HF 879

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

A bill for an act
relating to taxation; requiring withholding on certain contractor payments;
amending Minnesota Statutes 2006, section 290.92, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2006, section 290.92, is amended by adding a
subdivision to read:

new text begin Subd. 31. new text end

new text begin Payments to persons who are not employees. new text end

new text begin (a) For purposes of this
subdivision, "contractor" means a person carrying on a trade or business described in
industry code numbers 23 through 238990 of the North American Industry Classification
System.
new text end

new text begin (b) A contractor who makes payments to an individual, other than an employee, for
work must deduct and withhold two percent of the payment as Minnesota withholding
tax when the amount the contractor paid to that individual during the calendar year
exceeds $600.
new text end

new text begin (c) A payment subject to withholding under this subdivision must be treated as if
the payment were a wage paid by an employer to an employee. The requirements in the
definitions of "employee" and "employer" in subdivision 1 relating to geographic location
apply in determining whether withholding tax applies under this subdivision, but without
regard to whether the contractor or the individual otherwise satisfy the definition of an
employer or an employee. Each recipient of a payment subject to withholding under this
subdivision must furnish the contractor with a statement of the recipient's name, address,
and Social Security account number.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments made after July 31,
2007.
new text end