year in tax under
chapter 297I or a comparable tax of another state or country.
new text end
new text begin
(b) For purposes of this subdivision, "premiums" means amounts paid for arrangements
that constitute insurance for federal income tax purposes, but excludes return premiums,
premiums for reinsurance assumed from other insurance companies, and any other premiums
that are or would be exempt from taxation under section 297I.05 as a result of their type or
character, if the insurance was for business in Minnesota.
new text end
new text begin
This section is effective retroactively for taxable years beginning
after December 31, 2016.
new text end
Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:
new text begin
The
amount of expenses of a medical cannabis manufacturer, as defined under section 152.22,
subdivision 7, related to the business of medical cannabis under sections 152.21 to 152.37,
and not allowed for federal income tax purposes under section 280E of the Internal Revenue
Code is a subtraction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0134, is amended by adding a subdivision
to read:
new text begin
The
amount of expenses of a medical cannabis manufacturer, as defined under section 152.22,
subdivision 7, related to the business of medical cannabis under sections 152.21 to 152.37,
and not allowed for federal income tax purposes under section 280E of the Internal Revenue
Code is a subtraction.
new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.05, subdivision 1, is amended
to read:
The following corporations, individuals, estates, trusts,
and organizations shall be exempted from taxation under this chapter, provided that every
such person or corporation claiming exemption under this chapter, in whole or in part, must
establish to the satisfaction of the commissioner the taxable status of any income or activity:
(a) corporations, individuals, estates, and trusts engaged in the business of mining or
producing iron ore and mining, producing, or refining other ores, metals, and minerals, the
mining, production, or refining of which is subject to the occupation tax imposed by section
298.01; but if any such corporation, individual, estate, or trust engages in any other business
or activity or has income from any property not used in such business it shall be subject to
this tax computed on the net income from such property or such other business or activity.
Royalty shall not be considered as income from the business of mining or producing iron
ore within the meaning of this section;
(b) the United States of America, the state of Minnesota or any political subdivision of
either agencies or instrumentalities, whether engaged in the discharge of governmental or
proprietary functions; and
(c) any insurance company, deleted text begin as defined in section 290.17, subdivision 4, paragraph (j),
but including any insurance company licensed and domiciled in another state that grants,
on a reciprocal basis, exemption from retaliatory taxesdeleted text end new text begin other than a disqualified captive
insurance companynew text end .
new text begin
This section is effective retroactively for taxable years beginning
after December 31, 2016.
new text end
Minnesota Statutes 2016, section 290.0685, subdivision 1, is amended to read:
(a) An new text begin eligible new text end individual is allowed a credit against the
tax imposed by this chapter equal to $2,000 for each birth for which a certificate of birth
resulting in stillbirth has been issued under section 144.2151new text begin or in the case of a resident
described in paragraph (c), clauses (2) and (3), that was in another state when a birth resulting
in stillbirth occurred, if a certificate would have been issued under section 144.2151new text end . The
credit under this section is allowed only in the taxable year in which the stillbirth occurred
deleted text begin and if the child would have been a dependent of the taxpayer as defined in section 152 of
the Internal Revenue Codedeleted text end .
(b) For a deleted text begin nonresident ordeleted text end part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text begin
(c) For purposes of this section, "eligible individual" means:
new text end
new text begin
(1) the individual who gave birth resulting in stillbirth and who is also listed as a parent
on the certificate of birth resulting in stillbirth;
new text end
new text begin
(2) in the case of a resident that was transported to another state for medical care that
resulted in a birth resulting in stillbirth, the individual who gave birth to the child; or
new text end
new text begin
(3) in the case of a resident of Minnesota who is a member of the armed forces of the
United States or United Nations, stationed outside the state in compliance with military
orders, the individual who gave birth resulting in stillbirth, or if that individual is a
nonresident of Minnesota, the spouse.
new text end
new text begin
This section is effective retroactively for taxable years beginning
after December 31, 2015.
new text end
Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended
to read:
For purposes of the tax imposed by this section, the following
terms have the meanings given.
(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:
(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;
(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:
(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled person;
(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);
(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);
(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2; and
(6) the amount of addition required by section 290.0131, subdivisions 9 to 11;
less the sum of the amounts determined under the following:
(i) interest income as defined in section 290.0132, subdivision 2;
(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;
(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;
(iv) amounts subtracted from federal taxable income as provided by section 290.0132,
subdivisions 7, 9 to 15, 17, 21, 24, deleted text begin anddeleted text end 26new text begin , and 27new text end ; and
(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c).
In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code.
(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.
(c) "Net minimum tax" means the minimum tax imposed by this section.
(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.
(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2016, section 290.0921, subdivision 3, is amended to read:
"Alternative minimum taxable income"
is Minnesota net income as defined in section 290.01, subdivision 19, and includes the
adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), (f), and (h) of
the Internal Revenue Code. If a corporation files a separate company Minnesota tax return,
the minimum tax must be computed on a separate company basis. If a corporation is part
of a tax group filing a unitary return, the minimum tax must be computed on a unitary basis.
The following adjustments must be made.
(1) The portion of the depreciation deduction allowed for federal income tax purposes
under section 168(k) of the Internal Revenue Code that is required as an addition under
section 290.0133, subdivision 11, is disallowed in determining alternative minimum taxable
income.
(2) The subtraction for depreciation allowed under section 290.0134, subdivision 13, is
allowed as a depreciation deduction in determining alternative minimum taxable income.
(3) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
of the Internal Revenue Code does not apply.
(4) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
Revenue Code does not apply.
(5) The tax preference for depletion under section 57(a)(1) of the Internal Revenue Code
does not apply.
(6) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
Revenue Code does not apply.
(7) The tax preference for charitable contributions of appreciated property under section
57(a)(6) of the Internal Revenue Code does not apply.
(8) For purposes of calculating the adjustment for adjusted current earnings in section
56(g) of the Internal Revenue Code, the term "alternative minimum taxable income" as it
is used in section 56(g) of the Internal Revenue Code, means alternative minimum taxable
income as defined in this subdivision, determined without regard to the adjustment for
adjusted current earnings in section 56(g) of the Internal Revenue Code.
(9) For purposes of determining the amount of adjusted current earnings under section
56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 56(g)(4)
of the Internal Revenue Code with respect to (i) the amount of foreign dividend gross-up
subtracted as provided in section 290.0134, subdivision 2, or (ii) the amount of refunds of
income, excise, or franchise taxes subtracted as provided in section 290.0134, subdivision
8.
(10) Alternative minimum taxable income excludes the income from operating in a job
opportunity building zone as provided under section 469.317.
new text begin
(11) The subtraction for disallowed section 280E expenses of medical cannabis
manufacturers allowed under section 290.0134, subdivision 17, is allowed as a deduction
in determining alternative minimum taxable income.
new text end
Items of tax preference must not be reduced below zero as a result of the modifications
in this subdivision.
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 290.17, subdivision 4, is amended
to read:
(a) If a trade or business conducted wholly within
this state or partly within and partly without this state is part of a unitary business, the entire
income of the unitary business is subject to apportionment pursuant to section 290.191.
Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary business is
considered to be derived from any particular source and none may be allocated to a particular
place except as provided by the applicable apportionment formula. The provisions of this
subdivision do not apply to business income subject to subdivision 5, income of an insurance
company, or income of an investment company determined under section 290.36.
(b) The term "unitary business" means business activities or operations which result in
a flow of value between them. The term may be applied within a single legal entity or
between multiple entities and without regard to whether each entity is a sole proprietorship,
a corporation, a partnership or a trust.
(c) Unity is presumed whenever there is unity of ownership, operation, and use, evidenced
by centralized management or executive force, centralized purchasing, advertising,
accounting, or other controlled interaction, but the absence of these centralized activities
will not necessarily evidence a nonunitary business. Unity is also presumed when business
activities or operations are of mutual benefit, dependent upon or contributory to one another,
either individually or as a group.
(d) Where a business operation conducted in Minnesota is owned by a business entity
that carries on business activity outside the state different in kind from that conducted within
this state, and the other business is conducted entirely outside the state, it is presumed that
the two business operations are unitary in nature, interrelated, connected, and interdependent
unless it can be shown to the contrary.
(e) Unity of ownership does not exist when two or more corporations are involved unless
more than 50 percent of the voting stock of each corporation is directly or indirectly owned
by a common owner or by common owners, either corporate or noncorporate, or by one or
more of the member corporations of the group. For this purpose, the term "voting stock"
shall include membership interests of mutual insurance holding companies formed under
section 66A.40.
(f) The net income and apportionment factors under section 290.191 or 290.20 of foreign
corporations and other foreign entitiesnew text begin , but excluding an insurance company as defined in
section 290.01, subdivision 5b, that is also a disqualified captive insurance company,new text end which
are part of a unitary business shall not be included in the net income or the apportionment
factors of the unitary business; except that the income and apportionment factors of a foreign
entity, other than an entity treated as a C corporation for federal income tax purposes, that
are included in the federal taxable income, as defined in section 63 of the Internal Revenue
Code as amended through the date named in section 290.01, subdivision 19, of a domestic
corporation, domestic entity, or individual must be included in determining net income and
the factors to be used in the apportionment of net income pursuant to section 290.191 or
290.20. A foreign corporation or other foreign entity which is not included on a combined
report and which is required to file a return under this chapter shall file on a separate return
basis.
(g) For purposes of determining the net income of a unitary business and the factors to
be used in the apportionment of net income pursuant to section 290.191 or 290.20, there
must be included only the income and apportionment factors of domestic corporations or
other domestic entities that are determined to be part of the unitary business pursuant to this
subdivision, notwithstanding that foreign corporations or other foreign entities might be
included in the unitary business; except that the income and apportionment factors of a
foreign entity, other than an entity treated as a C corporation for federal income tax purposes,
that is included in the federal taxable income, as defined in section 63 of the Internal Revenue
Code as amended through the date named in section 290.01, subdivision 19, of a domestic
corporation, domestic entity, or individual must be included in determining net income and
the factors to be used in the apportionment of net income pursuant to section 290.191 or
290.20.
(h) Each corporation or other entity, except a sole proprietorship, that is part of a unitary
business must file combined reports as the commissioner determines. On the reports, all
intercompany transactions between entities included pursuant to paragraph (g) must be
eliminated and the entire net income of the unitary business determined in accordance with
this subdivision is apportioned among the entities by using each entity's Minnesota factors
for apportionment purposes in the numerators of the apportionment formula and the total
factors for apportionment purposes of all entities included pursuant to paragraph (g) in the
denominators of the apportionment formula. Except as otherwise provided by paragraph
(f), all sales of the unitary business made within this state pursuant to section 290.191 or
290.20 must be included on the combined report of a corporation or other entity that is a
member of the unitary business and is subject to the jurisdiction of this state to impose tax
under this chapter.
(i) If a corporation has been divested from a unitary business and is included in a
combined report for a fractional part of the common accounting period of the combined
report:
(1) its income includable in the combined report is its income incurred for that part of
the year determined by proration or separate accounting; and
(2) its sales, property, and payroll included in the apportionment formula must be prorated
or accounted for separately.
(j) For purposes of this subdivision, "insurance company" means an insurance company,
as defined in section 290.01, subdivision 5b, that isdeleted text begin :
deleted text end
deleted text begin
(1) licensed to engage in the business of insurance in Minnesota pursuant to chapter
60A; or
deleted text end
deleted text begin
(2) domiciled and licensed to engage in the business of insurance in another state or
country that imposes retaliatory taxes, fines, deposits, penalties, licenses, or fees and that
does not grant, on a reciprocal basis, exemption from such retaliatory taxes to insurance
companies or their agents domiciled in Minnesota.
deleted text end
deleted text begin (k) For purposes of this subdivision, "retaliatory taxes" means taxes imposed on insurance
companies organized in another state or country that result from the fact that an insurance
company organized in the taxing jurisdiction and doing business in the other jurisdiction is
subject to taxes, fines, deposits, penalties, licenses, or fees in an amount exceeding that
imposed by the taxing jurisdiction upon an insurance company organized in the other state
or country and doing business to the same extent in the taxing jurisdictiondeleted text end new text begin not a disqualified
captive insurance companynew text end .
new text begin
This section is effective retroactively for taxable years beginning
after December 31, 2016.
new text end
Minnesota Statutes 2017 Supplement, section 291.016, subdivision 3, is amended
to read:
(a) For estates of decedents dying after December 31, deleted text begin 2016deleted text end new text begin 2017new text end ,
a subtraction is allowed in computing the Minnesota taxable estate, equal to the sum of:
(1) the exclusion amount for the year of death under paragraph (b); and
(2) the lesser of:
(i) 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; or
(ii) $5,000,000 minus the exclusion amount for the year of death under paragraph (b).
(b) The following exclusion amounts apply for the year of death:
(1) deleted text begin $2,100,000 for decedents dying in 2017;
deleted text end
deleted text begin (2)deleted text end $2,400,000 for decedents dying in 2018; new text begin and
new text end
deleted text begin (3) $2,700,000deleted text end new text begin (2) $5,000,000new text end for decedents dying in 2019deleted text begin ; and
deleted text end
deleted text begin (4) $3,000,000 for decedents dying in 2020deleted text end and thereafter.
(c) The subtraction under this subdivision must not reduce the Minnesota taxable estate
to less than zero.
new text begin
This section is effective for estates of decedents dying after
December 31, 2019.
new text end
Minnesota Statutes 2017 Supplement, section 291.03, subdivision 1, is amended
to read:
The tax imposed must be computed by applying to the
Minnesota taxable estate the following schedule of rates and then the resulting amount
multiplied 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)deleted text end For estates of decedents dying in 2018 and thereafter:
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
This section is effective retroactively for estates of decedents
dying after December 31, 2017.
new text end
Minnesota Statutes 2016, section 291.03, subdivision 8, is amended to read:
(a) For purposes of this section, the following terms have the
meanings given in this subdivision.
(b) "Family member" means a family member as defined in section 2032A(e)(2) of the
Internal Revenue Code, or a trust whose present beneficiaries are all family members as
defined in section 2032A(e)(2) of the Internal Revenue Code.
(c) "Qualified heir" means a family member who acquired qualified property upon the
death of the decedent and satisfies the requirement under subdivision 9, clause deleted text begin (7)deleted text end new text begin (8)new text end , or
subdivision 10, clause (5), for the property.
(d) "Qualified property" means qualified small business property under subdivision 9
and qualified farm property under subdivision 10.
new text begin
This section is effective retroactively for estates of decedents
dying after December 31, 2016.
new text end
Minnesota Statutes 2017 Supplement, section 291.03, subdivision 9, is amended
to read:
Property satisfying all of the following
requirements is qualified small business property:
(1) The value of the property was included in the federal adjusted taxable estate.
(2) The property consists of the assets of a trade or business or shares of stock or other
ownership interests in a corporation or other entity engaged in a trade or business. Shares
of stock in a corporation or an ownership interest in another type of entity do not qualify
under this subdivision if the shares or ownership interests are traded on a public stock
exchange at any time during the three-year period ending on the decedent's date of death.
For purposes of this subdivision, an ownership interest includes the interest the decedent is
deemed to own under deleted text begin sectionsdeleted text end new text begin sectionnew text end 2036, 2037, deleted text begin anddeleted text end 2038new text begin , 2040, or 2044new text end of the Internal
Revenue Code.
(3) During the taxable year that ended before the decedent's death, the trade or business
must not have been a passive activity within the meaning of section 469(c) of the Internal
Revenue Code, and the decedent or the decedent's spouse must have materially participated
in the trade or business within the meaning of section 469(h) of the Internal Revenue Code,
excluding section 469(h)(3) of the Internal Revenue Code and any other provision provided
by United States Treasury Department regulation that substitutes material participation in
prior taxable years for material participation in the taxable year that ended before the
decedent's death.
(4) The gross annual sales of the trade or business were $10,000,000 or less for the last
taxable year that ended before the date of the death of the decedent.
(5) the property does not include:
(i) cash;
(ii) cash equivalents;
(iii) publicly traded securities; or
(iv) any assets not used in the operation of the trade or business.
(6) For property consisting of shares of stock or other ownership interests in an entity,
the value of items described in clause (5) must be excluded in the valuation of the decedent's
interest in the entity.
(7) The decedentnew text begin or the decedent's spousenew text end continuously owned the property,new text begin or an
undivided or joint interest in the property,new text end including property the decedentnew text begin or the decedent's
spousenew text end is deemed to own under deleted text begin sectionsdeleted text end new text begin sectionnew text end 2036, 2037, deleted text begin anddeleted text end 2038new text begin , 2040, or 2044new text end of
the Internal Revenue Code,new text begin or under subdivision 1d,new text end for the three-year period ending on the
date of death of the decedent. In the case of a sole proprietor, if the property replaced similar
property within the three-year period, the replacement property will be treated as having
been owned for the three-year period ending on the date of death of the decedent.new text begin For the
purposes of the three-year holding period under this clause, any ownership by the decedent's
spouse, whether the spouse predeceases or survives the decedent, is attributed to the decedent.
new text end
(8) For three years following the date of death of the decedent, the trade or business is
not a passive activity within the meaning of section 469(c) of the Internal Revenue Code,
and a family member materially participates in the operation of the trade or business within
the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3)
of the Internal Revenue Code and any other provision provided by United States Treasury
Department regulation that substitutes material participation in prior taxable years for
material participation in the three years following the date of death of the decedent.
(9) The estate and the qualified heir elect to treat the property as qualified small business
property and agree, in the form prescribed by the commissioner, to pay the recapture tax
under subdivision 11, if applicable.
new text begin
This section is effective retroactively for estates of decedents
dying after December 31, 2017.
new text end
Minnesota Statutes 2016, section 291.03, subdivision 10, is amended to read:
Property satisfying all of the following requirements
is qualified farm property:
(1) The value of the property was included in the federal adjusted taxable estate.
(2) The property consists of agricultural land and is owned by a person or entity that is
either not subject to or is in compliance with section 500.24.
(3) For property taxes payable in the taxable year of the decedent's death, the property
is classified as class 2a property under section 273.13, subdivision 23, and is classified as
agricultural homestead, agricultural relative homestead, or special agricultural homestead
under section 273.124.
(4) The decedentnew text begin or the decedent's spousenew text end continuously owned the property,new text begin or an
undivided or joint interest in the property,new text end including property the decedentnew text begin or the decedent's
spousenew text end is deemed to own under deleted text begin sectionsdeleted text end new text begin sectionnew text end 2036, 2037, deleted text begin anddeleted text end 2038new text begin , 2040, or 2044new text end of
the Internal Revenue Code,new text begin or under subdivision 1d,new text end for the three-year period ending on the
date of death of the decedent either by ownership of the agricultural land or pursuant to
holding an interest in an entity that is not subject to or is in compliance with section 500.24.new text begin
For the purposes of the three-year holding period under this clause, any ownership by the
decedent's spouse, whether the spouse predeceases or survives the decedent, is attributed
to the decedent.
new text end
(5) The property is classified for property tax purposes as class 2a property under section
273.13, subdivision 23, for three years following the date of death of the decedent.
(6) The estate and the qualified heir elect to treat the property as qualified farm property
and agree, in a form prescribed by the commissioner, to pay the recapture tax under
subdivision 11, if applicable.
new text begin
This section is effective retroactively for estates of decedents
dying after December 31, 2017.
new text end
Minnesota Statutes 2017 Supplement, section 291.03, subdivision 11, is amended
to read:
(a) If, within three years after the decedent's death and before
the death of the qualified heir, the qualified heir disposes of any interest in the qualified
property, other than by a disposition to a family member, or a family member ceases to
satisfy the requirement under subdivision 9, clause deleted text begin (7)deleted text end new text begin (8)new text end ; or 10, clause (5), an additional
estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir
replaces qualified small business property excluded under subdivision 9 with similar property,
then the qualified heir will not be treated as having disposed of an interest in the qualified
property.
(b) The amount of the additional tax equals the amount of the exclusion claimed by the
estate under subdivision 8, paragraph (d), multiplied by 16 percent.
(c) The additional tax under this subdivision is due on the day which is six months after
the date of the disposition or cessation in paragraph (a).
(d) The tax under this subdivision does not apply to the acquisition of title or possession
of the qualified property by a federal, state, or local government unit, or any other entity
with the power of eminent domain for a public purpose, as defined in section 117.025,
subdivision 11, within the three-year holding period.
(e) This subdivision shall not apply as a result of any of the following:
(1) a portion of qualified farm property consisting of less than one-fifth of the acreage
of the property is reclassified as class 2b property under section 273.13, subdivision 23, and
the qualified heir has not substantially altered the reclassified property during the three-year
holding period; or
(2) a portion of qualified farm property classified as 2a property at the death of the
decedent pursuant to section 273.13, subdivision 23, paragraph (a), consisting of a residence,
garage, and immediately surrounding one acre of land is reclassified as 4bb property during
the three-year holding period, and the qualified heir has not substantially altered the property.
new text begin
This section is effective retroactively for estates of decedents
dying after December 31, 2016.
new text end
new text begin
(a)
new text end
new text begin
Minnesota Statutes 2016, sections 289A.10, subdivision 1a; 289A.12, subdivision
18; 289A.18, subdivision 3a; 289A.20, subdivision 3a; and 291.03, subdivisions 8 and 10,
new text end
new text begin
are repealed.
new text end
new text begin
(b)
new text end
new text begin
Minnesota Statutes 2017 Supplement, section 291.03, subdivisions 9 and 11,
new text end
new text begin
are
repealed.
new text end
new text begin
This section is effective for estates of decedents dying after
December 31, 2018.
new text end
Minnesota Statutes 2017 Supplement, section 297A.61, subdivision 3, is
amended to read:
(a) "Sale" and "purchase" include, but are not limited to,
each of the transactions listed in this subdivision. In applying the provisions of this chapter,
the terms "tangible personal property" and "retail sale" include the taxable services listed
in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision of these taxable
services, unless specifically provided otherwise. Services performed by an employee for
an employer are not taxable. Services performed by a partnership or association for another
partnership or association are not taxable if one of the entities owns or controls more than
80 percent of the voting power of the equity interest in the other entity. Services performed
between members of an affiliated group of corporations are not taxable. For purposes of
the preceding sentence, "affiliated group of corporations" means those entities that would
be classified as members of an affiliated group as defined under United States Code, title
26, section 1504, disregarding the exclusions in section 1504(b).
(b) Sale and purchase include:
(1) any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, for a consideration in money or by exchange or barter; and
(2) the leasing of or the granting of a license to use or consume, for a consideration in
money or by exchange or barter, tangible personal property, other than a manufactured
home used for residential purposes for a continuous period of 30 days or more.
(c) Sale and purchase include the production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication, printing, or processing.
(d) Sale and purchase include the preparing for a consideration of food. Notwithstanding
section 297A.67, subdivision 2, taxable food includes, but is not limited to, the following:
(1) prepared food sold by the retailer;
(2) soft drinks;
(3) candy; and
(4) dietary supplements.
(e) A sale and a purchase includes the furnishing for a consideration of electricity, gas,
water, or steam for use or consumption within this state.
(f) A sale and a purchase includes the transfer for a consideration of prewritten computer
software whether delivered electronically, by load and leave, or otherwise.
(g) A sale and a purchase includes the furnishing for a consideration of the following
services:
(1) the privilege of admission to places of amusement, recreational areas, or athletic
events, and the making available of amusement devices, tanning facilities, reducing salons,
steam baths, health clubs, and spas or athletic facilitiesnew text begin , but not release fees or other charges
for pen-raised game or poultry by a game farm or hunting preservenew text end ;
(2) lodging and related services by a hotel, rooming house, resort, campground, motel,
or trailer camp, including furnishing the guest of the facility with access to telecommunication
services, and the granting of any similar license to use real property in a specific facility,
other than the renting or leasing of it for a continuous period of 30 days or more under an
enforceable written agreement that may not be terminated without prior notice and including
accommodations intermediary services provided in connection with other services provided
under this clause;
(3) nonresidential parking services, whether on a contractual, hourly, or other periodic
basis, except for parking at a meter;
(4) the granting of membership in a club, association, or other organization if:
(i) the club, association, or other organization makes available for the use of its members
sports and athletic facilities, without regard to whether a separate charge is assessed for use
of the facilities; and
(ii) use of the sports and athletic facility is not made available to the general public on
the same basis as it is made available to members.
Granting of membership means both onetime initiation fees and periodic membership duesnew text begin ,
but does not include release fees or other charges for pen-raised game or poultry by a game
farm or hunting preservenew text end . Sports and athletic facilities include golf courses; tennis,
racquetball, handball, and squash courts; basketball and volleyball facilities; running tracks;
exercise equipment; swimming pools; and other similar athletic or sports facilities;
(5) delivery of aggregate materials by a third party, excluding delivery of aggregate
material used in road construction; and delivery of concrete block by a third party if the
delivery would be subject to the sales tax if provided by the seller of the concrete block.
For purposes of this clause, "road construction" means construction of:
(i) public roads;
(ii) cartways; and
(iii) private roads in townships located outside of the seven-county metropolitan area
up to the point of the emergency response location sign; and
(6) services as provided in this clause:
(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
include services provided by coin operated facilities operated by the customer;
(ii) motor vehicle washing, waxing, and cleaning services, including services provided
by coin operated facilities operated by the customer, and rustproofing, undercoating, and
towing of motor vehicles;
(iii) building and residential cleaning, maintenance, and disinfecting services and pest
control and exterminating services;
(iv) detective, security, burglar, fire alarm, and armored car services; but not including
services performed within the jurisdiction they serve by off-duty licensed peace officers as
defined in section 626.84, subdivision 1, or services provided by a nonprofit organization
or any organization at the direction of a county for monitoring and electronic surveillance
of persons placed on in-home detention pursuant to court order or under the direction of the
Minnesota Department of Corrections;
(v) pet grooming services;
(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor plant
care; tree, bush, shrub, and stump removal, except when performed as part of a land clearing
contract as defined in section 297A.68, subdivision 40; and tree trimming for public utility
lines. Services performed under a construction contract for the installation of shrubbery,
plants, sod, trees, bushes, and similar items are not taxable;
(vii) massages, except when provided by a licensed health care facility or professional
or upon written referral from a licensed health care facility or professional for treatment of
illness, injury, or disease; and
(viii) the furnishing of lodging, board, and care services for animals in kennels and other
similar arrangements, but excluding veterinary and horse boarding services.
(h) A sale and a purchase includes the furnishing for a consideration of tangible personal
property or taxable services by the United States or any of its agencies or instrumentalities,
or the state of Minnesota, its agencies, instrumentalities, or political subdivisions.
(i) A sale and a purchase includes the furnishing for a consideration of
telecommunications services, ancillary services associated with telecommunication services,
and pay television services. Telecommunication services include, but are not limited to, the
following services, as defined in section 297A.669: air-to-ground radiotelephone service,
mobile telecommunication service, postpaid calling service, prepaid calling service, prepaid
wireless calling service, and private communication services. The services in this paragraph
are taxed to the extent allowed under federal law.
(j) A sale and a purchase includes the furnishing for a consideration of installation if the
installation charges would be subject to the sales tax if the installation were provided by
the seller of the item being installed.
(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer to a
customer when (1) the vehicle is rented by the customer for a consideration, or (2) the motor
vehicle dealer is reimbursed pursuant to a service contract as defined in section 59B.02,
subdivision 11.
(l) A sale and a purchase includes furnishing for a consideration of specified digital
products or other digital products or granting the right for a consideration to use specified
digital products or other digital products on a temporary or permanent basis and regardless
of whether the purchaser is required to make continued payments for such right. Wherever
the term "tangible personal property" is used in this chapter, other than in subdivisions 10
and 38, the provisions also apply to specified digital products, or other digital products,
unless specifically provided otherwise or the context indicates otherwise.
(m) The sale of the privilege of admission under section 297A.61, subdivision 3,
paragraph (g), clause (1), to a place of amusement, recreational area, or athletic event
includes all charges included in the privilege of admission's sales price, without deduction
for amenities that may be provided, unless the amenities are separately stated and the
purchaser of the privilege of admission is entitled to add or decline the amenities, and the
amenities are not otherwise taxable.
new text begin
This section is effective for sales and purchases made after June
30, 2018.
new text end
Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision to
read:
new text begin
Materials and supplies
used in, and equipment incorporated into, (1) the construction of a new fire station on the
campus of the Minnetonka city hall, and (2) the remodeling and expansion of an existing
police and fire station in Minnetonka to accommodate its use as a police station are exempt.
new text end
new text begin
This section is effective for sales and purchases made after June
30, 2018, and before January 1, 2021.
new text end
Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision to
read:
new text begin
Materials and supplies used in and
equipment incorporated into the construction of a new fire station, which includes firefighting
and public safety training facilities, in the city of Inver Grove Heights is exempt.
new text end
new text begin
This section is effective for sales and purchases made after June
30, 2018, and before January 1, 2021.
new text end
Minnesota Statutes 2016, section 477A.016, is amended to read:
new text begin (a) new text end No county, city, town or other taxing authority shall increase a present tax or impose
a new tax on sales or income.
new text begin
(b) No county, city, town, or other taxing authority shall increase a present excise tax
or fee or impose a new excise tax or fee on either:
new text end
new text begin
(1) the manufacture, distribution, wholesale, or retail sale of food, based on volume of
product sold, product sales value, or the type of product manufactured, distributed, or sold;
or
new text end
new text begin
(2) any container used for transporting, protecting, or consuming food.
new text end
new text begin
(c) For purposes of this section:
new text end
new text begin
(1) "food" has the meaning given in section 34A.01, subdivision 4; and
new text end
new text begin
(2) "container" means a bottle, cup, can, bag, or other packaging that is made from
plastic, aluminum, glass, cardboard, or other material.
new text end
new text begin
(d) This section does not apply to reasonable license fees lawfully imposed by a county,
city, town, or other licensing authority in the exercise of its regulatory authority to license
a trade, profession, or business.
new text end
new text begin
This section is effective the day following final enactment.
new text end
Laws 1986, chapter 396, section 5, as amended by Laws 2001, First Special Session
chapter 5, article 12, section 87, and Laws 2012, chapter 299, article 3, section 3, is amended
to read:
The city may, by resolution, levy in addition to taxes authorized by other law:
(1) a sales tax of not more than three percent on the gross receipts on retail on-sales of
intoxicating liquor and fermented malt beverages when sold at licensed on-sale liquor
establishments located within the downtown taxing area, provided that this tax may not be
imposed if sales of intoxicating liquor and fermented malt beverages are exempt from
taxation under chapter 297A;
(2) a sales tax of not more than three percent on the gross receipts from the furnishing
for consideration of lodging for a period of less than 30 days at a hotel, motel, rooming
house, tourist court, or trailer camp located within the city by a hotel or motel which has
more than 50 rooms available for lodging; the tax imposed under this clause shall be at a
rate that, when added to the sum of the rate of the sales tax imposed under Minnesota
Statutes, chapter 297A, the rate of the sales tax imposed under section 4, and the rate of any
other taxes on lodging in the city of Minneapolis, equals deleted text begin 13deleted text end new text begin 13.875new text end percent; and
(3) a sales tax of not more than three percent on the gross receipts on all sales of food
primarily for consumption on or off the premises by restaurants and places of refreshment
as defined by resolution of the city that occur within the downtown taxing area.
The taxes authorized by this section must not be terminated before January 1, 2047. The
taxes shall be imposed and may be adjusted periodically by the city council such that the
rates imposed produce revenue sufficient, together with the tax imposed under section 4,
to finance the purposes described in Minnesota Statutes, section 297A.994, and section 4,
subdivisions 3 and 4. These taxes shall be applied, first, as provided in Minnesota Statutes,
section 297A.994, subdivision 3, clauses (1) to (3), and then, solely to pay, secure, maintain,
and fund the payment of any principal of, premium on, and interest on any bonds or any
other purposes in section 4, subdivision 3 or 4. The commissioner of revenue may enter
into appropriate agreements with the city to provide for the collection of these taxes by the
state on behalf of the city. These taxes shall be subject to the same interest, penalties, and
enforcement provisions as the taxes imposed under Minnesota Statutes, chapter 297A.
new text begin
This section is effective for sales and purchases made after
September 30, 2018.
new text end
Laws 1986, chapter 462, section 31, as amended by Laws 1991, chapter 291, article
8, section 24, and Laws 2011, chapter 112, article 4, section 6, is amended to read:
Notwithstanding Minnesota Statutes, section 477A.016, or any other law, and
supplemental to the tax imposed by Laws 1982, chapter 523, article 25, section 1, the city
of St. Paul may impose, by ordinance, a tax, at a rate not greater than deleted text begin threedeleted text end new text begin fournew text end percent, on
the gross receipts from the furnishing for consideration of lodging and related services at a
hotel, rooming house, tourist court, motel, or resort, other than the renting or leasing of
space for a continuous period of 30 days or more. The tax does not apply to the furnishing
of lodging and related services by a business having less than 50 lodging rooms. The tax
shall be collected by and its proceeds paid to the city. Ninety-five percent of the revenues
generated by this tax shall be used to fund a convention bureau to market and promote the
city as a tourist or convention center.
new text begin
This section is effective the first day of the calendar quarter
beginning at least 30 days after the governing body of the city of St. Paul and its chief
clerical officer timely complete their compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
new text end
Minnesota Statutes 2016, section 103D.905, subdivision 9, is amended to read:
In addition to other tax levies provided in this section or in
any other law, a watershed district may levy a tax:
(1) to pay the costs of projects undertaken by the watershed district deleted text begin whichdeleted text end new text begin thatnew text end are deleted text begin to bedeleted text end
funded, in whole or in part, with deleted text begin the proceeds ofdeleted text end new text begin money appropriated by law for new text end grants or
deleted text begin construction or implementationdeleted text end loans deleted text begin under sections 103F.701 to 103F.755deleted text end new text begin to the districtnew text end ;
(2) to pay the principal of, or premium or administrative surcharge, if any, and interest
on, the bonds and notes issued by the watershed district pursuant to section 103F.725; or
(3) to repay the construction or implementation loans under sections 103F.701 to
103F.755.
Taxes levied with respect to payment of bonds and notes shall comply with section
475.61.
new text begin
This section is effective for taxes payable in 2019 and thereafter.
new text end
Minnesota Statutes 2016, section 138.053, is amended to read:
The governing body of any home rule charter or statutory city or town may annually
appropriate from its general fund an amount not to exceed 0.02418 percent of estimated
market value, derived from ad valorem taxes on property or other revenues, to be paid to
the historical society of its respective new text begin city, town, or new text end county to be used for the promotion of
historical work and to aid in defraying the expenses of carrying on the historical work in
the county. No city or town may appropriate any funds for the benefit of any historical
society unless the society is affiliated with and approved by the Minnesota Historical Society.
new text begin
This section is effective the day following final enactment.
new text end
Minnesota Statutes 2016, section 197.603, subdivision 2, is amended to read:
Pursuant to chapter 13 the county veterans service
officer is the responsible authority with respect to all records in the officer's custody. The
data on clients' applications for assistance is private data on individuals, as defined in section
13.02, subdivision 12.new text begin The county veterans service officer may disclose to the county assessor
private data necessary to determine a client's eligibility for the disabled veteran's homestead
market value exclusion under section 273.13, subdivision 34.
new text end
new text begin
This section is effective the day following final enactment.
new text end
Minnesota Statutes 2016, section 272.02, is amended by adding a subdivision to
read:
new text begin
(a) Property is exempt that:
new text end
new text begin
(1) is located in a city of the first class with a population of more than 380,000 as of the
2010 federal census;
new text end
new text begin
(2) was on January 1, 2016, and is for the current assessment, owned by a federally
recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota;
and
new text end
new text begin
(3) is used exclusively as a pharmacy.
new text end
new text begin
(b) Property that qualifies for the exemption under this subdivision is limited to parcels
and structures that do not exceed, in the aggregate, 4,000 square feet. Property acquired for
single-family housing, market-rate apartments, agriculture, or forestry does not qualify for
this exemption. The exemption created by this subdivision expires with taxes payable in
2028.
new text end
new text begin
This section is effective beginning with taxes payable in 2019
and thereafter.
new text end
Minnesota Statutes 2017 Supplement, section 272.029, subdivision 2, is amended
to read:
(a) For the purposes of this section:
(1) "wind energy conversion system" has the meaning given in section 216C.06,
subdivision 19, and also includes a substation that is used and owned by one or more wind
energy conversion facilities;
(2) "large scale wind energy conversion system" means a wind energy conversion system
of more than 12 megawatts, as measured by the nameplate capacity of the system or as
combined with other systems as provided in paragraph (b);
(3) "medium scale wind energy conversion system" means a wind energy conversion
system of over two and not more than 12 megawatts, as measured by the nameplate capacity
of the system or as combined with other systems as provided in paragraph (b); and
(4) "small scale wind energy conversion system" means a wind energy conversion system
of two megawatts and under, as measured by the nameplate capacity of the system or as
combined with other systems as provided in paragraph (b).
(b) For systems installed and contracted for after January 1, 2002, the total size of a
wind energy conversion system under this subdivision shall be determined according to this
paragraph. Unless the systems are interconnected with different distribution systems, the
nameplate capacity of one wind energy conversion system shall be combined with the
nameplate capacity of any other wind energy conversion system that is:
(1) located within five miles of the wind energy conversion system;
(2) constructed within the same 12-month period as the wind energy conversion system;
and
(3) under common ownership.
In the case of a dispute, the commissioner of commerce shall determine the total size of
the systemdeleted text begin , and shall draw all reasonable inferences in favor of combining the systemsdeleted text end .
(c) In making a determination under paragraph (b), the commissioner of commerce may
determine that two wind energy conversion systems are under common ownership when
the underlying ownership structure contains deleted text begin similardeleted text end new text begin the samenew text end persons or entities, even if the
ownership shares differ between the two systems. Wind energy conversion systems are not
under common ownership solely because the same person or entity provided equity financing
for the systemsnew text begin . Wind energy conversion systems that were determined by the commissioner
of commerce to be eligible for a renewable energy production incentive under section
216C.41 are not under common ownership unless a change in the qualifying owner was
made to an owner of another wind energy conversion system subsequent to the determination
by the commissioner of commercenew text end .
new text begin
This section is effective the day following final enactment.
new text end
Minnesota Statutes 2016, section 273.124, subdivision 3a, is amended to read:
(a) When a manufactured home park
is owned by a corporation or association organized under chapter 308A or 308B, and each
person who owns a share or shares in the corporation or association is entitled to occupy a
lot within the park, the corporation or association may claim homestead treatment for the
park. Each lot must be designated by legal description or number, and each lot is limited to
not more than one-half acre of land.
(b) The manufactured home park shall be entitled to homestead treatment if all of the
following criteria are met:
(1) the occupant or the cooperative corporation or association is paying the ad valorem
property taxes and any special assessments levied against the land and structure either
directly, or indirectly through dues to the corporation or association; and
(2) the corporation or association organized under chapter 308A or 308B is wholly
owned by persons having a right to occupy a lot owned by the corporation or association.
(c) A charitable corporation, organized under the laws of Minnesota with no outstanding
stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status,
qualifies for homestead treatment with respect to a manufactured home park if its members
hold residential participation warrants entitling them to occupy a lot in the manufactured
home park.
(d) "Homestead treatment" under this subdivision means the classification rate provided
for class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause
(5), item (ii)deleted text begin .deleted text end new text begin , andnew text end the homestead market value exclusion under section 273.13, subdivision
35, does not apply deleted text begin and the property taxes assessed against the park shall not be included in
the determination of taxes payable for rent paid under section 290A.03deleted text end .
new text begin
This section is effective beginning with claims for taxes payable
in 2019.
new text end
Minnesota Statutes 2016, section 273.1245, subdivision 2, is amended to read:
The assessor shall disclose the data described in subdivision 1 to
the commissioner of revenue as provided by law. The assessor shall also disclose all or
portions of the data described in subdivision 1 tonew text begin :
new text end
new text begin (1)new text end the county treasurer solely for the purpose of proceeding under the Revenue Recapture
Act to recover personal property taxes owingnew text begin ; and
new text end
new text begin (2) the county veterans service officer for the purpose of determining a person's eligibility
for the disabled veteran's homestead market value exclusion under section 273.13, subdivision
34new text end .
new text begin
This section is effective the day following final enactment.
new text end
Minnesota Statutes 2017 Supplement, section 273.13, subdivision 25, is amended
to read:
(a) Class 4a is residential real estate containing four or more units
and used or held for use by the owner or by the tenants or lessees of the owner as a residence
for rental periods of 30 days or more, excluding property qualifying for class 4d. Class 4a
also includes hospitals licensed under sections 144.50 to 144.56, other than hospitals exempt
under section 272.02, and contiguous property used for hospital purposes, without regard
to whether the property has been platted or subdivided. The market value of class 4a property
has a classification rate of 1.25 percent.
(b) Class 4b includes:
(1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;
(2) manufactured homes not classified under any other provision;
(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm
classified under subdivision 23, paragraph (b) containing two or three units; and
(4) unimproved property that is classified residential as determined under subdivision
33.
The market value of class 4b property has a classification rate of 1.25 percent.
(c) Class 4bb includes:
(1) nonhomestead residential real estate containing one unit, other than seasonal
residential recreational property;
(2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b); and
(3) a condominium-type storage unit having an individual property identification number
that is not used for a commercial purpose.
Class 4bb property has the same classification rates as class 1a property under subdivision
22.
Property that has been classified as seasonal residential recreational property at any time
during which it has been owned by the current owner or spouse of the current owner does
not qualify for class 4bb.
(d) Class 4c property includes:
(1) except as provided in subdivision 22, paragraph (c), real and personal property
devoted to commercial temporary and seasonal residential occupancy for recreation purposes,
for not more than 250 days in the year preceding the year of assessment. For purposes of
this clause, property is devoted to a commercial purpose on a specific day if any portion of
the property is used for residential occupancy, and a fee is charged for residential occupancy.
Class 4c property under this clause must contain three or more rental units. A "rental unit"
is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site
equipped with water and electrical hookups for recreational vehicles. A camping pad offered
for rent by a property that otherwise qualifies for class 4c under this clause is also class 4c
under this clause regardless of the term of the rental agreement, as long as the use of the
camping pad does not exceed 250 days. In order for a property to be classified under this
clause, eithernew text begin :new text end (i) the business located on the property must provide recreational activities,
at least 40 percent of the annual gross lodging receipts related to the property must be from
business conducted during 90 consecutive days, and either (A) at least 60 percent of all paid
bookings by lodging guests during the year must be for periods of at least two consecutive
nights; or (B) at least 20 percent of the annual gross receipts must be from charges for
providing recreational activitiesdeleted text begin , ordeleted text end new text begin ;new text end (ii) the business must contain 20 or fewer rental units,
and must be located in a township or a city with a population of 2,500 or less located outside
the metropolitan area, as defined under section 473.121, subdivision 2, that contains a portion
of a state trail administered by the Department of Natural Resourcesnew text begin ; or (iii) the facility
must consist of no more than five sleeping rooms and must provide an area or areas to
prepare meals and to conduct indoor craft or hobby activitiesnew text end . For purposes of item (i)(A),
a paid booking of five or more nights shall be counted as two bookings. Class 4c property
also includes commercial use real property used exclusively for recreational purposes in
conjunction with other class 4c property classified under this clause and devoted to temporary
and seasonal residential occupancy for recreational purposes, up to a total of two acres,
provided the property is not devoted to commercial recreational use for more than 250 days
in the year preceding the year of assessment and is located within two miles of the class 4c
property with which it is used. In order for a property to qualify for classification under this
clause, the owner must submit a declaration to the assessor designating the cabins or units
occupied for 250 days or less in the year preceding the year of assessment by January 15
of the assessment year. Those cabins or units and a proportionate share of the land on which
they are located must be designated class 4c under this clause as otherwise provided. The
remainder of the cabins or units and a proportionate share of the land on which they are
located will be designated as class 3a. The owner of property desiring designation as class
4c property under this clause must provide guest registers or other records demonstrating
that the units for which class 4c designation is sought were not occupied for more than 250
days in the year preceding the assessment if so requested. The portion of a property operated
as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5)
other nonresidential facility operated on a commercial basis not directly related to temporary
and seasonal residential occupancy for recreation purposes does not qualify for class 4c.
For the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
boats and motors, snowmobiles, downhill or cross-country ski equipment; providing marina
services, launch services, or guide services; or selling bait and fishing tackle;
(2) qualified property used as a golf course if:
(i) it is open to the public on a daily fee basis. It may charge membership fees or dues,
but a membership fee may not be required in order to use the property for golfing, and its
green fees for golfing must be comparable to green fees typically charged by municipal
courses; and
(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
A structure used as a clubhouse, restaurant, or place of refreshment in conjunction with
the golf course is classified as class 3a property;
(3) real property up to a maximum of three acres of land owned and used by a nonprofit
community service oriented organization and not used for residential purposes on either a
temporary or permanent basis, provided that:
(i) the property is not used for a revenue-producing activity for more than six days in
the calendar year preceding the year of assessment; or
(ii) the organization makes annual charitable contributions and donations at least equal
to the property's previous year's property taxes and the property is allowed to be used for
public and community meetings or events for no charge, as appropriate to the size of the
facility.
For purposes of this clause:
(A) "charitable contributions and donations" has the same meaning as lawful gambling
purposes under section 349.12, subdivision 25, excluding those purposes relating to the
payment of taxes, assessments, fees, auditing costs, and utility payments;
(B) "property taxes" excludes the state general tax;
(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
Revenue Code; and
(D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.
Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The
use of the property for social events open exclusively to members and their guests for periods
of less than 24 hours, when an admission is not charged nor any revenues are received by
the organization shall not be considered a revenue-producing activity.
The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the requirement
under item (ii) must file an application by May 1 with the assessor for eligibility for the
current year's assessment. The commissioner shall prescribe a uniform application form
and instructions;
(4) postsecondary student housing of not more than one acre of land that is owned by a
nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;
(5)(i) manufactured home parks as defined in section 327.14, subdivision 3, excluding
manufactured home parks described in items (ii) and (iii), (ii) manufactured home parks as
defined in section 327.14, subdivision 3, that are described in section 273.124, subdivision
3a, and (iii) class I manufactured home parks as defined in section 327C.01, subdivision
13;
(6) real property that is actively and exclusively devoted to indoor fitness, health, social,
recreational, and related uses, is owned and operated by a not-for-profit corporation, and is
located within the metropolitan area as defined in section 473.121, subdivision 2;
(7) a leased or privately owned noncommercial aircraft storage hangar not exempt under
section 272.01, subdivision 2, and the land on which it is located, provided that:
(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and
(ii) the land lease, or any ordinance or signed agreement restricting the use of the leased
premise, prohibits commercial activity performed at the hangar.
If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must be
filed by the new owner with the assessor of the county where the property is located within
60 days of the sale;
(8) a privately owned noncommercial aircraft storage hangar not exempt under section
272.01, subdivision 2, and the land on which it is located, provided that:
(i) the land abuts a public airport; and
(ii) the owner of the aircraft storage hangar provides the assessor with a signed agreement
restricting the use of the premises, prohibiting commercial use or activity performed at the
hangar; and
(9) residential real estate, a portion of which is used by the owner for homestead purposes,
and that is also a place of lodging, if all of the following criteria are met:
(i) rooms are provided for rent to transient guests that generally stay for periods of 14
or fewer days;
(ii) meals are provided to persons who rent rooms, the cost of which is incorporated in
the basic room rate;
(iii) meals are not provided to the general public except for special events on fewer than
seven days in the calendar year preceding the year of the assessment; and
(iv) the owner is the operator of the property.
The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22;
(10) real property up to a maximum of three acres and operated as a restaurant as defined
under section 157.15, subdivision 12, provided it: (i) is located on a lake as defined under
section 103G.005, subdivision 15, paragraph (a), clause (3); and (ii) is either devoted to
commercial purposes for not more than 250 consecutive days, or receives at least 60 percent
of its annual gross receipts from business conducted during four consecutive months. Gross
receipts from the sale of alcoholic beverages must be included in determining the property's
qualification under item (ii). The property's primary business must be as a restaurant and
not as a bar. Gross receipts from gift shop sales located on the premises must be excluded.
Owners of real property desiring 4c classification under this clause must submit an annual
declaration to the assessor by February 1 of the current assessment year, based on the
property's relevant information for the preceding assessment year;
(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used as
a marina, as defined in section 86A.20, subdivision 5, which is made accessible to the public
and devoted to recreational use for marina services. The marina owner must annually provide
evidence to the assessor that it provides services, including lake or river access to the public
by means of an access ramp or other facility that is either located on the property of the
marina or at a publicly owned site that abuts the property of the marina. No more than 800
feet of lakeshore may be included in this classification. Buildings used in conjunction with
a marina for marina services, including but not limited to buildings used to provide food
and beverage services, fuel, boat repairs, or the sale of bait or fishing tackle, are classified
as class 3a property; and
(12) real and personal property devoted to noncommercial temporary and seasonal
residential occupancy for recreation purposes.
Class 4c property has a classification rate of 1.5 percent of market value, except that (i)
each parcel of noncommercial seasonal residential recreational property under clause (12)
has the same classification rates as class 4bb property, (ii) manufactured home parks assessed
under clause (5), item (i), have the same classification rate as class 4b property, the market
value of manufactured home parks assessed under clause (5), item (ii), have a classification
rate of 0.75 percent if more than 50 percent of the lots in the park are occupied by
shareholders in the cooperative corporation or association and a classification rate of one
percent if 50 percent or less of the lots are so occupied, and class I manufactured home
parks as defined in section 327C.01, subdivision 13, have a classification rate of 1.0 percent,
(iii) commercial-use seasonal residential recreational property and marina recreational land
as described in clause (11), has a classification rate of one percent for the first $500,000 of
market value, and 1.25 percent for the remaining market value, (iv) the market value of
property described in clause (4) has a classification rate of one percent, (v) the market value
of property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent,
(vi) that portion of the market value of property in clause (9) qualifying for class 4c property
has a classification rate of 1.25 percent, and (vii) property qualifying for classification under
clause (3) that is owned or operated by a congressionally chartered veterans organization
has a classification rate of one percent. The commissioner of veterans affairs must provide
a list of congressionally chartered veterans organizations to the commissioner of revenue
by June 30, 2017, and by January 1, 2018, and each year thereafter.
(e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion of
the units in the building qualify as low-income rental housing units as certified under section
273.128, subdivision 3, only the proportion of qualifying units to the total number of units
in the building qualify for class 4d. The remaining portion of the building shall be classified
by the assessor based upon its use. Class 4d also includes the same proportion of land as
the qualifying low-income rental housing units are to the total units in the building. For all
properties qualifying as class 4d, the market value determined by the assessor must be based
on the normal approach to value using normal unrestricted rents.
(f) The first tier of market value of class 4d property has a classification rate of 0.75
percent. The remaining value of class 4d property has a classification rate of 0.25 percent.
For the purposes of this paragraph, the "first tier of market value of class 4d property" means
the market value of each housing unit up to the first tier limit. For the purposes of this
paragraph, all class 4d property value must be assigned to individual housing units. The
first tier limit is $100,000 for assessment year 2014. For subsequent years, the limit is
adjusted each year by the average statewide change in estimated market value of property
classified as class 4a and 4d under this section for the previous assessment year, excluding
valuation change due to new construction, rounded to the nearest $1,000, provided, however,
that the limit may never be less than $100,000. Beginning with assessment year 2015, the
commissioner of revenue must certify the limit for each assessment year by November 1
of the previous year.
new text begin
This section is effective beginning with taxes payable in 2019.
new text end
Minnesota Statutes 2017 Supplement, section 273.13, subdivision 34, is amended
to read:
(a) All or a portion of
the market value of property owned by a veteran and serving as the veteran's homestead
under this section is excluded in determining the property's taxable market value if the
veteran has a service-connected disability of 70 percent or more as certified by the United
States Department of Veterans Affairs. To qualify for exclusion under this subdivision, the
veteran must have been honorably discharged from the United States armed forces, as
indicated by United States Government Form DD214 or other official military discharge
papers.
(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is excluded,
except as provided in clause (2); and
(2) for a total (100 percent) and permanent disability, $300,000 of market value is
excluded.
(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), clause
(2), predeceases the veteran's spouse, and if upon the death of the veteran the spouse holds
the legal or beneficial title to the homestead and permanently resides there, the exclusion
shall carry over to the benefit of the veteran's spouse for the current taxes payable year and
for eight additional taxes payable years or until such time as the spouse remarries, or sells,
transfers, or otherwise disposes of the property, whichever comes firstnew text begin , except as otherwise
provided in paragraph (n)new text end . Qualification under this paragraph requires an application under
paragraph (h), and a spouse must notify the assessor if there is a change in the spouse's
marital status, ownership of the property, or use of the property as a permanent residence.
(d) If the spouse of a member of any branch or unit of the United States armed forces
who dies due to a service-connected cause while serving honorably in active service, as
indicated on United States Government Form DD1300 or DD2064, holds the legal or
beneficial title to a homestead and permanently resides there, the spouse is entitled to the
benefit described in paragraph (b), clause (2), for eight taxes payable years, or until such
time as the spouse remarries or sells, transfers, or otherwise disposes of the property,
whichever comes firstnew text begin , except as otherwise provided in paragraph (n)new text end .
(e) If a veteran meets the disability criteria of paragraph (a) but does not own property
classified as homestead in the state of Minnesota, then the homestead of the veteran's primary
family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify
for under paragraph (b).
(f) In the case of an agricultural homestead, only the portion of the property consisting
of the house and garage and immediately surrounding one acre of land qualifies for the
valuation exclusion under this subdivision.
(g) A property qualifying for a valuation exclusion under this subdivision is not eligible
for the market value exclusion under subdivision 35, or classification under subdivision 22,
paragraph (b).
(h) To qualify for a valuation exclusion under this subdivision a property owner must
apply to the assessor by deleted text begin July 1deleted text end new text begin December 15new text end of the first assessment year for which the
exclusion is sought. For an application received after deleted text begin July 1deleted text end new text begin December 15new text end , the exclusion
shall become effective for the following assessment year. Except as provided in paragraph
(c), the owner of a property that has been accepted for a valuation exclusion must notify
the assessor if there is a change in ownership of the property or in the use of the property
as a homestead.new text begin When a property qualifying for a market value exclusion under this
subdivision is sold or transferred, the exclusion must be removed for taxes payable in the
following year, provided that the new owner may file a claim for an exclusion if eligible.
new text end
(i) A first-time application by a qualifying spouse for the market value exclusion under
paragraph (d) must be made any time within two years of the death of the service member.
(j) For purposes of this subdivision:
(1) "active service" has the meaning given in section 190.05;
(2) "own" means that the person's name is present as an owner on the property deed;
(3) "primary family caregiver" means a person who is approved by the secretary of the
United States Department of Veterans Affairs for assistance as the primary provider of
personal care services for an eligible veteran under the Program of Comprehensive Assistance
for Family Caregivers, codified as United States Code, title 38, section 1720G; and
(4) "veteran" has the meaning given the term in section 197.447.
(k) If a veteran dying after December 31, 2011, did not apply for or receive the exclusion
under paragraph (b), clause (2), before dying, the veteran's spouse is entitled to the benefit
under paragraph (b), clause (2), for eight taxes payable years or until the spouse remarries
or sells, transfers, or otherwise disposes of the propertynew text begin , except as otherwise provided in
paragraph (n),new text end if:
(1) the spouse files a first-time application within two years of the death of the service
member or by June 1, 2019, whichever is later;
(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the
homestead and permanently resides there;
(3) the veteran met the honorable discharge requirements of paragraph (a); and
(4) the United States Department of Veterans Affairs certifies that:
(i) the veteran met the total (100 percent) and permanent disability requirement under
paragraph (b), clause (2); or
(ii) the spouse has been awarded dependency and indemnity compensation.
(l) The purpose of this provision of law providing a level of homestead property tax
relief for gravely disabled veterans, their primary family caregivers, and their surviving
spouses is to help ease the burdens of war for those among our state's citizens who bear
those burdens most heavily.
(m) By July 1, the county veterans service officer must certify the disability rating and
permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.
new text begin
(n) A spouse who received the benefit in paragraph (c), (d), or (k) but no longer holds
the legal or beneficial title to the property may continue to receive the exclusion for a
property other than the property for which the exclusion was initially granted until the spouse
remarries or sells, transfers, or otherwise disposes of the property, provided that:
new text end
new text begin
(1) the spouse applies under paragraph (h) for the continuation of the exclusion allowed
under this paragraph;
new text end
new text begin
(2) the spouse holds the legal or beneficial title to the property for which the continuation
of the exclusion is sought under this paragraph and permanently resides there;
new text end
new text begin
(3) the estimated market value of the property for which the exclusion is sought under
this paragraph is less than or equal to the estimated market value of the property that first
received the exclusion, based on the value of each property on the date of the sale of the
property that first received the exclusion; and
new text end
new text begin
(4) the spouse has not previously received the benefit under this paragraph for a property
other than the property for which the exclusion is sought.
new text end
new text begin
The exclusion for a spouse under this paragraph and paragraph (c), (d), or (k) may not
exceed a total of eight taxes payable years.
new text end
new text begin
This section is effective beginning with assessments in 2018, for
taxes payable in 2019.
new text end
Minnesota Statutes 2017 Supplement, section 275.025, subdivision 1, is amended
to read:
new text begin (a) new text end The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy for commercial-industrial property is $784,590,000
for taxes payable in 2018 and thereafter. The state general levy for seasonal-recreational
property is $44,190,000 for taxes payable in 2018 and thereafter. The tax under this section
is not treated as a local tax rate under section 469.177 and is not the levy of a governmental
unit under chapters 276A and 473F.
new text begin (b) new text end The commissioner shall increase or decrease the preliminary or final rate for a year
as necessary to account for errors and tax base changes that affected a preliminary or final
rate for either of the two preceding years. Adjustments are allowed to the extent that the
necessary information is available to the commissioner at the time the rates for a year must
be certified, and for the following reasons:
(1) an erroneous report of taxable value by a local official;
(2) an erroneous calculation by the commissioner; and
(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported on the abstracts of tax lists submitted under section
275.29 that was not reported on the abstracts of assessment submitted under section 270C.89
for the same year.
The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.
new text begin
(c) Each year, the commissioner must reduce the state commercial-industrial levy under
paragraph (a) by the amount of state general tax that would be paid by property defined in
subdivision 2, paragraph (c), if it were not exempt.
new text end
new text begin
This section is effective beginning with taxes payable in 2020.
new text end
Minnesota Statutes 2017 Supplement, section 275.025, subdivision 2, is amended
to read:
new text begin (a) new text end For the purposes of this section,
"commercial-industrial tax capacity" means the tax capacity of all taxable property classified
as class 3 or class 5(1) under section 273.13, excluding:
(1) the tax capacity attributable to the first $100,000 of market value of each parcel of
commercial-industrial property as defined under section 273.13, subdivision 24, clauses (1)
and (2);
(2) electric generation attached machinery under class 3; deleted text begin and
deleted text end
(3) property described in section 473.625new text begin ; and
new text end
new text begin (4) property described in paragraph (c)new text end .
new text begin (b) new text end County commercial-industrial tax capacity amounts are not adjusted for the captured
net tax capacity of a tax increment financing district under section 469.177, subdivision 2,
the net tax capacity of transmission lines deducted from a local government's total net tax
capacity under section 273.425, or fiscal disparities contribution and distribution net tax
capacities under chapter 276A or 473F. For purposes of this subdivision, the procedures
for determining eligibility for tier 1 under section 273.13, subdivision 24, clauses (1) and
(2), shall apply in determining the portion of a property eligible to be considered within the
first $100,000 of market value.
new text begin
(c) Personal property that is part of an intrastate natural gas transportation or distribution
pipeline system is exempt from the tax imposed under this section if:
new text end
new text begin
(1) construction of the pipeline system began after January 1, 2018; and
new text end
new text begin
(2) the property is located in an area:
new text end
new text begin
(i) outside the seven-county metropolitan area, as defined in section 473.121, subdivision
3; and
new text end
new text begin
(ii) in which households or businesses lacked access to natural gas distribution systems
as of January 1, 2018.
new text end
new text begin
The exemption under this paragraph applies for a period not to exceed 12 years, provided
that once a property no longer qualifies, it may not subsequently qualify for the exemption
under this paragraph.
new text end
new text begin
This section is effective beginning with taxes payable in 2020.
new text end
Minnesota Statutes 2016, section 275.066, is amended to read:
For the purposes of property taxation and property tax state aids, the term "special taxing
districts" includes the following entities:
(1) watershed districts under chapter 103D;
(2) sanitary districts under sections 442A.01 to 442A.29;
(3) regional sanitary sewer districts under sections 115.61 to 115.67;
(4) regional public library districts under section 134.201;
(5) park districts under chapter 398;
(6) regional railroad authorities under chapter 398A;
(7) hospital districts under sections 447.31 to 447.38;
(8) St. Cloud Metropolitan Transit Commission under sections 458A.01 to 458A.15;
(9) Duluth Transit Authority under sections 458A.21 to 458A.37;
(10) regional development commissions under sections 462.381 to 462.398;
(11) housing and redevelopment authorities under sections 469.001 to 469.047;
(12) port authorities under sections 469.048 to 469.068;
(13) economic development authorities under sections 469.090 to 469.1081;
(14) Metropolitan Council under sections 473.123 to 473.549;
(15) Metropolitan Airports Commission under sections 473.601 to 473.679;
(16) Metropolitan Mosquito Control Commission under sections 473.701 to 473.716;
(17) Morrison County Rural Development Financing Authority under Laws 1982, chapter
437, section 1;
(18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section 6;
(19) East Lake County Medical Clinic District under Laws 1989, chapter 211, sections
1 to 6;
(20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article 5,
section 39;
(21) Middle Mississippi River Watershed Management Organization under sections
103B.211 and 103B.241;
(22) emergency medical services special taxing districts under section 144F.01;
(23) a county levying under the authority of section 103B.241, 103B.245, or 103B.251;
(24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home
under Laws 2003, First Special Session chapter 21, article 4, section 12;
(25) an airport authority created under section 360.0426; deleted text begin and
deleted text end
(26) new text begin fire protection special taxing districts under section 299O.01; and
new text end
new text begin (27) new text end any other political subdivision of the state of Minnesota, excluding counties, school
districts, cities, and towns, that has the power to adopt and certify a property tax levy to the
county auditor, as determined by the commissioner of revenue.
new text begin
This section is effective the day following final enactment.
new text end
Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 13, is amended
to read:
"Property taxes payable" means the property tax
exclusive of special assessments, penalties, and interest payable on a claimant's homestead
after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2,
and any other state paid property tax credits in any calendar year, and after any refund
claimed and allowable under section 290A.04, subdivision 2h, that is first payable in the
year that the property tax is payable. In the case of a claimant who makes ground lease
payments, "property taxes payable" includes the amount of the payments directly attributable
to the property taxes assessed against the parcel on which the house is located. Regardless
of the limitations in section 280A(c)(5) of the Internal Revenue Code, "property taxes
payable" must be apportioned or reduced for the use of a portion of the claimant's homestead
for a business purpose if the claimant deducts any business depreciation expenses for the
use of a portion of the homestead or deducts expenses under section 280A of the Internal
Revenue Code for a business operated in the claimant's homestead. For homesteads which
are manufactured homes as defined in section 273.125, subdivision 8, deleted text begin and for homesteads
which aredeleted text end new text begin including manufactured homes located in a manufactured home community owned
by a cooperative organized under chapter 308A or 308B, andnew text end park trailers taxed as
manufactured homes under section 168.012, subdivision 9, "property taxes payable" shall
also include 17 percent of the gross rent paid in the preceding year for the site on which the
homestead is located. When a homestead is owned by two or more persons as joint tenants
or tenants in common, such tenants shall determine between them which tenant may claim
the property taxes payable on the homestead. If they are unable to agree, the matter shall
be referred to the commissioner of revenue whose decision shall be final. Property taxes
are considered payable in the year prescribed by law for payment of the taxes.
In the case of a claim relating to "property taxes payable," the claimant must have owned
and occupied the homestead on January 2 of the year in which the tax is payable and (i) the
property must have been classified as homestead property pursuant to section 273.124, on
or before December 15 of the assessment year to which the "property taxes payable" relate;
or (ii) the claimant must provide documentation from the local assessor that application for
homestead classification has been made on or before December 15 of the year in which the
"property taxes payable" were payable and that the assessor has approved the application.
new text begin
This section is effective beginning with claims for taxes payable
in 2019.
new text end
new text begin
(a) For purposes of this section, the following terms have
the meanings given unless the context clearly requires otherwise.
new text end
new text begin
(b) "City" means a statutory or home rule charter city.
new text end
new text begin
(c) "Governing body" means for a city, its city council; for a county, its county board;
and for a town, the board of supervisors.
new text end
new text begin
(d) "Political subdivision" means a county, a city, or a township organized to provide
town government.
new text end
new text begin
(a) Two or more political subdivisions may establish,
by resolution of their governing bodies, a special taxing district to provide fire protection
or emergency medical services or both in the area of the district, comprising the jurisdiction
of each of the political subdivisions forming the district. For a county that participates in
establishing a district, the county's jurisdiction comprises the unorganized territory of the
county that it designates in its resolution for inclusion in the district. The area of the special
taxing district does not need to be contiguous or its boundaries continuous.
new text end
new text begin
(b) Before establishing a district under this section, the participating political subdivisions
must enter an agreement that specifies how any liabilities, other than debt issued under
subdivision 6, and assets of the district will be distributed if the district is dissolved. The
agreement may also include other terms, including a method for apportioning the levy of
the district among participating political subdivisions under subdivision 4, paragraph (b),
as the political subdivisions determine appropriate. The agreement must be adopted no later
than upon passage of the resolution establishing the district under paragraph (a), but may
be later amended by agreement of each of the political subdivisions participating in the
district.
new text end
new text begin
The special taxing district established under this section is governed
by a board made up initially of representatives of each participating political subdivision
in the proportions set out in the establishing resolution, subject to change as provided in the
district's charter, if any, or in the district's bylaws. Each participating political subdivision's
representative must be an elected member of the governing body of the political subdivision
and serves at the pleasure of that participant's governing body.
new text end
new text begin
(a) The board may levy a tax on the taxable real and personal
property in the district. The tax levy may not exceed 0.096 percent of the estimated market
value of the district, or $1,100,000, whichever is less. The proceeds of the levy must be
used as provided in subdivision 5. The board shall certify the levy at the times provided
under section 275.07. The board shall provide the county with whatever information is
necessary to identify the property that is located within the district. If the boundaries include
a part of a parcel, the entire parcel is included in the district. The county auditors must
spread, collect, and distribute the proceeds of the tax at the same time and in the same
manner as provided by law for all other property taxes.
new text end
new text begin
(b) As an alternative to paragraph (a), the board may apportion its levy among the political
subdivisions that are members of the district under a formula or method, such as population,
number of service calls, cost of providing service, the market value of improvements, or
other measure or measures, that was approved by the governing body of each of the political
subdivisions that is a member of the district. The amount of the levy allocated to each
political subdivision must be added to that political subdivision's levy and spread at the
same time and in the same manner as provided by law for other taxes. The proceeds of the
levy must be collected and remitted to the district and used as provided in subdivision 5.
new text end
new text begin
The proceeds of property taxes levied under this section
must be used to provide fire protection or emergency medical services to residents of the
district and property located in the district, as well as to pay debt issued under subdivision
6. Services may be provided by employees of the district or by contracting for services
provided by other governmental or private entities.
new text end
new text begin
(a) The district may incur debt under chapter 475 when the board
determines doing so is necessary to accomplish its duties.
new text end
new text begin
(b) In addition, the board of the district may issue certificates of indebtedness or capital
notes under section 412.301 to purchase capital equipment. In applying section 412.301,
paragraph (e), to the district the following rules apply:
new text end
new text begin
(1) the taxable property of the entire district must be used to calculate the percent of
estimated market value; and
new text end
new text begin
(2) "the number of voters at the last municipal election" means the sum of the number
of voters at the last municipal election for each of the cities that is a member of the district
plus the number of registered voters in each town that is a participating member of the
district.
new text end
new text begin
(a) In addition to authority expressly granted in this section, a special
taxing district may exercise any power that may be exercised by any of its participating
political subdivisions and that is necessary or reasonable to support the services set out in
subdivision 5. The district may only levy the taxes authorized in subdivision 4. These powers
include, without limitation, the authority to participate in state programs and to enforce or
carry out state laws related to fire protection or emergency medical services, including
programs providing state aid, reimbursement or funding of employee benefits, authorizing
local enforcement of state standards, and similar authority. These include but are not limited
to fire protection related programs and political subdivision powers or responsibilities under
chapters 299A and 424A; sections 6.495, 69.011, and 353.64; and any administrative rules
related to the fire code.
new text end
new text begin
(b) To the extent that the district's authority under this subdivision overlaps with or may
conflict with the authority of the participating political subdivision, the agreement under
subdivision 2, paragraph (b), must provide for allocation of those powers or responsibilities
between the participating political subdivisions and the district and may provide for resolution
of conflicts in the exercise of those powers.
new text end
new text begin
(a) Additional eligible political subdivisions may
be added to a special taxing district under this section as provided by the board of the district
and agreed to in a resolution of the governing body of the political subdivision proposed to
be added.
new text end
new text begin
(b) A political subdivision may withdraw from a special taxing district under this section
by resolution of its governing body. The political subdivision must notify the board of the
special taxing district of the withdrawal by providing a copy of the resolution at least two
years in advance of the proposed withdrawal. The taxable property of the withdrawing
member is subject to the property tax levy under subdivision 4 for the two taxes payable
years following the notice of the withdrawal, unless the board and the withdrawing member
agree otherwise by a resolution adopted by each of their governing bodies. If a political
subdivision withdraws from a district for which debt was issued under subdivision 6 when
the political subdivision was a participating member of the district and which is outstanding
when the political subdivision withdraws from the district, the taxable property of the
withdrawing political subdivision remains subject to the special taxing district debt levy
until that outstanding debt has been paid or defeased. If the district's property levy to repay
the debt was apportioned among the political subdivisions under an alternative formula or
method under subdivision 4, paragraph (b), the withdrawing political subdivision is subject
to the same percentage of the debt levy as applied in the taxes payable year immediately
before its withdrawal from the district.
new text end
new text begin
(c) Notwithstanding subdivision 2, a special taxing district comprised of two political
subdivisions continues to exist even if one of the political subdivisions withdraws.
new text end
new text begin
The special taxing district may be dissolved by resolution approved
by majority vote of the board. If the special taxing district is dissolved, the assets and
liabilities may be assigned to a successor entity, if any, or otherwise disposed of for public
purposes as provided in the agreement adopted under subdivision 2, paragraph (b), or
otherwise agreed to by the participating political subdivisions. A district may not be dissolved
until all debt issued under subdivision 6 has been paid or defeased.
new text end
new text begin
This section is effective the day following final enactment.
new text end
Minnesota Statutes 2016, section 473H.08, subdivision 1, is amended to read:
Agricultural preserves shall continue until deleted text begin either
deleted text end the landowner deleted text begin ordeleted text end new text begin ,new text end the authoritynew text begin , or a state agency or governmental unitnew text end initiates expiration
as provided in this section.
new text begin
This section is effective the day following final enactment and
applies to any agricultural preserve where the previously required eight-year termination
period under Minnesota Statutes, section 473H.08, has not yet expired.
new text end
Minnesota Statutes 2016, section 473H.08, is amended by adding a subdivision
to read:
new text begin
(a) An agricultural preserve expires
immediately when a state agency or other governmental unit purchases the property or
obtains an easement over the property for the purpose of creating or expanding a public
trail or public park. This subdivision applies only to the portion of the agricultural preserve
acquired for trail or park purposes, and any portion of the property not acquired for trail or
park purposes shall remain an agricultural preserve.
new text end
new text begin
(b) The acquiring state agency or governmental unit shall give notice of the expiration
under paragraph (a) to the authority. The notice must specify the portion of the property
being removed from the agricultural preserve and the date on which that portion expires.
new text end
new text begin
This section is effective the day following final enactment and
applies to any agricultural preserve where the previously required eight-year termination
period under Minnesota Statutes, section 473H.08, has not yet expired.
new text end
Minnesota Statutes 2016, section 473H.08, subdivision 4, is amended to read:
Upon receipt of the notice provided in subdivision 2new text begin or 3anew text end ,
or upon notice served by the authority as provided in subdivision 3, the authority shall
forward the original notice to the county recorder for recording, or to the registrar of titles
if the land is registered, and shall notify the county auditor, county assessor, the Metropolitan
Council, and the county soil and water conservation district of the date of expiration.
Designation as an agricultural preserve and all benefits and limitations accruing through
sections 473H.02 to 473H.17 for the preserve shall cease on the date of expiration. The
restrictive covenant contained in the application shall terminate on the date of expiration.
new text begin
This section is effective the day following final enactment and
applies to any agricultural preserve where the previously required eight-year termination
period under Minnesota Statutes, section 473H.08, has not yet expired.
new text end
Laws 2008, chapter 366, article 5, section 33, the effective date, as amended by
Laws 2013, chapter 143, article 4, section 35, is amended to read:
This section is effective for taxes levied in 2008, payable in 2009,
and is repealed effective for taxes levied in deleted text begin 2018deleted text end new text begin 2023new text end , payable in deleted text begin 2019deleted text end new text begin 2024new text end , and thereafter.
new text begin
This section is effective beginning with taxes payable in 2019.
new text end
Laws 2009, chapter 88, article 2, section 46, subdivision 1, as amended by Laws
2013, chapter 143, article 4, section 36, is amended to read:
The city of Cloquet and Perch Lake Township, by resolution
of each of their governing bodies, may establish the Cloquet Area Fire and Ambulance
new text begin Special new text end Taxing District for the purpose of providing fire or ambulance services, or both,
throughout the district. In this section, "municipality" means home rule charter and statutory
cities, towns, and Indian tribes. The district may exercise all the powers relating to fire and
ambulance services of the municipalities that receive fire or ambulance services, or both,
from the district. Upon application, any other municipality may join the district with the
agreement of the municipalities that comprise the district at the time of its application to
join.
new text begin
This section is effective upon compliance by the Cloquet Area
Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021,
subdivision 3.
new text end
Laws 2009, chapter 88, article 2, section 46, subdivision 2, is amended to read:
The Cloquet Area Fire and Ambulance new text begin Special new text end Taxing District Board
is governed by a board made up initially of one or more elected officials of the governing
body of each participating municipality in the proportions set out in the establishing
resolution, subject to change as provided in the district's charter, if any, or in the district's
bylaws. Each municipality's representatives serve at the pleasure of that municipality's
governing body.
new text begin
This section is effective upon compliance by the Cloquet Area
Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021,
subdivision 3.
new text end
Laws 2009, chapter 88, article 2, section 46, subdivision 3, as amended by Laws
2013, chapter 143, article 4, section 37, is amended to read:
The district board may impose a property tax on taxable property as
provided in this subdivisionnew text begin to pay the costs of providing fire or ambulance services, or
both, throughout the district as well as to pay debt issued under subdivision 4new text end . The board
shall annually determine the total amount of the levy that is attributable to the cost of
providing fire services and the cost of providing ambulance services within the primary
service area. For those municipalities that only receive ambulance services, the costs for
the provision of ambulance services shall be levied against taxable property within those
municipalities at a rate necessary not to exceed 0.019 percent of the estimated market value.
For those municipalities that receive both fire and ambulance services, the tax shall be
imposed at a rate that does not exceed 0.2835 percent of estimated market value.
When a member municipality opts to receive fire service from the district or an additional
municipality becomes a member of the district, the cost of providing fire services to that
community shall be determined by the board and added to the maximum levy amount.
Each county auditor of a county that contains a municipality subject to the tax under
this section must collect the tax and pay it to the Fire and Ambulance Special Taxing District.
The district may also impose other fees or charges as allowed by law for the provision of
fire and ambulance services.
new text begin
This section is effective upon compliance by the Cloquet Area
Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021,
subdivision 3.
new text end
Laws 2009, chapter 88, article 2, section 46, subdivision 4, is amended to read:
The district may incur debt in the manner provided for
a municipality deleted text begin by Minnesota Statutes, chapter 475, when necessary to accomplish its duties.deleted text end new text begin ,
as defined in Minnesota Statutes, sections 475.51, subdivision 2, and 475.521, subdivision
1, paragraph (c), under Minnesota Statutes, chapter 475, and may issue certificates of
indebtedness or capital notes in the manner provided for a city under Minnesota Statutes,
section 412.301, when necessary to accomplish its duties. The debt service for debt, the
proceeds of which financed capital costs for ambulance service, shall be levied against
taxable property within those municipalities in the primary service area. The debt service
for debt, the proceeds of which financed capital costs for fire service, shall be levied against
taxable property within those municipalities receiving fire services.
new text end
new text begin
This section is effective upon compliance by the Cloquet Area
Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021,
subdivision 3.
new text end
Laws 2009, chapter 88, article 2, section 46, subdivision 5, is amended to read:
Notice of intent to withdraw from participation in the district
may be given only in the month of January, with a minimum of twelve months notice of
intent to withdraw. Withdrawal becomes effective for taxes levied new text begin pursuant to subdivision
3 new text end in the year when the notice is given. new text begin A property tax levied by the district on taxable
property located in a withdrawing municipality to make debt service payments for obligations
issued by the district pursuant to subdivision 4 shall remain in effect until the obligations
outstanding on the date of withdrawal are satisfied, including any property tax levied in
connection with a refunding of such obligations. new text end The district and its members may develop
and agree upon new text begin other new text end continuing obligations after withdrawal of a municipality.
new text begin
This section is effective upon compliance by the Cloquet Area
Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021,
subdivision 3.
new text end
Laws 2017, First Special Session chapter 1, article 10, section 4, the effective
date, is amended to read:
This section is effective for applications new text begin and
certifications new text end made in 2018 and thereafter, except the repeal of the exclusion of land under
item (iii) is effective retroactively for payments due under Minnesota Statutes, section
290C.08, beginning for payments due to be made in 2014. In order to qualify for retroactive
payments, the following requirements must be met: (1) the owner of land exceeding 60,000
acres that is subject to a single conservation easement funded under Minnesota Statutes,
section 97A.056 or a comparable permanent easement conveyed to a governmental or
nonprofit entity, must submit an application to the commissioner of revenue, in a form and
manner and at a time acceptable to the commissioner, establishing that the affected property
and its use met the requirement of Minnesota Statutes, chapter 290C, as amended by this
section; (2) the owner and each county in which the land is located must certify to the
commissioner that no petitions challenging the market value of the property are pending
under Minnesota Statutes, chapter 278; and (3) the requirements of clauses (1) and (2) must
be satisfied by October 1, 2017. No interest accrues on payment under this section for
periods before November 1, 2017.
new text begin
This section is effective the day following final enactment.
new text end
new text begin
(a) The commissioner of revenue shall study and prepare a report on the current methods
used to value the operating property of pipelines and public utilities, as defined in Minnesota
Statutes, section 216B.02, subdivision 4, in the state of Minnesota.
new text end
new text begin
(b) The report must:
new text end
new text begin
(1) describe, in detail, prior and current methods used to value pipeline and public utility
operating property in Minnesota;
new text end
new text begin
(2) evaluate whether the current methods used produce an accurate estimate of market
value;
new text end
new text begin
(3) compile and explain, in detail, the number of state-assessed pipeline and public utility
valuations that have been appealed in the last 20 years, and the extent to which the market
value was increased or reduced, by agreement, settlement, or judgment, and list and provide
detail on the taxing jurisdictions that have been issued a refund order in the last 20 years as
a result of agreement, settlement, or judgment, including the year and amount paid;
new text end
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(4) report the costs incurred by all taxing jurisdictions relating to the appeals and litigation
to settle any disputes in the last 20 years;
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new text begin
(5) evaluate the extent to which host political subdivisions and communities are
adequately compensated under the existing Minnesota property tax system for the external
costs imposed by pipeline and public utility systems;
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(6) describe, analyze, and compare the methods used to value pipeline and public utility
operating property in other states, not limited to border states; and
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(7) make recommendations and prepare legislation on improvements or alternative
valuation methods for pipeline and public utility operating property.
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(c) The commissioner shall report the findings of the study to the committees of the
house of representatives and senate having jurisdiction over taxes by February 15, 2019,
and file the report as required by Minnesota Statutes, section 3.195.
new text end
new text begin
This section is effective July 1, 2018.
new text end
Minnesota Statutes 2016, section 103E.611, subdivision 2, is amended to read:
(a) Interest is an additional drainage lien on all property until paid.
The interest rate on the drainage lien principal from the date the drainage lien statement is
recorded must be set by the board but may not exceed the rate determined by the state court
administrator for judgments under section 549.09new text begin , or six percent, whichever is greaternew text end .
(b) Before the tax lists for the year are given to the county treasurer, the auditor shall
compute the interest on the unpaid balance of the drainage lien at the rate set by the board.
The amount of interest must be computed on the entire unpaid principal from the date the
drainage lien was recorded to August 15 of the next calendar year, and afterwards from
August 15 to August 15 of each year.
(c) Interest is due and payable after November 1 of each year the drainage lien principal
or interest is due and unpaid.
Minnesota Statutes 2016, section 471.831, subdivision 1, is amended to read:
A municipality, as defined in
subdivision 2, may file a petition and seek any relief available to it under United States
Code, title 11, as amended deleted text begin through December 31, 1996deleted text end .
Minnesota Statutes 2016, section 474A.02, subdivision 22b, is amended to read:
"Public facilities project" means any publicly owned
facility, or new text begin a new text end facility deleted text begin owned by a nonprofit organizationdeleted text end that is used for district heating or
cooling, new text begin whether publicly or privately owned, new text end that is eligible to be financed with the proceeds
of public facilities bonds as defined under section 474A.02, subdivision 23a.
Minnesota Statutes 2016, section 475.521, subdivision 1, is amended to read:
For purposes of this section, the following terms have the
meanings given.
(a) "Bonds" mean an obligation defined under section 475.51.
(b) "Capital improvement" means acquisition or betterment of public lands, buildings
or other improvements for the purpose of a city hall, town hall, library, public safety facility,
and public works facility. An improvement must have an expected useful life of five years
or more to qualify. Capital improvement does not include light rail transit or any activity
related to it, or a park, road, bridge, administrative building other than a city or town hall,
or land for any of those facilities. For purposes of this section, "capital improvement"
includes expenditures for purposes described in this paragraph that have been incurred by
a municipality before approval of a capital improvement plan, if such expenditures are
included in a capital improvement plan approved on or before the date of the public hearing
under subdivision 2 regarding issuance of bonds for such expenditures.
(c) "Municipality" means a home rule charter or statutory city or a town deleted text begin described in
section 368.01, subdivision 1 or 1adeleted text end .
Minnesota Statutes 2016, section 62V.05, subdivision 2, is amended to read:
deleted text begin
(a) Prior to January 1, 2015, MNsure shall retain or collect
up to 1.5 percent of total premiums for individual and small group market health plans and
dental plans sold through MNsure to fund the cash reserves of MNsure, but the amount
collected shall not exceed a dollar amount equal to 25 percent of the funds collected under
section 62E.11, subdivision 6, for calendar year 2012.
deleted text end
deleted text begin
(b) Beginning January 1, 2015, MNsure shall retain or collect up to 3.5 percent of total
premiums for individual and small group market health plans and dental plans sold through
MNsure to fund the operations of MNsure, but the amount collected shall not exceed a
dollar amount equal to 50 percent of the funds collected under section 62E.11, subdivision
6, for calendar year 2012.
deleted text end
deleted text begin (c)deleted text end new text begin (a)new text end Beginning January 1, 2016, new text begin through December 31, 2018, new text end MNsure shall retain or
collect up to 3.5 percent of total premiums for individual and small group market health
plans and dental plans sold through MNsure to fund the operations of MNsure, but the
amount collected may never exceed a dollar amount greater than 100 percent of the funds
collected under section 62E.11, subdivision 6, for calendar year 2012.
deleted text begin
(d) For fiscal years 2014 and 2015, the commissioner of management and budget is
authorized to provide cash flow assistance of up to $20,000,000 from the special revenue
fund or the statutory general fund under section 16A.671, subdivision 3, paragraph (a), to
MNsure. Any funds provided under this paragraph shall be repaid, with interest, by June
30, 2015.
deleted text end
new text begin
(b) Beginning January 1, 2019, MNsure shall retain or collect up to two percent of total
premiums for individual and small group health plans and dental plans sold through MNsure
to fund the operations of MNsure, but the amount collected may never exceed a dollar
amount greater than 25 percent of the funds collected under section 62E.11, su