2nd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; making tax policy, collection, 1.3 and administrative changes; imposing penalties; 1.4 amending Minnesota Statutes 1994, sections 60A.15, 1.5 subdivision 12; 60A.199, subdivisions 8 and 10; 1.6 270.72, subdivisions 1, 2, and 3; 273.124, 1.7 subdivisions 3 and 6; 274.14; 289A.18, subdivision 2; 1.8 289A.20, subdivision 2; 289A.38, subdivision 7; 1.9 289A.40, subdivision 1; 289A.43; 289A.55, subdivision 1.10 7; 289A.60, subdivisions 2, 12, and by adding a 1.11 subdivision; 290.01, subdivision 7b; 290.015, 1.12 subdivision 1; 290.191, subdivisions 1, 5, and 6; 1.13 290.92, subdivisions 1 and 23; 290.9201, subdivision 1.14 3; 294.09, subdivisions 1 and 4; 295.53, subdivision 1.15 2; 296.12, subdivisions 3, 4, and 11; 296.141, 1.16 subdivisions 1, 2, and 6; 296.17, subdivisions 1, 3, 1.17 5, and 11; 296.18, subdivisions 1, 2, and 5; 297.08, 1.18 subdivisions 1 and 3; 297.35, subdivision 1; 297.43, 1.19 subdivision 2; 297C.02, subdivision 2; 297C.07; 1.20 297C.14, subdivision 2; 297E.11, subdivision 4; 1.21 297E.12, subdivision 2; 299F.26, subdivisions 1 and 4; 1.22 proposing coding for new law in Minnesota Statutes, 1.23 chapters 270; 296; and 340A; repealing Minnesota 1.24 Statutes 1994, sections 270.70, subdivisions 8, 9, and 1.25 10; 297A.212; and 297A.38. 1.26 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.27 ARTICLE 1 1.28 INCOME TAX AND BUSINESS TAXES 1.29 Section 1. Minnesota Statutes 1994, section 289A.18, 1.30 subdivision 2, is amended to read: 1.31 Subd. 2. [WITHHOLDING RETURNS, ENTERTAINER WITHHOLDING 1.32 RETURNS, RETURNS FOR WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE 1.33 CONTRACTORS, AND WITHHOLDING RETURNS FROM PARTNERSHIPS AND S 1.34 CORPORATIONS.] Withholding returns are due on or before the last 1.35 day of the month following the close of the quarterly period. 2.1 However, if the return shows timely deposits in full payment of 2.2 the taxes due for that period, thereturnreturns for the first, 2.3 second, and third quarters may be filed on or before the tenth 2.4 day of the second calendar month following the period and the 2.5 return for the fourth quarter may be filed on or before the 28th 2.6 day of the second calendar month following the period. An 2.7 employer, in preparing a quarterly return, may take credit for 2.8 monthly deposits previously made for that quarter. Entertainer 2.9 withholding tax returns are due within 30 days after each 2.10 performance. Returns for withholding from payments to 2.11 out-of-state contractors are due within 30 days after the 2.12 payment to the contractor. Returns for withholding by 2.13 partnerships are due on or before the due date specified for 2.14 filing partnership returns. Returns for withholding by S 2.15 corporations are due on or before the due date specified for 2.16 filing corporate franchise tax returns. 2.17 Sec. 2. Minnesota Statutes 1994, section 289A.20, 2.18 subdivision 2, is amended to read: 2.19 Subd. 2. [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 2.20 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 2.21 WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 2.22 (a) A tax required to be deducted and withheld during the 2.23 quarterly period must be paid on or before the last day of the 2.24 month following the close of the quarterly period, unless an 2.25 earlier time for payment is provided. A tax required to be 2.26 deducted and withheld from compensation of an entertainer and 2.27 from a payment to an out-of-state contractor must be paid on or 2.28 before the date the return for such tax must be filed under 2.29 section 289A.18, subdivision 2. Taxes required to be deducted 2.30 and withheld by partnerships and S corporations must be paid on 2.31 or before the date the return must be filed under section 2.32 289A.18, subdivision 2. 2.33 (b) An employer who, during the previous quarter, withheld 2.34 more than$500$1,500 of tax under section 290.92, subdivision 2.35 2a or 3, or 290.923, subdivision 2, must deposit tax withheld 2.36 under those sections with the commissioner within the time 3.1 allowed to deposit the employer's federal withheld employment 3.2 taxes under Treasury Regulation, section 31.6302-1, without 3.3 regard to the safe harbor or de minimus rules in subparagraph 3.4 (f) or the one-day rule in subsection (c), clause (3). 3.5 Taxpayers must submit a copy of their federal notice of deposit 3.6 status to the commissioner upon request by the commissioner. 3.7 (c) The commissioner may prescribe by rule other return 3.8 periods or deposit requirements. In prescribing the reporting 3.9 period, the commissioner may classify payors according to the 3.10 amount of their tax liability and may adopt an appropriate 3.11 reporting period for the class that the commissioner judges to 3.12 be consistent with efficient tax collection. In no event will 3.13 the duration of the reporting period be more than one year. 3.14 (d) If less than the correct amount of tax is paid to the 3.15 commissioner, proper adjustments with respect to both the tax 3.16 and the amount to be deducted must be made, without interest, in 3.17 the manner and at the times the commissioner prescribes. If the 3.18 underpayment cannot be adjusted, the amount of the underpayment 3.19 will be assessed and collected in the manner and at the times 3.20 the commissioner prescribes. 3.21 (e) If the aggregate amount of the tax withheld during a 3.22 fiscal year ending June 30 under section 290.92, subdivision 2a 3.23 or 3, is equal to or exceeds$120,000$50,000, the employer must 3.24 remit each required deposit in the subsequent calendar year by 3.25 means of a funds transfer as defined in section 336.4A-104, 3.26 paragraph (a). The funds transfer payment date, as defined in 3.27 section 336.4A-401, must be on or before the date the deposit is 3.28 due. If the date the deposit is due is not a funds transfer 3.29 business day, as defined in section 336.4A-105, paragraph (a), 3.30 clause (4), the payment date must be on or before the funds 3.31 transfer business day next following the date the deposit is due. 3.32 (f) Providers of payroll services who remit withholding 3.33 deposits on behalf of 50 or more employers, or on behalf of any 3.34 employer with aggregate amounts over the threshold in paragraph 3.35 (e), must remit all deposits by means of a funds transfer as 3.36 provided in paragraph (e), regardless of the aggregate amount of 4.1 tax withheld during a fiscal year for all of the employers. 4.2 Sec. 3. Minnesota Statutes 1994, section 289A.38, 4.3 subdivision 7, is amended to read: 4.4 Subd. 7. [FEDERAL TAX CHANGES.] If the amount of income, 4.5 items of tax preference, deductions, or credits for any year of 4.6 a taxpayer as reported to the Internal Revenue Service is 4.7 changed or corrected by the commissioner of Internal Revenue or 4.8 other officer of the United States or other competent authority, 4.9 or where a renegotiation of a contract or subcontract with the 4.10 United States results in a change in income, items of tax 4.11 preference, deductions, or credits, or, in the case of estate 4.12 tax, where there are adjustments to the taxable estate resulting 4.13 in a change to the credit for state death taxes, the taxpayer 4.14 shall report the change or correction or renegotiation results 4.15 in writing to the commissioner, in the form required by the4.16commissioner. The report must be submitted within90180 days 4.17 after the final determination and mustconcede the accuracy of4.18the determination or state how it is wrongbe in the form of 4.19 either an amended Minnesota return conceding the accuracy of the 4.20 federal determination or a letter detailing how the federal 4.21 determination is incorrect or does not change the Minnesota 4.22 tax. A taxpayer filing an amended federal tax return must also 4.23 file a copy of the amended return with the commissioner of 4.24 revenue within90180 days after filing the amended return. 4.25 Sec. 4. Minnesota Statutes 1994, section 289A.55, 4.26 subdivision 7, is amended to read: 4.27 Subd. 7. [INSTALLMENT PAYMENTS; ESTATE TAX.] Interest must 4.28 be paid on unpaid installment payments of the tax authorized 4.29 under section 289A.30, subdivision 2, beginning on the date the 4.30 tax was due without regard to extensions allowed or extensions 4.31 elected, at the rateof interest in effect undergiven in 4.32 section 270.75, nine months following the date of death. 4.33 Sec. 5. Minnesota Statutes 1994, section 289A.60, is 4.34 amended by adding a subdivision to read: 4.35 Subd. 24. [PENALTY FOR FAILURE TO NOTIFY OF FEDERAL 4.36 CHANGE.] If a person fails to report to the commissioner a 5.1 change or correction of the person's federal return in the 5.2 manner and time prescribed in section 289A.38, subdivision 7, 5.3 there must be added to the tax an amount equal to ten percent of 5.4 the amount of any underpayment of Minnesota tax attributable to 5.5 the federal change. 5.6 Sec. 6. Minnesota Statutes 1994, section 290.01, 5.7 subdivision 7b, is amended to read: 5.8 Subd. 7b. [RESIDENT TRUST.] Resident trust means a trust, 5.9 except a grantor type trust, whichis administered in this state5.10 either (1) was created by a will of a decedent who at his or her 5.11 death was domiciled in this state or (2) is an irrevocable 5.12 trust, the grantor of which was domiciled in this state at the 5.13 time the trust became irrevocable. For the purpose of this 5.14 subdivision, a trust is considered irrevocable to the extent the 5.15 grantor is not treated as the owner thereof under sections 671 5.16 to 678 of the Internal Revenue Code. The term "grantor type 5.17 trust" means a trust where the income or gains of the trust are 5.18 taxable to the grantor or others treated as substantial owners 5.19 under sections 671 to 678 of the Internal Revenue Code. 5.20 Sec. 7. Minnesota Statutes 1994, section 290.015, 5.21 subdivision 1, is amended to read: 5.22 Subdivision 1. [GENERAL RULE.] (a) Except as provided in 5.23 subdivision 3, a person that conducts a trade or business that 5.24 has a place of business in this state, regularly has employees 5.25 or independent contractors conducting business activities on its 5.26 behalf in this state, or owns or leases real property located in 5.27 this state or tangible personal property located in this state 5.28 as defined in section 290.191, subdivision 6, paragraph (e), is 5.29 subject to the taxes imposed by this chapter. 5.30 (b) Except as provided in subdivision 3, a person that 5.31 conducts a trade or business not described in paragraph (a) is 5.32 subject to the taxes imposed by this chapter if the trade or 5.33 business obtains or regularly solicits business from within this 5.34 state, without regard to physical presence in this state. 5.35 (c) For purposes of paragraph (b), business from within 5.36 this state includes, but is not limited to: 6.1 (1) sales of products or services of any kind or nature to 6.2 customers in this state who receive the product or service in 6.3 this state; 6.4 (2) sales of services which are performed from outside this 6.5 state but thebenefits of whichservices areconsumedreceived 6.6 in this state; 6.7 (3) transactions with customers in this state that involve 6.8 intangible property and result in income flowing to the person 6.9 from within this state as provided in section 290.191; 6.10 (4) leases of tangible personal property that is located in 6.11 this state as defined in section 290.191, subdivision 6, 6.12 paragraph (e); 6.13 (5) sales and leases of real property located in this 6.14 state; and 6.15 (6) if a financial institution, deposits received from 6.16 customers in this state. 6.17 (d) For purposes of paragraph (b), solicitation includes, 6.18 but is not limited to: 6.19 (1) the distribution, by mail or otherwise, without regard 6.20 to the state from which such distribution originated or in which 6.21 the materials were prepared, of catalogs, periodicals, 6.22 advertising flyers, or other written solicitations of business 6.23 to customers in this state; 6.24 (2) display of advertisements on billboards or other 6.25 outdoor advertising in this state; 6.26 (3) advertisements in newspapers published in this state; 6.27 (4) advertisements in trade journals or other periodicals, 6.28 the circulation of which is primarily within this state; 6.29 (5) advertisements in a Minnesota edition of a national or 6.30 regional publication or a limited regional edition of which this 6.31 state is included of a broader regional or national publication 6.32 which are not placed in other geographically defined editions of 6.33 the same issue of the same publication; 6.34 (6) advertisements in regional or national publications in 6.35 an edition which is not by its contents geographically targeted 6.36 to Minnesota, but which is sold over the counter in Minnesota or 7.1 by subscription to Minnesota residents; 7.2 (7) advertisements broadcast on a radio or television 7.3 station located in Minnesota; or 7.4 (8) any other solicitation by telegraph, telephone, 7.5 computer database, cable, optic, microwave, or other 7.6 communication system. 7.7 Sec. 8. Minnesota Statutes 1994, section 290.191, 7.8 subdivision 1, is amended to read: 7.9 Subdivision 1. [GENERAL RULE.] (a) Except as otherwise 7.10 provided in section 290.17, subdivision 5, the net income from a 7.11 trade or business carried on partly within and partly without 7.12 this state must be apportioned to this state as provided in this 7.13 section. 7.14 (b) For purposes of this section, "state" means a state of 7.15 the United States, the District of Columbia, the commonwealth of 7.16 Puerto Rico, or any territory or possession of the United States 7.17 or any foreign country. 7.18 Sec. 9. Minnesota Statutes 1994, section 290.191, 7.19 subdivision 5, is amended to read: 7.20 Subd. 5. [DETERMINATION OF SALES FACTOR.] For purposes of 7.21 this section, the following rules apply in determining the sales 7.22 factor. 7.23 (a) The sales factor includes all sales, gross earnings, or 7.24 receipts received in the ordinary course of the business, except 7.25 that the following types of income are not included in the sales 7.26 factor: 7.27 (1) interest; 7.28 (2) dividends; 7.29 (3) sales of capital assets as defined in section 1221 of 7.30 the Internal Revenue Code; 7.31 (4) sales of property used in the trade or business, except 7.32 sales of leased property of a type which is regularly sold as 7.33 well as leased; 7.34 (5) sales of debt instruments as defined in section 7.35 1275(a)(1) of the Internal Revenue Code or sales of stock; and 7.36 (6) royalties, fees, or other like income of a type which 8.1 qualify for a subtraction from federal taxable income under 8.2 section 290.01, subdivision 19(d)(11). 8.3 (b) Sales of tangible personal property are made within 8.4 this state if the property is received by a purchaser at a point 8.5 within this state, and the taxpayer is taxable in this state, 8.6 regardless of the f.o.b. point, other conditions of the sale, or 8.7 the ultimate destination of the property. 8.8 (c) Tangible personal property delivered to a common or 8.9 contract carrier or foreign vessel for delivery to a purchaser 8.10 in another state or nation is a sale in that state or nation, 8.11 regardless of f.o.b. point or other conditions of the sale. 8.12 (d) Notwithstanding paragraphs (b) and (c), when 8.13 intoxicating liquor, wine, fermented malt beverages, cigarettes, 8.14 or tobacco products are sold to a purchaser who is licensed by a 8.15 state or political subdivision to resell this property only 8.16 within the state of ultimate destination, the sale is made in 8.17 that state. 8.18 (e) Sales made by or through a corporation that is 8.19 qualified as a domestic international sales corporation under 8.20 section 992 of the Internal Revenue Code are not considered to 8.21 have been made within this state. 8.22 (f) Sales, rents, royalties, and other income in connection 8.23 with real property is attributed to the state in which the 8.24 property is located. 8.25 (g) Receipts from the lease or rental of tangible personal 8.26 property, including finance leases and true leases, must be 8.27 attributed to this state if the property is located in this 8.28 state and to other states if the property is not located in this 8.29 state. Moving property including, but not limited to, motor 8.30 vehicles, rolling stock, aircraft, vessels, or mobile equipment 8.31 is located in this state if: 8.32 (1) the operation of the property is entirely within this 8.33 state; or 8.34 (2) the operation of the property is in two or more states 8.35 and the principal base of operations from which the property is 8.36 sent out is in this state. 9.1 (h) Royalties and other income not described in paragraph 9.2 (a), clause (6), received for the use of or for the privilege of 9.3 using intangible property, including patents, know-how, 9.4 formulas, designs, processes, patterns, copyrights, trade names, 9.5 service names, franchises, licenses, contracts, customer lists, 9.6 or similar items, must be attributed to the state in which the 9.7 property is used by the purchaser. If the property is used in 9.8 more than one state, the royalties or other income must be 9.9 apportioned to this state pro rata according to the portion of 9.10 use in this state. If the portion of use in this state cannot 9.11 be determined, the royalties or other income must be excluded 9.12 from both the numerator and the denominator. Intangible 9.13 property is used in this state if the purchaser uses the 9.14 intangible property or the rights therein in the regular course 9.15 of its business operations in this state, regardless of the 9.16 location of the purchaser's customers. 9.17 (i) Sales of intangible property are made within the state 9.18 in which the property is used by the purchaser. If the property 9.19 is used in more than one state, the sales must be apportioned to 9.20 this state pro rata according to the portion of use in this 9.21 state. If the portion of use in this state cannot be 9.22 determined, the sale must be excluded from both the numerator 9.23 and the denominator of the sales factor. Intangible property is 9.24 used in this state if the purchaser used the intangible property 9.25 in the regular course of its business operations in this state. 9.26 (j) Receipts from the performance of services must be 9.27 attributed to the statein which the benefits ofwhere the 9.28 services areconsumedreceived.If the benefits are consumed in9.29more than one state, the receipts from those benefits must be9.30apportioned to this state pro rata according to the portion of9.31the benefits consumed in this state. If the extent to which the9.32benefits of services are consumed in this state is not readily9.33determinable, the benefits of theFor the purposes of this 9.34 section, receipts from the performance of services provided to a 9.35 corporation, partnership, or trust may only be attributed to a 9.36 state where it has a fixed place of doing business. If the 10.1 state where the services are received is not readily 10.2 determinable or is a state where the corporation, partnership, 10.3 or trust receiving the service does not have a fixed place of 10.4 doing business, the services shall be deemed to beconsumed10.5 received at the location of the office of the customer from 10.6 which the services were ordered in the regular course of the 10.7 customer's trade or business. If the ordering office cannot be 10.8 determined, thebenefits of theservices shall be deemed to be 10.9consumedreceived at the office of the customer to which the 10.10 services are billed. 10.11 Sec. 10. Minnesota Statutes 1994, section 290.191, 10.12 subdivision 6, is amended to read: 10.13 Subd. 6. [DETERMINATION OF RECEIPTS FACTOR FOR FINANCIAL 10.14 INSTITUTIONS.] (a) For purposes of this section, the rules in 10.15 this subdivision andsubdivisions 7 andsubdivision 8 apply in 10.16 determining the receipts factor for financial institutions. 10.17 (b) "Receipts" for this purpose means gross income, 10.18 including net taxable gain on disposition of assets, including 10.19 securities and money market instruments, when derived from 10.20 transactions and activities in the regular course of the 10.21 taxpayer's trade or business. 10.22 (c) "Money market instruments" means federal funds sold and 10.23 securities purchased under agreements to resell, commercial 10.24 paper, banker's acceptances, and purchased certificates of 10.25 deposit and similar instruments to the extent that the 10.26 instruments are reflected as assets under generally accepted 10.27 accounting principles. 10.28 (d) "Securities" means United States Treasury securities, 10.29 obligations of United States government agencies and 10.30 corporations, obligations of state and political subdivisions, 10.31 corporate stock, bonds, and other securities, participations in 10.32 securities backed by mortgages held by United States or state 10.33 government agencies, loan-backed securities and similar 10.34 investments to the extent the investments are reflected as 10.35 assets under generally accepted accounting principles. 10.36 (e) Receipts from the lease or rental of real or tangible 11.1 personal property, including both finance leases and true 11.2 leases, must be attributed to this state if the property is 11.3 located in this state. Tangible personal property that is 11.4 characteristically moving property, such as motor vehicles, 11.5 rolling stock, aircraft, vessels, mobile equipment, and the 11.6 like, is considered to be located in a state if: 11.7 (1) the operation of the property is entirely within the 11.8 state; or 11.9 (2) the operation of the property is in two or more states, 11.10 but the principal base of operations from which the property is 11.11 sent out is in the state. 11.12 (f) Interest income and other receipts from assets in the 11.13 nature of loans that are secured primarily by real estate or 11.14 tangible personal property must be attributed to this state if 11.15 the security property is located in this state under the 11.16 principles stated in paragraph (e). 11.17 (g) Interest income and other receipts from consumer loans 11.18 not secured by real or tangible personal property that are made 11.19 to residents of this state, whether at a place of business, by 11.20 traveling loan officer, by mail, by telephone or other 11.21 electronic means, must be attributed to this state. 11.22 (h) Interest income and other receipts from commercial 11.23 loans and installment obligations that are unsecured by real or 11.24 tangible personal property or secured by intangible property 11.25 must be attributed to this state if the proceeds of the loan are 11.26 to be applied in this state. If it cannot be determined where 11.27 the funds are to be applied, the income and receipts are 11.28 attributed to the state in which the office of the borrower from 11.29 which the application would be made in the regular course of 11.30 business is located. If this cannot be determined, the 11.31 transaction is disregarded in the apportionment formula. 11.32 (i) Interest income and other receipts from a participating 11.33 financial institution's portion of participation and syndication 11.34 loans must be attributed under paragraphs (e) to (h). A 11.35 participation loan is an arrangement in which a lender makes a 11.36 loan to a borrower and then sells, assigns, or otherwise 12.1 transfers all or a part of the loan to a purchasing financial 12.2 institution. A syndication loan is a loan transaction involving 12.3 multiple financial institutions in which all the lenders are 12.4 named as parties to the loan documentation, are known to the 12.5 borrower, and have privity of contract with the borrower. 12.6 (j) Interest income and other receipts including service 12.7 charges from financial institution credit card and travel and 12.8 entertainment credit card receivables and credit card holders' 12.9 fees must be attributed to the state to which the card charges 12.10 and fees are regularly billed. 12.11 (k) Merchant discount income derived from financial 12.12 institution credit card holder transactions with a merchant must 12.13 be attributed to the state in which the merchant is located. In 12.14 the case of merchants located within and outside the state, only 12.15 receipts from merchant discounts attributable to sales made from 12.16 locations within the state are attributed to this state. It is 12.17 presumed, subject to rebuttal, that the location of a merchant 12.18 is the address shown on the invoice submitted by the merchant to 12.19 the taxpayer. 12.20 (l) Receipts from the performance of fiduciary and other 12.21 services must be attributed to the state in whichthe benefits12.22ofthe services areconsumedreceived.If the benefits are12.23consumed in more than one state, the receipts from those12.24benefits must be apportioned to this state pro rata according to12.25the portion of the benefits consumed in this state.For the 12.26 purposes of this section, services provided to a corporation, 12.27 partnership, or trust must be attributed to a state where it has 12.28 a fixed place of doing business. If theextent to which the12.29benefits ofstate where the services areconsumed in this state12.30 received is not readily determinable or is a state where the 12.31 corporation, partnership, or trust does not have a fixed place 12.32 of doing business, thebenefits of theservices shall be deemed 12.33 to beconsumedreceived at the location of the office of the 12.34 customer from which the services were ordered in the regular 12.35 course of the customer's trade or business. If the ordering 12.36 office cannot be determined, thebenefits of theservices shall 13.1 be deemed to beconsumedreceived at the office of the customer 13.2 to which the services are billed. 13.3 (m) Receipts from the issuance of travelers checks and 13.4 money orders must be attributed to the state in which the checks 13.5 and money orders are purchased. 13.6 (n) Receipts from investments of a financial institution in 13.7 securities and from money market instruments must be apportioned 13.8 to this state based on the ratio that total deposits from this 13.9 state, its residents, including any business with an office or 13.10 other place of business in this state, its political 13.11 subdivisions, agencies, and instrumentalities bear to the total 13.12 deposits from all states, their residents, their political 13.13 subdivisions, agencies, and instrumentalities. In the case of 13.14 an unregulated financial institution subject to this section, 13.15 these receipts are apportioned to this state based on the ratio 13.16 that its gross business income, excluding such receipts, earned 13.17 from sources within this state bears to gross business income, 13.18 excluding such receipts, earned from sources within all states. 13.19 For purposes of this subdivision, deposits made by this state, 13.20 its residents, its political subdivisions, agencies, and 13.21 instrumentalities must be attributed to this state, whether or 13.22 not the deposits are accepted or maintained by the taxpayer at 13.23 locations within this state. 13.24 (o) A financial institution's interest in property 13.25 described in section 290.015, subdivision 3, paragraph (b), is 13.26 included in the receipts factor in the same manner as assets in 13.27 the nature of securities or money market instruments are 13.28 included in paragraph (n). 13.29 Sec. 11. Minnesota Statutes 1994, section 290.92, 13.30 subdivision 1, is amended to read: 13.31 Subdivision 1. [DEFINITIONS.] (1) [WAGES.] For purposes 13.32 of this section, the term "wages" means the same as that term is 13.33 defined in section 3401(a) and (f) of the Internal Revenue Code,13.34except wages shall not include agricultural labor as defined in13.35section 3121(g) of the Internal Revenue Code. 13.36 (2) [PAYROLL PERIOD.] For purposes of this section the 14.1 term "payroll period" means a period for which a payment of 14.2 wages is ordinarily made to the employee by the employee's 14.3 employer, and the term "miscellaneous payroll period" means a 14.4 payroll period other than a daily, weekly, biweekly, 14.5 semimonthly, monthly, quarterly, semiannual, or annual payroll 14.6 period. 14.7 (3) [EMPLOYEE.] For purposes of this section the term 14.8 "employee" means any resident individual performing services for 14.9 an employer, either within or without, or both within and 14.10 without the state of Minnesota, and every nonresident individual 14.11 performing services within the state of Minnesota, the 14.12 performance of which services constitute, establish, and 14.13 determine the relationship between the parties as that of 14.14 employer and employee. As used in the preceding sentence, the 14.15 term "employee" includes an officer of a corporation, and an 14.16 officer, employee, or elected official of the United States, a 14.17 state, or any political subdivision thereof, or the District of 14.18 Columbia, or any agency or instrumentality of any one or more of 14.19 the foregoing. 14.20 (4) [EMPLOYER.] For purposes of this section the term 14.21 "employer" means any person, including individuals, fiduciaries, 14.22 estates, trusts, partnerships, limited liability companies, and 14.23 corporations transacting business in or deriving any income from 14.24 sources within the state of Minnesota for whom an individual 14.25 performs or performed any service, of whatever nature, as the 14.26 employee of such person, except that if the person for whom the 14.27 individual performs or performed the services does not have 14.28 legal control of the payment of the wages for such services, the 14.29 term "employer," except for purposes of paragraph (1), means the 14.30 person having legal control of the payment of such wages. As 14.31 used in the preceding sentence, the term "employer" includes any 14.32 corporation, individual, estate, trust, or organization which is 14.33 exempt from taxation under section 290.05 and further includes, 14.34 but is not limited to, officers of corporations who have legal 14.35 control, either individually or jointly with another or others, 14.36 of the payment of the wages. 15.1 (5) [NUMBER OF WITHHOLDING EXEMPTIONS CLAIMED.] For 15.2 purposes of this section, the term "number of withholding 15.3 exemptions claimed" means the number of withholding exemptions 15.4 claimed in a withholding exemption certificate in effect under 15.5 subdivision 5, except that if no such certificate is in effect, 15.6 the number of withholding exemptions claimed shall be considered 15.7 to be zero. 15.8 Sec. 12. Minnesota Statutes 1994, section 290.9201, 15.9 subdivision 3, is amended to read: 15.10 Subd. 3. [CREDIT AGAINST TAX.] Each calendar year an 15.11 entertainment entity may take a nonrefundable credit 15.12 of$100$120 against the tax imposed by this section. 15.13 Sec. 13. [OMISSIONS FROM INHERITANCE OR ESTATE TAX 15.14 RETURN.] 15.15 Effective for decedents dying before August 1, 1990, the 15.16 provisions of Minnesota Statutes, section 289A.38, subdivision 15.17 6, apply to assets omitted from an inheritance tax return or 15.18 estate tax return rather than the provisions of Minnesota 15.19 Statutes 1988, section 291.11, subdivision 1, clause (2)(c). 15.20 Sec. 14. [EFFECTIVE DATE.] 15.21 Section 1 is effective for returns due after December 31, 15.22 1995. Section 2 as it relates to quarterly withholding deposits 15.23 is effective for withholding done after December 31, 1995, and 15.24 the remainder of section 2 is effective for payments due after 15.25 December 31, 1995. Sections 3 and 5 are effective for federal 15.26 determinations after December 31, 1995. Section 4 is effective 15.27 for estates of decedents dying after the date of final 15.28 enactment. Section 6 is effective for deaths after December 31, 15.29 1995, and trusts that become irrevocable after December 31, 15.30 1995. Sections 7 to 10 are effective for tax years beginning 15.31 after December 31, 1995. Section 11 is effective for wages paid 15.32 after December 31, 1995. Section 12 is effective for tax years 15.33 beginning after December 31, 1994. 15.34 ARTICLE 2 15.35 PROPERTY TAX AND PROPERTY TAX REFUNDS 15.36 Section 1. Minnesota Statutes 1994, section 273.124, 16.1 subdivision 3, is amended to read: 16.2 Subd. 3. [COOPERATIVES AND CHARITABLE CORPORATIONS.] When 16.3 one or more dwellings, or one or more buildings which each 16.4 contain several dwelling units, are owned by a corporation or 16.5 association organized under chapter 308A, and each person who 16.6 owns a share or shares in the corporation or association is 16.7 entitled to occupy a dwelling, or dwelling unit in the building, 16.8 the corporation or association may claim homestead treatment for 16.9 each dwelling, or for each unit in case of a building containing 16.10 several dwelling units, for the dwelling or for the part of the 16.11 value of the building occupied by a shareholder. Each dwelling 16.12 or unit must be designated by legal description or number, and 16.13 the net tax capacity of each dwelling that qualifies for 16.14 assessment under this subdivision must include not more than 16.15 one-half acre of land, if platted, nor more than 80 acres if 16.16 unplatted. The net tax capacity of the building or buildings 16.17 containing several dwelling units is the sum of the net tax 16.18 capacities of each of the respective units comprising the 16.19 building. To qualify for the treatment provided by this 16.20 subdivision, the corporation or association must be wholly owned 16.21 by persons having a right to occupy a dwelling or dwelling unit 16.22 owned by the corporation or association. A charitable 16.23 corporation organized under the laws of Minnesota and not 16.24 otherwise exempt thereunder with no outstanding stock qualifies 16.25 for homestead treatment with respect to member residents of the 16.26 dwelling units who have purchased and hold residential 16.27 participation warrants entitling them to occupy the units. 16.28 When dwelling units no longer qualify under this 16.29 subdivision, the current owner must notify the assessor within 16.30 60 days. Failure to notify the assessor within 60 days shall 16.31 result in the loss of benefits under this subdivision for taxes 16.32 payable in the year that the failure is discovered. For these 16.33 purposes, "benefits under this subdivision" means the difference 16.34 in the net tax capacity of the units which no longer qualify as 16.35 computed under this subdivision and as computed under the 16.36 otherwise applicable law, times the local tax rate applicable to 17.1 the building for that taxes payable year. Upon discovery of a 17.2 failure to notify, the assessor shall inform the auditor of the 17.3 difference in net tax capacity for the building or buildings in 17.4 which units no longer qualify, and the auditor shall calculate 17.5 the benefits under this subdivision. Such amount, plus a 17.6 penalty equal to 100 percent of that amount, shall then be 17.7 demanded of the building's owner. The property owner may appeal 17.8 the county's determination by filing a notice of appeal with the 17.9 Minnesota tax court within 60 days of the date of the notice 17.10 from the county. Unless inconsistent with the provisions of 17.11 this subdivision, and except for the provisions of section 17.12 278.03 requiring partial payments, the tax court shall treat the 17.13 appeal as a chapter 278 property tax appeal. If the amount of 17.14 the benefits under this subdivision and penalty are not paid 17.15 within 60 days, and if no appeal has been filed, the county 17.16 auditor shall certify the amount of the benefit and penalty to 17.17 the succeeding year's tax list to be collected as part of the 17.18 property taxes on the affected buildings. 17.19 Sec. 2. Minnesota Statutes 1994, section 273.124, 17.20 subdivision 6, is amended to read: 17.21 Subd. 6. [LEASEHOLD COOPERATIVES.] When one or more 17.22 dwellings or one or more buildings which each contain several 17.23 dwelling units is owned by a nonprofit corporation subject to 17.24 the provisions of chapter 317A and qualifying under section 17.25 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as 17.26 amended through December 31, 1990, or a limited partnership 17.27 which corporation or partnership operates the property in 17.28 conjunction with a cooperative association, and has received 17.29 public financing, homestead treatment may be claimed by the 17.30 cooperative association on behalf of the members of the 17.31 cooperative for each dwelling unit occupied by a member of the 17.32 cooperative. The cooperative association must provide the 17.33 assessor with the social security numbers of those members. To 17.34 qualify for the treatment provided by this subdivision, the 17.35 following conditions must be met: 17.36 (a) the cooperative association must be organized under 18.1 chapter 308A and all voting members of the board of directors 18.2 must be resident tenants of the cooperative and must be elected 18.3 by the resident tenants of the cooperative; 18.4 (b) the cooperative association must have a lease for 18.5 occupancy of the property for a term of at least 20 years, which 18.6 permits the cooperative association, while not in default on the 18.7 lease, to participate materially in the management of the 18.8 property, including material participation in establishing 18.9 budgets, setting rent levels, and hiring and supervising a 18.10 management agent; 18.11 (c) to the extent permitted under state or federal law, the 18.12 cooperative association must have a right under a written 18.13 agreement with the owner to purchase the property if the owner 18.14 proposes to sell it; if the cooperative association does not 18.15 purchase the property it is offered for sale, the owner may not 18.16 subsequently sell the property to another purchaser at a price 18.17 lower than the price at which it was offered for sale to the 18.18 cooperative association unless the cooperative association 18.19 approves the sale; 18.20 (d) a minimum of 40 percent of the cooperative 18.21 association's members must have incomes at or less than 60 18.22 percent of area median gross income as determined by the United 18.23 States Secretary of Housing and Urban Development under section 18.24 142(d)(2)(B) of the Internal Revenue Code of 1986, as amended 18.25 through December 31, 1991. For purposes of this clause, "member 18.26 income" means the income of a member existing at the time the 18.27 member acquires cooperative membership; 18.28 (e) if a limited partnership owns the property, it must 18.29 include as the managing general partner a nonprofit organization 18.30 operating under the provisions of chapter 317A and qualifying 18.31 under section 501(c)(3) or 501(c)(4) of the Internal Revenue 18.32 Code of 1986, as amended through December 31, 1990, and the 18.33 limited partnership agreement must provide that the managing 18.34 general partner have sufficient powers so that it materially 18.35 participates in the management and control of the limited 18.36 partnership; 19.1 (f) prior to becoming a member of a leasehold cooperative 19.2 described in this subdivision, a person must have received 19.3 notice that (1) describes leasehold cooperative property in 19.4 plain language, including but not limited to the effects of 19.5 classification under this subdivision on rents, property taxes 19.6 and tax credits or refunds, and operating expenses, and (2) 19.7 states that copies of the articles of incorporation and bylaws 19.8 of the cooperative association, the lease between the owner and 19.9 the cooperative association, a sample sublease between the 19.10 cooperative association and a tenant, and, if the owner is a 19.11 partnership, a copy of the limited partnership agreement, can be 19.12 obtained upon written request at no charge from the owner, and 19.13 the owner must send or deliver the materials within seven days 19.14 after receiving any request; 19.15 (g) if a dwelling unit of a building was occupied on the 19.16 60th day prior to the date on which the unit became leasehold 19.17 cooperative property described in this subdivision, the notice 19.18 described in paragraph (f) must have been sent by first class 19.19 mail to the occupant of the unit at least 60 days prior to the 19.20 date on which the unit became leasehold cooperative property. 19.21 For purposes of the notice under this paragraph, the copies of 19.22 the documents referred to in paragraph (f) may be in proposed 19.23 version, provided that any subsequent material alteration of 19.24 those documents made after the occupant has requested a copy 19.25 shall be disclosed to any occupant who has requested a copy of 19.26 the document. Copies of the articles of incorporation and 19.27 certificate of limited partnership shall be filed with the 19.28 secretary of state after the expiration of the 60-day period 19.29 unless the change to leasehold cooperative status does not 19.30 proceed; 19.31 (h) the county attorney of the county in which the property 19.32 is located must certify to the assessor that the property meets 19.33 the requirements of this subdivision; 19.34 (i) the public financing received must be from at least one 19.35 of the following sources: 19.36 (1) tax increment financing proceeds used for the 20.1 acquisition or rehabilitation of the building or interest rate 20.2 write-downs relating to the acquisition of the building; 20.3 (2) government issued bonds exempt from taxes under section 20.4 103 of the Internal Revenue Code of 1986, as amended through 20.5 December 31, 1991, the proceeds of which are used for the 20.6 acquisition or rehabilitation of the building; 20.7 (3) programs under section 221(d)(3), 202, or 236, of Title 20.8 II of the National Housing Act; 20.9 (4) rental housing program funds under Section 8 of the 20.10 United States Housing Act of 1937 or the market rate family 20.11 graduated payment mortgage program funds administered by the 20.12 Minnesota housing finance agency that are used for the 20.13 acquisition or rehabilitation of the building; 20.14 (5) low-income housing credit under section 42 of the 20.15 Internal Revenue Code of 1986, as amended through December 31, 20.16 1991; 20.17 (6) public financing provided by a local government used 20.18 for the acquisition or rehabilitation of the building, including 20.19 grants or loans from (i) federal community development block 20.20 grants; (ii) HOME block grants; or (iii) residential rental 20.21 bonds issued under chapter 474A; or 20.22 (7) other rental housing program funds provided by the 20.23 Minnesota housing finance agency for the acquisition or 20.24 rehabilitation of the building; 20.25 (j) at the time of the initial request for homestead 20.26 classification or of any transfer of ownership of the property, 20.27 the governing body of the municipality in which the property is 20.28 located must hold a public hearing and make the following 20.29 findings: 20.30 (1) that the granting of the homestead treatment of the 20.31 apartment's units will facilitate safe, clean, affordable 20.32 housing for the cooperative members that would otherwise not be 20.33 available absent the homestead designation; 20.34 (2) that the owner has presented information satisfactory 20.35 to the governing body showing that the savings garnered from the 20.36 homestead designation of the units will be used to reduce 21.1 tenant's rents or provide a level of furnishing or maintenance 21.2 not possible absent the designation; and 21.3 (3) that the requirements of paragraphs (b), (d), and (i) 21.4 have been met. 21.5 Homestead treatment must be afforded to units occupied by 21.6 members of the cooperative association and the units must be 21.7 assessed as provided in subdivision 3, provided that any unit 21.8 not so occupied shall be classified and assessed pursuant to the 21.9 appropriate class. No more than three acres of land may, for 21.10 assessment purposes, be included with each dwelling unit that 21.11 qualifies for homestead treatment under this subdivision. 21.12 When dwelling units no longer qualify under this 21.13 subdivision, the current owner must notify the assessor within 21.14 60 days. Failure to notify the assessor within 60 days shall 21.15 result in the loss of benefits under this subdivision for taxes 21.16 payable in the year that the failure is discovered. For these 21.17 purposes, "benefits under this subdivision" means the difference 21.18 in the net tax capacity of the units which no longer qualify as 21.19 computed under this subdivision and as computed under the 21.20 otherwise applicable law, times the local tax rate applicable to 21.21 the building for that taxes payable year. Upon discovery of a 21.22 failure to notify, the assessor shall inform the auditor of the 21.23 difference in net tax capacity for the building or buildings in 21.24 which units no longer qualify, and the auditor shall calculate 21.25 the benefits under this subdivision. Such amount, plus a 21.26 penalty equal to 100 percent of that amount, shall then be 21.27 demanded of the building's owner. The property owner may appeal 21.28 the county's determination by filing a notice of appeal with the 21.29 Minnesota tax court within 60 days of the date of the notice 21.30 from the county. Unless inconsistent with the provisions of 21.31 this subdivision, and except for the provisions of section 21.32 278.03 requiring partial payments, the tax court shall treat the 21.33 appeal as a chapter 278 property tax appeal. If the amount of 21.34 the benefits under this subdivision and penalty are not paid 21.35 within 60 days, and if no appeal has been filed, the county 21.36 auditor shall certify the amount of the benefit and penalty to 22.1 the succeeding year's tax list to be collected as part of the 22.2 property taxes on the affected buildings. 22.3 Sec. 3. Minnesota Statutes 1994, section 274.14, is 22.4 amended to read: 22.5 274.14 [LENGTH OF SESSION; RECORD.] 22.6 The county board of equalization or the special board of 22.7 equalization appointed by it shall meet during the lasttwo22.8weeks in June that containten meeting days,in June. For this 22.9 purpose, "meeting days" are defined as any day of the week 22.10 excluding Saturday and Sunday. No action taken by the county 22.11 board of review after June 30 is valid, except for corrections 22.12 permitted in sections 273.01 and 274.01. The county auditor 22.13 shall keep an accurate record of the proceedings and orders of 22.14 the board. The record must be published like other proceedings 22.15 of county commissioners. A copy of the published record must be 22.16 sent to the commissioner of revenue, with the abstract of 22.17 assessment required by section 274.16. 22.18 Sec. 4. Minnesota Statutes 1994, section 289A.60, 22.19 subdivision 12, is amended to read: 22.20 Subd. 12. [PENALTIES RELATING TO PROPERTY TAX REFUNDS.] 22.21 (a) If the commissioner determines that a property tax refund 22.22 claim is or was excessive and was filed with fraudulent intent, 22.23 the claim must be disallowed in full. If the claim has been 22.24 paid, the amount disallowed may be recovered by assessment and 22.25 collection. 22.26 (b) If it is determined that a property tax refund claim is 22.27 excessive and was negligently prepared, ten percent of the 22.28 corrected claim must be disallowed. If the claim has been paid, 22.29 the amount disallowed must be recovered by assessment and 22.30 collection. 22.31 (c) An owneror managing agentwhoknowinglywithout 22.32 reasonable cause fails to give a certificate of rent 22.33 constituting property tax to a renter, as required by section 22.34 290A.19, paragraph (a), is liable to the commissioner for a 22.35 penalty of $100 for each failure. 22.36 (d) If the owner or managing agent knowingly gives rent 23.1 certificates that report total rent constituting property taxes 23.2 in excess of the amount of actual rent constituting property 23.3 taxes paid on the rented part of a property, the owner or 23.4 managing agent is liable for a penalty equal to the greater of 23.5 (1) $100 or (2) 50 percent of the excess that is reported. An 23.6 overstatement of rent constituting property taxes is presumed to 23.7 be knowingly made if it exceeds by ten percent or more the 23.8 actual rent constituting property taxes. 23.9 (e) No claim is allowed if the initial claim is filed more 23.10 than one year after the original due date for filing the claim. 23.11 Sec. 5. [EFFECTIVE DATE.] 23.12 Section 3 is effective for taxes payable in 1997 and 23.13 thereafter. Sections 1 and 2 are effective January 1, 1996, and 23.14 thereafter. Section 4 is effective for certificates of rent 23.15 paid required after the date of final enactment. 23.16 ARTICLE 3 23.17 SALES AND SPECIAL TAXES 23.18 Section 1. Minnesota Statutes 1994, section 297.08, 23.19 subdivision 1, is amended to read: 23.20 Subdivision 1. [CONTRABAND DEFINED.] The following are 23.21 declared to be contraband: 23.22 (1) All packages which do not have stamps affixed to them 23.23 as provided in sections 297.01 to 297.13, including but not 23.24 limited to (i) packages with illegible stamps and packages with 23.25 stamps that are not complete or whole even if the stamps are 23.26 legible, and (ii) all devices for the vending of cigarettes in 23.27 whichsuch unstampedpackages as defined in item (i) are found, 23.28 including all contents contained within the devices. 23.29 (2) Any device for the vending of cigarettes and all 23.30 packages of cigarettes contained therein, where the device does 23.31 not afford at least partial visibility of contents. Where any 23.32 package exposed to view does not carry the stamp required by 23.33 sections 297.01 to 297.13, it shall be presumed that all 23.34 packages contained in the device are unstamped and contraband. 23.35 (3) Any device for the vending of cigarettes to which the 23.36 commissioner or authorized agents have been denied access for 24.1 the inspection of contents. In lieu of seizure, the 24.2 commissioner or an agent may seal the device to prevent its use 24.3 until inspection of contents is permitted. 24.4 (4) Any device for the vending of cigarettes which does not 24.5 carry the name and address of the owner, plainly marked and 24.6 visible from the front of the machine. 24.7 (5) Any device including, but not limited to, motor 24.8 vehicles, trailers, snowmobiles, airplanes, and boats used with 24.9 the knowledge of the owner or of a person operating with the 24.10 consent of the owner for the storage or transportation of more 24.11 than 5,000 cigarettes which are contraband under this 24.12 subdivision. When cigarettes are being transported in the 24.13 course of interstate commerce, or are in movement from either a 24.14 public warehouse to a distributor upon orders from a 24.15 manufacturer or distributor, or from one distributor to another, 24.16 the cigarettes are not contraband, notwithstanding the 24.17 provisions of clause (1). 24.18 (6) All packages obtained in violation of section 297.11, 24.19 subdivision 6. 24.20 (7) All packages offered for sale or held as inventory in 24.21 violation of section 297.11, subdivision 7. 24.22 Sec. 2. Minnesota Statutes 1994, section 297.08, 24.23 subdivision 3, is amended to read: 24.24 Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 24.25 DISPOSITION OF SEIZED PROPERTY.] Within two days after the 24.26 seizure of any alleged contraband, the person making the seizure 24.27 shall deliver an inventory of the property seized to the person 24.28 from whom the seizure was made, if known, and file a copy with 24.29 the commissioner. Within ten days after the date of service of 24.30 the inventory, the person from whom the property was seized or 24.31 any person claiming an ownership or security interest in the 24.32 property may file with the commissioner a demand for a judicial 24.33 determination of the question as to whether the property was 24.34 lawfully subject to seizure and forfeiture. The commissioner, 24.35 within 30 days, shall institute an action in the district court 24.36 of the county where the seizure was made to determine the issue 25.1 of forfeiture. The only issue to be decided by the court is 25.2 whether the alleged contraband is contraband, as defined in 25.3 subdivision 1. The action shall be brought in the name of the 25.4 state and shall be prosecuted by the county attorney or by the 25.5 attorney general. The court shall hear the action without a 25.6 jury and shall try and determine the issues of fact and law 25.7 involved. Whenever a judgment of forfeiture is entered, the 25.8 commissioner may, unless the judgment is stayed pending an 25.9 appeal, either (1) deliver the forfeited property to the 25.10 commissioner of human services for use by patients in state 25.11 institutions; (2) cause it to be destroyed; or (3) cause it to 25.12 be sold at public auction as provided by law. If a demand for 25.13 judicial determination is made and no action is commenced as 25.14 provided in this subdivision, the property shall be released by 25.15 the commissioner and redelivered to the person entitled to it. 25.16 If no demand is made, the property seized shall be deemed 25.17 forfeited to the state by operation of law and may be disposed 25.18 of by the commissioner as provided where there has been a 25.19 judgment of forfeiture.Whenever the commissioner is satisfied25.20that any person from whom property is seized under sections25.21297.01 to 297.13 was acting in good faith and without intent to25.22evade the tax imposed by sections 297.01 to 297.13, the25.23commissioner shall release the property seized, without further25.24legal proceedings.25.25 Sec. 3. Minnesota Statutes 1994, section 297C.02, 25.26 subdivision 2, is amended to read: 25.27 Subd. 2. [FERMENTED MALT BEVERAGES.] There is imposed 25.28 onthe direct or indirect sale of fermented malt beveragesall 25.29 fermented malt beverages that are imported, directly or 25.30 indirectly sold, or possessed in this state the following excise 25.31 tax: 25.32 (1) on fermented malt beverages containing not more than 25.33 3.2 percent alcohol by weight, $2.40 per barrel of 31 gallons; 25.34 (2) on fermented malt beverages containing more than 3.2 25.35 percent alcohol by weight, $4.60 per barrel of 31 gallons. 25.36 The tax is at a proportional rate for fractions of a barrel 26.1 of 31 gallons. 26.2 Sec. 4. Minnesota Statutes 1994, section 297C.07, is 26.3 amended to read: 26.4 297C.07 [EXCEPTIONS.] 26.5 The following are not subject to the excise tax: 26.6 (1) Sales by a manufacturer, brewer, or wholesaler for 26.7 shipment outside the state in interstate commerce. 26.8 (2) Sales of wine for sacramental purposes under section 26.9 340A.316. 26.10 (3) Fruit juices naturally fermented or beer naturally 26.11 brewed in the home for family use. 26.12 (4) Malt beverages served by a brewery for on-premise 26.13 consumption at no charge, or distributed to brewery employees 26.14 for on-premise consumption under a labor contract. 26.15 (5) Alcoholic beverages sold to authorized manufacturers of 26.16 food products or pharmaceutical firms. The alcoholic beverage 26.17 must be used exclusively in the manufacture of food products or 26.18 medicines. For purposes of this part, "manufacturer" means a 26.19 manufacturer of food products intended for sale to wholesalers 26.20 or retailers for ultimate sale to the consumer. 26.21 (6) Sales to common carriers engaged in interstate 26.22 transportation of passengers and qualified approved military 26.23 clubs, except as provided in section 297C.17. 26.24 (7) Alcoholic beverages sold or transferred between 26.25 Minnesota wholesalers. 26.26 (8) Sales to a federal agency, that the state of Minnesota 26.27 is prohibited from taxing under the constitution or laws of the 26.28 United States or under the constitution of Minnesota. 26.29 (9) Shipments of wine to Minnesota residents under section 26.30 340A.417. 26.31 (10) One liter of intoxicating liquor or 288 ounces of malt 26.32 liquor per calendar month imported or possessed by a person 26.33 entering Minnesota from another state, provided the alcoholic 26.34 beverages accompany the person into this state and will not be 26.35 offered for sale or used for any commercial purpose. 26.36 (11) Four liters of intoxicating liquor or ten quarts (320 27.1 ounces) of malt liquor per calendar month imported or possessed 27.2 by a person entering Minnesota from a foreign country, provided 27.3 the alcoholic beverages accompany the person into this state and 27.4 will not be offered for sale or used for any commercial purpose. 27.5 (12) The alcoholic beverage contained in 12 or fewer 27.6 commemorative bottles per calendar month imported into this 27.7 state, provided the bottles accompany a collector of 27.8 commemorative bottles into this state. 27.9 Sec. 5. [REPEALER.] 27.10 Minnesota Statutes 1994, section 297A.212, is repealed. 27.11 Sec. 6. [EFFECTIVE DATE.] 27.12 Sections 1, 2, 3, 4, and 5, are effective the day following 27.13 final enactment. 27.14 ARTICLE 4 27.15 COLLECTIONS AND COMPLIANCE 27.16 Section 1. Minnesota Statutes 1994, section 60A.15, 27.17 subdivision 12, is amended to read: 27.18 Subd. 12. [OVERPAYMENTS, CLAIMS FOR REFUND.] (1) 27.19 [PROCEDURE, TIME LIMIT, APPROPRIATION.] A company who has paid, 27.20 voluntarily or otherwise, or from whom there has been collected 27.21 an amount of tax for any year in excess of the amount legally 27.22 due for that year, may file with the commissioner of revenue a 27.23 claim for a refund of the excess. Except as provided in 27.24 subdivision 11, no claim or refund shall be allowed or made 27.25 after3-1/2 years from the date prescribed for filing the return27.26(plus any extension of time granted for filing the return but27.27only if filed within the extended time) or after two years from27.28the date of overpayment, whichever period is longer, unless27.29before the expiration of the period a claim is filed by the27.30companythe period prescribed in section 289A.40, subdivision 1. 27.31 For this purpose, a return or amended return claiming an 27.32 overpayment constitutes a claim for refund. 27.33 Upon the filing of a claim, the commissioner shall examine 27.34 it, shall make and file written findings denying or allowing the 27.35 claim in whole or in part, and shall mail a notice thereof to 27.36 the company at the address stated upon the return. If the claim 28.1 is allowed in whole or in part, the commissioner shall issue a 28.2 certificate for the refundment of the excess paid by the 28.3 company, with interest at the rate specified in section 270.76 28.4 computed from the date of the payment of the tax until the date 28.5 the refund is paid or the credit is made to the company. The 28.6 commissioner of finance shall pay the refund out of the proceeds 28.7 of the taxes imposed by this section, as other state moneys are 28.8 expended. As much of the proceeds of the taxes as necessary are 28.9 appropriated for that purpose. 28.10 (2) [DENIAL OF CLAIM, COURT PROCEEDINGS.] If the claim is 28.11 denied in whole or in part, the commissioner shall mail an order 28.12 of denial to the company in the manner prescribed in subdivision 28.13 8. An appeal from this order may be taken to the Minnesota tax 28.14 court in the manner prescribed in section 271.06, or the company 28.15 may commence an action against the commissioner to recover the 28.16 denied overpayment. The action may be brought in the district 28.17 court of the district in the county of its principal place of 28.18 business, or in the district court for Ramsey county. The 28.19 action in the district court must be commenced within 18 months 28.20 following the mailing of the order of denial to the company. If 28.21 a claim for refund is filed by a company and no order of denial 28.22 is issued within six months of the filing, the company may 28.23 commence an action in the district court as in the case of a 28.24 denial, but the action must be commenced within two years of the 28.25 date that the claim for refund was filed. 28.26 (3) [CONSENT TO EXTEND TIME.] If the commissioner and the 28.27 company have, within the periods prescribed in clause (1), 28.28 consented in writing to any extension of time for the assessment 28.29 of the tax, the period within which a claim for refund may be 28.30 filed, or a refund may be made or allowed, if no claim is filed, 28.31 shall be the period within which the commissioner and the 28.32 company have consented to an extension for the assessment of the 28.33 tax and six months thereafter.The period within which a claim28.34for refund may be filed shall not expire prior to two years28.35after the tax was paid.28.36 (4) [OVERPAYMENTS; REFUNDS.] If the amount determined to be 29.1 an overpayment exceeds the taxes imposed by this section, the 29.2 amount of excess shall be considered an overpayment. An amount 29.3 paid as tax constitutes an overpayment even if in fact there was 29.4 no tax liability with respect to which the amount was paid. 29.5 Notwithstanding any other provision of law to the contrary, 29.6 in the case of any overpayment, the commissioner, within the 29.7 applicable period of limitations, shall refund any balance of 29.8 more than one dollar to the company if the company requests the 29.9 refund. 29.10 Sec. 2. Minnesota Statutes 1994, section 60A.199, 29.11 subdivision 8, is amended to read: 29.12 Subd. 8. [REFUND PROCEDURE; TIME LIMIT; APPROPRIATION.] A 29.13 licensee which has paid, voluntarily or otherwise, or from which 29.14 there was collected an amount of tax for any year in excess of 29.15 the amount legally due for that year, may file with the 29.16 commissioner of revenue a claim for a refund of the excess. 29.17 Except as provided in subdivision 3, no claim or refund shall be 29.18 allowed or made after3-1/2 years from the date prescribed for29.19filing the return (plus any extension of time granted for filing29.20the return but only if filed within the extended time) or after29.21two years from the date of overpayment, whichever period is29.22longer, unless before the expiration of the period a claim is29.23filed by the licenseethe period prescribed in section 289A.40, 29.24 subdivision 1. For this purpose, a return or amended return 29.25 claiming an overpayment constitutes a claim for refund. 29.26 Upon the filing of a claim the commissioner shall examine 29.27 it, shall make written findings thereon denying or allowing the 29.28 claim in whole or in part, and shall mail a notice thereof to 29.29 the licensee at the address stated upon the return. If the 29.30 claim is allowed in whole or in part, the commissioner shall 29.31 issue a certificate for a refund of the excess paid by the 29.32 licensee, with interest at the rate specified in section 270.76 29.33 computed from the date of the payment of the tax until the date 29.34 the refund is paid or credit is made to the licensee. The 29.35 commissioner of finance shall cause the refund to be paid as 29.36 other state moneys are expended. So much of the proceeds of the 30.1 taxes as is necessary are appropriated for that purpose. 30.2 Sec. 3. Minnesota Statutes 1994, section 60A.199, 30.3 subdivision 10, is amended to read: 30.4 Subd. 10. [CONSENT TO EXTEND TIME.] If the commissioner 30.5 and the licensee have, within the periods prescribed by this 30.6 section, consented in writing to any extension of time for the 30.7 assessment of the tax, the period within which a claim for 30.8 refund may be filed, or a refund may be made or allowed, if no 30.9 claim is filed, is the period within which the commissioner and 30.10 the licensee have consented to an extension for the assessment 30.11 of the tax and six months thereafter, the period within which a30.12claim for refund may be filed shall not expire prior to two30.13years after the tax was paid. 30.14 Sec. 4. [270.7002] [PERSONAL LIABILITY FOR FAILURE TO 30.15 HONOR A LEVY.] 30.16 Subdivision 1. [SURRENDER OF PROPERTY SUBJECT TO LEVY.] A 30.17 person who fails or refuses to surrender property or rights to 30.18 property subject to a levy served on the person under section 30.19 270.70, 270.7001, or 290.92, subdivision 23, is liable in an 30.20 amount equal to the value of the property or rights not 30.21 surrendered, or the amount of taxes, penalties, and interest for 30.22 the collection of which the levy was made, whichever is less. A 30.23 financial institution need not surrender funds on deposit until 30.24 ten days after service of the levy. 30.25 Subd. 2. [PENALTY.] In addition to the personal liability 30.26 imposed by subdivision 1, if a person required to surrender 30.27 property or rights to property fails to do so without reasonable 30.28 cause, the person is liable for a penalty equal to 25 percent of 30.29 the amount under subdivision 1. 30.30 Subd. 3. [PERSON DEFINED.] The term "person" as used in 30.31 this section includes an officer or employee of a corporation or 30.32 a member or employee of a partnership, who as such officer, 30.33 employee, or member is under a duty to surrender the property or 30.34 rights to property or to respond to the levy. 30.35 Subd. 4. [ORDER ASSESSING LIABILITY.] The liability 30.36 imposed by this section may, after demand to honor a levy has 31.1 been made, be assessed by the commissioner within 60 days after 31.2 service of the demand. The assessment may be based on 31.3 information available to the commissioner. The assessment is 31.4 presumed to be valid, and the burden is on the person assessed 31.5 to show it is incorrect or invalid. An order assessing 31.6 liability for failure to honor a levy is reviewable 31.7 administratively under section 289A.65, and is appealable to tax 31.8 court under chapter 271. The amount assessed, plus interest at 31.9 the rate specified in section 270.75, may be collected by any 31.10 remedy available to the commissioner for the collection of 31.11 taxes. The proceeds collected are applied first to the 31.12 liability of the original taxpayer to the extent of the 31.13 liability under subdivision 1 plus interest, and then to the 31.14 penalty under subdivision 2. 31.15 Sec. 5. Minnesota Statutes 1994, section 270.72, 31.16 subdivision 1, is amended to read: 31.17 Subdivision 1. [TAX CLEARANCE REQUIRED.] The state or a 31.18 political subdivision of the state may not issue, transfer, or 31.19 renew, and must revoke, a license for the conduct of a 31.20 profession, occupation, trade, or business, if the commissioner 31.21 notifies the licensing authority that the applicant owes the 31.22 state delinquent taxes, penalties, or interest. The 31.23 commissioner may not notify the licensing authority unless the 31.24 applicant taxpayer owes $500 or more in delinquent taxes or has 31.25 not filed returns. If the applicant taxpayer does not owe 31.26 delinquent taxes but has not filed returns, the commissioner may 31.27 not notify the licensing authority unless the taxpayer has been 31.28 given 90 days' written notice to file the returns or show that 31.29 the returns are not required to be filed. A licensing authority 31.30 that has received a notice from the commissioner may issue, 31.31 transfer,orrenew, or not revoke the applicant's license only 31.32 if (a) the commissioner issues a tax clearance certificate and 31.33 (b) the commissioner or the applicant forwards a copy of the 31.34 clearance to the authority. The commissioner may issue a 31.35 clearance certificate only if the applicant does not owe the 31.36 state any uncontested delinquent taxes, penalties, or interest 32.1 and has filed all required returns. 32.2 Sec. 6. Minnesota Statutes 1994, section 270.72, 32.3 subdivision 2, is amended to read: 32.4 Subd. 2. [DEFINITIONS.] For purposes of this section, the 32.5 following terms have the meanings given. 32.6 (a) "Taxes" are all taxes payable to the commissioner 32.7 including penalties and interest due on the taxes. 32.8 (b) "Delinquent taxes" do not include a tax liability if 32.9 (i) an administrative or court action which contests the amount 32.10 or validity of the liability has been filed or served, (ii) the 32.11 appeal period to contest the tax liability has not expired, or 32.12 (iii) the applicant has entered into a payment agreement and is 32.13 current with the payments. 32.14 (c) "Applicant" means an individual if the license is 32.15 issued to or in the name of an individual or the corporation or 32.16 partnership if the license is issued to or in the name of a 32.17 corporation or partnership. "Applicant" also means an officer 32.18 of a corporation, a member of a partnership, or an individual 32.19 who is liable for delinquent taxes, either for the entity for 32.20 which the license is at issue or for another entity for which 32.21 the liability was incurred, or personally as a licensee. In the 32.22 case of a license transfer, "applicant" also means both the 32.23 transferor and the transferee of the license. "Applicant" also 32.24 means any holder of a license. 32.25 (d) "License" includes a contract for space rental at the 32.26 Minnesota state fair. 32.27 (e) "Licensing authority" includes the Minnesota state fair 32.28 board. 32.29 Sec. 7. Minnesota Statutes 1994, section 270.72, 32.30 subdivision 3, is amended to read: 32.31 Subd. 3. [NOTICE AND HEARING.] (a) The commissioner, on 32.32 notifying a licensing authority pursuant to subdivision 1 not to 32.33 issue, transfer, or renew a license, must send a copy of the 32.34 notice to the applicant. If the applicant requests, in writing, 32.35 within 30 days of the date of the notice a hearing, a contested 32.36 case hearing must be held. The hearing must be held within 45 33.1 days of the date the commissioner refers the case to the office 33.2 of administrative hearings. Notwithstanding any law to the 33.3 contrary, the applicant must be served with 20 days' notice in 33.4 writing specifying the time and place of the hearing and the 33.5 allegations against the applicant. The notice may be served 33.6 personally or by mail. 33.7 (b) Prior to notifying a licensing authority pursuant to 33.8 subdivision 1 to revoke a license, the commissioner must send a 33.9 notice to the applicant of the commissioner's intent to require 33.10 revocation of the license and of the applicant's right to a 33.11 hearing under paragraph (a). A license is subject to revocation 33.12 when 30 days have passed following the date of the notice in 33.13 this paragraph without the applicant requesting a hearing, or, 33.14 if a hearing is timely requested, upon final determination of 33.15 the hearing under section 14.62, subdivision 1. A license shall 33.16 be revoked by the licensing authority within 30 days after 33.17 receiving notice from the commissioner to revoke. 33.18 (c) A hearing under this subdivision is in lieu of any 33.19 other hearing or proceeding provided by law arising from any 33.20 action taken under subdivision 1. 33.21 Sec. 8. [270.721] [REVOCATION OF CORPORATE CERTIFICATES OF 33.22 AUTHORITY TO DO BUSINESS IN THIS STATE.] 33.23 When a foreign corporation authorized to do business in 33.24 this state under chapter 303 fails to comply with any tax laws 33.25 administered by the commissioner of revenue, the commissioner 33.26 may serve the secretary of state with a certified copy of an 33.27 order finding such failure to comply. The secretary of state, 33.28 upon receipt of the order, shall revoke the certificate of 33.29 authority of the corporation to do business in this state, and 33.30 shall reinstate the certificate under section 303.19 only when 33.31 the corporation has obtained from the commissioner an order 33.32 finding that the corporation is in compliance with state tax 33.33 law. An order requiring revocation of a certificate shall not 33.34 be issued unless the commissioner gives the corporation 30 days' 33.35 written notice of the proposed order, specifying the violations 33.36 of state tax law, and affording the corporation an opportunity 34.1 to request a contested case hearing under chapter 14. 34.2 Sec. 9. Minnesota Statutes 1994, section 289A.40, 34.3 subdivision 1, is amended to read: 34.4 Subdivision 1. [TIME LIMIT; GENERALLY.] Unless otherwise 34.5 provided in this chapter, a claim for a refund of an overpayment 34.6 of state tax must be filed within 3-1/2 years from the date 34.7 prescribed for filing the return, plus any extension of time 34.8 granted for filing the return, but only if filed within the 34.9 extended time, ortwo yearsone year from thetimedate of an 34.10 order assessing tax under section 289A.37, subdivision 1, upon 34.11 payment in full of the taxis paid in full, penalties, and 34.12 interest shown on the order, whichever period expires 34.13 later. Claims for refund filed after the 3-1/2 year period but 34.14 within the one-year period are limited to the amount of the tax, 34.15 penalties, and interest on the order and to issues determined by 34.16 the order. 34.17 Sec. 10. Minnesota Statutes 1994, section 289A.60, 34.18 subdivision 2, is amended to read: 34.19 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 34.20 a taxpayer fails to make and file a return other than an income 34.21 tax return of an individual, a withholding return, or sales or 34.22 use tax return, within the time prescribed or an extension, a 34.23 penalty is added to the tax. The penalty is three percent of 34.24 the amount of tax not paid on or before the date prescribed for 34.25 payment of the tax including any extensions if the failure is 34.26 for not more than 30 days, with an additional five percent of 34.27 the amount of tax remaining unpaid during each additional 30 34.28 days or fraction of 30 days, during which the failure continues, 34.29 not exceeding 23 percent in the aggregate. 34.30If a taxpayer fails to file a return, other than an income34.31tax return of an individual, within 60 days of the date34.32prescribed for filing of the return (determined with regard to34.33any extension of time for filing), the addition to tax under34.34this subdivision must not be less than the lesser of: (1) $200;34.35or (2) the greater of (a) 25 percent of the amount required to34.36be shown as tax on the return without reduction for any payments35.1made or refundable credits allowable against the tax, or (b) $50.35.2 If a taxpayer fails to file an individual income tax return 35.3 within six months after the date prescribed for filing of the 35.4 return, a penalty of ten percent of the amount of tax not paid 35.5 by the end of that six-month period is added to the tax. 35.6 If a taxpayer fails to file a withholding or sales or use 35.7 tax return within the time prescribed, including an extension, a 35.8 penalty of five percent of the amount of tax not timely paid is 35.9 added to the tax. 35.10 Sec. 11. Minnesota Statutes 1994, section 290.92, 35.11 subdivision 23, is amended to read: 35.12 Subd. 23. [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 35.13 (1) The commissioner may, within five years after the date of 35.14 assessment of the tax, or if a lien has been filed under section 35.15 270.69, within the statutory period for enforcement of the lien, 35.16 give notice to any employer deriving income which has a taxable 35.17 situs in this state regardless of whether the income is exempt 35.18 from taxation, that an employee of that employer is delinquent 35.19 in a certain amount with respect to any state taxes, including 35.20 penalties, interest, and costs. The commissioner can proceed 35.21 under this subdivision only if the tax is uncontested or if the 35.22 time for appeal of the tax has expired. The commissioner shall 35.23 not proceed under this subdivision until the expiration of 30 35.24 days after mailing to the taxpayer, at the taxpayer's last known 35.25 address, a written notice of (a) the amount of taxes, interest, 35.26 and penalties due from the taxpayer and demand for their 35.27 payment, and (b) the commissioner's intention to require 35.28 additional withholding by the taxpayer's employer pursuant to 35.29 this subdivision. The effect of the notice shall expire 180 35.30 days after it has been mailed to the taxpayer provided that the 35.31 notice may be renewed by mailing a new notice which is in 35.32 accordance with this subdivision. The renewed notice shall have 35.33 the effect of reinstating the priority of the original claim. 35.34 The notice to the taxpayer shall be in substantially the same 35.35 form as that provided in section 571.72. The notice shall 35.36 further inform the taxpayer of the wage exemptions contained in 36.1 section 550.37, subdivision 14. If no statement of exemption is 36.2 received by the commissioner within 30 days from the mailing of 36.3 the notice, the commissioner may proceed under this 36.4 subdivision. The notice to the taxpayer's employer may be 36.5 served by mail or by delivery by an employee of the department 36.6 of revenue and shall be in substantially the same form as 36.7 provided in section 571.75. Upon receipt of notice, the 36.8 employer shall withhold from compensation due or to become due 36.9 to the employee, the total amount shown by the notice, subject 36.10 to the provisions of section 571.922. The employer shall 36.11 continue to withhold each pay period until the notice is 36.12 released by the commissioner under section 270.709. Upon 36.13 receipt of notice by the employer, the claim of the state of 36.14 Minnesota shall have priority over any subsequent garnishments 36.15 or wage assignments. The commissioner may arrange between the 36.16 employer and the employee for withholding a portion of the total 36.17 amount due the employee each pay period, until the total amount 36.18 shown by the notice plus accrued interest has been withheld. 36.19 The "compensation due" any employee is defined in 36.20 accordance with the provisions of section 571.921. The maximum 36.21 withholding allowed under this subdivision for any one pay 36.22 period shall be decreased by any amounts payable pursuant to a 36.23 garnishment action with respect to which the employer was served 36.24 prior to being served with the notice of delinquency and any 36.25 amounts covered by any irrevocable and previously effective 36.26 assignment of wages; the employer shall give notice to the 36.27 department of the amounts and the facts relating to such 36.28 assignments within ten days after the service of the notice of 36.29 delinquency on the form provided by the department of revenue as 36.30 noted in this subdivision. 36.31 (2) If the employee ceases to be employed by the employer 36.32 before the full amount set forth in a notice of delinquency plus 36.33 accrued interest has been withheld, the employer shall 36.34 immediately notify the commissioner in writing of the 36.35 termination date of the employee and the total amount withheld. 36.36 No employer may discharge any employee by reason of the fact 37.1 that the commissioner has proceeded under this subdivision. If 37.2 an employer discharges an employee in violation of this 37.3 provision, the employee shall have the same remedy as provided 37.4 in section 571.927, subdivision 2. 37.5 (3) Within ten days after the expiration of such pay 37.6 period, the employer shall remit to the commissioner, on a form 37.7 and in the manner prescribed by the commissioner, the amount 37.8 withheld during each pay period under this subdivision.Should37.9any employer, after notice, willfully fail to withhold in37.10accordance with the notice and this subdivision, or willfully37.11fail to remit any amount withheld as required by this37.12subdivision, the employer shall be liable for the total amount37.13set forth in the notice together with accrued interest which may37.14be collected by any means provided by law relating to taxation.37.15Any amount collected from the employer for failure to withhold37.16or for failure to remit under this subdivision shall be credited37.17to the employee's account in the following manner: penalties,37.18interest, tax, and costs.37.19 (4) Clauses (1), (2), and (3), except provisions imposing a 37.20 liability on the employer for failure to withhold or remit, 37.21 shall apply to cases in which the employer is the United States 37.22 or any instrumentality thereof or this state or any municipality 37.23 or other subordinate unit thereof. 37.24 (5) The commissioner shall refund to the employee excess 37.25 amounts withheld from the employee under this subdivision. If 37.26 any excess results from payments by the employer because of 37.27 willful failure to withhold or remit as prescribed in clause 37.28 (3), the excess attributable to the employer's payment shall be 37.29 refunded to the employer. 37.30 (6) Employers required to withhold delinquent taxes, 37.31 penalties, interest, and costs under this subdivision shall not 37.32 be required to compute any additional interest, costs or other 37.33 charges to be withheld. 37.34 (7) The collection remedy provided to the commissioner by 37.35 this subdivision shall have the same legal effect as if it were 37.36 a levy made pursuant to section 270.70. 38.1 Sec. 12. Minnesota Statutes 1994, section 294.09, 38.2 subdivision 1, is amended to read: 38.3 Subdivision 1. [PROCEDURES; TIME LIMIT.] A company, joint 38.4 stock association, copartnership, corporation, or individual who 38.5 has paid, voluntarily or otherwise, or from whom there has been 38.6 collected (other than by proceedings instituted by the attorney 38.7 general under sections 294.06 and 294.08, subdivision 3) an 38.8 amount of gross earnings tax for any year in excess of the 38.9 amount legally due for that year, may file with the commissioner 38.10 of revenue a claim for a refund of such excess. Except as 38.11 provided in subdivision 4, no such claim shall be entertained 38.12 unless filed withintwo years after such tax was paid or38.13collected, or within 3-1/2 years from the filing of the return,38.14whichever period is the longerthe period prescribed in section 38.15 289A.40, subdivision 1. Upon the filing of a claim the 38.16 commissioner shall examine the same and shall make and file 38.17 written findings thereon denying or allowing the claim in whole 38.18 or in part and shall mail a notice thereof to such company, 38.19 joint stock association, copartnership, corporation, or 38.20 individual at the address stated upon the return. If such claim 38.21 is allowed in whole or in part, the commissioner shall credit 38.22 the amount of the allowance against any tax due the state from 38.23 the claimant and for the balance of said allowance, if any, the 38.24 commissioner shall issue a certificate for the refundment of the 38.25 excess paid. The commissioner of finance shall cause such 38.26 refund to be paid out of the proceeds of the gross earnings 38.27 taxes imposed by Minnesota Statutes 1967, chapters 294 and 295 38.28 as other state moneys are expended. So much of the proceeds as 38.29 may be necessary are hereby appropriated for that purpose. Any 38.30 allowance so made by the commissioner shall include interest at 38.31 the rate specified in section 270.76 computed from the date of 38.32 payment or collection of the tax until the date the refund is 38.33 paid to the claimant. 38.34 Sec. 13. Minnesota Statutes 1994, section 294.09, 38.35 subdivision 4, is amended to read: 38.36 Subd. 4. [CONSENT TO EXTEND TIME.] If the commissioner and 39.1 the taxpayer have within the periods prescribed in subdivision 1 39.2 consented in writing to any extension of time for the assessment 39.3 of the tax under the provisions of section 294.08, subdivision 39.4 4, the period within which a claim for refund may be filed, or a 39.5 refund may be made or allowed, if no claim is filed, shall be 39.6 the period within which the commissioner and the taxpayer have 39.7 consented to an extension for the assessment of the tax and six 39.8 months thereafter, provided, however, that the period within39.9which a claim for refund may be filed shall not expire prior to39.10two years after the tax was paid. 39.11 Sec. 14. Minnesota Statutes 1994, section 297.35, 39.12 subdivision 1, is amended to read: 39.13 Subdivision 1. On or before the 18th day of each calendar 39.14 month every distributor with a place of business in this state 39.15 shall file a return with the commissioner showing the quantity 39.16 and wholesale sales price of each tobacco product (1) brought, 39.17 or caused to be brought, into this state for sale; and (2) made, 39.18 manufactured, or fabricated in this state for sale in this 39.19 state, during the preceding calendar month. Every licensed 39.20 distributor outside this state shall in like manner file a 39.21 return showing the quantity and wholesale sales price of each 39.22 tobacco product shipped or transported to retailers in this 39.23 state to be sold by those retailers, during the preceding 39.24 calendar month. Returns shall be made upon forms furnished and 39.25 prescribed by the commissioner and shall contain such other 39.26 information as the commissioner may require. Each return shall 39.27 be accompanied by a remittance for the full tax liability shown 39.28 therein, less 1.5 percent of such liability as compensation to 39.29 reimburse the distributor for expenses incurred in the 39.30 administration of sections 297.31 to 297.39. The return for the 39.31 May liability and 75 percent of the estimated June liability is 39.32 due on the date payment of the tax is due. 39.33 A distributor having a liability of $120,000 or more during 39.34 acalendarfiscal year ending June 30 must remit all liabilities 39.35 in the subsequentfiscalcalendar yearending June 30by means 39.36 of a funds transfer as defined in section 336.4A-104, paragraph 40.1 (a). The funds transfer payment date, as defined in section 40.2 336.4A-401, must be on or before the date the tax is due. If 40.3 the date the tax is due is not a funds transfer business day, as 40.4 defined in section 336.4A-105, paragraph (a), clause (4), the 40.5 payment date must be on or before the funds transfer business 40.6 day next following the date the tax is due. 40.7 Sec. 15. Minnesota Statutes 1994, section 297.43, 40.8 subdivision 2, is amended to read: 40.9 Subd. 2. [PENALTY FOR FAILURE TO FILE.] If a person fails 40.10 to make and file a return within the time required under 40.11 sections 297.07, 297.23, and 297.35, there shall be added to the 40.12 tax five percent of the amount of tax not paid on or before the 40.13 date prescribed for payment of the tax. The amount so added to 40.14 any tax under this subdivision and subdivision 1 shall be 40.15 collected at the same time and in the same manner and as a part 40.16 of the tax and shall bear interest at the rate specified in 40.17 section 270.75 from the time the tax should have been paid, 40.18 unless the tax has been paid before the discovery of the 40.19 negligence, in which case the amount so added shall be collected 40.20 in the same manner as the tax. 40.21In the case of a failure to file a return within 60 days of40.22the date prescribed for filing of the return (determined with40.23regard to any extension of time for filing), the addition to tax40.24under this subdivision shall not be less than the lesser of (i)40.25$200; or (ii) the greater of (a) 25 percent of the amount40.26required to be shown as tax on the return without reduction for40.27any payments made or refundable credits allowable against the40.28tax; or (b) $50.40.29 Sec. 16. Minnesota Statutes 1994, section 297C.14, 40.30 subdivision 2, is amended to read: 40.31 Subd. 2. [PENALTY FOR FAILURE TO FILE.] If a person fails 40.32 to make and file a return within the time required by this 40.33 chapter or an extension of time, there shall be added to the tax 40.34 five percent of the amount of tax not paid on or before the date 40.35 prescribed for payment of the tax. The amount so added to any 40.36 tax under subdivisions 1 and 2 shall be collected at the same 41.1 time and in the same manner and as a part of the tax and shall 41.2 bear interest at the rate specified in section 270.75 from the 41.3 time the tax should have been paid, unless the tax has been paid 41.4 before the discovery of the negligence, in which case the amount 41.5 so added shall be collected in the same manner as the tax. 41.6In the case of a failure to file a return within 60 days of41.7the date prescribed for filing of the return (determined with41.8regard to any extension of time for filing), the addition to tax41.9under this subdivision shall not be less than the lesser of (i)41.10$200; or (ii) the greater of (a) 25 percent of the amount41.11required to be shown as tax on the return without reduction for41.12any payments made or refundable credits allowable against the41.13tax; or (b) $50.41.14 Sec. 17. Minnesota Statutes 1994, section 297E.11, 41.15 subdivision 4, is amended to read: 41.16 Subd. 4. [TIME LIMIT FOR REFUNDS.] Unless otherwise 41.17 provided in this chapter, a claim for a refund of an overpayment 41.18 of tax must be filed within3-1/2 years from the date prescribed41.19for filing the return, plus any extension of time granted for41.20filing the return, but only if filed within the extended time,41.21or two years from the time the tax is paid, whichever period41.22expires laterthe period prescribed in section 289A.40, 41.23 subdivision 1. Interest on refunds must be computed at the rate 41.24 specified in section 270.76 from the date of payment to the date 41.25 the refund is paid or credited. For purposes of this 41.26 subdivision, the date of payment is the later of the date the 41.27 tax was finally due or was paid. 41.28 Sec. 18. Minnesota Statutes 1994, section 297E.12, 41.29 subdivision 2, is amended to read: 41.30 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 41.31 a taxpayer fails to make and file a return within the time 41.32 prescribed or an extension, a penalty is added to the tax. The 41.33 penalty is five percent of the amount of tax not paid on or 41.34 before the date prescribed for payment of the tax. 41.35If a taxpayer fails to file a return within 60 days of the41.36date prescribed for filing of the return (determined with regard42.1to any extension of time for filing), the addition to tax under42.2this subdivision must be at least the lesser of: (1) $200; or42.3(2) the greater of (i) 25 percent of the amount required to be42.4shown as tax on the return without reduction for any payments42.5made or refundable credits allowable against the tax, or (ii)42.6$50.42.7 Sec. 19. Minnesota Statutes 1994, section 299F.26, 42.8 subdivision 1, is amended to read: 42.9 Subdivision 1. [PROCEDURE, TIME LIMIT, APPROPRIATION.] A 42.10 company which has paid, voluntarily or otherwise, or from which 42.11 there was collected an amount of tax for any year in excess of 42.12 the amount legally due for that year, may file with the 42.13 commissioner of revenue a claim for a refund of the excess. 42.14 Except as provided in subdivision 4, no claim or refund shall be 42.15 allowed or made after3-1/2 years from the date prescribed for42.16filing the return (plus any extension of time granted for filing42.17the return but only if filed within the extended time) or after42.18two years from the date of overpayment, whichever period is42.19longer, unless before the expiration of the period a claim is42.20filed by the companythe period prescribed in section 289A.40, 42.21 subdivision 1. For this purpose a return or amended return 42.22 claiming an overpayment constitutes a claim for refund. 42.23 Upon the filing of a claim the commissioner shall examine 42.24 the same and shall make and file written findings thereon 42.25 denying or allowing the claim in whole or in part and shall mail 42.26 a notice thereof to the company at the address stated upon the 42.27 return. If such claim is allowed in whole or in part, the 42.28 commissioner shall issue a certificate for the refundment of the 42.29 excess paid by the company, with interest at the rate specified 42.30 in section 270.76 computed from the date of the payment of the 42.31 tax until the date the refund is paid or the credit is made to 42.32 the company, and the commissioner of finance shall cause the 42.33 refund to be paid as other state moneys are expended. So much 42.34 of the proceeds of the taxes as is necessary are appropriated 42.35 for that purpose. 42.36 Sec. 20. Minnesota Statutes 1994, section 299F.26, 43.1 subdivision 4, is amended to read: 43.2 Subd. 4. [CONSENT TO EXTEND TIME.] If the commissioner and 43.3 the company have within the periods prescribed in subdivision 1, 43.4 consented in writing to any extension of time for the assessment 43.5 of the tax, the period within a claim for refund may be filed, 43.6 or a refund may be made or allowed, if no claim is filed, shall 43.7 be the period within which the commissioner and the company have 43.8 consented to an extension for the assessment of the tax and six 43.9 months thereafter, provided, however, that the period within43.10which a claim for refund may be filed shall not expire prior to43.11two years after the tax was paid. 43.12 Sec. 21. [REPEALER.] 43.13 Minnesota Statutes 1994, sections 270.70, subdivisions 8, 43.14 9, and 10; and 297A.38, are repealed. 43.15 Sec. 22. [EFFECTIVE DATE.] 43.16 Sections 1, 2, 9, 12, 17, and 19 are effective for claims 43.17 for refund which have not been filed as of the day following 43.18 final enactment and in which the time period for filing the 43.19 claim has not expired under the provisions in effect prior to 43.20 the day following final enactment. The time period for filing 43.21 such claims is the time period prescribed in the enacted 43.22 sections, or one year after the day following final enactment, 43.23 whichever is greater. 43.24 Sections 3, 13, and 20, and the provisions in section 1 43.25 pertaining to consents to extend time, are effective for 43.26 consents to extend time for filing claims for refund entered 43.27 into on or after the day following final enactment. 43.28 Sections 4, 8, 10, 11, 14 to 16, 18, and 21 are effective 43.29 the day following final enactment. 43.30 Sections 5 to 7 are effective July 1, 1995. 43.31 ARTICLE 5 43.32 CRIMINAL PENALTIES 43.33 Section 1. [340A.7035] [CONSUMER IMPORTATION; ILLEGAL 43.34 ACTS.] 43.35 A person who enters Minnesota from another state and who 43.36 imports or possesses alcoholic beverages in excess of the 44.1 tax-exempt quantities provided for in section 297C.07, 44.2 paragraphs (10), (11), and (12), is guilty of a misdemeanor. A 44.3 person who enters Minnesota from a foreign country who imports 44.4 or possesses alcoholic beverages on which the excise tax imposed 44.5 by sections 297C.02 and 297C.09 has not been paid, other than 44.6 the tax-exempt quantities provided for in section 297C.07, 44.7 paragraphs (10), (11), and (12), is guilty of a misdemeanor. A 44.8 peace officer, the commissioner of public safety, and employees 44.9 designated by the commissioner of public safety may seize 44.10 alcoholic beverages imported or possessed in violation of this 44.11 section. This section does not apply to the consignments of 44.12 alcoholic beverages shipped into this state by holders of 44.13 Minnesota import licenses or Minnesota manufacturers and 44.14 wholesalers when licensed by the commissioner of public safety 44.15 or to common carriers with licenses to sell alcoholic beverages 44.16 in more than one state when licensed by the commissioner of 44.17 public safety to sell alcoholic beverages in this state. 44.18 Sec. 2. [EFFECTIVE DATE.] 44.19 Section 1 is effective the day following final enactment. 44.20 ARTICLE 6 44.21 MISCELLANEOUS 44.22 Section 1. Minnesota Statutes 1994, section 289A.43, is 44.23 amended to read: 44.24 289A.43 [PROHIBITION OF SUITS TO RESTRAIN ASSESSMENT OR 44.25 COLLECTION.] 44.26 Except for the express procedures in this chapter, chapters 44.27 270 and 271, and any other tax statutes for contesting the 44.28 assessment or collection of taxes, penalties, or interest 44.29 administered by the commissioner of revenue, and except for an 44.30 action challenging the constitutionality of a tax statute on its 44.31 face, if it is demonstrated to the court by clear and convincing 44.32 evidence that under no circumstances would the commissioner 44.33 ultimately prevail and that the taxpayer will suffer irreparable 44.34 harm if the relief sought is not granted, no suit to restrain 44.35 assessment or collection, including a declaratory judgment 44.36 action, can be maintained in any court by any person. 45.1 Sec. 2. Minnesota Statutes 1994, section 295.53, 45.2 subdivision 2, is amended to read: 45.3 Subd. 2. [DEDUCTIONS FOR STAFF MODEL HEALTH PLAN COMPANY.] 45.4 In addition to the exemptions allowed under subdivision 1, a 45.5 staff model health plan company may deduct from its gross 45.6 revenues for the year: 45.7 (1) amounts paid to hospitals, surgical centers, and health 45.8 care providers that are not employees of the staff model health 45.9 plan company for services on which liability for the tax is 45.10 imposed under section 295.52; 45.11 (2) net amounts added to reserves,ifto the extent that 45.12 the amounts added do not cause total reservesdo notto exceed 45.13 200 percent of the statutory net worth requirement, the 45.14 calculation of which may be determined on a consolidated basis, 45.15 taking into account the amounts held in reserve by affiliated 45.16 staff model health plan companies; 45.17 (3) assessments for the comprehensive health insurance plan 45.18 under section 62E.11; and 45.19 (4) amounts spent for administration as reported as total 45.20 administration to the department of health in the statement of 45.21 revenues, expenses, and net worth pursuant to section 62D.08, 45.22 subdivision 3, clause (a). 45.23 Sec. 3. [296.041] [ELECTRONICALLY FILED RETURNS OR 45.24 REPORTS; SIGNATURES.] 45.25 For purposes of this chapter, the name of the taxpayer, the 45.26 name of the taxpayer's authorized agent, or the taxpayer's 45.27 identification number constitutes a signature when transmitted 45.28 as part of the information on returns or reports filed by 45.29 electronic means by the taxpayer or at the taxpayer's 45.30 direction. "Electronic means" includes, but is not limited to, 45.31 the use of a touch-tone telephone to transmit return or report 45.32 information in a manner prescribed by the commissioner. 45.33 Sec. 4. Minnesota Statutes 1994, section 296.12, 45.34 subdivision 3, is amended to read: 45.35 Subd. 3. [TAX COLLECTION, REPORTING AND PAYMENT.] (a) For 45.36 clear diesel fuel, the tax is imposed on the distributor who 46.1 receives the fuel. 46.2 (b) For all other special fuels, the tax is imposed on the 46.3 distributor, bulk purchaser, or special fuel dealer. The tax 46.4 may be paid upon receipt or sale as follows: 46.5 (1) Distributors and special fuel dealers may, subject to 46.6 the approval of the commissioner, elect to pay to the 46.7 commissioner the special fuel excise tax on all special fuel 46.8 delivered or sold into the supply tank of an aircraft or a 46.9 licensed motor vehicle. Under this option an invoice must be 46.10 issued at the time of each delivery showing the name and address 46.11 of the purchaser, date of sale, number of gallons, price per 46.12 gallon and total amount of sale. A separate sales ticket book 46.13 shall be maintained for special fuel sales; and 46.14 (2) Bulk purchasers shall report and pay the excise tax on 46.15 all special fuel purchased by them for storage, to the 46.16 commissioner in the form and manner prescribed by the 46.17 commissioner. 46.18 (c) Any person delivering special fuel on which the excise 46.19 tax has not previously been paid, into the supply tank of an 46.20 aircraft or a licensed motor vehicle shall report such delivery 46.21 and pay the excise tax on the special fuel so delivered, to the 46.22 commissioner. 46.23 Sec. 5. Minnesota Statutes 1994, section 296.12, 46.24 subdivision 4, is amended to read: 46.25 Subd. 4. [MONTHLY REPORTS; SHRINKAGE ALLOWANCE.] On or 46.26 before the 23rd day of each month, the persons subject to the 46.27 provisions of this section shall filein the office of the46.28commissioner at St. Paul, Minnesota,a report in thefollowing46.29mannerform and manner prescribed by the commissioner. Reports 46.30 shall contain information as follows: 46.31 (1) Distributors of clear diesel fuel must file a monthly 46.32 tax return with the department listing all purchases or receipts 46.33 of clear diesel fuel. Distributors may be allowed to take a 46.34 credit or credits under section 296.14, subdivision 2. 46.35 (2) Distributors and dealers of special fuel other than 46.36 clear diesel fuel shall report the total number of gallons 47.1 delivered to them during the preceding calendar month and shall 47.2 pay the special fuel excise tax due thereon to the commissioner. 47.3 The invoice must show the true and correct name and address of 47.4 the purchaser, and the purchaser's signature. The report shall 47.5 contain such other information as the commissioner may require. 47.6 (3) Distributors and dealers of special fuel other than 47.7 clear diesel fuel who have elected to pay the special fuel 47.8 excise tax on all special fuel delivered into the supply tank of 47.9 an aircraft or licensed motor vehicle as provided in subdivision 47.10 3, shall report the total number of gallons delivered into the 47.11 supply tank of an aircraft or licensed motor vehicle during the 47.12 preceding calendar month and shall pay the special fuel excise 47.13 tax due thereon to the commissioner. 47.14 (4) Bulk purchasers shall report and pay the special fuel 47.15 excise tax on all special fuel except clear diesel fuel 47.16 purchased by them for storage, during the preceding calendar 47.17 month. In such cases as the commissioner may permit, credit for 47.18 the excise tax due or previously paid on special fuel not used 47.19 in aircraft or licensed motor vehicles, may be allowed in 47.20 computing tax liability. The report shall contain such other 47.21 information as the commissioner may require. 47.22 (5) In computing the special fuel excise tax due, a 47.23 deduction of one percent of the quantity of special fuel on 47.24 which tax is due shall be made for evaporation and loss. 47.25 (6) Each report shall contain a confession of judgment for 47.26 the amount of the tax shown due thereon to the extent not timely 47.27 paid. 47.28 Sec. 6. Minnesota Statutes 1994, section 296.12, 47.29 subdivision 11, is amended to read: 47.30 Subd. 11. [QUALIFIED BULK PURCHASERS.] Notwithstanding any 47.31 other provision of law to the contrary, the commissioner of 47.32 revenue may allow any bulk purchaser who receives special fuel 47.33 other than clear diesel fuel in bulk storage for subsequent 47.34 delivery into the supply tank of licensed motor vehicles or 47.35 aircraft operated by the bulk purchaser to purchase bulk special 47.36 fuel on a tax paid basis from any consenting supplier licensed 48.1 as a distributor or special fuel dealer under this section or 48.2 section 296.06. Bulk purchasers qualifying under this provision 48.3 must become registered in a manner approved by the commissioner 48.4 but shall be exempt from the bulk purchaser license 48.5 requirements. Every licensed distributor or special fuel dealer 48.6 who sells or delivers special fuel other than clear diesel fuel 48.7 on a tax paid basis to persons registered under this provision 48.8 must report on or before the 23rd day of each month sales made 48.9 during the preceding calendar month and shall pay the special 48.10 fuel excise tax due thereon to the commissioner. The report 48.11 shall be in the form and manner prescribed by the commissioner, 48.12 and shall contain information as the commissioner may require. 48.13 Sec. 7. Minnesota Statutes 1994, section 296.141, 48.14 subdivision 1, is amended to read: 48.15 Subdivision 1. [PAYMENT OF GASOLINE TAX AND PETROLEUM TANK 48.16 RELEASE CLEANUP FEE; SHRINKAGE ALLOWANCE.] On or before the 23rd 48.17 day of each month, every person who is required to pay a 48.18 gasoline tax shall filein the office ofwith the commissioner 48.19at St. Paul, Minnesota,a report, inathe form and manner 48.20 approved by the commissioner, showing the number of gallons of 48.21 petroleum products received by the reporter during the preceding 48.22 calendar month, and other information the commissioner may 48.23 require. The number of gallons of gasoline must be reported in 48.24 United States standard liquid gallons (231 cubic inches), except 48.25 that the commissioner may upon written application and for cause 48.26 shown permit the distributor to report the number of gallons of 48.27 gasoline as corrected to a 60 degree Fahrenheit temperature. If 48.28 the application is granted, all gasoline covered in the 48.29 application and allowed by the commissioner must continue to be 48.30 reported by the distributor on the adjusted basis for a period 48.31 of one year from the date of the granting of the application. 48.32 The number of gallons of petroleum products other than gasoline 48.33 must be reported as originally invoiced. 48.34 Each report must show separately the number of gallons of 48.35 aviation gasoline received by the reporter during such calendar 48.36 month. 49.1 Each report must include the amount of gasoline tax on 49.2 gasoline received by the reporter during the preceding month; 49.3 provided that in computing the tax a deduction of three percent 49.4 of the quantity of gasoline received by a distributor shall be 49.5 made for evaporation and loss; provided further that at the time 49.6 of reporting, the distributor shall submit satisfactory evidence 49.7 that one-third of the three percent deduction has been credited 49.8 or paid to dealers on quantities sold to them.TheA written 49.9 report is deemed to have been filed as required in this 49.10 subdivision if postmarked on or before the 23rd day of the month 49.11 in which payable. 49.12 Sec. 8. Minnesota Statutes 1994, section 296.141, 49.13 subdivision 2, is amended to read: 49.14 Subd. 2. [INSPECTION FEES.] Persons required to pay an 49.15 inspection fee under section 239.101 must file a report. Each 49.16 report must include the amount of inspection fees due on 49.17 petroleum products.TheReports must be filed with the 49.18 commissioner in the form and manner the commissioner 49.19 prescribes. A written report is considered filed as required if 49.20 postmarked on or before the 23rd day of the month in which 49.21 payable. 49.22 Sec. 9. Minnesota Statutes 1994, section 296.141, 49.23 subdivision 6, is amended to read: 49.24 Subd. 6. [ON-FARM BULK STORAGE OF GASOLINE OR SPECIAL 49.25 FUEL; ETHYL ALCOHOL FOR PERSONAL USE.] Notwithstanding the 49.26 provisions of this section, the producer of ethyl alcohol which 49.27 is produced for personal use and not for sale in the usual 49.28 course of business and a farmer who uses gasoline or any special 49.29 fuel on which a tax has not been paid shall report and pay the 49.30 tax on all ethyl alcohol, gasoline, or special fuel delivered 49.31 into the supply tank of a licensed motor vehicle during the 49.32 preceding calendar year. The tax must be reported in the form 49.33 and manner prescribed by the commissioner and paid together with 49.34 any refund claim filed by the taxpayer under section 296.18. If 49.35 no refund claim is filed, the tax must be reported and paid 49.36 annually by March 15 or more frequently, as the commissioner may 50.1 prescribe. Any producer qualifying under this subdivision is 50.2 exempt from the licensing requirements contained in section 50.3 296.06, subdivision 1. 50.4 Sec. 10. Minnesota Statutes 1994, section 296.17, 50.5 subdivision 1, is amended to read: 50.6 Subdivision 1. [UNREPORTED FUEL.] It shall be the duty of 50.7 every distributor, dealer, and person who sells or uses gasoline 50.8 manufactured, produced, received, or stored by the distributor, 50.9 dealer, or person, and of every person using gasoline in motor 50.10 vehicles or special fuel in licensed motor vehicles, if the same 50.11 has not been reported or if the tax on account thereof has not 50.12 been paid to the commissioner, to report to the commissioner in 50.13 the form and manner prescribed by the commissioner, the quantity 50.14 of such gasoline so sold or used or such special fuel used, and 50.15 such person shall become liable for the payment of the tax. All 50.16 provisions of sections 296.01 to 296.421 relating to the 50.17 calculation, collection and payment of the tax shall be 50.18 applicable to any such person, dealer or distributor. 50.19 Sec. 11. Minnesota Statutes 1994, section 296.17, 50.20 subdivision 3, is amended to read: 50.21 Subd. 3. [REFUNDS ON FUEL USED IN OTHER STATES.] Every 50.22 person regularly or habitually operating motor vehicles upon the 50.23 public highways of any other state or states and using in said 50.24 motor vehicles gasoline or special fuel purchased or obtained in 50.25 this state, shall be allowed a credit or refund equal to the tax 50.26 on said gasoline or special fuel paid to this state on the 50.27 gasoline or special fuel actually used in the other state or 50.28 states. No credit or refund shall be allowed under this 50.29 subdivision for taxes paid to any state which imposes a tax upon 50.30 gasoline or special fuel purchased or obtained in this state and 50.31 used on the highways of such other state, and which does not 50.32 allow a similar credit or refund for the tax paid to this state 50.33 on gasoline or special fuel purchased or acquired in such other 50.34 state and used on the highways of this state. Every person 50.35 claiming a credit or refund under this subdivision shall file a 50.36 claimon ain the form and manner prescribed by the commissioner 51.1 or take the credit on a subsequent tax return within one year of 51.2 the last day of the month following the end of the quarter when 51.3 the overpayment occurred. 51.4 Sec. 12. Minnesota Statutes 1994, section 296.17, 51.5 subdivision 5, is amended to read: 51.6 Subd. 5. [UNREPORTED AVIATION GASOLINE.] The provisions of 51.7 subdivision 1 do not apply to aviation gasoline. It shall be 51.8 the duty of every distributor, dealer, and person who receives, 51.9 sells, stores, or withdraws from storage in this state aviation 51.10 gasoline manufactured, produced, received, or stored by the 51.11 distributor, dealer, or person, if the same has not been 51.12 reported or if a tax provided for in section 296.02 on account 51.13 thereof, has not been paid to the commissioner, to report to the 51.14 commissioner, in the form and manner prescribed by the 51.15 commissioner, the quantity of such gasoline so received, sold, 51.16 stored, or withdrawn from storage, and such person shall become 51.17 liable for the payment of the tax. 51.18 All provisions of sections 296.01 to 296.421 relating to 51.19 the calculation, collections, and payment of the tax shall be 51.20 applicable to any such person, dealer, or distributor. 51.21 Sec. 13. Minnesota Statutes 1994, section 296.17, 51.22 subdivision 11, is amended to read: 51.23 Subd. 11. [MOTOR CARRIER REPORTS.] Every motor carrier 51.24 subject to the road tax shall, on or before the last day of 51.25 April, July, October, and January, file with the commissioner 51.26suchin the form and manner prescribed by the commissioner, 51.27 reports of operations during the previous three monthsas the51.28commissioner may require, and such other reports from time to 51.29 time as the commissioner may deem necessary. The commissioner 51.30 by rule may exempt from the quarterly reporting requirements of 51.31 this section those motor carriers whose mileage is all or 51.32 substantially all and those motor carriers whose mileage is 51.33 minimal within this state, or states with which Minnesota has 51.34 reciprocity and require in such instances an annual report 51.35 reflecting the operations of the carrier during the previous 51.36 year along with payment of any taxes due. 52.1 Each report shall contain a confession of judgment for the 52.2 amount of the tax shown due thereon to the extent not timely 52.3 paid. 52.4 Sec. 14. Minnesota Statutes 1994, section 296.18, 52.5 subdivision 1, is amended to read: 52.6 Subdivision 1. [CLAIM; FUEL USED IN OTHER VEHICLES.] Any 52.7 person who shall buy and use gasoline for a qualifying purpose 52.8 other than use in motor vehicles, snowmobiles except as provided 52.9 in clause (2), or motorboats, or special fuel for a qualifying 52.10 purpose other than use in licensed motor vehicles, and who shall 52.11 have paid the Minnesota excise tax directly or indirectly 52.12 through the amount of the tax being included in the price of the 52.13 gasoline or special fuel, or otherwise, shall be reimbursed and 52.14 repaid the amount of the tax paid upon filing with the 52.15 commissioner asignedclaimin writingin the form and manner 52.16 prescribed by the commissioner, and containing the information 52.17 the commissioner shall requireand accompanied by the original52.18invoice thereof. By signing any such claim which is false or 52.19 fraudulent, the applicant shall be subject to the penalties 52.20 provided in this section for knowingly making a false claim. 52.21 The claim shall set forth the total amount of the gasoline so 52.22 purchased and used by the applicant other than in motor 52.23 vehicles, or special fuel so purchased and used by the applicant 52.24 other than in licensed motor vehicles, and shall state when and 52.25 for what purpose it was used. When a claim contains an error in 52.26 computation or preparation, the commissioner is authorized to 52.27 adjust the claim in accordance with the evidence shown on the 52.28 claim or other information available to the commissioner. The 52.29 commissioner, on being satisfied that the claimant is entitled 52.30 to the payments, shall approve the claim and transmit it to the 52.31 commissioner of finance. No repayment shall be made unless the 52.32 claim and invoice shall be filed with the commissioner within 52.33 one year from the date of the purchase. The postmark on the 52.34 envelope in whichthea written claim is mailed shall determine 52.35theits date of filing. The words "gasoline" or "special fuel" 52.36 as used in this subdivision do not include aviation gasoline or 53.1 special fuel for aircraft. Gasoline or special fuel bought and 53.2 used for a "qualifying purpose" means: 53.3 (1) Gasoline or special fuel used in carrying on a trade or 53.4 business, used on a farm situated in Minnesota, and used for a 53.5 farming purpose. "Farm" and "farming purpose" have the meanings 53.6 given them in section 6420(c)(2), (3), and (4) of the Internal 53.7 Revenue Code of 1986, as amended through December 31, 1988. 53.8 (2) Gasoline or special fuel used for off-highway business 53.9 use. "Off-highway business use" means any use by a person in 53.10 that person's trade, business, or activity for the production of 53.11 income. "Off-highway business use" includes use of a passenger 53.12 snowmobile off the public highways as part of the operations of 53.13 a resort as defined in section 157.01, subdivision 1. 53.14 "Off-highway business use" does not include use as a fuel in a 53.15 motor vehicle which, at the time of use, is registered or is 53.16 required to be registered for highway use under the laws of any 53.17 state or foreign country. 53.18 (3) Gasoline or special fuel placed in the fuel tanks of 53.19 new motor vehicles, manufactured in Minnesota, and shipped by 53.20 interstate carrier to destinations in other states or foreign 53.21 countries. 53.22 Sec. 15. Minnesota Statutes 1994, section 296.18, 53.23 subdivision 2, is amended to read: 53.24 Subd. 2. [FAILURE TO USE OR SELL FOR INTENDED PURPOSE; 53.25 REPORTS REQUIRED.] (1) Any person who shall buy aviation 53.26 gasoline or special fuel for aircraft use and who shall have 53.27 paid the excise taxes due thereon directly or indirectly through 53.28 the amount of the tax being included in the price thereof, or 53.29 otherwise, and shall use said gasoline or special fuel in motor 53.30 vehicles or shall knowingly sell it to any person for use in 53.31 motor vehicles shall, on or before the twenty-third day of the 53.32 month following that in which such gasoline or special fuel was 53.33 so used or sold, report the fact of such use or sale to the 53.34 commissioner in such form and manner as the commissioner may 53.35 prescribe. 53.36 (2) Any person who shall buy gasoline other than aviation 54.1 gasoline and who shall have paid the motor vehicle gasoline 54.2 excise tax directly or indirectly through the amount of the tax 54.3 being included in the price of the gasoline, or otherwise, who 54.4 shall knowingly sell such gasoline to any person to be used for 54.5 the purpose of producing or generating power for propelling 54.6 aircraft, or who shall receive, store, or withdraw from storage 54.7 such gasoline to be used for that purpose, shall, on or before 54.8 the 23rd day of the month following that in which such gasoline 54.9 was so sold, stored, or withdrawn from storage, report the fact 54.10 of such sale, storage, or withdrawal from storage to the 54.11 commissioner in such form and manner as the commissioner may 54.12 prescribe. 54.13 (3) Any person who shall buy aviation gasoline or special 54.14 fuel for aircraft use and who shall have paid the excise taxes 54.15 directly or indirectly through the amount of the tax being 54.16 included in the price thereof, or otherwise, who shall not use 54.17 it in motor vehicles or receive, sell, store, or withdraw it 54.18 from storage for the purpose of producing or generating power 54.19 for propelling aircraft, shall be reimbursed and repaid the 54.20 amount of the tax paid upon filing with the commissioner a 54.21signedclaimin writingin such form andcontaining such54.22information as the commissioner shall require and accompanied by54.23the original invoice thereofmanner as the commissioner may 54.24 prescribe. Bysigning any suchfiling a claim which is false or 54.25 fraudulent, the applicant shall be subject to the penalties 54.26 provided in section 296.25 for knowingly or willfully making a 54.27 false claim. The claim shall set forth the total amount of the 54.28 aviation gasoline or special fuel for aircraft use so purchased 54.29 and used by the applicant, and shall state when and for what 54.30 purpose it was used. When a claim contains an error in 54.31 computation or preparation, the commissioner is authorized to 54.32 adjust the claim in accordance with the evidence shown on the 54.33 claim or other information available to the commissioner. The 54.34 commissioner, on being satisfied that the claimant is entitled 54.35 to payment, shall approve the claim and transmit it to the 54.36 commissioner of finance. No repayment shall be made unless the 55.1 claim and invoice shall be filed with the commissioner within 55.2 one year from the date of the purchase. The postmark on the 55.3 envelope in whichthea written claim is mailed shall determine 55.4theits date of filing. 55.5 Sec. 16. Minnesota Statutes 1994, section 296.18, 55.6 subdivision 5, is amended to read: 55.7 Subd. 5. [GRADUATED REDUCTION-BASIS REFUND CLAIM, 55.8 REQUIREMENTS.] Any distributor or other person claiming to be 55.9 entitled to any refund provided for in subdivision 4 shall 55.10 receive such refund upon filing with the commissioner a verified 55.11 claim in such form and manner, and, containing such information,55.12and accompanied by such invoices or other proofas the 55.13 commissioner shall require. The claim shall set forth, among 55.14 other things, the total number of gallons of aviation gasoline 55.15 or special fuel for aircraft use upon which the claimant has 55.16 directly or indirectly paid the excise tax provided for in 55.17 sections 296.02, subdivision 2, or 296.025, subdivision 2, 55.18 during the calendar year, which has been received, stored, or 55.19 withdrawn from storage by the claimant in this state and not 55.20 sold or otherwise disposed of to others. The commissioner, on 55.21 being satisfied that the claimant is entitled to the refund, 55.22 shall approve the claim and transmit it to the commissioner of 55.23 finance, and it shall be paid as provided for in section 55.24 296.421, subdivision 2. All claims for refunds under this 55.25 subdivision shall be made on or before April 15 following the 55.26 end of the calendar year for which the refund is claimed. 55.27 Claims for aviation gasoline and special fuel tax refund filed 55.28 within 15 days beyond the due date prescribed by this 55.29 subdivision shall be honored by the commissioner less a penalty 55.30 of 25 percent of the amount of the approved claim. 55.31 Sec. 17. [EFFECTIVE DATE.] 55.32 Section 1 is effective for lawsuits initiated on or after 55.33 the day following final enactment. Sections 2 to 16 are 55.34 effective the day following final enactment.