HF 991

2nd Engrossment - 92nd Legislature (2021 - 2022) Posted on 02/11/2022 11:43am

A bill for an act
relating to financing and operation of state and local government; providing
conformity and nonconformity to certain federal tax law changes; modifying
individual income and corporate franchise taxes, sales and use taxes, partnership
taxes, special and excise taxes, property taxes, local government aids, provisions
related to local taxes, tax increment financing, public finance, and other
miscellaneous taxes and tax provisions; providing for various individual and
corporate additions and subtractions to income; modifying certain income tax
credits and authorizing new credits; providing for a pass-through entity tax;
modifying definitions for resident trusts; modifying existing and providing new
sales tax exemptions; modifying vapor and tobacco tax provisions; modifying and
providing certain property tax exemptions; modifying property classification
provisions; allowing for certain special assessments; modifying local government
aid appropriations; modifying existing local taxes and authorizing new local taxes;
modifying property tax homeowners' and renters' refunds; authorizing and
modifying certain tax increment financing provisions; providing for a tax
expenditure review commission and the required expiration of tax expenditures;
making appointments; requiring reports; appropriating money; amending Minnesota
Statutes 2020, sections 3.192; 3.8853, subdivision 2; 16A.152, subdivision 2;
41B.0391, subdivisions 2, 4; 116J.8737, subdivisions 5, 12; 270.41, subdivision
3a; 270.44; 270A.03, subdivision 2; 270B.12, subdivisions 8, 9; 270B.14, by
adding a subdivision; 270C.11, subdivisions 2, 4, 6; 270C.13, subdivision 1;
270C.22, subdivision 1; 270C.445, subdivisions 3, 6; 272.02, by adding a
subdivision; 272.029, subdivision 2; 272.0295, subdivisions 2, 5; 272.115,
subdivision 1; 273.063; 273.0755; 273.124, subdivisions 1, 3a, 6, 9, 13, 13a, 13c,
13d, 14; 273.1245, subdivision 1; 273.13, subdivisions 23, 25, 34; 273.1315,
subdivision 2; 273.18; 275.025, subdivisions 1, 2; 275.065, subdivisions 1, 3, by
adding subdivisions; 275.066; 287.04; 289A.02, subdivision 7; 289A.08,
subdivisions 7, 11, by adding subdivisions; 289A.09, subdivision 2; 289A.20,
subdivision 4; 289A.31, subdivision 1; 289A.37, subdivision 2; 289A.38,
subdivisions 7, 8, 9, 10; 289A.42; 289A.60, subdivisions 15, 24; 290.01,
subdivisions 19, 31, by adding a subdivision; 290.0121, subdivision 3; 290.0122,
subdivisions 4, 8; 290.0131, by adding subdivisions; 290.0132, subdivision 27,
by adding subdivisions; 290.0133, subdivision 6, by adding subdivisions; 290.0134,
subdivision 18, by adding a subdivision; 290.06, subdivisions 2c, 2d, 22, by adding
subdivisions; 290.0671, subdivisions 1, 1a, 7; 290.0674, subdivision 2a; 290.0681,
subdivision 10; 290.0682; 290.0685, subdivision 1, by adding a subdivision;
290.091, subdivision 2; 290.17, by adding subdivisions; 290.21, subdivision 9, by
adding a subdivision; 290.31, subdivision 1; 290.92, subdivisions 1, 2a, 3, 4b, 4c,
5, 5a, 19, 20; 290.923, subdivision 9; 290.993; 290A.03, subdivisions 3, 15;
290A.04, subdivisions 2, 2a; 290A.25; 291.005, subdivision 1; 295.75, subdivision
2; 296A.06, subdivision 2; 297A.66, subdivision 3; 297A.67, by adding a
subdivision; 297A.70, subdivision 13, by adding a subdivision; 297A.71,
subdivision 52, by adding a subdivision; 297A.75, subdivisions 1, 2, 3; 297A.993,
subdivision 2; 297E.021, subdivision 4; 297F.01, subdivisions 19, 22b, 23, by
adding subdivisions; 297F.031; 297F.04, subdivision 2; 297F.05, by adding a
subdivision; 297F.09, subdivisions 3, 4a, 7, 10; 297F.10, subdivision 1; 297F.13,
subdivision 4; 297F.17, subdivisions 1, 6; 297G.09, subdivision 9; 297G.16,
subdivision 7; 297H.04, subdivision 2; 297H.05; 297I.05, subdivision 7; 297I.20,
by adding a subdivision; 298.001, by adding a subdivision; 298.24, subdivision
1; 298.405, subdivision 1; 325F.781, subdivisions 1, 5, 6; 429.021, subdivision 1;
429.031, subdivision 3; 453A.04, subdivision 21, by adding a subdivision; 462A.38;
465.71; 469.176, by adding a subdivision; 469.1763, subdivisions 2, 3, 4; 469.319,
subdivision 4; 475.56; 475.58, subdivision 3b; 475.60, subdivision 1; 475.67,
subdivision 8; 477A.013, subdivision 13; 477A.03, subdivisions 2a, 2b; 477A.10;
609B.153; Laws 2009, chapter 88, article 2, section 46, subdivision 3, as amended;
Laws 2017, First Special Session chapter 1, article 3, section 32, as amended; Laws
2019, First Special Session chapter 6, article 6, sections 25; 27; proposing coding
for new law in Minnesota Statutes, chapters 3; 16A; 116U; 289A; 477A; proposing
coding for new law as Minnesota Statutes, chapters 299O; 428B; repealing
Minnesota Statutes 2020, sections 270C.17, subdivision 2; 290.01, subdivisions
7b, 19i; 290.0131, subdivision 18; 327C.01, subdivision 13; 327C.16; 469.055,
subdivision 7.

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

ARTICLE 1

FEDERAL CONFORMITY

Section 1.

Minnesota Statutes 2020, section 289A.02, subdivision 7, is amended to read:

Subd. 7.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, deleted text begin2018 deleted text end new text begin 2020 new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
new text end

Sec. 2.

Minnesota Statutes 2020, section 290.01, subdivision 19, is amended to read:

Subd. 19.

Net income.

(a) For a trust or estate taxable under section 290.03, and a
corporation taxable under section 290.02, the term "net income" means the federal taxable
income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through
the date named in this subdivision, incorporating the federal effective dates of changes to
the Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in sections 290.0131 to 290.0136.

(b) For an individual, the term "net income" means federal adjusted gross income with
the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

(c) In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
and

(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.

(d) The net income of a real estate investment trust as defined and limited by section
856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

(e) The net income of a designated settlement fund as defined in section 468B(d) of the
Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through December 31, deleted text begin2018 deleted text end new text begin 2020 new text end,
shall be in effect for taxable years beginning after December 31, 1996.

(g) Except as otherwise provided, references to the Internal Revenue Code in this
subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of
determining net income for the applicable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
new text end

Sec. 3.

Minnesota Statutes 2020, section 290.01, subdivision 31, is amended to read:

Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, deleted text begin2018 deleted text end new text begin 2020 new text end. Internal Revenue Code also includes any uncodified provision in federal
law that relates to provisions of the Internal Revenue Code that are incorporated into
Minnesota law.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
new text end

Sec. 4.

Minnesota Statutes 2020, section 290.0122, subdivision 4, is amended to read:

Subd. 4.

Charitable contributions.

(a) A taxpayer is allowed a deduction for charitable
contributions. The deduction equals the amount of the charitable contribution deduction
allowable to the taxpayer under section 170 of the Internal Revenue Code, including the
denial of the deduction under section 408(d)(8), except that the deleted text beginprovisions of section
170(b)(1)(G) apply regardless of the taxable year deleted text end new text begin deduction under this subdivision is limited
to 60 percent of the taxpayer's contribution base as defined in section 170(b)(1)(H) of the
Internal Revenue Code new text end.

(b) For taxable years beginning after December 31, 2017, the determination of carryover
amounts must be made by applying the rules under section 170 of the Internal Revenue
Code based on the charitable contribution deductions claimed and allowable under this
section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2019.
new text end

Sec. 5.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 19. new text end

new text begin Business interest. new text end

new text begin The amount of business interest deducted under section
163(j) of the Internal Revenue Code of 1986, as amended through December 31, 2020, that
exceeds the amount of business interest allowed to be deducted under section 163(j) of the
Internal Revenue Code of 1986, as amended through December 31, 2018, is an addition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, and before January 1, 2021.
new text end

Sec. 6.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 20. new text end

new text begin Excess business losses. new text end

new text begin The amount by which an excess business loss under
section 461(l)(3) of the Internal Revenue Code of 1986, as amended through December 31,
2018, exceeds the amount of a disallowed loss carryover under section 461(l)(3) of the
Internal Revenue Code of 1986, as amended through December 31, 2020, is an addition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively at the same time and for
the same taxable years as the temporary changes in section 2304 of Public Law 116-136
were effective for federal purposes.
new text end

Sec. 7.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 21. new text end

new text begin Net operating loss. new text end

new text begin The amount by which a net operating loss deducted under
section 172 of the Internal Revenue Code of 1986, as amended through December 31, 2020,
exceeds the amount of a net operating loss allowed to be deducted under the Internal Revenue
Code of 1986, as amended through December 31, 2018, including the amount of the addition
required under subdivision 20 to the extent the amount is not included under section 172
of the Internal Revenue Code of 1986, as amended through December 31, 2018, is an
addition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively at the same time and for
the same taxable years as the temporary changes in section 2303 of Public Law 116-136
were effective for federal purposes.
new text end

Sec. 8.

Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 30. new text end

new text begin Delayed business interest. new text end

new text begin (a) The amount of delayed business interest is a
subtraction.
new text end

new text begin (b) For purposes of this subdivision, the following terms have the meanings given:
new text end

new text begin (1) "delayed business interest" means the lesser of:
new text end

new text begin (i) the base amount; or
new text end

new text begin (ii) the amount of business interest deductible under section 163(j) of the Internal Revenue
Code, excluding the special rule under section 163(j)(10) of the Internal Revenue Code,
less the amount of business interest deducted under section 163(j) of the Internal Revenue
Code for the taxable year; and
new text end

new text begin (2) "base amount" means the sum of each addition required under section 290.0131,
subdivision 19, for all prior taxable years, less the sum of all subtractions claimed under
this subdivision for all prior taxable years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively at the same time and for
the same taxable years as the temporary changes in section 2306 of Public Law 116-136
were effective for federal purposes and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 31. new text end

new text begin Delayed net operating loss. new text end

new text begin (a) The amount of a delayed net operating loss
is a subtraction.
new text end

new text begin (b) For purposes of this subdivision, the following terms have the meanings given:
new text end

new text begin (1) "delayed net operating loss" means the lesser of:
new text end

new text begin (i) the base amount; or
new text end

new text begin (ii) the net operating loss deduction limit under section 172(a) of the Internal Revenue
Code of 1986, as amended through December 31, 2018, including the amount of the addition
required under section 290.0131, subdivision 20, to the extent the amount is not included
under section 172 of the Internal Revenue Code, less the amount of any net operating loss
deducted under section 172 of the Internal Revenue Code for the taxable year; and
new text end

new text begin (2) "base amount" means the sum of each addition required under section 290.0131,
subdivision 21, for all prior taxable years, less the sum of all subtractions claimed under
this subdivision for all prior taxable years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2018.
new text end

Sec. 10.

Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Business interest. new text end

new text begin The amount of business interest deducted under section
163(j) of the Internal Revenue Code of 1986, as amended through December 31, 2020, or
section 290.34, that exceeds the amount of business interest allowed to be deducted under
section 163(j) of the Internal Revenue Code of 1986, as amended through December 31,
2018, or section 290.34, is an addition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
new text end

Sec. 11.

Minnesota Statutes 2020, section 290.0134, is amended by adding a subdivision
to read:

new text begin Subd. 20. new text end

new text begin Delayed business interest. new text end

new text begin (a) The amount of delayed business interest is a
subtraction.
new text end

new text begin (b) For purposes of this subdivision, the following terms have the meanings given:
new text end

new text begin (1) "delayed business interest" means the portion of the base amount equal to the
difference, if any, between:
new text end

new text begin (i) the amount of business interest deductible under section 290.34 or section 163(j) of
the Internal Revenue Code, excluding the special rule under section 163(j)(10) of the Internal
Revenue Code; and
new text end

new text begin (ii) the amount of business interest deducted under section 163(j) of the Internal Revenue
Code for the taxable year; and
new text end

new text begin (2) "base amount" means the sum of each addition required under section 290.0131,
subdivision 16, for all prior taxable years, less the sum of all subtractions claimed under
this subdivision for all prior taxable years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively at the same time and for
the same taxable years as the temporary changes in section 2306 of Public Law 116-136
were effective for federal purposes and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2020, section 290.993, is amended to read:

290.993 SPECIAL LIMITED ADJUSTMENT.

(a) For an individual income taxpayer subject to tax under section 290.06, subdivision
2c, or a partnership that elects to file a composite return under section 289A.08, subdivision
7, for taxable years beginning after December 31, 2017, and before January 1, 2019, the
following special rules apply:

(1) an individual income taxpayer may: (i) take the standard deduction; or (ii) make an
election under section 63(e) of the Internal Revenue Code to itemize, for Minnesota individual
income tax purposes, regardless of the choice made on their federal return; and

(2) there is an adjustment to tax equal to the difference between the tax calculated under
this chapter using the Internal Revenue Code as amended through December 16, 2016, and
the tax calculated under this chapter using the Internal Revenue Code amended through
December 31, 2018, before the application of credits. The end result must be zero additional
tax due or refund.

(b) The adjustment in paragraph (a), clause (2), does not apply to any changes due to
sections 11012, 13101, 13201, 13202, 13203, 13204, 13205, 13207, 13301, 13302, 13303,
13313, 13502, 13503, 13801, 14101, 14102, 14211 through 14215, and 14501 of Public
Law 115-97; and section 40411 of Public Law 115-123.

new text begin (c) For an individual, estate, trust, or partnership subject to an adjustment under this
section, any change in tax as a result of this act, including amendments to the Internal
Revenue Code that are incorporated in this act, must be calculated after the adjustment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
new text end

Sec. 13.

Minnesota Statutes 2020, section 290A.03, subdivision 15, is amended to read:

Subd. 15.

Internal Revenue Code.

"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended through December 31, deleted text begin2018 deleted text end new text begin 2020 new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property tax refunds based on property
taxes payable after December 31, 2021, and rent paid after December 31, 2020.
new text end

Sec. 14.

Minnesota Statutes 2020, section 291.005, subdivision 1, is amended to read:

Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following terms
used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
increased by the value of any property in which the decedent had a qualifying income interest
for life and for which an election was made under section 291.03, subdivision 1d, for
Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,
as amended through December 31, deleted text begin2018 deleted text end new text begin 2020 new text end.

(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included in the estate which has its situs outside Minnesota,
and (b) including any property omitted from the federal gross estate which is includable in
the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of death
was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person appointed
by the court to administer and dispose of the property of the decedent. If there is no executor,
administrator or other person appointed, qualified, and acting within this state, then any
person in actual or constructive possession of any property having a situs in this state which
is included in the federal gross estate of the decedent shall be deemed to be a personal
representative to the extent of the property and the Minnesota estate tax due with respect
to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death was
in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply
to determinations of domicile under this chapter.

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept or
located at the time of the decedent's death or for a gift of tangible personal property within
three years of death, the state or country in which it was normally kept or located when the
gift was executed;

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was domiciled
at death or for a gift of intangible personal property within three years of death, the state or
country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent. If
the pass-through entity is owned by a person or persons in addition to the decedent, ownership
of the property is attributed to the decedent in proportion to the decedent's capital ownership
share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of whether
it is taxed as an association or is disregarded for federal income tax purposes under Code
of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includable in the decedent's federal gross estate;
but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under section
6 of the Securities Exchange Act, United States Code, title 15, section 78f.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
new text end

Sec. 15. new text beginTEMPORARY NONCONFORMITY ADDITIONS AND SUBTRACTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms in this section
have the meanings given.
new text end

new text begin (b) For an individual, estate, or trust:
new text end

new text begin (1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0132,
subdivision 1, and the rules in that subdivision apply for this section; and
new text end

new text begin (2) "addition" has the meaning given in Minnesota Statutes, section 290.0131, subdivision
1, and the rules in that subdivision apply for this section.
new text end

new text begin (c) For a corporation other than an S corporation:
new text end

new text begin (1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0134,
subdivision 1, and the rules in that subdivision apply for this section; and
new text end

new text begin (2) "addition" has the meaning given in Minnesota Statutes, section 290.0133, subdivision
1, and the rules in that subdivision apply for this section.
new text end

new text begin (d) The definitions in Minnesota Statutes, section 290.01, apply for this section.
new text end

new text begin Subd. 2. new text end

new text begin Temporary subtraction; federal credits for sick and family leave;
individuals, estates, and trusts. new text end

new text begin (a) For an individual, estate, or trust, the amount by which
gross income is increased under the following credits is a subtraction:
new text end

new text begin (1) the payroll credit for required paid sick leave under section 7001 of Public Law
116-127; and
new text end

new text begin (2) the payroll credit for required paid family leave under section 7003 of Public Law
116-127.
new text end

new text begin (b) This subdivision is effective retroactively for taxable years in which a taxpayer
claimed the credits described in paragraph (a).
new text end

new text begin Subd. 3. new text end

new text begin Temporary subtraction; federal credits for sick and family leave;
corporations. new text end

new text begin (a) For a corporation other than an S corporation, the amount by which gross
income is increased under the following credits is a subtraction:
new text end

new text begin (1) the payroll credit for required paid sick leave under section 7001 of Public Law
116-127; and
new text end

new text begin (2) the payroll credit for required paid family leave under section 7003 of Public Law
116-127.
new text end

new text begin (b) This subdivision is effective retroactively for taxable years in which a taxpayer
claimed the credits described in paragraph (a).
new text end

new text begin Subd. 4. new text end

new text begin Temporary subtraction; wages used to claim employee retention credit;
individuals, estates, and trusts. new text end

new text begin (a) For an individual, estate, or trust, the amount disallowed
under section 2301(e) of Public Law 116-136 is a subtraction.
new text end

new text begin (b) This subdivision is effective retroactively for taxable years in which a taxpayer had
a deduction disallowed under section 2301(e) of Public Law 116-136.
new text end

new text begin Subd. 5. new text end

new text begin Temporary subtraction; wages used to claim employee retention credit;
corporations. new text end

new text begin (a) For a corporation other than an S corporation, the amount disallowed
under section 2301(e) of Public Law 116-136 is a subtraction.
new text end

new text begin (b) This subdivision is effective retroactively for taxable years in which a taxpayer had
a deduction disallowed under section 2301(e) of Public Law 116-136.
new text end

new text begin Subd. 6. new text end

new text begin Temporary addition; business meals; individuals, estates, and trusts. new text end

new text begin (a)
For an individual, estate, or trust, the amount deducted for food or beverages under section
274(n)(2) of the Internal Revenue Code that exceeds the 50 percent limit in section 274(n)(1)
of the Internal Revenue Code is an addition.
new text end

new text begin (b) This subdivision is effective retroactively for expenses paid or incurred after December
31, 2020, and before January 1, 2023.
new text end

new text begin Subd. 7. new text end

new text begin Temporary addition; business meals; C corporations. new text end

new text begin (a) For a corporation
other than an S corporation, the amount deducted for food or beverages under section
274(n)(2) of the Internal Revenue Code that exceeds the 50 percent limit in section 274(n)(1)
of the Internal Revenue Code is an addition.
new text end

new text begin (b) This subdivision is effective retroactively for expenses paid or incurred after December
31, 2020, and before January 1, 2023.
new text end

new text begin Subd. 8. new text end

new text begin Temporary addition; PPP expenses for individuals, estates, and trusts. new text end

new text begin (a)
For the purposes of this subdivision:
new text end

new text begin (1) "qualifying business" means a business with paycheck protection program expenses
in the taxable year that is a partnership, limited liability company, S corporation, or sole
proprietorship;
new text end

new text begin (2) "paycheck protection program expenses" means amounts allowed as a deduction
under section 276 of the COVID-related Tax Relief Act of 2020 in Public Law 116-260;
and
new text end

new text begin (3) "paycheck protection program loan" means a discharged loan that is excluded from
gross income under section 1106(i) of Public Law 116-136.
new text end

new text begin (b) For a qualifying business, for each paycheck protection program loan, the amount
of paycheck protection program expenses in excess of $350,000 is an addition.
new text end

new text begin (c) This section is effective retroactively at the same time and for the same taxable years
as the changes in section 276 of the COVID-related Tax Relief Act of 2020 in Public Law
116-260.
new text end

new text begin Subd. 9. new text end

new text begin Temporary addition; PPP expenses for C corporations. new text end

new text begin (a) For the purposes
of this subdivision:
new text end

new text begin (1) "qualifying business" means a business with paycheck protection program expenses
that is a corporation other than an S corporation;
new text end

new text begin (2) "paycheck protection program expenses" means amounts allowed as a deduction
under section 276 of the COVID-related Tax Relief Act of 2020 in Public Law 116-260;
and
new text end

new text begin (3) "paycheck protection program loan" means a discharged loan that is excluded from
gross income under section 1106(i) of Public Law 116-136.
new text end

new text begin (b) For a qualifying business, for each paycheck protection program loan, the amount
of paycheck protection program expenses in excess of $350,000 is an addition.
new text end

new text begin (c) This section is effective retroactively at the same time and for the same taxable years
as the changes in section 276 of the COVID-related Tax Relief Act of 2020 in Public Law
116-260.
new text end

new text begin Subd. 10. new text end

new text begin Nonresident apportionment; alternative minimum tax. new text end

new text begin (a) For the purpose
of calculating the percentage under Minnesota Statutes, section 290.06, subdivision 2c,
paragraph (e), the commissioner of revenue must increase:
new text end

new text begin (1) the numerator in Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e),
clause (1), by the subtractions in subdivisions 2 and 4; and
new text end

new text begin (2) the denominator in Minnesota Statutes, section 290.06, subdivision 2c, paragraph
(e), clause (2), by the additions in subdivisions 6 and 8.
new text end

new text begin (b) For the purpose of determining "income" under Minnesota Statutes, section 289A.08,
the commissioner of revenue must consider the additions under subdivisions 6 and 8 and
the subtractions under subdivisions 2 and 4.
new text end

new text begin (c) A taxpayer's alternative minimum taxable income under Minnesota Statutes, section
290.091, is increased by the amount of the taxpayer's additions under subdivisions 6 and 8,
and reduced by the amount of the taxpayer's subtractions under subdivisions 2 and 4.
new text end

new text begin (d) This section is effective for taxable years in which a taxpayer had an addition or
subtraction under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the taxable years specified in each
subdivision.
new text end

Sec. 16. new text beginWORKING FAMILY CREDIT; SPECIAL EARNED INCOME RULES
FOR TAX YEAR 2020.
new text end

new text begin For the purposes of calculating the credit under Minnesota Statutes, section 290.067,
the commissioner of revenue must allow a taxpayer to elect to determine earned income
using the rules in section 211 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020
in Public Law 116-260.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2019, and before January 1, 2021.
new text end

Sec. 17. new text beginTEMPORARY INDIVIDUAL INCOME TAX SUBTRACTION;
UNEMPLOYMENT INSURANCE BENEFITS.
new text end

new text begin (a) For the purposes of this section:
new text end

new text begin (1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0132; and
new text end

new text begin (2) "unemployment compensation" has the meaning given in section 85(b) of the Internal
Revenue Code.
new text end

new text begin (b) For taxable years beginning after December 31, 2019, and before January 1, 2021,
an individual taxpayer with adjusted gross income that is less than $150,000 is allowed a
subtraction equal to the amount of unemployment compensation received in the taxable
year. The subtraction is limited to $10,200, except for a joint return the subtraction is limited
to $10,200 in unemployment compensation received by each spouse.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2019, and before January 1, 2021.
new text end

ARTICLE 2

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2020, section 41B.0391, subdivision 2, is amended to read:

Subd. 2.

Tax credit for owners of agricultural assets.

(a) An owner of agricultural
assets may take a credit against the tax due under chapter 290 for the sale or rental of
agricultural assets to a beginning farmer in the amount allocated by the authority under
subdivision 4. An owner of agricultural assets is eligible for allocation of a credit equal to:

(1) five percent of the lesser of the sale price or the fair market value of the agricultural
asset, up to a maximum of $32,000;

(2) ten percent of the gross rental income in each of the first, second, and third years of
a rental agreement, up to a maximum of $7,000 per year; or

(3) 15 percent of the cash equivalent of the gross rental income in each of the first,
second, and third years of a share rent agreement, up to a maximum of $10,000 per year.

(b) A qualifying rental agreement includes cash rent of agricultural assets or a share rent
agreement. The agricultural asset must be rented at prevailing community rates as determined
by the authority.

(c) The credit may be claimed only after approval and certification by the authority, and
is limited to the amount stated on the certificate issued under subdivision 4. An owner of
agricultural assets must apply to the authority for certification and allocation of a credit, in
a form and manner prescribed by the authority.

(d) An owner of agricultural assets or beginning farmer may terminate a rental agreement,
including a share rent agreement, for reasonable cause upon approval of the authority. If a
rental agreement is terminated without the fault of the owner of agricultural assets, the tax
credits shall not be retroactively disallowed. In determining reasonable cause, the authority
must look at which party was at fault in the termination of the agreement. If the authority
determines the owner of agricultural assets did not have reasonable cause, the owner of
agricultural assets must repay all credits received as a result of the rental agreement to the
commissioner of revenue. The repayment is additional income tax for the taxable year in
which the authority makes its decision or when a final adjudication under subdivision 5,
paragraph (a), is made, whichever is later.

(e) The credit is limited to the liability for tax as computed under chapter 290 for the
taxable year. If the amount of the credit determined under this section for any taxable year
exceeds this limitation, the excess is a beginning farmer incentive credit carryover according
to section 290.06, subdivision 37.

new text begin (f) Notwithstanding subdivision 1, paragraph (c), for purposes of the credit for the sale
of an agricultural asset under paragraph (a), clause (1), the family member definitional
exclusions in subdivision 1, paragraph (c), clauses (4) and (5), do not apply.
new text end

new text begin (g) For a qualifying sale to a family member, to qualify for the credit under paragraph
(a), clause (1), the sale price of the agricultural asset must equal or exceed the assessed
value of the asset as of the date of the sale. If there is no assessed value, the sale price must
equal or exceed 80 percent of the fair market value of the asset as of the date of the sale.
new text end

new text begin (h) For the purposes of this section, "qualifying sale to a family member" means a sale
to a beginning farmer in which the beginning farmer or the beginning farmer's spouse is a
family member of:
new text end

new text begin (1) the owner of the agricultural asset; or
new text end

new text begin (2) a partner, member, shareholder, or trustee of the owner of the agricultural asset.
new text end

new text begin (i) For a sale to a socially disadvantaged farmer or rancher, the credit rate under paragraph
(a), clause (1), is ten percent rather than five percent. For the purposes of this section,
"socially disadvantaged farmer or rancher" has the meaning given in United States Code,
title 7, section 2279(a)(5).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 2.

Minnesota Statutes 2020, section 41B.0391, subdivision 4, is amended to read:

Subd. 4.

Authority duties.

(a) The authority shall:

(1) approve and certify or recertify beginning farmers as eligible for the program under
this section;

(2) approve and certify or recertify owners of agricultural assets as eligible for the tax
credit under subdivision 2 subject to the allocation limits in paragraph (c);

(3) provide necessary and reasonable assistance and support to beginning farmers for
qualification and participation in financial management programs approved by the authority;

(4) refer beginning farmers to agencies and organizations that may provide additional
pertinent information and assistance; and

(5) notwithstanding section 41B.211, the Rural Finance Authority must share information
with the commissioner of revenue to the extent necessary to administer provisions under
this subdivision and section 290.06, subdivisions 37 and 38. The Rural Finance Authority
must annually notify the commissioner of revenue of approval and certification or
recertification of beginning farmers and owners of agricultural assets under this section.
For credits under subdivision 2, the notification must include the amount of credit approved
by the authority and stated on the credit certificate.

(b) The certification of a beginning farmer or an owner of agricultural assets under this
section is valid for the year of the certification and the two following years, after which
time the beginning farmer or owner of agricultural assets must apply to the authority for
recertification.

(c) For credits for owners of agricultural assets allowed under subdivision 2, the authority
must not allocate more than $5,000,000 for taxable years beginning after December 31,
2017, and before January 1, 2019, and must not allocate more than $6,000,000 for taxable
years beginning after December 31, 2018. The authority must allocate credits on a first-come,
first-served basis beginning on January 1 of each year, except that recertifications for the
second and third years of credits under subdivision 2, paragraph (a), clauses (1) and (2),
have first priority. Any amount authorized but not allocated in any taxable year does not
cancel and is added to the allocation for the next taxable year.

new text begin (d) For taxable years beginning after December 31, 2020, the amount available to be
allocated for the taxable year under paragraph (c) is reduced by five percent. Beginning in
fiscal year 2022, an amount equal to the reduction under this paragraph is annually
appropriated from the general fund to the Rural Finance Authority to develop an online
application system and administer the credits under this section. The amount of the
appropriation for a fiscal year must be determined based on the reduction for taxable years
beginning after December 31 of the previous fiscal year and before January 1 of the fiscal
year of the appropriation. The Rural Finance Authority must disregard amounts carried
forward from previous taxable years when calculating the reduction under this paragraph.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 3.

Minnesota Statutes 2020, section 116J.8737, subdivision 5, is amended to read:

Subd. 5.

Credit allowed.

(a) A qualified investor or qualified fund is eligible for a credit
equal to 25 percent of the qualified investment in a qualified small business. Investments
made by a pass-through entity qualify for a credit only if the entity is a qualified fund. The
commissioner must not allocate more than $10,000,000 in credits to qualified investors or
qualified funds for the taxable years listed in paragraph (i). For each taxable year, 50 percent
must be allocated to credits for qualified investments in qualified greater Minnesota
businesses and minority-owned, women-owned, or veteran-owned qualified small businesses
in Minnesota. Any portion of a taxable year's credits that is reserved for qualified investments
in greater Minnesota businesses and minority-owned, women-owned, or veteran-owned
qualified small businesses in Minnesota that is not allocated by September 30 of the taxable
year is available for allocation to other credit applications beginning on October 1. Any
portion of a taxable year's credits that is not allocated by the commissioner does not cancel
and may be carried forward to subsequent taxable years until all credits have been allocated.

(b) The commissioner may not allocate more than a total maximum amount in credits
for a taxable year to a qualified investor for the investor's cumulative qualified investments
as an individual qualified investor and as an investor in a qualified fund; for married couples
filing joint returns the maximum is $250,000, and for all other filers the maximum is
$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits
over all taxable years for qualified investments in any one qualified small business.

(c) The commissioner may not allocate a credit to a qualified investor either as an
individual qualified investor or as an investor in a qualified fund if, at the time the investment
is proposed:

(1) the investor is an officer or principal of the qualified small business; or

(2) the investor, either individually or in combination with one or more members of the
investor's family, owns, controls, or holds the power to vote 20 percent or more of the
outstanding securities of the qualified small business.

A member of the family of an individual disqualified by this paragraph is not eligible for a
credit under this section. For a married couple filing a joint return, the limitations in this
paragraph apply collectively to the investor and spouse. For purposes of determining the
ownership interest of an investor under this paragraph, the rules under section 267(c) and
267(e) of the Internal Revenue Code apply.

(d) Applications for tax credits for 2010 must be made available on the department's
website by September 1, 2010, and the department must begin accepting applications by
September 1, 2010. Applications for subsequent years must be made available by November
1 of the preceding year.

(e) Qualified investors and qualified funds must apply to the commissioner for tax credits.
Tax credits must be allocated to qualified investors or qualified funds in the order that the
tax credit request applications are filed with the department. The commissioner must approve
or reject tax credit request applications within 15 days of receiving the application. The
investment specified in the application must be made within 60 days of the allocation of
the credits. If the investment is not made within 60 days, the credit allocation is canceled
and available for reallocation. A qualified investor or qualified fund that fails to invest as
specified in the application, within 60 days of allocation of the credits, must notify the
commissioner of the failure to invest within five business days of the expiration of the
60-day investment period.

(f) All tax credit request applications filed with the department on the same day must
be treated as having been filed contemporaneously. If two or more qualified investors or
qualified funds file tax credit request applications on the same day, and the aggregate amount
of credit allocation claims exceeds the aggregate limit of credits under this section or the
lesser amount of credits that remain unallocated on that day, then the credits must be allocated
among the qualified investors or qualified funds who filed on that day on a pro rata basis
with respect to the amounts claimed. The pro rata allocation for any one qualified investor
or qualified fund is the product obtained by multiplying a fraction, the numerator of which
is the amount of the credit allocation claim filed on behalf of a qualified investor and the
denominator of which is the total of all credit allocation claims filed on behalf of all
applicants on that day, by the amount of credits that remain unallocated on that day for the
taxable year.

(g) A qualified investor or qualified fund, or a qualified small business acting on their
behalf, must notify the commissioner when an investment for which credits were allocated
has been made, and the taxable year in which the investment was made. A qualified fund
must also provide the commissioner with a statement indicating the amount invested by
each investor in the qualified fund based on each investor's share of the assets of the qualified
fund at the time of the qualified investment. After receiving notification that the investment
was made, the commissioner must issue credit certificates for the taxable year in which the
investment was made to the qualified investor or, for an investment made by a qualified
fund, to each qualified investor who is an investor in the fund. The certificate must state
that the credit is subject to revocation if the qualified investor or qualified fund does not
hold the investment in the qualified small business for at least three years, consisting of the
calendar year in which the investment was made and the two following years. The three-year
holding period does not apply if:

(1) the investment by the qualified investor or qualified fund becomes worthless before
the end of the three-year period;

(2) 80 percent or more of the assets of the qualified small business is sold before the end
of the three-year period;

(3) the qualified small business is sold before the end of the three-year period;

(4) the qualified small business's common stock begins trading on a public exchange
before the end of the three-year period; or

(5) the qualified investor dies before the end of the three-year period.

(h) The commissioner must notify the commissioner of revenue of credit certificates
issued under this section.

(i) The credit allowed under this subdivision is effective for each of the deleted text beginfollowing taxable
deleted text end deleted text begin years: deleted text end new text begintaxable years beginning after December 31, 2020, and before January 1, 2023.
new text end

deleted text begin (1) taxable years beginning after December 31, 2018, and before January 1, 2020; and
deleted text end

deleted text begin (2) taxable years beginning after December 31, 2020, and before January 1, 2022.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2020, section 116J.8737, subdivision 12, is amended to read:

Subd. 12.

Sunset.

This section expires for taxable years beginning after December 31,
deleted text begin 2021 deleted text end new text begin 2022 new text end, except that reporting requirements under subdivision 6 and revocation of credits
under subdivision 7 remain in effect through deleted text begin2023 deleted text end new text begin 2024 new text end for qualified investors and qualified
funds, and through deleted text begin2025 deleted text end new text begin 2026 new text end for qualified small businesses, reporting requirements under
subdivision 9 remain in effect through deleted text begin2021 deleted text end new text begin 2022 new text end, and the appropriation in subdivision 11
remains in effect through deleted text begin2025 deleted text end new text begin 2026 new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

new text begin [116U.27] FILM PRODUCTION CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Allocation certificate" means a certificate issued by the commissioner to a taxpayer
upon receipt of an initial application for a credit for a project that has not yet been completed.
new text end

new text begin (c) "Application" means the application for a credit under subdivision 4.
new text end

new text begin (d) "Commissioner" means the commissioner of employment and economic development.
new text end

new text begin (e) "Credit certificate" means a certificate issued by the commissioner upon submission
of the cost verification report in subdivision 4, paragraph (e).
new text end

new text begin (f) "Eligible production costs" means eligible production costs as defined in section
116U.26, paragraph (b), clause (1), incurred in Minnesota that are directly attributable to
the production of a film project in Minnesota.
new text end

new text begin (g) "Film" has the meaning given in section 116U.26, paragraph (b), clause (2).
new text end

new text begin (h) "Project" means a film:
new text end

new text begin (1) that includes the promotion of Minnesota;
new text end

new text begin (2) for which the taxpayer has expended at least $1,000,000 in the taxable year for
eligible production costs; and
new text end

new text begin (3) to the extent practicable, that employs Minnesota residents.
new text end

new text begin (i) "Promotion of Minnesota" or "promotion" means visible display of a static or animated
logo, approved by the commissioner and lasting approximately five seconds, that promotes
Minnesota within its presentation and all promotional trailers worldwide in the end credits
before the below-the-line crew crawl for the life of the project.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin A taxpayer is eligible for a credit up to 25 percent of eligible
production costs paid in a taxable year. A taxpayer may only claim a credit if the taxpayer
was issued a credit certificate under subdivision 4.
new text end

new text begin Subd. 3. new text end

new text begin Credit assignable. new text end

new text begin A taxpayer who is eligible for a credit under this subdivision
may assign the credit, in whole or in part, to another taxpayer, who is then allowed the credit
under section 290.06, subdivision 39, or 297I.20, subdivision 4. An assignment is not valid
unless the assignee notifies the commissioner within 30 days of the date that the assignment
is made. The commissioner shall prescribe the forms necessary for notifying the
commissioner of the assignment of a credit certificate and for claiming a credit by assignment.
A credit must be assigned for at least 75 percent of the credit amount subject to assignment.
A credit may be assigned at any time, provided that, for an assignment of a credit carryover
under section 290.06, subdivision 39, paragraph (b), only the unused amount of the carryover
is assigned.
new text end

new text begin Subd. 4. new text end

new text begin Applications; allocations. new text end

new text begin (a) To qualify for a credit under this section, a
taxpayer must submit to the commissioner an initial application for a credit in the form
prescribed by the commissioner, in consultation with the commissioner of revenue.
new text end

new text begin (b) Upon approving an application for a credit that meets the requirements of this section,
the commissioner shall issue allocation certificates that:
new text end

new text begin (1) verify eligibility for the credit;
new text end

new text begin (2) state the amount of credit anticipated for the eligible project, with the credit amount
up to 25 percent of eligible project costs; and
new text end

new text begin (3) state the taxable year in which the credit is allocated.
new text end

new text begin The commissioner must consult with Minnesota Film and Television prior to issuing an
allocation certificate.
new text end

new text begin (c) The commissioner must not issue allocation certificates for more than $10,000,000
of credits each year. If the entire amount is not allocated in that taxable year, any remaining
amount is available for allocation for the four following taxable years until the entire
allocation has been made. The commissioner must not award any credits for taxable years
beginning after December 31, 2024, and any unallocated amounts cancel on that date.
new text end

new text begin (d) The commissioner must allocate credits on a first-come, first-served basis.
new text end

new text begin (e) Upon completion of a project, the taxpayer shall submit to the commissioner a report
prepared by an independent certified public accountant licensed in the state of Minnesota
to verify the amount of eligible production costs related to the project. The report must be
prepared in accordance with generally accepted accounting principles. Upon receipt and
review of the cost verification report, the commissioner shall determine the final amount
of eligible production costs and issue a credit certificate to the taxpayer. The credit may not
exceed the anticipated credit amount on the allocation certificate. If the credit is less than
the anticipated amount on the allocation credit, the difference is returned to the amount
available for allocation under paragraph (c). To claim the credit under section 290.06,
subdivision 39, or 297I.20, subdivision 4, a taxpayer must include a copy of the certificate
as part of the taxpayer's return.
new text end

new text begin Subd. 5. new text end

new text begin Report required. new text end

new text begin By March 15, 2024, the commissioner, in consultation with
the commissioner of revenue, must provide a report to the chairs and ranking minority
members of the legislative committees with jurisdiction over economic development and
taxes. The report must comply with sections 3.195 and 3.197, and must detail the following:
new text end

new text begin (1) the amount of credits earned in each taxable year;
new text end

new text begin (2) the number of applications received and approved for the credit;
new text end

new text begin (3) the types of projects eligible for the credit;
new text end

new text begin (4) the total economic impact of the credit in Minnesota, including the number of jobs
resulting from the credit; and
new text end

new text begin (5) any other information the commissioner, in consultation with the commissioner of
revenue, deems necessary for purposes of claiming and administering the credit.
new text end

new text begin Subd. 6. new text end

new text begin Expiration. new text end

new text begin This section expires January 1, 2025, for taxable years beginning
after December 31, 2024.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020, and before January 1, 2025.
new text end

Sec. 6.

Minnesota Statutes 2020, section 289A.08, subdivision 7, is amended to read:

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.

(a) The commissioner may allow a partnership with nonresident partners to
file a composite return and to pay the tax on behalf of nonresident partners who have no
other Minnesota source income. This composite return must include the names, addresses,
Social Security numbers, income allocation, and tax liability for the nonresident partners
electing to be covered by the composite return.

(b) The computation of a partner's tax liability must be determined by multiplying the
income allocated to that partner by the highest rate used to determine the tax liability for
individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
deductions, or personal exemptions are not allowed.

(c) The partnership must submit a request to use this composite return filing method for
nonresident partners. The requesting partnership must file a composite return in the form
prescribed by the commissioner of revenue. The filing of a composite return is considered
a request to use the composite return filing method.

(d) The electing partner must not have any Minnesota source income other than the
income from the partnership and other electing partnerships. If it is determined that the
electing partner has other Minnesota source income, the inclusion of the income and tax
liability for that partner under this provision will not constitute a return to satisfy the
requirements of subdivision 1. The tax paid for the individual as part of the composite return
is allowed as a payment of the tax by the individual on the date on which the composite
return payment was made. If the electing nonresident partner has no other Minnesota source
income, filing of the composite return is a return for purposes of subdivision 1.

(e) This subdivision does not negate the requirement that an individual pay estimated
tax if the individual's liability would exceed the requirements set forth in section 289A.25.
The individual's liability to pay estimated tax is, however, satisfied when the partnership
pays composite estimated tax in the manner prescribed in section 289A.25.

(f) If an electing partner's share of the partnership's gross income from Minnesota sources
is less than the filing requirements for a nonresident under this subdivision, the tax liability
is zero. However, a statement showing the partner's share of gross income must be included
as part of the composite return.

(g) The election provided in this subdivision is only available to a partner who has no
other Minnesota source income and who is either (1) a full-year nonresident individual or
(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the
Internal Revenue Code.

(h) A corporation defined in section 290.9725 and its nonresident shareholders may
make an election under this paragraph. The provisions covering the partnership apply to
the corporation and the provisions applying to the partner apply to the shareholder.

(i) Estates and trusts distributing current income only and the nonresident individual
beneficiaries of the estates or trusts may make an election under this paragraph. The
provisions covering the partnership apply to the estate or trust. The provisions applying to
the partner apply to the beneficiary.

(j) For the purposes of this subdivision, "income" means the partner's share of federal
adjusted gross income from the partnership modified by the additions provided in section
290.0131, subdivisions 8 to 10 deleted text beginand deleted text end new text begin, new text end 16, new text begin and 19 to 23, new text end and the subtractions provided in: (1)
section 290.0132, subdivision 9, to the extent the amount is assignable or allocable to
Minnesota under section 290.17; and (2) section 290.0132, deleted text beginsubdivision deleted text end new text begin subdivisions new text end 14 new text begin,
30, and 31 new text end. The subtraction allowed under section 290.0132, subdivision 9, is only allowed
on the composite tax computation to the extent the electing partner would have been allowed
the subtraction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020, except that the provisions relating to section 290.0131, subdivisions 20 and 21,
are effective retroactively for taxable years beginning after December 31, 2017, and the
provisions relating to section 290.0131, subdivision 19, and section 290.0132, subdivisions
30 and 31, are effective retroactively for taxable years beginning after December 31, 2018.
new text end

Sec. 7.

Minnesota Statutes 2020, section 289A.08, is amended by adding a subdivision to
read:

new text begin Subd. 7a. new text end

new text begin Pass-through entity tax. new text end

new text begin (a) For the purposes of this subdivision, the following
terms have the meanings given:
new text end

new text begin (1) "income" has the meaning given in subdivision 7, paragraph (j), except that the
provisions that apply to a partnership apply to a qualifying entity and the provisions that
apply to a partner apply to a qualifying owner. The income of both a resident and nonresident
qualifying owner is allocated and assigned to this state as provided for nonresident partners
and shareholders under section 290.17;
new text end

new text begin (2) "qualifying owner" means a resident or nonresident individual, estate, or trust that
is a partner, member, or shareholder of a qualifying entity; and
new text end

new text begin (3) "qualifying entity" means a partnership, limited liability company, or corporation
organized under subchapter S of the Internal Revenue Code for federal income tax purposes,
including a qualified subsidiary also organized under subchapter S of the Internal Revenue
Code. Qualifying entity does not include a partnership, limited liability company, or
corporation that has a partnership, limited liability company, or corporation as a partner,
member, or shareholder.
new text end

new text begin (b) A qualifying entity may elect to file a return and pay the pass-through entity tax
imposed under paragraph (c). The election:
new text end

new text begin (1) must be made on or before the due date or extended due date of the qualifying entity's
pass-through entity tax return;
new text end

new text begin (2) may only be made by qualifying owners who hold more than a 50 percent ownership
interest in a qualifying entity; and
new text end

new text begin (3) is binding on all qualifying owners who have an ownership interest in the qualifying
entity.
new text end

new text begin (c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a
qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.
new text end

new text begin (d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount
of the qualifying owner's income multiplied by the tax rates and brackets used to determine
the tax liability for married individuals filing separate returns, estates, and trusts under
section 290.06, subdivision 2c. When making this determination:
new text end

new text begin (1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed;
and
new text end

new text begin (2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.
new text end

new text begin (e) The amount of each credit and deduction used to determine a qualifying owner's tax
liability under paragraph (d) must also be used to determine that qualifying owner's individual
income tax liability under chapter 290.
new text end

new text begin (f) This subdivision does not negate the requirement that a qualifying owner pay estimated
tax if the qualifying owner's tax liability would exceed the requirements set forth in section
289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's
tax liability as determined under paragraph (d) is, however, satisfied when the qualifying
entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated
tax.
new text end

new text begin (g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the
treatment of distributions, is determined as if the election to pay the pass-through entity tax
under paragraph (b) is not made.
new text end

new text begin (h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a
pass-through entity tax return must be treated as a composite return and a qualifying entity
filing a pass-through entity tax return must be treated as a partnership filing a composite
return.
new text end

new text begin (i) The provisions of subdivision 17 apply to the election to pay the pass-through entity
tax under this subdivision.
new text end

new text begin (j) If a nonresident qualifying owner of a qualifying entity making the election to file
and pay the tax under this subdivision has no other Minnesota source income, filing of the
pass-through entity tax return is a return for purposes of subdivision 1, provided that the
nonresident qualifying owner must not have any Minnesota source income other than the
income from the qualifying entity and other electing qualifying entities. If it is determined
that the nonresident qualifying owner has other Minnesota source income, the inclusion of
the income and tax liability for that owner under this provision will not constitute a return
to satisfy the requirements of subdivision 1. The tax paid for the individual as part of the
pass-through entity tax return is allowed as a payment of the tax by the individual on the
date on which the pass-through entity tax return payment was made.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 8.

Minnesota Statutes 2020, section 289A.08, subdivision 11, is amended to read:

Subd. 11.

Information included in income tax return.

(a) The return must state:

(1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the address
of the taxpayer in the same name or names and same address as the taxpayer has used in
making the taxpayer's income tax return to the United States;

(2) the date or dates of birth of the taxpayer or taxpayers;

(3) new text begin the following information:
new text end

new text begin (i) new text end the Social Security number of the taxpayer, or taxpayers, if a Social Security number
has been issued by the United States with respect to the taxpayers new text begin; or
new text end

new text begin (ii) the individual tax identification number of the taxpayer, or taxpayers, if a Social
Security number has not been issued by the United States with respect to the taxpayers, as
allowed under section 290.0671 new text end; and

(4) the amount of the taxable income of the taxpayer as it appears on the federal return
for the taxable year to which the Minnesota state return applies.

(b) The taxpayer must attach to the taxpayer's Minnesota state income tax return a copy
of the federal income tax return that the taxpayer has filed or is about to file for the period.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 9.

Minnesota Statutes 2020, section 290.01, is amended by adding a subdivision to
read:

new text begin Subd. 7c. new text end

new text begin Resident trust. new text end

new text begin (a) "Resident trust" means a trust, except a grantor type trust,
which has sufficient relevant connections with Minnesota during the applicable tax year to
be permissibly taxed, consistent with due process, as a resident trust. Relevant connections
with Minnesota include but are not limited to the following:
new text end

new text begin (1) one or more of the trustees, fiduciaries, nonfiduciary service providers, settlors,
grantors, or beneficiaries of the trust are residents or part-year residents of Minnesota;
new text end

new text begin (2) tangible or intangible assets making up any part of the trust are located in Minnesota;
new text end

new text begin (3) any part of the administration of the trust took place in Minnesota;
new text end

new text begin (4) the laws of Minnesota are specifically made applicable to the trust or to the parties
to the trust, whether by choice of law or by operation of law;
new text end

new text begin (5) the trust was created by a will of a decedent who at death was domiciled in Minnesota;
new text end

new text begin (6) the trust and the will under which it was created were probated in Minnesota or were
otherwise approved or enforced by Minnesota's courts; and
new text end

new text begin (7) Minnesota's courts have a continuing supervisory or other existing relationship with
the trust.
new text end

new text begin (b) The term "grantor type trust" means a trust where the income or gains of the trust
are taxable to the grantor or others treated as substantial owners under sections 671 to 678
of the Internal Revenue Code.
new text end

new text begin (c) The term "administration of the trust" means the performance of any administrative
function for the trust, including but not limited to the following:
new text end

new text begin (1) investing of trust assets;
new text end

new text begin (2) distributing of trust assets;
new text end

new text begin (3) conducting trust business;
new text end

new text begin (4) conducting any litigation or other legal proceedings;
new text end

new text begin (5) conducting administrative services, including but not limited to record keeping and
the preparation and filing of tax returns;
new text end

new text begin (6) making fiduciary decisions, including but not limited to decisions regarding any of
the administrative functions listed in this paragraph; and
new text end

new text begin (7) official keeping of books and records of the trust, including but not limited to the
original minutes of trustee meetings and the original trust instruments, are located in
Minnesota.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 10.

Minnesota Statutes 2020, section 290.0122, subdivision 8, is amended to read:

Subd. 8.

Losses.

A taxpayer is allowed a deduction for losses deleted text begin. The deduction equals the
amount deleted text end allowed under deleted text beginsections 165(d) and 165(h) of the Internal Revenue Code, disregarding
the limitation on personal casualty losses in paragraph (h)(5). deleted text end new text begin section 165(a) of the Internal
Revenue Code, including the limitation provided in section 67(b)(3) of the Internal Revenue
Code, for the following:
new text end

new text begin (1) losses described in paragraphs (2) and (3) of section 165(c) of the Internal Revenue
Code, including the provisions of section 165(h) of the Internal Revenue Code but
disregarding paragraph (h)(5); and
new text end

new text begin (2) losses described in section 165(d) of the Internal Revenue Code.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
that the reference to paragraph (2) of section 165(c) of the Internal Revenue Code is effective
retroactively for taxable years beginning after December 31, 2018.
new text end

Sec. 11.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 22. new text end

new text begin Previously taxed deferred foreign income. new text end

new text begin The amount received by a resident
or part-year resident that is excluded from federal adjusted gross income or federal taxable
income under section 959 of the Internal Revenue Code, because the amount was previously
included under sections 951A or 965 of the Internal Revenue Code, is an addition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 12.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 23. new text end

new text begin Income attributable to domestic production activities of cooperatives. new text end

new text begin The
amount of the deduction allowable under section 199A(g) of the Internal Revenue Code is
an addition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 13.

Minnesota Statutes 2020, section 290.0132, subdivision 27, is amended to read:

Subd. 27.

Deferred foreign income.

The amount of deferred foreign income deleted text beginrecognized
because of deleted text end new text begin under new text end section 965 of the Internal Revenue Code is a subtraction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2015, except the changes incorporated by federal changes are effective
retroactively at the same time the changes became effective for federal purposes.
new text end

Sec. 14.

Minnesota Statutes 2020, section 290.0133, subdivision 6, is amended to read:

Subd. 6.

Special deductions.

The amount of any special deductions under sections 241
to 247, new text beginand new text end250 deleted text begin, and 965 deleted text end of the Internal Revenue Code is an addition.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2015, except that the changes incorporated by federal changes are
effective retroactively at the same time the changes became effective for federal purposes.
new text end

Sec. 15.

Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Previously taxed deferred foreign income. new text end

new text begin The amount received by a
corporation that is excluded from gross income under section 959 of the Internal Revenue
Code, because the amount was previously included under sections 951A or 965 of the
Internal Revenue Code, is an addition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 16.

Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Income attributable to domestic production activities of cooperatives. new text end

new text begin The
amount of the deduction allowable under section 199A(g) of the Internal Revenue Code is
an addition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 17.

Minnesota Statutes 2020, section 290.0134, subdivision 18, is amended to read:

Subd. 18.

Deferred foreign income.

The amount of deferred foreign income deleted text beginrecognized
because of deleted text end new text begin under new text end section 965 of the Internal Revenue Code is a subtraction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 18.

Minnesota Statutes 2020, section 290.06, subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:

(1) On the first deleted text begin$38,770 deleted text end new text begin $42,800 new text end, 5.35 percent;

(2) On all over deleted text begin$38,770 deleted text end new text begin $42,800 new text end, but not over deleted text begin$154,020 deleted text end new text begin $154,010 new text end, 6.8 percent;

(3) On all over deleted text begin$154,020 deleted text end new text begin $154,010 new text end, but not over deleted text begin$269,010 deleted text end new text begin $276,200 new text end, 7.85 percent;

(4) On all over deleted text begin$269,010 deleted text end new text begin $276,200, but not over $1,000,000 new text end, 9.85 percent deleted text begin. deleted text end new text begin;
new text end

new text begin (5) On all over $1,000,000, 11.15 percent.
new text end

Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts after the adjustment required in subdivision 2d.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin$26,520 deleted text end new text begin $29,270 new text end, 5.35 percent;

(2) On all over deleted text begin$26,520 deleted text end new text begin $29,270 new text end, but not over deleted text begin$87,110 deleted text end new text begin $86,620 new text end, 6.8 percent;

(3) On all over deleted text begin$87,110 deleted text end new text begin $86,620 new text end, but not over deleted text begin$161,720 deleted text end new text begin $166,040 new text end, 7.85 percent;

(4) On all over deleted text begin$161,720 deleted text end new text begin $166,040, but not over $500,000 new text end, 9.85 percent deleted text begin. deleted text end new text begin;
new text end

new text begin (5) On all over $500,000, 11.15 percent.
new text end

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin$32,650 deleted text end new text begin $36,030 new text end, 5.35 percent;

(2) On all over deleted text begin$32,650 deleted text end new text begin $36,030 new text end, but not over deleted text begin$131,190 deleted text end new text begin $131,230 new text end, 6.8 percent;

(3) On all over deleted text begin$131,190 deleted text end new text begin $131,230 new text end, but not over deleted text begin$214,980 deleted text end new text begin $220,730 new text end, 7.85 percent;

(4) On all over deleted text begin$214,980 deleted text end new text begin $220,730, but not over $750,000 new text end, 9.85 percent deleted text begin. deleted text end new text begin;
new text end

new text begin (5) On all over $750,000, 11.15 percent.
new text end

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text beginand deleted text end
17 new text begin, and 19 to 23 new text end, and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9, 10, 14, 15, 17, 18, deleted text beginand deleted text end 27 new text begin, 30, and 31 new text end, and 290.0137, paragraph (c), after
applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17;
and

(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text beginand deleted text end
17 new text begin, and 19 to 23 new text end, and 290.0137, paragraph (a); and reduced by

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, deleted text beginand deleted text end
27 new text begin, 30, and 31 new text end, and 290.0137, paragraph (c).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 19.

Minnesota Statutes 2020, section 290.06, subdivision 2d, is amended to read:

Subd. 2d.

Inflation adjustment of brackets.

The commissioner shall annually adjust
the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
in subdivision 2c as provided in section 270C.22. The statutory year is taxable year deleted text begin2019 deleted text end new text begin
2021 new text end. The rate applicable to any rate bracket must not be changed. The dollar amounts
setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the
rate bracket for married filing separate returns after this adjustment is done. The rate bracket
for married filing separate must be one-half of the rate bracket for married filing joint.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 20.

Minnesota Statutes 2020, section 290.06, subdivision 22, is amended to read:

Subd. 22.

Credit for taxes paid to another state.

(a) A taxpayer who is liable for taxes
based on net income to another state, as provided in paragraphs (b) through (f), upon income
allocated or apportioned to Minnesota, is entitled to a credit for the tax paid to another state
if the tax is actually paid in the taxable year or a subsequent taxable year. A taxpayer who
is a resident of this state pursuant to section 290.01, subdivision 7, paragraph (b), and who
is subject to income tax as a resident in the state of the individual's domicile is not allowed
this credit unless the state of domicile does not allow a similar credit.

(b) For an individual, estate, or trust, the credit is determined by multiplying the tax
payable under this chapter by the ratio derived by dividing the income subject to tax in the
other state that is also subject to tax in Minnesota while a resident of Minnesota by the
taxpayer's federal adjusted gross income, as defined in section 62 of the Internal Revenue
Code, modified by the addition required by section 290.0131, subdivision 2, and the
subtraction allowed by section 290.0132, subdivision 2, to the extent the income is allocated
or assigned to Minnesota under sections 290.081 and 290.17.

(c) If the taxpayer is an athletic team that apportions all of its income under section
290.17, subdivision 5, the credit is determined by multiplying the tax payable under this
chapter by the ratio derived from dividing the total net income subject to tax in the other
state by the taxpayer's Minnesota taxable income.

(d)(1) The credit determined under paragraph (b) or (c) shall not exceed the amount of
tax so paid to the other state on the gross income earned within the other state subject to
tax under this chapter; and

(2) the allowance of the credit does not reduce the taxes paid under this chapter to an
amount less than what would be assessed if the gross income earned within the other state
were excluded from taxable net income.

(e) In the case of the tax assessed on a lump-sum distribution under section 290.032, the
credit allowed under paragraph (a) is the tax assessed by the other state on the lump-sum
distribution that is also subject to tax under section 290.032, and shall not exceed the tax
assessed under section 290.032. To the extent the total lump-sum distribution defined in
section 290.032, subdivision 1, includes lump-sum distributions received in prior years or
is all or in part an annuity contract, the reduction to the tax on the lump-sum distribution
allowed under section 290.032, subdivision 2, includes tax paid to another state that is
properly apportioned to that distribution.

(f) If a Minnesota resident reported an item of income to Minnesota and is assessed tax
in such other state on that same income after the Minnesota statute of limitations has expired,
the taxpayer shall receive a credit for that year under paragraph (a), notwithstanding any
statute of limitations to the contrary. The claim for the credit must be submitted within one
year from the date the taxes were paid to the other state. The taxpayer must submit sufficient
proof to show entitlement to a credit.

(g) For the purposes of this subdivision, a resident shareholder of a corporation treated
as an "S" corporation under section 290.9725, must be considered to have paid a tax imposed
on the shareholder in an amount equal to the shareholder's pro rata share of any net income
tax paid by the S corporation to another state. For the purposes of the preceding sentence,
the term "net income tax" means any tax imposed on or measured by a corporation's net
income.

(h) For the purposes of this subdivision, a resident partner of an entity taxed as a
partnership under the Internal Revenue Code must be considered to have paid a tax imposed
on the partner in an amount equal to the partner's pro rata share of any net income tax paid
by the partnership to another state. For purposes of the preceding sentence, the term "net
income" tax means any tax imposed on or measured by a partnership's net income. new text begin For
purposes of this paragraph, "partnership" includes a limited liability company and "partner"
includes a member of a limited liability company.
new text end

(i) For the purposes of this subdivision, "another state":

(1) includes:

(i) the District of Columbia; and

(ii) a province or territory of Canada; but

(2) excludes Puerto Rico and the several territories organized by Congress.

(j) The limitations on the credit in paragraphs (b), (c), and (d), are imposed on a state
by state basis.

(k) For a tax imposed by a province or territory of Canada, the tax for purposes of this
subdivision is the excess of the tax over the amount of the foreign tax credit allowed under
section 27 of the Internal Revenue Code. In determining the amount of the foreign tax credit
allowed, the net income taxes imposed by Canada on the income are deducted first. Any
remaining amount of the allowable foreign tax credit reduces the provincial or territorial
tax that qualifies for the credit under this subdivision.

(l)(1) The credit allowed to a qualifying individual under this section for tax paid to a
qualifying state equals the credit calculated under paragraphs (b) and (d), plus the amount
calculated by multiplying:

(i) the difference between the preliminary credit and the credit calculated under paragraphs
(b) and (d), by

(ii) the ratio derived by dividing the income subject to tax in the qualifying state that
consists of compensation for performance of personal or professional services by the total
amount of income subject to tax in the qualifying state.

(2) If the amount of the credit that a qualifying individual is eligible to receive under
clause (1) for tax paid to a qualifying state exceeds the tax due under this chapter before
the application of the credit calculated under clause (1), the commissioner shall refund the
excess to the qualifying individual. An amount sufficient to pay the refunds required by this
subdivision is appropriated to the commissioner from the general fund.

(3) For purposes of this paragraph, "preliminary credit" means the credit that a qualifying
individual is eligible to receive under paragraphs (b) and (d) for tax paid to a qualifying
state without regard to the limitation in paragraph (d), clause (2); "qualifying individual"
means a Minnesota resident under section 290.01, subdivision 7, paragraph (a), who received
compensation during the taxable year for the performance of personal or professional services
within a qualifying state; and "qualifying state" means a state with which an agreement
under section 290.081 is not in effect for the taxable year but was in effect for a taxable
year beginning before January 1, 2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 21.

Minnesota Statutes 2020, section 290.06, is amended by adding a subdivision to
read:

new text begin Subd. 39. new text end

new text begin Film production credit. new text end

new text begin (a) A taxpayer, including a taxpayer to whom a credit
has been assigned under section 116U.27, subdivision 3, may claim a credit against the tax
imposed by this chapter equal to the amount certified on a credit certificate under section
116U.27, subject to the limitations in this subdivision.
new text end

new text begin (b) The credit is limited to the liability for tax, as computed under this chapter, for the
taxable year. If the amount of the credit determined under this subdivision for any taxable
year exceeds this limitation, the excess is a film production credit carryover to each of the
five succeeding taxable years. The entire amount of the excess unused credit for the taxable
year is carried first to the earliest of the taxable years to which the credit may be carried
and then to each successive year to which the credit may be carried. The amount of the
unused credit that may be added under this paragraph must not exceed the taxpayer's liability
for tax, less any film production credit for the taxable year.
new text end

new text begin (c) Credits allowed to a partnership, a limited liability company taxed as a partnership,
or an S corporation are passed through to the partners, members, shareholders, or owners,
respectively, pro rata to each based on the partner's, member's, shareholder's, or owner's
share of the entity's assets, or as specially allocated in the organizational documents or any
other executed agreement, as of the last day of the taxable year.
new text end

new text begin (d) Notwithstanding the approval and certification by the commissioner of employment
and economic development under section 116U.27, the commissioner may utilize any audit
and examination powers under chapter 270C or 289A to the extent necessary to verify that
the taxpayer is eligible for the credit and to assess the amount of any improperly claimed
credit. The commissioner may only assess the original recipient of the credit certificate for
the amount of improperly claimed credits. The commissioner may not assess a credit
certificate transferee for any amount of improperly claimed credits, and a transferee's claim
for credit is not affected by the commissioner's assessment of improperly claimed credits
against the transferor.
new text end

new text begin (e) This subdivision expires January 1, 2025, for taxable years beginning after December
31, 2024, except that the expiration of this section does not affect the commissioner of
revenue's authority to audit or power of examination and assessment for credits claimed
under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020, and before January 1, 2025.
new text end

Sec. 22.

Minnesota Statutes 2020, section 290.06, is amended by adding a subdivision to
read:

new text begin Subd. 40. new text end

new text begin Pass-through entity tax credit. new text end

new text begin (a) A qualifying owner of a qualifying entity
that elects to pay the pass-through entity tax under section 289A.08, subdivision 7a, may
claim a credit against the tax due under this chapter equal to the amount of the owner's tax
liability as calculated under section 289A.08, subdivision 7a, paragraph (d).
new text end

new text begin (b) If the amount of the credit the taxpayer may claim under this subdivision exceeds
the taxpayer's tax liability under this chapter, the commissioner of revenue shall refund the
excess to the taxpayer. The amount necessary to pay the claim for the refund provided in
this subdivision is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin (c) For purposes of this subdivision, "qualifying entity," "qualifying owner," and "tax
liability" have the meanings given in section 289A.08, subdivision 7a, paragraphs (a) and
(d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 23.

Minnesota Statutes 2020, section 290.0671, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

(a) An individual who is a resident of Minnesota is
allowed a credit against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code deleted text begin, except that: deleted text end new text begin.
new text end

new text begin (b) A taxpayer who is a resident of Minnesota and is otherwise eligible for the credit
under section 32 of the Internal Revenue Code may qualify for the credit under this section
under one or more of the following exceptions:
new text end

(1) deleted text begina taxpayer with deleted text end new text begin the taxpayer had new text end no qualifying children deleted text beginwho has deleted text end new text beginand new text endattained the
age of 21, but not deleted text beginattained deleted text end new text beginthe new text endage new text begin of new text end 65 new text begin, new text end before the close of the taxable year deleted text beginand is otherwise
eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit deleted text end;
deleted text begin and
deleted text end

(2) deleted text begina taxpayer who is otherwise eligible for a credit under section 32 of the Internal
Revenue Code remains eligible for the credit even if deleted text end new text begin the taxpayer otherwise qualifies for a
credit under this section and new text end the taxpayer's earned income or adjusted gross income exceeds
the income limitation under section 32 of the Internal Revenue Code deleted text begin. deleted text end new text begin; or
new text end

new text begin (3) the taxpayer does not meet the requirements of section 32(m) of the Internal Revenue
Code but provides an individual taxpayer identification number.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end For individuals with no qualifying children, the credit equals deleted text begin3.9 deleted text end new text begin 5 new text end percent of the
first deleted text begin$7,150 deleted text end new text begin $8,000 new text end of earned income. The credit is reduced by 2.0 percent of earned income
or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in
no case is the credit less than zero.

deleted text begin (c) deleted text end new text begin (d) new text end For individuals with one qualifying child, the credit equals 9.35 percent of the
first deleted text begin$11,950 deleted text end new text begin $12,270 new text end of earned income. The credit is reduced by 6.0 percent of earned
income or adjusted gross income, whichever is greater, in excess of the phaseout threshold,
but in no case is the credit less than zero.

deleted text begin (d) deleted text end new text begin (e) new text end For individuals with two qualifying children, the credit equals 11 percent of the
first deleted text begin$19,600 deleted text end new text begin $20,120 new text end of earned income. The credit is reduced by 10.5 percent of earned
income or adjusted gross income, whichever is greater, in excess of the phaseout threshold,
but in no case is the credit less than zero.

deleted text begin (e) deleted text end new text begin (f) new text end For individuals with three or more qualifying children, the credit equals 12.5
percent of the first deleted text begin$20,000 deleted text end new text begin $20,530 new text end of earned income. The credit is reduced by 10.5 percent
of earned income or adjusted gross income, whichever is greater, in excess of the phaseout
threshold, but in no case is the credit less than zero.

deleted text begin (f) deleted text end new text begin (g) new text end For a part-year resident, the credit must be allocated based on the percentage
calculated under section 290.06, subdivision 2c, paragraph (e).

deleted text begin (g) deleted text end new text begin (h) new text end For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section 290.0132,
subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross
income reduced by the earned income not subject to tax under this chapter over federal
adjusted gross income. For purposes of this paragraph, the following clauses are not
considered "earned income not subject to tax under this chapter":

(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;

(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and

(3) income derived from an Indian reservation by an enrolled member of the reservation
while living on the reservation.

deleted text begin (h) deleted text end new text begin (i) new text end For the purposes of this section, the phaseout threshold equals:

(1) deleted text begin$14,570 deleted text end new text begin $14,960 new text end for married taxpayers filing joint returns with no qualifying children;

(2) deleted text begin$8,730 deleted text end new text begin $8,960 new text end for all other taxpayers with no qualifying children;

(3) deleted text begin$28,610 deleted text end new text begin $29,380 new text end for married taxpayers filing joint returns with one qualifying child;

(4) deleted text begin$22,770 deleted text end new text begin $23,380 new text end for all other taxpayers with one qualifying child;

(5) deleted text begin$32,840 deleted text end new text begin $33,720 new text end for married taxpayers filing joint returns with two qualifying
children;

(6) deleted text begin$27,000 deleted text end new text begin $27,720 new text end for all other taxpayers with two qualifying children;

(7) deleted text begin$33,140 deleted text end new text begin $34,030 new text end for married taxpayers filing joint returns with three or more
qualifying children; and

(8) deleted text begin$27,300 deleted text end new text begin $28,030 new text end for all other taxpayers with three or more qualifying children.

deleted text begin (i) deleted text end new text begin (j) new text end The commissioner shall construct tables showing the amount of the credit at various
income levels and make them available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may graduate the transition
between income brackets.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 24.

Minnesota Statutes 2020, section 290.0671, subdivision 1a, is amended to read:

Subd. 1a.

Definitions.

new text begin(a) new text endFor purposes of this section, the new text begin following new text end terms deleted text begin"Qualifying
child," and deleted text end new text begin have the meanings given.
new text end

new text begin (b) new text end "Earned income deleted text begin, deleted text end" deleted text beginhave deleted text end new text begin has new text end the deleted text beginmeanings deleted text end new text begin meaning new text end given in section 32(c) of the
Internal Revenue Code deleted text begin, and the term "adjusted gross income" has the meaning given in
section 62 of the Internal Revenue Code deleted text end.

new text begin (c) new text end"Earned income of the lesser-earning spouse" has the meaning given in section
290.0675, subdivision 1, paragraph (d).

new text begin (d) "Qualifying child" has the meaning given in section 32(c) of the Internal Revenue
Code, except that the requirements of section 32(m) of the Internal Revenue Code do not
apply for the purposes of determining a qualifying child if the taxpayer provides an individual
taxpayer identification number.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 25.

Minnesota Statutes 2020, section 290.0671, subdivision 7, is amended to read:

Subd. 7.

Inflation adjustment.

The commissioner shall annually adjust the earned
income amounts used to calculate the credit and the phase-out thresholds in subdivision 1
as provided in section 270C.22. The statutory year is taxable year deleted text begin2019 deleted text end new text begin 2021 new text end.

Sec. 26.

Minnesota Statutes 2020, section 290.0674, subdivision 2a, is amended to read:

Subd. 2a.

Income.

(a) For purposes of this section, "income" means the sum of the
following:

(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code;
and

(2) the sum of the following amounts to the extent not included in clause (1):

(i) all nontaxable income;

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

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

(iv) cash public assistance and relief;

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

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

(vii) workers' compensation;

(viii) nontaxable strike benefits;

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

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

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

(xii) nontaxable scholarship or fellowship grants;

(xiii) the amount of deduction allowed under section deleted text begin199 deleted text end new text begin 199A(g) new text end of the Internal Revenue
Code;

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

(xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue
Code; and

(xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code.

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

(b) "Income" does not include:

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

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

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

(4) relief granted under chapter 290A;

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 27.

Minnesota Statutes 2020, section 290.0681, subdivision 10, is amended to read:

Subd. 10.

Sunset.

This section expires after fiscal year deleted text begin2021 deleted text end new text begin 2029 new text end, except that the office's
authority to issue credit certificates under subdivision 4 based on allocation certificates that
were issued before fiscal year deleted text begin2022 deleted text end new text begin 2030 new text end remains in effect through deleted text begin2024 deleted text end new text begin 2032 new text end, and the
reporting requirements in subdivision 9 remain in effect through the year following the year
in which all allocation certificates have either been canceled or resulted in issuance of credit
certificates, or deleted text begin2025 deleted text end new text begin 2033 new text end, whichever is earlier.

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

Minnesota Statutes 2020, section 290.0682, is amended to read:

290.0682 STUDENT LOAN CREDIT.

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Adjusted gross income" means federal adjusted gross income as defined in section
62 of the Internal Revenue Code.

(c) "Earned income" has the meaning given in section deleted text begin32(c) of the Internal Revenue
Code deleted text end new text begin 290.0675, subdivision 1, paragraph (b) new text end.

(d) "Eligible individual" means a resident individual with one or more qualified education
loans related to an undergraduate or graduate degree program at a postsecondary educational
institution.

(e) "Eligible loan payments" means the amount the eligible individual paid during the
taxable year in principal and interest on qualified education loans.

(f) "Postsecondary educational institution" means a public or nonprofit postsecondary
institution eligible for state student aid under section 136A.103 or, if the institution is not
located in this state, a public or nonprofit postsecondary institution participating in the
federal Pell Grant program under title IV of the Higher Education Act of 1965, Public Law
89-329, as amended.

(g) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred on behalf of the eligible individual.

Subd. 2.

Credit allowed.

(a) An eligible individual is allowed a credit against the tax
due under this chapter.

(b) The credit for an eligible individual equals the least of:

(1) eligible loan payments minus ten percent of an amount equal to adjusted gross income
in excess of $10,000, but in no case less than zero;

(2) the earned income for the taxable year of the eligible individual, if any;

(3) the sum of:

(i) the interest portion of eligible loan payments made during the taxable year; and

(ii) ten percent of the original loan amount of all qualified education loans of the eligible
individual; or

(4) $500.

(c) For a part-year resident, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).

(d) In the case of a married couple, each spouse is eligible for the credit in this section. new text begin
For the purposes of paragraph (b), for married taxpayers filing joint returns, each spouse's
adjusted gross income equals the spouse's percentage share of the couple's earned income,
multiplied by the couple's combined adjusted gross income.
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable; appropriation. new text end

new text begin (a) If the amount of credit which a claimant
is eligible to receive under this section exceeds the claimant's tax liability under this chapter,
the commissioner shall refund the excess to the claimant.
new text end

new text begin (b) An amount sufficient to pay the refunds required by this section is appropriated to
the commissioner from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 29.

Minnesota Statutes 2020, section 290.0685, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

(a) An new text begineligible new text endindividual is allowed a credit against the
tax imposed by this chapter equal to $2,000 for each deleted text beginbirth for which a certificate of birth
resulting in stillbirth has been issued under section 144.2151 deleted text end new text begin stillbirth new text end. The credit under this
section is allowed only in the taxable year in which the stillbirth occurred deleted text beginand if the child
would have been a dependent of the taxpayer as defined in section 152 of the Internal
Revenue Code deleted text end.

(b) For a deleted text beginnonresident or deleted text end part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2015.
new text end

Sec. 30.

Minnesota Statutes 2020, section 290.0685, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given, unless the context clearly indicates otherwise.
new text end

new text begin (b) "Certificate of birth" means the printed certificate of birth resulting in stillbirth issued
under section 144.2151 or for a birth occurring in another state or country a similar certificate
issued under that state's or country's law.
new text end

new text begin (c) "Eligible individual" means an individual who is:
new text end

new text begin (1)(i) a resident; or
new text end

new text begin (ii) the nonresident spouse of a resident who is a member of armed forces of the United
States or the United Nations; and
new text end

new text begin (2)(i) the individual who gave birth resulting in stillbirth and is listed as a parent on the
certificate of birth;
new text end

new text begin (ii) if no individual meets the requirements of clause (i) for a stillbirth that occurs in this
state, then the first parent listed on the certificate of birth resulting in still birth; or
new text end

new text begin (iii) the individual who gave birth resulting in stillbirth for a birth outside of this state
for which no certificate of birth was issued.
new text end

new text begin (d) "Stillbirth" means a birth for which a fetal death report would be required under
section 144.222, subdivision 1, if the birth occurred in this state.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2015.
new text end

Sec. 31.

Minnesota Statutes 2020, section 290.091, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given.

(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a person with a disability;

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2;

(6) the amount of addition required by section 290.0131, subdivisions 9, 10, deleted text beginand deleted text end 16 new text begin, and
19 to 23 new text end;

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
not included in the addition required under clause (6); and

(8) to the extent not included in federal alternative minimum taxable income, the amount
of foreign-derived intangible income deducted under section 250 of the Internal Revenue
Code;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;

(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by
section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, deleted text beginand deleted text end 26 to 29 new text begin, 30, and 31 new text end;

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c); and

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
subdivision 7.

In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
taxable income must be increased by the addition in section 290.0131, subdivision 16.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.

(c) "Net minimum tax" means the minimum tax imposed by this section.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020, except that the provisions relating to section 290.0131, subdivisions 20 and 21,
are effective retroactively for taxable years beginning after December 31, 2017, and the
provisions relating to section 290.0131, subdivision 19, and section 290.0132, subdivisions
30 and 31, are effective retroactively for taxable years beginning after December 31, 2018.
new text end

Sec. 32.

Minnesota Statutes 2020, section 290.17, is amended by adding a subdivision to
read:

new text begin Subd. 4a. new text end

new text begin Controlled foreign corporations. new text end

new text begin (a) For purposes of applying subdivision
4, a controlled foreign corporation as defined in section 957 of the Internal Revenue Code
is deemed to be a domestic corporation if:
new text end

new text begin (1) a United States shareholder of a controlled foreign corporation is required for the
taxable year to include in gross income the shareholder's global intangible low-taxed income
under section 951A of the Internal Revenue Code; and
new text end

new text begin (2) the controlled foreign corporation is a member of a unitary group.
new text end

new text begin (b) In the event the taxpayer fails to designate the controlled foreign corporation as a
member of a unitary group and the commissioner subsequently determines that the controlled
foreign corporation is a member of a unitary group, the commissioner's determination is
prima facie valid. The taxpayer subject to the determination has the burden of establishing
the incorrectness of the determination in any related action or proceeding.
new text end

new text begin (c) For purposes of imposing a tax under this chapter, the federal taxable income of a
controlled foreign corporation deemed to be a domestic corporation under this subdivision
must be computed as follows:
new text end

new text begin (1) a profit and loss statement must be prepared in the currency in which the books of
account of the controlled foreign corporation are regularly maintained;
new text end

new text begin (2) except as determined by the commissioner or otherwise allowed under the Internal
Revenue Code, adjustments must be made to the profit and loss statement to conform the
statement to the accounting principles generally accepted in the United States for the
preparation of those statements;
new text end

new text begin (3) adjustments must be made to the profit and loss statement to conform it to the tax
accounting standards required by the commissioner;
new text end

new text begin (4) unless otherwise authorized by the commissioner, the apportionment factors and
profit and loss statement of each member of the combined group must be converted into
the currency in which the parent company maintains its books and records; and
new text end

new text begin (5) the taxpayer's apportionment factors and profit and loss statement must be expressed
in United States dollars.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 33.

Minnesota Statutes 2020, section 290.17, is amended by adding a subdivision to
read:

new text begin Subd. 4b. new text end

new text begin Worldwide election. new text end

new text begin (a) Taxpayer members of a unitary group, of which one
or more members are deemed to be domestic corporations under subdivision 4a for the
taxable year, may elect to determine each of their apportioned shares of the net business
income or loss of the combined group under a worldwide election. Under the election,
taxpayer members must take into account the entire income and apportionment factors of
each member of the unitary group, regardless of the place where a member is incorporated
or formed. Corporations or other entities incorporated or formed outside of the United States
are subject to the requirements of subdivision 4a, paragraph (c), in reporting their income.
new text end

new text begin (b) A worldwide election is effective only if made on a timely filed, original return for
the tax year by each member of the unitary group subject to tax under this chapter.
new text end

new text begin (c) A worldwide election is binding for and applies to the taxable year it is made and
for the ten following taxable years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 34.

Minnesota Statutes 2020, section 290.17, is amended by adding a subdivision to
read:

new text begin Subd. 4c. new text end

new text begin Withdrawal; reinstitution. new text end

new text begin (a) The election under subdivision 4b, paragraph
(a), may be withdrawn:
new text end

new text begin (1) after expiration of the ten-year period in subdivision 4b, paragraph (c), provided that
the withdrawal is made in writing within one year after the expiration of the election; or
new text end

new text begin (2) prior to the expiration of the ten-year period, if the taxpayer members:
new text end

new text begin (i) file a written withdrawal request with the commissioner;
new text end

new text begin (ii) demonstrate that they would experience an extraordinary financial hardship due to
increased tax arising from unforeseen changes in this state's tax statutes, laws, or policies;
and
new text end

new text begin (iii) receive written permission from the commissioner approving the withdrawal, which
the commissioner may grant.
new text end

new text begin (b) A withdrawal made under paragraph (a) is binding for ten years. If no withdrawal
is properly made under paragraph (a), clause (1), the worldwide election is binding for an
additional ten taxable years. If the commissioner grants written permission to withdraw
under paragraph (a), clause (2), the commissioner must impose any requirement deemed
necessary to prevent evasion of tax or to clearly reflect income for the election period before
or after withdrawal.
new text end

new text begin (c) Notwithstanding the requirement binding withdrawal for ten years under paragraph
(b), the election may be reinstituted if the taxpayer members:
new text end

new text begin (1) file a written reinstitution request with the commissioner;
new text end

new text begin (2) demonstrate that they would experience an extraordinary hardship due to unforeseen
changes in this state's tax statutes, laws, or policies; and
new text end

new text begin (3) receive written permission from the commissioner approving the reinstitution, which
the commissioner may grant.
new text end

new text begin (d) A reinstitution under paragraph (c) is binding for a period of ten years. The withdrawal
provisions of paragraph (a) apply to a reinstitution under paragraph (c), and the provisions
of paragraph (c) apply to a reinstitution following a subsequent withdrawal.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 35.

Minnesota Statutes 2020, section 290.21, subdivision 9, is amended to read:

Subd. 9.

Controlled foreign corporations.

The net income of a deleted text begindomestic deleted text end corporation
that is included pursuant to section 951 of the Internal Revenue Code is dividend income.

new text begin EFFECTIVE DATE. new text end

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

Sec. 36.

Minnesota Statutes 2020, section 290.21, is amended by adding a subdivision to
read:

new text begin Subd. 10. new text end

new text begin Previously taxed deferred foreign income. new text end

new text begin The amount included under
section 290.0133, subdivision 16, is dividend income.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 37.

Minnesota Statutes 2020, section 290.92, subdivision 4b, is amended to read:

Subd. 4b.

Withholding by partnerships.

(a) A partnership shall deduct and withhold
a tax as provided in paragraph (b) for nonresident individual partners based on their
distributive shares of partnership income for a taxable year of the partnership.

(b) The amount of tax withheld is determined by multiplying the partner's distributive
share allocable to Minnesota under section 290.17, paid or credited during the taxable year
by the highest rate used to determine the income tax liability for an individual under section
290.06, subdivision 2c, except that the amount of tax withheld may be determined by the
commissioner if the partner submits a withholding exemption certificate under subdivision
5.

(c) The commissioner may reduce or abate the tax withheld under this subdivision if the
partnership had reasonable cause to believe that no tax was due under this section.

(d) Notwithstanding paragraph (a), a partnership is not required to deduct and withhold
tax for a nonresident partner if:

(1) the partner elects to have the tax due paid as part of the partnership's composite return
under section 289A.08, subdivision 7;

(2) the partner has Minnesota assignable federal adjusted gross income from the
partnership of less than $1,000; or

(3) the partnership is liquidated or terminated, the income was generated by a transaction
related to the termination or liquidation, and no cash or other property was distributed in
the current or prior taxable year;

(4) the distributive shares of partnership income are attributable to:

(i) income required to be recognized because of discharge of indebtedness;

(ii) income recognized because of a sale, exchange, or other disposition of real estate,
depreciable property, or property described in section 179 of the Internal Revenue Code;
or

(iii) income recognized on the sale, exchange, or other disposition of any property that
has been the subject of a basis reduction pursuant to section 108, 734, 743, 754, or 1017 of
the Internal Revenue Code

to the extent that the income does not include cash received or receivable or, if there is cash
received or receivable, to the extent that the cash is required to be used to pay indebtedness
by the partnership or a secured debt on partnership property; deleted text beginor
deleted text end

(5) the partnership is a publicly traded partnership, as defined in section 7704(b) of the
Internal Revenue Code deleted text begin. deleted text end new text begin; or
new text end

new text begin (6) the partnership has elected to pay the pass-through entity tax under section 289A.08,
subdivision 7a.
new text end

(e) For purposes of sections 270C.60, 289A.09, subdivision 2, 289A.20, subdivision 2,
paragraph (c), 289A.50, 289A.56, 289A.60, and 289A.63, a partnership is considered an
employer.

(f) To the extent that income is exempt from withholding under paragraph (d), clause
(4), the commissioner has a lien in an amount up to the amount that would be required to
be withheld with respect to the income of the partner attributable to the partnership interest,
but for the application of paragraph (d), clause (4). The lien arises under section 270C.63
from the date of assessment of the tax against the partner, and attaches to that partner's share
of the profits and any other money due or to become due to that partner in respect of the
partnership. Notice of the lien may be sent by mail to the partnership, without the necessity
for recording the lien. The notice has the force and effect of a levy under section 270C.67,
and is enforceable against the partnership in the manner provided by that section. Upon
payment in full of the liability subsequent to the notice of lien, the partnership must be
notified that the lien has been satisfied.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 38.

Minnesota Statutes 2020, section 290.92, subdivision 4c, is amended to read:

Subd. 4c.

Withholding by S corporations.

(a) A corporation having a valid election in
effect under section 290.9725 shall deduct and withhold a tax as provided in paragraph (b)
for nonresident individual shareholders their share of the corporation's income for the taxable
year.

(b) The amount of tax withheld is determined by multiplying the amount of income
allocable to Minnesota under section 290.17 by the highest rate used to determine the income
tax liability of an individual under section 290.06, subdivision 2c, except that the amount
of tax withheld may be determined by the commissioner if the shareholder submits a
withholding exemption certificate under subdivision 5.

(c) Notwithstanding paragraph (a), a corporation is not required to deduct and withhold
tax for a nonresident shareholder, if:

(1) the shareholder elects to have the tax due paid as part of the corporation's composite
return under section 289A.08, subdivision 7;

(2) the shareholder has Minnesota assignable federal adjusted gross income from the
corporation of less than $1,000; deleted text beginor
deleted text end

(3) the corporation is liquidated or terminated, the income was generated by a transaction
related to the termination or liquidation, and no cash or other property was distributed in
the current or prior taxable year deleted text begin. deleted text end new text begin; or
new text end

new text begin (4) the S corporation has elected to pay the pass-through entity tax under section 289A.08,
subdivision 7a.
new text end

(d) For purposes of sections 270C.60, 289A.09, subdivision 2, 289A.20, subdivision 2,
paragraph (c), 289A.50, 289A.56, 289A.60, and 289A.63, a corporation is considered an
employer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 39.

Minnesota Statutes 2020, section 290A.03, subdivision 3, is amended to read:

Subd. 3.

Income.

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

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

(2) the sum of the following amounts to the extent not included in clause (1):

(i) all nontaxable income;

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

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

(iv) cash public assistance and relief;

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

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

(vii) workers' compensation;

(viii) nontaxable strike benefits;

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

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

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

(xii) to the extent not included in federal adjusted gross income, distributions received
by the claimant or spouse from a traditional or Roth style retirement account or plan;

(xiii) nontaxable scholarship or fellowship grants;

(xiv) alimony received to the extent not included in the recipient's income;

(xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue
Code;

(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue
Code; deleted text beginand
deleted text end

(xvii) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code deleted text begin. deleted text end new text begin; and
new text end

new text begin (xviii) the amount of deduction allowed under section 199A(g) of the Internal Revenue
Code.
new text end

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

(b) "Income" does not include:

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

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

(3) to the extent included in federal adjusted gross income, amounts contributed by the
claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed
the retirement base amount reduced by the amount of contributions excluded from federal
adjusted gross income, but not less than zero;

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

(5) relief granted under this chapter;

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

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

(8) alimony paid.

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

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

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

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

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

(5) for the claimant's fifth dependent, the exemption amount; and

(6) if the claimant or claimant's spouse had a disability or attained the age of 65 on or
before December 31 of the year for which the taxes were levied or rent paid, the exemption
amount.

(d) For purposes of this subdivision, the following terms have the meanings given:

(1) "exemption amount" means the exemption amount under section 290.0121,
subdivision 1, paragraph (b), for the taxable year for which the income is reported;

(2) "retirement base amount" means the deductible amount for the taxable year for the
claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for
inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard
to whether the claimant or spouse claimed a deduction; and

(3) "traditional or Roth style retirement account or plan" means retirement plans under
sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 40.

Minnesota Statutes 2020, section 297I.20, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Film production credit. new text end

new text begin (a) A taxpayer may claim a credit against the premiums
tax imposed under this chapter equal to the amount indicated on the credit certificate
statement issued to the company under section 116U.27. If the amount of the credit exceeds
the taxpayer's liability for tax under this chapter, the excess is a credit carryover to each of
the five succeeding taxable years. The entire amount of the excess unused credit for the
taxable year must be carried first to the earliest of the taxable years to which the credit may
be carried and then to each successive year to which the credit may be carried. This credit
does not affect the calculation of fire state aid under section 477B.03 and police state aid
under section 477C.03.
new text end

new text begin (b) This subdivision expires January 1, 2025, for taxable years beginning after and
premiums received after December 31, 2024.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after and for
premiums received after December 31, 2020, and before January 1, 2025.
new text end

Sec. 41. new text beginCLARIFICATION OF SECTION 179 EXPENSING CONFORMITY.
new text end

new text begin For taxable years beginning after December 31, 2019, no addition is required under
Minnesota Statutes, sections 290.0131, subdivision 10, and 290.0133, subdivision 12, for
property placed in service in taxable years beginning before January 1, 2020, including the
following:
new text end

new text begin (1) the addition for carryover amounts pursuant to section 179(b)(3) of the Internal
Revenue Code for property placed in service in taxable years beginning before January 1,
2020; and
new text end

new text begin (2) the addition for property placed in service in taxable years beginning before January
1, 2020, resulting from being a shareholder or partner in an S-corporation or partnership
with a taxable year that began before January 1, 2020.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2019.
new text end

Sec. 42. new text beginREPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2020, sections 290.01, subdivision 19i; and 290.0131, subdivision
18, new text end new text begin are repealed effective retroactively for taxable years beginning after December 31, 2015.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2020, section 290.01, subdivision 7b, new text end new text begin is repealed effective for
taxable years beginning after December 31, 2020.
new text end

ARTICLE 3

PARTNERSHIP AUDITS

Section 1.

Minnesota Statutes 2020, section 270C.445, subdivision 6, is amended to read:

Subd. 6.

Enforcement; administrative order; penalties; cease and desist.

(a) The
commissioner may impose an administrative penalty of not more than $1,000 per violation
of subdivision 3 or 5, or section 270C.4451, provided that a penalty may not be imposed
for any conduct for which a tax preparer penalty is imposed under section 289A.60,
subdivision 13. The commissioner may terminate a tax preparer's authority to transmit
returns electronically to the state, if the commissioner determines the tax preparer engaged
in a pattern and practice of violating this section. Imposition of a penalty under this paragraph
is subject to the contested case procedure under chapter 14. The commissioner shall collect
the penalty in the same manner as the income tax. There is no right to make a claim for
refund under section 289A.50 of the penalty imposed under this paragraph. Penalties imposed
under this paragraph are public data.

(b) In addition to the penalty under paragraph (a), if the commissioner determines that
a tax preparer has violated subdivision 3 or 5, or section 270C.4451, the commissioner may
issue an administrative order to the tax preparer requiring the tax preparer to cease and
desist from committing the violation. The administrative order may include an administrative
penalty provided in paragraph (a).

(c) If the commissioner issues an administrative order under paragraph (b), the
commissioner must send the order to the tax preparer addressed to the last known address
of the tax preparer.

(d) A cease and desist order under paragraph (b) must:

(1) describe the act, conduct, or practice committed and include a reference to the law
that the act, conduct, or practice violates; and

(2) provide notice that the tax preparer may request a hearing as provided in this
subdivision.

(e) Within 30 days after the commissioner issues an administrative order under paragraph
(b), the tax preparer may request a hearing to review the commissioner's action. The request
for hearing must be made in writing and must be served on the commissioner at the address
specified in the order. The hearing request must specifically state the reasons for seeking
review of the order. The date on which a request for hearing is served by mail is the postmark
date on the envelope in which the request for hearing is mailed.

(f) If a tax preparer does not timely request a hearing regarding an administrative order
issued under paragraph (b), the order becomes a final order of the commissioner and is not
subject to review by any court or agency.

(g) If a tax preparer timely requests a hearing regarding an administrative order issued
under paragraph (b), the hearing must be commenced within ten days after the commissioner
receives the request for a hearing.

(h) A hearing timely requested under paragraph (e) is subject to the contested case
procedure under chapter 14, as modified by this subdivision. The administrative law judge
must issue a report containing findings of fact, conclusions of law, and a recommended
order within ten days after the completion of the hearing, the receipt of late-filed exhibits,
or the submission of written arguments, whichever is later.

(i) Within five days of the date of the administrative law judge's report issued under
paragraph (h), any party aggrieved by the administrative law judge's report may submit
written exceptions and arguments to the commissioner. Within 15 days after receiving the
administrative law judge's report, the commissioner must issue an order vacating, modifying,
or making final the administrative order.

(j) The commissioner and the tax preparer requesting a hearing may by agreement
lengthen any time periods prescribed in paragraphs (g) to (i).

(k) An administrative order issued under paragraph (b) is in effect until it is modified
or vacated by the commissioner or an appellate court. The administrative hearing provided
by paragraphs (e) to (i) and any appellate judicial review as provided in chapter 14 constitute
the exclusive remedy for a tax preparer aggrieved by the order.

(l) The commissioner may impose an administrative penalty, in addition to the penalty
under paragraph (a), up to $5,000 per violation of a cease and desist order issued under
paragraph (b). Imposition of a penalty under this paragraph is subject to the contested case
procedure under chapter 14. Within 30 days after the commissioner imposes a penalty under
this paragraph, the tax preparer assessed the penalty may request a hearing to review the
penalty order. The request for hearing must be made in writing and must be served on the
commissioner at the address specified in the order. The hearing request must specifically
state the reasons for seeking review of the order. The cease and desist order issued under
paragraph (b) is not subject to review in a proceeding to challenge the penalty order under
this paragraph. The date on which a request for hearing is served by mail is the postmark
date on the envelope in which the request for hearing is mailed. If the tax preparer does not
timely request a hearing, the penalty order becomes a final order of the commissioner and
is not subject to review by any court or agency. A penalty imposed by the commissioner
under this paragraph may be collected and enforced by the commissioner as an income tax
liability. There is no right to make a claim for refund under section 289A.50 of the penalty
imposed under this paragraph. A penalty imposed under this paragraph is public data.

(m) If a tax preparer violates a cease and desist order issued under paragraph (b), the
commissioner may terminate the tax preparer's authority to transmit returns electronically
to the state. Termination under this paragraph is public data.

(n) A cease and desist order issued under paragraph (b) is public data when it is a final
order.

(o) Notwithstanding any other law, the commissioner may impose a penalty or take other
action under this subdivision against a tax preparer, with respect to a return, within the
period to assess tax on that return as provided by deleted text beginsection deleted text end new text begin sections new text end 289A.38 new text begin to 289A.382 new text end.

(p) Notwithstanding any other law, the imposition of a penalty or any other action against
a tax preparer under this subdivision, other than with respect to a return, must be taken by
the commissioner within five years of the violation of statute.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 2.

Minnesota Statutes 2020, section 289A.31, subdivision 1, is amended to read:

Subdivision 1.

Individual income, fiduciary income, mining company, corporate
franchise, and entertainment taxes.

(a) Individual income, fiduciary income, mining
company, and corporate franchise taxes, and interest and penalties, must be paid by the
taxpayer upon whom the tax is imposed, except in the following cases:

(1) the tax due from a decedent for that part of the taxable year in which the decedent
died during which the decedent was alive and the taxes, interest, and penalty due for the
prior years must be paid by the decedent's personal representative, if any. If there is no
personal representative, the taxes, interest, and penalty must be paid by the transferees, as
defined in section 270C.58, subdivision 3, to the extent they receive property from the
decedent;

(2) the tax due from an infant or other incompetent person must be paid by the person's
guardian or other person authorized or permitted by law to act for the person;

(3) the tax due from the estate of a decedent must be paid by the estate's personal
representative;

(4) the tax due from a trust, including those within the definition of a corporation, as
defined in section 290.01, subdivision 4, must be paid by a trustee; and

(5) the tax due from a taxpayer whose business or property is in charge of a receiver,
trustee in bankruptcy, assignee, or other conservator, must be paid by the person in charge
of the business or property so far as the tax is due to the income from the business or property.

(b) Entertainment taxes are the joint and several liability of the entertainer and the
entertainment entity. The payor is liable to the state for the payment of the tax required to
be deducted and withheld under section 290.9201, subdivision 7, and is not liable to the
entertainer for the amount of the payment.

(c) The taxes imposed under sections 289A.35 new text begin, paragraph (b), 289A.382, subdivision
3, new text end and 290.0922 on partnerships are the joint and several liability of the partnership and the
general partners.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 3.

Minnesota Statutes 2020, section 289A.37, subdivision 2, is amended to read:

Subd. 2.

Erroneous refunds.

(a) Except as provided in paragraph (b), an erroneous
refund occurs when the commissioner issues a payment to a person that exceeds the amount
the person is entitled to receive under law. An erroneous refund is considered an
underpayment of tax on the date issued.

(b) To the extent that the amount paid does not exceed the amount claimed by the
taxpayer, an erroneous refund does not include the following:

(1) any amount of a refund or credit paid pursuant to a claim for refund filed by a
taxpayer, including but not limited to refunds of claims made under section 290.06,
subdivision 23; 290.067; 290.0671; 290.0672; 290.0674; 290.0675; 290.0677; 290.068;
290.0681; or 290.0692; or chapter 290A; or

(2) any amount paid pursuant to a claim for refund of an overpayment of tax filed by a
taxpayer.

(c) The commissioner may make an assessment to recover an erroneous refund at any
time within two years from the issuance of the erroneous refund. If all or part of the erroneous
refund was induced by fraud or misrepresentation of a material fact, the assessment may
be made at any time.

(d) Assessments of amounts that are not erroneous refunds under paragraph (b) must be
conducted under deleted text beginsection deleted text end new text begin sections new text end 289A.38 new text begin to 289A.382 new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 4.

Minnesota Statutes 2020, section 289A.38, subdivision 7, is amended to read:

Subd. 7.

Federal tax changes.

(a) If the amount of income, items of tax preference,
deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for any
period, as reported to the Internal Revenue Service is changed or corrected by the
commissioner of Internal Revenue or other officer of the United States or other competent
authority, or where a renegotiation of a contract or subcontract with the United States results
in a change in income, items of tax preference, deductions, credits, or withholding tax, or,
in the case of estate tax, where there are adjustments to the taxable estate, the taxpayer shall
report the deleted text beginchange or correction or renegotiation results deleted text end new text begin federal adjustments new text end in writing to the
commissioner. The new text beginfederal adjustments new text endreport must be submitted within 180 days after the
final determination new text begindate new text endand must be in the form of either an amended Minnesota estate,
withholding tax, corporate franchise tax, or income tax return conceding the accuracy of
the federal deleted text begindetermination deleted text end new text begin adjustment new text end or a letter detailing how the federal deleted text begindetermination deleted text end new text begin
adjustment new text end is incorrect or does not change the Minnesota tax. An amended Minnesota
income tax return must be accompanied by an amended property tax refund return, if
necessary. A taxpayer filing an amended federal tax return must also file a copy of the
amended return with the commissioner of revenue within 180 days after filing the amended
return.

(b) deleted text beginFor the purposes of paragraph (a), a change or correction includes any case where a
taxpayer reaches a closing agreement or compromise with the Internal Revenue Service
under section 7121 or 7122 of the Internal Revenue Code. deleted text end new text begin In the case of a final federal
adjustment arising from a partnership-level audit or an administrative adjustment request
filed by a partnership under section 6227 of the Internal Revenue Code, a taxpayer must
report adjustments as provided for under section 289A.382, and not this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 5.

Minnesota Statutes 2020, section 289A.38, subdivision 8, is amended to read:

Subd. 8.

Failure to report change or correction of federal return.

If a taxpayer fails
to make a new text begin federal adjustments new text end report as required by subdivision 7 new text begin or section 289A.382 new text end, the
commissioner may recompute the tax, including a refund, based on information available
to the commissioner. The tax may be recomputed within six years after the new text begin federal
adjustments new text end report should have been filed, notwithstanding any period of limitations to the
contrary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 6.

Minnesota Statutes 2020, section 289A.38, subdivision 9, is amended to read:

Subd. 9.

Report made of change or correction of federal return.

If a taxpayer is
required to make a new text begin federal adjustments new text end report under subdivision 7 new text begin or section 289A.382 new text end, and
does report the change or files a copy of the amended return, the commissioner may
recompute and reassess the tax due, including a refund (1) within one year after the new text begin federal
adjustments new text end report or amended return is filed with the commissioner, notwithstanding any
period of limitations to the contrary, or (2) within any other applicable period stated in this
section, whichever period is longer. The period provided for the carryback of any amount
of loss or credit is also extended as provided in this subdivision, notwithstanding any law
to the contrary. If the commissioner has completed a field audit of the taxpayer, and, but
for this subdivision, the commissioner's time period to adjust the tax has expired, the
additional tax due or refund is limited to only those changes that are required to be made
to the return which relate to the changes made on the federal return. This subdivision does
not apply to sales and use tax.

For purposes of this subdivision and section 289A.42, subdivision 2, a "field audit" is
the physical presence of examiners in the taxpayer's or taxpayer's representative's office
conducting an examination of the taxpayer with the intention of issuing an assessment or
notice of change in tax or which results in the issuing of an assessment or notice of change
in tax. The examination may include inspecting a taxpayer's place of business, tangible
personal property, equipment, computer systems and facilities, pertinent books, records,
papers, vouchers, computer printouts, accounts, and documents.

new text begin A taxpayer may make estimated payments to the commissioner of the tax expected to
result from a pending audit by the Internal Revenue Service. The taxpayer may make
estimated payments prior to the due date of the federal adjustments report without the
taxpayer having to file the report with the commissioner. The commissioner must credit the
estimated tax payments against any tax liability of the taxpayer ultimately found to be due
to the commissioner. The estimated payments limit the accrual of further statutory interest
on that amount. If the estimated tax payments exceed the final tax liability plus statutory
interest ultimately determined to be due, the taxpayer is entitled to a refund or credit for the
excess, provided the taxpayer files a federal adjustments report, or claim for refund or credit
of tax, no later than one year following the final determination date.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 7.

Minnesota Statutes 2020, section 289A.38, subdivision 10, is amended to read:

Subd. 10.

Incorrect determination of federal adjusted gross income.

Notwithstanding
any other provision of this chapter, if a taxpayer whose net income is determined under
section 290.01, subdivision 19, omits from income an amount that will under the Internal
Revenue Code extend the statute of limitations for the assessment of federal income taxes,
or otherwise incorrectly determines the taxpayer's federal adjusted gross income resulting
in adjustments by the Internal Revenue Service, then the period of assessment and
determination of tax will be that under the Internal Revenue Code. When a change is made
to federal income during the extended time provided under this subdivision, the provisions
under subdivisions 7 to 9 new text begin and section 289A.382 new text end regarding additional extensions apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 8.

new text begin [289A.381] DEFINITIONS; PARTNERSHIPS; FEDERAL ADJUSTMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions relating to federal adjustments. new text end

new text begin Unless otherwise specified,
the definitions in this section apply for the purposes of sections 289A.38, subdivisions 7 to
9, 289A.381, and 289A.382.
new text end

new text begin Subd. 2. new text end

new text begin Administrative adjustment request. new text end

new text begin "Administrative adjustment request"
means an administrative adjustment request filed by a partnership under section 6227 of
the Internal Revenue Code.
new text end

new text begin Subd. 3. new text end

new text begin Audited partnership. new text end

new text begin "Audited partnership" means a partnership subject to a
federal adjustment resulting from a partnership-level audit.
new text end

new text begin Subd. 4. new text end

new text begin Corporate partner. new text end

new text begin "Corporate partner" means a partner that is subject to tax
under section 290.02.
new text end

new text begin Subd. 5. new text end

new text begin Direct partner. new text end

new text begin "Direct partner" means a partner that holds an immediate legal
ownership interest in a partnership or pass-through entity.
new text end

new text begin Subd. 6. new text end

new text begin Exempt partner. new text end

new text begin "Exempt partner" means a partner that is exempt from taxes
on its net income under section 290.05, subdivision 1.
new text end

new text begin Subd. 7. new text end

new text begin Federal adjustment. new text end

new text begin "Federal adjustment" means any change in an amount
calculated under the Internal Revenue Code, whether to income, gross estate, a credit, an
item of preference, or any other item that is used by a taxpayer to compute a tax administered
under this chapter for the reviewed year whether that change results from action by the
Internal Revenue Service or other competent authority, including a partnership-level audit,
or from the filing of an amended federal return, federal refund claim, or an administrative
adjustment request by the taxpayer. A federal adjustment is positive to the extent that it
increases taxable income as determined under section 290.01, subdivision 29, and is negative
to the extent that it decreases taxable income as determined under section 290.01, subdivision
29.
new text end

new text begin Subd. 8. new text end

new text begin Federal adjustments report. new text end

new text begin "Federal adjustments report" includes a method
or form prescribed by the commissioner for use by a taxpayer to report federal adjustments,
including an amended Minnesota tax return or a uniform multistate report.
new text end

new text begin Subd. 9. new text end

new text begin Federal partnership representative. new text end

new text begin "Federal partnership representative"
means the person the partnership designates for the taxable year as the partnership's
representative, or the person the Internal Revenue Service has appointed to act as the
partnership representative, pursuant to section 6223(a) of the Internal Revenue Code.
new text end

new text begin Subd. 10. new text end

new text begin Final determination date. new text end

new text begin "Final determination date" means:
new text end

new text begin (1) for a federal adjustment arising from an audit by the Internal Revenue Service or
other competent authority, the first day on which no federal adjustment arising from that
audit remains to be finally determined, whether by agreement, or, if appealed or contested,
by a final decision with respect to which all rights of appeal have been waived or exhausted;
new text end

new text begin (2) for a federal adjustment arising from an audit or other action by the Internal Revenue
Service or other competent authority, if the taxpayer filed as a member of a combined report
under section 290.17, subdivision 4, the first day on which no related federal adjustments
arising from that audit remain to be finally determined as described in clause (1) for the
entire combined group;
new text end

new text begin (3) for a federal adjustment arising from the filing of an amended federal return, a federal
refund claim, or the filing by a partnership of an administrative adjustment request, the date
on which the amended return, refund claim, or administrative adjustment request was filed;
or
new text end

new text begin (4) for agreements required to be signed by the Internal Revenue Service and the taxpayer,
the date on which the last party signed the agreement.
new text end

new text begin Subd. 11. new text end

new text begin Final federal adjustment. new text end

new text begin "Final federal adjustment" means a federal
adjustment after the final determination date for that federal adjustment has passed.
new text end

new text begin Subd. 12. new text end

new text begin Indirect partner. new text end

new text begin "Indirect partner" means either:
new text end

new text begin (1) a partner in a partnership or pass-through entity that itself holds an immediate legal
ownership interest in another partnership or pass-through entity; or
new text end

new text begin (2) a partner in a partnership or pass-through entity that holds an indirect interest in
another partnership or pass-through entity through another indirect partner.
new text end

new text begin Subd. 13. new text end

new text begin Partner. new text end

new text begin "Partner" means a person that holds an interest directly or indirectly
in a partnership or other pass-through entity.
new text end

new text begin Subd. 14. new text end

new text begin Partnership. new text end

new text begin "Partnership" has the meaning provided under section 7701(a)(2)
of the Internal Revenue Code.
new text end

new text begin Subd. 15. new text end

new text begin Partnership-level audit. new text end

new text begin "Partnership-level audit" means an examination by
the Internal Revenue Service at the partnership level pursuant to subtitle F, chapter 63,
subchapter C, of the Internal Revenue Code, which results in federal adjustments and
adjustments to partnership-related items.
new text end

new text begin Subd. 16. new text end

new text begin Pass-through entity. new text end

new text begin "Pass-through entity" means an entity, other than a
partnership, that is not subject to the tax imposed under section 290.02. The term pass-through
entity includes but is not limited to S corporations, estates, and trusts other than grantor
trusts.
new text end

new text begin Subd. 17. new text end

new text begin Resident partner. new text end

new text begin "Resident partner" means an individual, trust, or estate
partner who is a resident of Minnesota under section 290.01, subdivision 7, 7a, or 7b, for
the relevant tax period.
new text end

new text begin Subd. 18. new text end

new text begin Reviewed year. new text end

new text begin "Reviewed year" means the taxable year of a partnership that
is subject to a partnership-level audit from which federal adjustments arise.
new text end

new text begin Subd. 19. new text end

new text begin Tiered partner. new text end

new text begin "Tiered partner" means any partner that is a partnership or
pass-through entity.
new text end

new text begin Subd. 20. new text end

new text begin Unrelated business taxable income. new text end

new text begin "Unrelated business taxable income"
has the meaning provided under section 512 of the Internal Revenue Code.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 9.

new text begin [289A.382] REPORTING AND PAYMENT REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin State partnership representative. new text end

new text begin (a) With respect to an action required
or permitted to be taken by a partnership under this section, or in a proceeding under section
270C.35 or 271.06, the state partnership representative for the reviewed year shall have the
sole authority to act on behalf of the partnership, and its direct partners and indirect partners
shall be bound by those actions.
new text end

new text begin (b) The state partnership representative for the reviewed year is the partnership's federal
partnership representative unless the partnership, in a form and manner prescribed by the
commissioner, designates another person as its state partnership representative.
new text end

new text begin Subd. 2. new text end

new text begin Reporting and payment requirements for partnerships and tiered
partners. new text end

new text begin (a) Except for when an audited partnership makes the election in subdivision 3,
and except for negative federal adjustments required under federal law taken into account
by the partnership in the partnership return for the adjustment or other year, all final federal
adjustments of an audited partnership must comply with paragraph (b) and each direct
partner of the audited partnership, other than a tiered partner, must comply with paragraph
(c).
new text end

new text begin (b) No later than 90 days after the final determination date, the audited partnership must:
new text end

new text begin (1) file a completed federal adjustments report, including all partner-level information
required under section 289A.12, subdivision 3, with the commissioner;
new text end

new text begin (2) notify each of its direct partners of their distributive share of the final federal
adjustments;
new text end

new text begin (3) file an amended composite report for all direct partners who were included in a
composite return under section 289A.08, subdivision 7, in the reviewed year, and pay the
additional amount that would have been due had the federal adjustments been reported
properly as required; and
new text end

new text begin (4) file amended withholding reports for all direct partners who were or should have
been subject to nonresident withholding under section 290.92, subdivision 4b, in the reviewed
year, and pay the additional amount that would have been due had the federal adjustments
been reported properly as required.
new text end

new text begin (c) No later than 180 days after the final determination date, each direct partner, other
than a tiered partner, that is subject to a tax administered under this chapter, other than the
sales tax, must:
new text end

new text begin (1) file a federal adjustments report reporting their distributive share of the adjustments
reported to them under paragraph (b), clause (2); and
new text end

new text begin (2) pay any additional amount of tax due as if the final federal adjustment had been
properly reported, plus any penalty and interest due under this chapter, and less any credit
for related amounts paid or withheld and remitted on behalf of the direct partner under
paragraph (b), clauses (3) and (4).
new text end

new text begin Subd. 3. new text end

new text begin Election; partnership or tiered partners pay. new text end

new text begin (a) An audited partnership may
make an election under this subdivision to pay its assessment at the entity level. If an audited
partnership makes an election to pay its assessment at the entity level it must:
new text end

new text begin (1) no later than 90 days after the final determination date:
new text end

new text begin (i) file a completed federal adjustments report, which includes the residency information
for all individual, trust, and estate direct partners and information pertaining to all other
direct partners as prescribed by the commissioner; and
new text end

new text begin (ii) notify the commissioner that it is making the election under this subdivision; and
new text end

new text begin (2) no later than 180 days after the final determination date, pay an amount, determined
as follows, in lieu of taxes on partners:
new text end

new text begin (i) exclude from final federal adjustments the distributive share of these adjustments
made to a direct exempt partner that is not unrelated business taxable income;
new text end

new text begin (ii) exclude from final federal adjustments the distributive share of these adjustments
made to a direct partner that has filed a federal adjustments report and paid the applicable
tax, as required under subdivision 2, for the distributive share of adjustments reported on a
federal return under section 6225(c) of the Internal Revenue Code;
new text end

new text begin (iii) assign and apportion at the partnership level using sections 290.17 to 290.20 the
total distributive share of the remaining final federal adjustments for the reviewed year
attributed to direct corporate partners and direct exempt partners; multiply the total by the
highest tax rate in section 290.06, subdivision 1, for the reviewed year; and calculate interest
and penalties as applicable under this chapter;
new text end

new text begin (iv) allocate at the partnership level using section 290.17, subdivision 1, the total
distributive share of all final federal adjustments attributable to individual resident direct
partners for the reviewed year; multiply the total by the highest tax rate in section 290.06,
subdivision 2c, for the reviewed year; and calculate interest and penalties as applicable
under this chapter;
new text end

new text begin (v) assign and apportion at the partnership level using sections 290.17 to 290.20 the total
distributive share of the remaining final federal adjustments attributable to nonresident
individual direct partners and direct partners who are an estate or a trust for the reviewed
year; multiply the total by the highest tax rate in section 290.06, subdivision 2c, for the
reviewed year; and calculate interest and penalties as applicable under this chapter;
new text end

new text begin (vi) for the total distributive share of the remaining final federal adjustments reported
to tiered partners:
new text end

new text begin (A) determine the amount of the adjustments that would be assigned using section 290.17,
subdivision 2, paragraphs (a) to (d), excluding income or gains from intangible personal
property not employed in the business of the recipient of the income or gains if the recipient
of the income or gains is a resident of this state or is a resident trust or estate under section
290.17, subdivision 2, paragraph (c), or apportioned using sections 290.17, subdivision 3,
290.191, and 290.20; and then determine the portion of the amount that would be allocated
to this state;
new text end

new text begin (B) determine the amount of the adjustments that are fully sourced to the taxpayer's state
of residency under section 290.17, subdivision 2, paragraph (e), and income or gains from
intangible personal property not employed in the business of the recipient of the income or
gains if the recipient of the income or gains is a resident of this state or is a resident trust
or estate under section 290.17, subdivision 2, paragraph (c);
new text end

new text begin (C) determine the portion of the amount determined in subitem (B) that can be established
to be properly allocable to nonresident indirect partners or other partners not subject to tax
on the adjustments; and
new text end

new text begin (D) multiply the total of the amounts determined in subitems (A) and (B) reduced by
the amount determined in subitem (C) by the highest tax rate in section 290.06, subdivision
2c, for the reviewed year, and calculate interest and penalties as applicable under this chapter;
and
new text end

new text begin (vii) add the amounts determined in items (iii) to (vi), and pay all applicable taxes,
penalties, and interest to the commissioner.
new text end

new text begin (b) An audited partnership may not make an election under this subdivision to report:
new text end

new text begin (1) a federal adjustment that results in unitary business income to a corporate partner
required to file as a member of a combined report under section 290.17, subdivision 4; or
new text end

new text begin (2) any final federal adjustments resulting from an administrative adjustment request.
new text end

new text begin (c) An audited partnership not otherwise subject to any reporting or payment obligation
to this state may not make an election under this subdivision.
new text end

new text begin Subd. 4. new text end

new text begin Tiered partners and indirect partners. new text end

new text begin The direct and indirect partners of an
audited partnership that are tiered partners, and all the partners of the tiered partners, that
are subject to tax under chapter 290 are subject to the reporting and payment requirements
contained in subdivision 2, and the tiered partners are entitled to make the elections provided
in subdivision 3. The tiered partners or their partners shall make required reports and
payments no later than 90 days after the time for filing and furnishing of statements to tiered
partners and their partners as established under section 6226 of the Internal Revenue Code.
new text end

new text begin Subd. 5. new text end

new text begin Effects of election by partnership or tiered partner and payment of amount
due. new text end

new text begin (a) Unless the commissioner determines otherwise, an election under subdivision 3 is
irrevocable.
new text end

new text begin (b) If an audited partnership or tiered partner properly reports and pays an amount
determined in subdivision 3, the amount must be treated as paid in lieu of taxes owed by
the partnership's direct partners and indirect partners, to the extent applicable, on the same
final federal adjustments. The direct partners or indirect partners of the partnership who are
not resident partners may not take any deduction or credit for this amount or claim a refund
of the amount in this state.
new text end

new text begin (c) Nothing in this subdivision precludes resident direct partners from claiming a credit
against taxes paid under section 290.06 on any amounts paid by the audited partnership or
tiered partners on the resident partner's behalf to another state or local tax jurisdiction.
new text end

new text begin Subd. 6. new text end

new text begin Failure of partnership or tiered partner to report or pay. new text end

new text begin Nothing in this
section prevents the commissioner from assessing direct partners or indirect partners for
taxes they owe, using the best information available, in the event that, for any reason, a
partnership or tiered partner fails to timely make any report or payment required by this
section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 10.

Minnesota Statutes 2020, section 289A.42, is amended to read:

289A.42 CONSENT TO EXTEND STATUTE.

Subdivision 1.

Extension agreement.

If before the expiration of time prescribed in
sections 289A.38 new text begin to 289A.382 new text end and 289A.40 for the assessment of tax or the filing of a claim
for refund, both the commissioner and the taxpayer have consented in writing to the
assessment or filing of a claim for refund after that time, the tax may be assessed or the
claim for refund filed at any time before the expiration of the agreed-upon period. The
period may be extended by later agreements in writing before the expiration of the period
previously agreed upon. The taxpayer and the commissioner may also agree to extend the
period for collection of the tax.

Subd. 2.

Federal extensions.

When a taxpayer consents to an extension of time for the
assessment of federal withholding or income taxes, the period in which the commissioner
may recompute the tax is also extended, notwithstanding any period of limitations to the
contrary, as follows:

(1) for the periods provided in deleted text beginsection deleted text end new text begin sections new text end 289A.38, subdivisions 8 and 9 new text begin, and
289A.382, subdivisions 2 and 3 new text end;

(2) for six months following the expiration of the extended federal period of limitations
when no change is made by the federal authority. If no change is made by the federal
authority, and, but for this subdivision, the commissioner's time period to adjust the tax has
expired, and if the commissioner has completed a field audit of the taxpayer, no additional
changes resulting in additional tax due or a refund may be made. For purposes of this
subdivision, "field audit" has the meaning given deleted text beginit deleted text end in section 289A.38, subdivision 9.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 11.

Minnesota Statutes 2020, section 289A.60, subdivision 24, is amended to read:

Subd. 24.

Penalty for failure to notify of federal change.

If a person fails to report to
the commissioner a change or correction of the person's federal return in the manner and
time prescribed in deleted text beginsection deleted text end new text beginsections new text end289A.38, subdivision 7 new text begin, and 289A.382 new text end, there must be
added to the tax an amount equal to ten percent of the amount of any underpayment of
Minnesota tax attributable to the federal change.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 12.

Minnesota Statutes 2020, section 290.31, subdivision 1, is amended to read:

Subdivision 1.

Partners, not partnership, subject to tax.

Except as provided under
deleted text begin section deleted text end new text begin sections new text end 289A.35, paragraph (b), new text begin and 289A.382, subdivision 3, new text end a partnership as such
shall not be subject to the income tax imposed by this chapter, but is subject to the tax
imposed under section 290.0922. Persons carrying on business as partners shall be liable
for income tax only in their separate or individual capacities.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 13.

Minnesota Statutes 2020, section 297F.17, subdivision 6, is amended to read:

Subd. 6.

Time limit for bad debt refund.

Claims for refund must be filed with the
commissioner during the one-year period beginning with the timely filing of the taxpayer's
federal income tax return containing the bad debt deduction that is being claimed. Claimants
under this subdivision are subject to the notice requirements of deleted text beginsection deleted text end new text begin sections new text end 289A.38,
subdivision 7 new text begin, and 289A.382 new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 14.

Minnesota Statutes 2020, section 297G.16, subdivision 7, is amended to read:

Subd. 7.

Time limit for a bad debt deduction.

Claims for refund must be filed with
the commissioner within one year of the filing of the taxpayer's income tax return containing
the bad debt deduction that is being claimed. Claimants under this subdivision are subject
to the notice requirements of deleted text beginsection 289A.38, subdivision 7 deleted text end new text begin sections 289A.38 to 289A.382 new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

Sec. 15.

Minnesota Statutes 2020, section 469.319, subdivision 4, is amended to read:

Subd. 4.

Repayment procedures.

(a) For the repayment of taxes imposed under chapter
290 or 297A or local taxes collected pursuant to section 297A.99, a business must file an
amended return with the commissioner of revenue and pay any taxes required to be repaid
within 30 days after becoming subject to repayment under this section. The amount required
to be repaid is determined by calculating the tax for the period or periods for which repayment
is required without regard to the exemptions and credits allowed under section 469.315.

(b) For the repayment of taxes imposed under chapter 297B, a business must pay any
taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of
revenue, within 30 days after becoming subject to repayment under this section.

(c) For the repayment of property taxes, the county auditor shall prepare a tax statement
for the business, applying the applicable tax extension rates for each payable year and
provide a copy to the business and to the taxpayer of record. The business must pay the
taxes to the county treasurer within 30 days after receipt of the tax statement. The business
or the taxpayer of record may appeal the valuation and determination of the property tax to
the Tax Court within 30 days after receipt of the tax statement.

(d) The provisions of chapters 270C and 289A relating to the commissioner's authority
to audit, assess, and collect the tax and to hear appeals are applicable to the repayment
required under paragraphs (a) and (b). The commissioner may impose civil penalties as
provided in chapter 289A, and the additional tax and penalties are subject to interest at the
rate provided in section 270C.40. The additional tax shall bear interest from 30 days after
becoming subject to repayment under this section until the date the tax is paid. Any penalty
imposed pursuant to this section shall bear interest from the date provided in section 270C.40,
subdivision 3, to the date of payment of the penalty.

(e) If a property tax is not repaid under paragraph (c), the county treasurer shall add the
amount required to be repaid to the property taxes assessed against the property for payment
in the year following the year in which the auditor provided the statement under paragraph
(c).

(f) For determining the tax required to be repaid, a reduction of a state or local sales or
use tax is deemed to have been received on the date that the good or service was purchased
or first put to a taxable use. In the case of an income tax or franchise tax, including the credit
payable under section 469.318, a reduction of tax is deemed to have been received for the
two most recent tax years that have ended prior to the date that the business became subject
to repayment under this section. In the case of a property tax, a reduction of tax is deemed
to have been received for the taxes payable in the year that the business became subject to
repayment under this section and for the taxes payable in the prior year.

(g) The commissioner may assess the repayment of taxes under paragraph (d) any time
within two years after the business becomes subject to repayment under subdivision 1, or
within any period of limitations for the assessment of tax under deleted text beginsection deleted text end new text beginsections new text end289A.38 new text begin
to 289A.382 new text end, whichever period is later. The county auditor may send the statement under
paragraph (c) any time within three years after the business becomes subject to repayment
under subdivision 1.

(h) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business becomes subject to
repayment under this section nor for any year thereafter. Property is not exempt from tax
under section 272.02, subdivision 64, for any taxes payable in the year following the year
in which the property became subject to repayment under this section nor for any year
thereafter. A business is not eligible for any sales tax benefits beginning with goods or
services purchased or first put to a taxable use on the day that the business becomes subject
to repayment under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017, except that for partnerships that make an election under Code of
Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively
and applies to the same tax periods to which the election relates.
new text end

ARTICLE 4

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2020, section 297A.67, is amended by adding a subdivision
to read:

new text begin Subd. 38. new text end

new text begin Season ticket purchasing rights to collegiate events. new text end

new text begin The sale of a right to
purchase the privilege of admission to a college or university athletic event in a preferred
viewing location for a season of a particular athletic event is exempt provided that:
new text end

new text begin (1) the consideration paid for the right to purchase is used entirely to support student
scholarships, wellness, and academic costs;
new text end

new text begin (2) the consideration paid for the right to purchase is separately stated from the admission
price; and
new text end

new text begin (3) the admission price is equal to or greater than the highest priced general admission
ticket for the closest seat not in the preferred viewing location.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2021.
new text end

Sec. 2.

Minnesota Statutes 2020, section 297A.70, subdivision 13, is amended to read:

Subd. 13.

Fund-raising sales by or for nonprofit groups.

(a) The following sales by
the specified organizations for fund-raising purposes are exempt, subject to the limitations
listed in paragraph (b):

(1) all sales made by a nonprofit organization that exists solely for the purpose of
providing educational or social activities for young people primarily age 18 and under;

(2) all sales made by an organization that is a senior citizen group or association of
groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized
and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii) no
part of its net earnings inures to the benefit of any private shareholders;

(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if the
beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization under
section 501(c)(3) of the Internal Revenue Code; and

(4) sales of candy sold for fund-raising purposes by a nonprofit organization that provides
educational and social activities primarily for young people age 18 and under.

(b) The exemptions listed in paragraph (a) are limited in the following manner:

(1) the exemption under paragraph (a), clauses (1) and (2), applies only to the first
$20,000 of the gross annual receipts of the organization from fund-raising; deleted text beginand
deleted text end

(2) the exemption under paragraph (a), clause (1), does not apply if the sales are derived
from admission charges or from activities for which the money must be deposited with the
school district treasurer under section 123B.49, subdivision 2 deleted text begin, or deleted text end new text begin; and
new text end

new text begin (3) the exemption under paragraph (a), clause (1), does not apply if the sales are derived
from admission charges or from activities for which the money must new text end be recorded in the
same manner as other revenues or expenditures of the school district under section 123B.49,
subdivision 4 deleted text begin. deleted text end new text begin, unless the following conditions are both met:
new text end

new text begin (i) the sales are made for fund-raising purposes of a club, association, or other
organization of elementary or secondary school students organized for the purpose of
carrying on sports activities, educational activities, or other extracurricular activities; and
new text end

new text begin (ii) the school district reserves revenue raised for extracurricular activities, as provided
in section 123B.49, subdivision 4, paragraph (e), and spends the revenue raised by a particular
extracurricular activity only for that extracurricular activity.
new text end

(c) Sales of tangible personal property and services are exempt if the entire proceeds,
less the necessary expenses for obtaining the property or services, will be contributed to a
registered combined charitable organization described in section 43A.50, to be used
exclusively for charitable, religious, or educational purposes, and the registered combined
charitable organization has given its written permission for the sale. Sales that occur over
a period of more than 24 days per year are not exempt under this paragraph.

(d) For purposes of this subdivision, a club, association, or other organization of
elementary or secondary school students organized for the purpose of carrying on sports,
educational, or other extracurricular activities is a separate organization from the school
district or school for purposes of applying the $20,000 limit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after the
date of final enactment.
new text end

Sec. 3.

Minnesota Statutes 2020, section 297A.70, is amended by adding a subdivision to
read:

new text begin Subd. 22. new text end

new text begin Prepared food used by certain nonprofits. new text end

new text begin Sales of prepared food to a
nonprofit organization that, as part of its charitable mission, is sponsoring and managing
the provision of meals and other food through the federal Child and Adult Care Food Program
or the federal Summer Food Service Program to unaffiliated centers and sites are exempt
from sales tax. Only prepared food purchased from a caterer or other business under a
contract with the nonprofit and used directly in the federal Child and Adult Care Food
Program or the federal Summer Food Service Program qualifies for this exemption. Prepared
food purchased by the nonprofit for other purposes remains taxable.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2021.
new text end

Sec. 4.

Minnesota Statutes 2020, section 297A.71, subdivision 52, is amended to read:

Subd. 52.

Construction; certain local government facilities.

(a) Materials and supplies
used in and equipment incorporated into the construction, reconstruction, upgrade, expansion,
or remodeling of the following local government owned facilities are exempt:

(1) a new fire station, which includes firefighting, emergency management, public safety
training, and other public safety facilities in the city of Monticello if materials, supplies,
and equipment are purchased after January 31, 2019, and before January 1, 2022;

(2) a new fire station, which includes firefighting and public safety training facilities
and public safety facilities, in the city of Inver Grove Heights if materials, supplies, and
equipment are purchased after June 30, 2018, and before January 1, 2021;

(3) a fire station and police station, including access roads, lighting, sidewalks, and
utility components, on or adjacent to the property on which the fire station or police station
are located that are necessary for safe access to and use of those buildings, in the city of
Minnetonka if materials, supplies, and equipment are purchased after May 23, 2019, and
before January 1, deleted text begin2021 deleted text end new text begin 2022 new text end;

(4) the school building in Independent School District No. 414, Minneota, if materials,
supplies, and equipment are purchased after January 1, 2018, and before January 1, 2021;

(5) a fire station in the city of Mendota Heights, if materials, supplies, and equipment
are purchased after December 31, 2018, and before January 1, 2021; and

(6) a Dakota County law enforcement collaboration center, also known as the Safety
and Mental Health Alternative Response Training (SMART) Center, if materials, supplies,
and equipment are purchased after June 30, 2019, and before July 1, 2021.

(b) The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied and then refunded in the manner provided in section 297A.75.

(c) The total refund for the project listed in paragraph (a), clause (3), must not exceed
$850,000.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2020, section 297A.71, is amended by adding a subdivision to
read:

new text begin Subd. 53. new text end

new text begin Public safety facilities. new text end

new text begin (a) Materials and supplies used or consumed in and
equipment incorporated into the construction, remodeling, expansion, or improvement of
a fire station or police station, including related facilities, owned and operated by a local
government, as defined in section 297A.70, subdivision 2, paragraph (d), are exempt.
new text end

new text begin (b) For purposes of this subdivision, "related facilities" includes access roads, lighting,
sidewalks, and utility components on or adjacent to the property on which the fire station
or police station is located that are necessary for safe access to and use of those buildings.
new text end

new text begin (c) The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied and then refunded in the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2021.
new text end

Sec. 6.

Minnesota Statutes 2020, section 297A.75, subdivision 1, is amended to read:

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the following
exempt items must be imposed and collected as if the sale were taxable and the rate under
section 297A.62, subdivision 1, applied. The exempt items include:

(1) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(2) building materials for mineral production facilities exempt under section 297A.71,
subdivision 14;

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

(4) building materials used in a residence for veterans with a disability exempt under
section 297A.71, subdivision 11;

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

(6) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23;

(7) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(8) equipment and materials used for the generation, transmission, and distribution of
electrical energy and an aerial camera package exempt under section 297A.68, subdivision
37;

(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph
(a), clause (10);

(10) materials, supplies, and equipment for construction or improvement of projects and
facilities under section 297A.71, subdivision 40;

(11) materials, supplies, and equipment for construction, improvement, or expansion of
a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 45;

(12) enterprise information technology equipment and computer software for use in a
qualified data center exempt under section 297A.68, subdivision 42;

(13) materials, supplies, and equipment for qualifying capital projects under section
297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);

(14) items purchased for use in providing critical access dental services exempt under
section 297A.70, subdivision 7, paragraph (c);

(15) items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision
44;

(16) building materials, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51; deleted text beginand
deleted text end

(17) building materials, equipment, and supplies for qualifying capital projects under
section 297A.71, subdivision 52 deleted text begin. deleted text end new text begin; and
new text end

new text begin (18) building materials, equipment, and supplies for constructing, remodeling, expanding,
or improving a fire station, police station, or related facilities exempt under section 297A.71,
subdivision 53.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2021.
new text end

Sec. 7.

Minnesota Statutes 2020, section 297A.75, subdivision 2, is amended to read:

Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must
be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;

(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a
joint venture of municipal electric utilities;

(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying
business;

(8) for subdivision 1, clauses (9), (10), (13), deleted text beginand deleted text end (17), new text beginand (18), new text endthe applicant must be
the governmental entity that owns or contracts for the project or facility; and

(9) for subdivision 1, clause (16), the applicant must be the owner or developer of the
building or project.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2021.
new text end

Sec. 8.

Minnesota Statutes 2020, section 297A.75, subdivision 3, is amended to read:

Subd. 3.

Application.

(a) The application must include sufficient information to permit
the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor,
or builder, under subdivision 1, clauses (3) to (13) or (15) to deleted text begin(17) deleted text end new text begin (18) new text end, the contractor,
subcontractor, or builder must furnish to the refund applicant a statement including the cost
of the exempt items and the taxes paid on the items unless otherwise specifically provided
by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under
this section.

(b) An applicant may not file more than two applications per calendar year for refunds
for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2021.
new text end

Sec. 9.

Laws 2017, First Special Session chapter 1, article 3, section 32, the effective date,
as amended by Laws 2019, First Special Session chapter 6, article 3, section 18, is amended
to read:

EFFECTIVE DATE.

Paragraph (a) is effective retroactively for sales and purchases
made after September 30, 2016, and before deleted text beginJanuary deleted text end new text begin July new text end 1, 2023. Paragraph (b) is effective
for sales and purchases made (1) after September 30, 2016, and before July 1, 2017; and
(2) after December 31, 2018, and before July 1, 2019.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10. new text beginPROPERTIES DESTROYED OR DAMAGED BY FIRE; CITY OF
ALEXANDRIA.
new text end

new text begin (a) The sale and purchase of the following items are exempt from sales and use tax
imposed under Minnesota Statutes, chapter 297A, if the items are used to repair, replace,
clean, or otherwise remediate damage to real and personal property damaged or destroyed
in the February 25, 2020, fire in the city of Alexandria, if sales and purchases are made after
February 24, 2020, and before February 28, 2023:
new text end

new text begin (1) building materials and supplies used or consumed in, and equipment incorporated
into the construction, replacement, or repair of real property; and
new text end

new text begin (2) durable equipment used in a restaurant for food storage, preparation, and serving.
new text end

new text begin (b) Building cleaning and disinfecting services related to mitigating smoke damage to
real property are exempt from sales and use tax imposed under Minnesota Statutes, chapter
297A, if sales and purchases are made after February 24, 2020, and before January 1, 2021.
new text end

new text begin (c) For sales and purchases made after February 24, 2020, and before July 1, 2021, the
tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62,
subdivision 1, applied and then refunded in the manner provided in Minnesota Statutes,
section 297A.75. The amount required to pay the refunds under this section is appropriated
from the general fund to the commissioner of revenue. Refunds for eligible purchases must
not be issued until after June 30, 2021.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies retroactively to sales and purchases made after February 24, 2020.
new text end

Sec. 11. new text beginCITY OF BUFFALO; SALES TAX EXEMPTION FOR CONSTRUCTION
MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the construction of a new fire station, which includes firefighting,
emergency management, public safety training, and other public safety facilities in the city
of Buffalo, are exempt from sales and use tax imposed under Minnesota Statutes, chapter
297A, if materials, supplies, and equipment are purchased after March 31, 2020, and before
July 1, 2021.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible
purchases must not be issued until after June 30, 2021.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from April 1, 2020, and
applies to sales and purchases made after March 31, 2020, and before July 1, 2021.
new text end

Sec. 12. new text beginCITY OF HIBBING; SALES TAX EXEMPTION FOR CONSTRUCTION
MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the following projects in the city of Hibbing are exempt from sales and
use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and
equipment are purchased after May 1, 2019, and before January 1, 2025:
new text end

new text begin (1) the addition of an Early Childhood Family Education Center to an existing elementary
school; and
new text end

new text begin (2) improvements to an existing athletic facility in Independent School District No. 701.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible
purchases must not be issued until after June 30, 2021.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from May 2, 2019, and
applies to sales and purchases made after May 1, 2019, and before January 1, 2025.
new text end

Sec. 13. new text beginCITY OF MAPLEWOOD; SALES TAX EXEMPTION FOR
CONSTRUCTION MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the construction of a new fire station and emergency management
operations center, including on-site infrastructure improvements of parking lot, road access,
lighting, sidewalks, and utility components in the city of Maplewood are exempt from sales
and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and
equipment are purchased after September 30, 2020, and before July 1, 2021.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible
purchases must not be issued until after June 30, 2021.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from August 1, 2020, and
applies to sales and purchases made after September 30, 2020, and before July 1, 2021.
new text end

Sec. 14. new text beginCITY OF MARSHALL; SALES TAX EXEMPTION FOR CONSTRUCTION
MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the following projects in the city of Marshall in Independent School District
No. 413 are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A,
if materials, supplies, and equipment are purchased after May 1, 2019, and before January
1, 2022:
new text end

new text begin (1) the construction of a new elementary school; and
new text end

new text begin (2) the remodeling of existing school buildings.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible
purchases must not be issued until after June 30, 2021.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively to May 2, 2019, and applies
to materials, supplies, and equipment purchased after May 1, 2019, and before January 1,
2022.
new text end

Sec. 15. new text beginCITY OF PLYMOUTH; SALES TAX EXEMPTION FOR CONSTRUCTION
MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the following projects in the city of Plymouth are exempt from sales and
use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and
equipment are purchased after January 1, 2021, and before July 1, 2021:
new text end

new text begin (1) demolition and replacement of the existing Fire Station No. 2 on its existing site;
and
new text end

new text begin (2) renovation and expansion of Fire Station No. 3.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible
purchases must not be issued until after June 30, 2021.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 2, 2021, and
applies to sales and purchases made after January 1, 2021, and before July 1, 2021.
new text end

Sec. 16. new text beginCITY OF PROCTOR; SALES TAX EXEMPTION FOR CONSTRUCTION
MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the construction of a sand and salt storage facility in the city of Proctor
are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if
materials, supplies, and equipment are purchased after March 31, 2021, and before January
1, 2023.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible
purchases must not be issued until after June 30, 2021.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from April 1, 2021, and
applies to sales and purchases made after March 31, 2021, and before January 1, 2023.
new text end

Sec. 17. new text beginCITY OF VIRGINIA; SALES TAX EXEMPTION FOR CONSTRUCTION
MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the construction of a regional public safety center and training facility for
fire and police departments, emergency medical services, regional emergency services
training, and other regional community needs are exempt from sales and use tax imposed
under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased
after May 1, 2021, and before July 1, 2021.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible
purchases must not be issued until after June 30, 2021.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from May 2, 2021, and
applies to sales and purchases made after May 1, 2021, and before July 1, 2021.
new text end

Sec. 18. new text beginROCK RIDGE PUBLIC SCHOOLS; SALES TAX EXEMPTION FOR
CONSTRUCTION MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the construction of two new elementary school buildings and a new high
school building in Independent School District No. 2909, Rock Ridge Public Schools, are
exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials,
supplies, and equipment are purchased after May 1, 2019, and before January 1, 2024.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible
purchases must not be issued until after June 30, 2021.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from May 2, 2019, and
applies to sales and purchases made after May 1, 2019, and before January 1, 2024.
new text end

Sec. 19. new text beginMSP AIRPORT; SALES TAX EXEMPTION FOR CONSTRUCTION
MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment
incorporated into the following projects at the Minneapolis-St. Paul International Airport
are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if
materials, supplies, and equipment are purchased after June 30, 2021, and before January
1, 2024:
new text end

new text begin (1) construction of an aircraft rescue and firefighting station and associated facilities;
new text end

new text begin (2) construction of a facility for the storage of trades materials and equipment;
new text end

new text begin (3) replacement and rehabilitation of a terminal building roof;
new text end

new text begin (4) replacement, rehabilitation, and improvements of a baggage handling system; and
new text end

new text begin (5) replacement, rehabilitation, and operational improvements of Terminal 1 passenger
arrivals and departures area.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the same manner provided for projects
under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective from July 1, 2021, and applies to sales
and purchases made after June 30, 2021, and before January 1, 2024.
new text end

Sec. 20. new text beginPROPERTIES DESTROYED OR DAMAGED DURING PROTESTS AND
UNREST IN MAY AND JUNE OF 2020.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption. new text end

new text begin (a) The sale and purchase of the following items are exempt
if the items are used to repair, replace, clean, or otherwise remediate damage to real and
personal property damaged or destroyed after May 24, 2020, and before June 16, 2020,
resulting from protests and unrest in the cities included in the peacetime emergency declared
in the governor's Executive Order No. 20-64:
new text end

new text begin (1) building materials and supplies used or consumed in, and equipment incorporated
into, the construction, replacement, or repair of real property;
new text end

new text begin (2) retail fixtures, office equipment, and restaurant equipment, so long as each item has
a useful life of more than one year and costs at least $5,000; and
new text end

new text begin (3) building cleaning and disinfecting services related to mitigating smoke damage and
graffiti on and in impacted buildings.
new text end

new text begin (b) The exemption in this subdivision only applies to materials, supplies, and services
purchased to repair, replace, clean, or otherwise remediate damage to buildings owned by
a government entity or by a private owner provided the building housed one or more of the
following entities at the time of the damage or destruction:
new text end

new text begin (1) a commercial establishment with an annual gross income of $30,000,000 or less in
calendar year 2019;
new text end

new text begin (2) a nonprofit organization; or
new text end

new text begin (3) a low-income housing development that meets the certification requirements under
Minnesota Statutes, section 273.128, whether or not the development was occupied at the
time of its damage or destruction.
new text end

new text begin (c) The tax must be imposed and collected as if the rate under Minnesota Statutes, section
297A.62, subdivision 1, applied and then refunded in the manner provided in Minnesota
Statutes, section 297A.75, except that the applicant must have been an owner or occupant
of the real property at the time of its destruction. The exemption under paragraph (a) applies
to sales and purchases made after May 25, 2020, and before December 1, 2022. Refunds
for eligible purchases must not be issued until after June 30, 2021.
new text end

new text begin (d) Both the owner and occupants of the real property at the time of the damage or
destruction may apply for a refund under this subdivision but may only request a refund for
the goods and services they paid for, or were contracted and paid for on their behalf. The
exemption does not apply to purchases of an owner if the owner did not own the real property
at the time of the damage or destruction.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount necessary to pay the refunds under subdivision 1
is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after May 25, 2020.
new text end

Sec. 21. new text beginSALES TAX EXEMPTION FOR CERTAIN PURCHASES RELATED TO
COVID-19.
new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 289A.50, or any law to the contrary,
the sale and purchase of any materials, supplies, or equipment used in this state by a restaurant
to adapt to health guidelines or any executive order related to COVID-19 is exempt from
sales and use taxes imposed under Minnesota Statutes, chapter 297A. For the purposes of
this section, "restaurant" means an establishment used as, maintained as, advertised as, or
held out to be an operation that prepares, serves, or otherwise provides food or beverages,
or both, for human consumption, which operates from a location for more than 21 days
annually. Restaurant does not include food carts, mobile food units, grocery stores,
convenience stores, gas stations, bakeries, or delis.
new text end

new text begin (b) The maximum refund allowed under this section is $1,000 per federal employer
identification number or Minnesota sales and use tax account number, whichever number
is used to file sales tax returns. A business using a consolidated return to report sales tax
information from more than one restaurant location, as provided in Minnesota Statutes,
section 289A.11, subdivision 1, paragraph (a), is eligible for a refund of up to $1,000, per
restaurant location reported.
new text end

new text begin (c) The tax on the gross receipts from the sale of the items exempt under paragraph (a)
must be imposed and collected as if the sale were taxable and the rate under Minnesota
Statutes, section 297A.62, subdivision 1, applied. Refunds for eligible purchases must not
be issued until after June 30, 2021.
new text end

new text begin (d) Upon application on forms prescribed by the commissioner, a refund equal to the
tax paid on the gross receipts of the exempt items or $1,000, whichever is less, must be paid
to the applicant. Only the owner of the restaurant may apply for the refund. The application
must include sufficient information to permit the commissioner to verify the tax paid and
that the applicant is the owner of the restaurant.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective retroactively from
March 1, 2020, and applies to sales and purchases made after February 29, 2020, and before
January 1, 2022.
new text end

ARTICLE 5

VAPOR AND TOBACCO TAXES

Section 1.

Minnesota Statutes 2020, section 297F.01, is amended by adding a subdivision
to read:

new text begin Subd. 7a. new text end

new text begin Delivery sale. new text end

new text begin "Delivery sale" has the meaning given in section 325F.781,
subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2022.
new text end

Sec. 2.

Minnesota Statutes 2020, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 7b. new text end

new text begin Heat device. new text end

new text begin "Heat device" means any electronic heat device, heat system,
or similar product or device, meant to be used with a cigarette to produce a vapor or aerosol,
regardless of whether sold with a cigarette. A heat device includes any batteries, heating
elements, components, parts, accessories, apparel, or other items that are packaged with,
connected to, attached to, or contained within the product or device.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2022.
new text end

Sec. 3.

Minnesota Statutes 2020, section 297F.01, subdivision 19, is amended to read:

Subd. 19.

Tobacco products.

(a) "Tobacco products" means any product containing,
made, or derived from tobacco that is intended for human consumption, whether chewed,
smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or
any component, part, or accessory of a tobacco product, including, but not limited to, cigars;
cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking
tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing
tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds
and forms of tobacco; but does not include cigarettes as defined in this section. Tobacco
products includes nicotine solution products new text begin and heat devices new text end. Tobacco products excludes
any tobacco product that has been approved by the United States Food and Drug
Administration for sale as a tobacco cessation product, as a tobacco dependence product,
or for other medical purposes, and is being marketed and sold solely for such an approved
purpose.

(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4, tobacco
products includes a premium cigar, as defined in subdivision 13a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2022.
new text end

Sec. 4.

Minnesota Statutes 2020, section 297F.01, subdivision 22b, is amended to read:

Subd. 22b.

Nicotine solution products.

(a) "Nicotine solution products" means any
cartridge, bottle, or other package that contains nicotine made or derived from tobacco, that
is in a solution that is consumed, or meant to be consumed, through the use of a heating
element, power source, electronic circuit, or other electronic, chemical, or mechanical means
that produces vapor or aerosol. This paragraph expires December 31, 2019.

(b) Beginning January 1, 2020, "nicotine solution products" means any cartridge, bottle,
or other package that contains nicotine, including nicotine made or derived from tobacco
or sources other than tobacco, that is in a solution that is consumed, or meant to be consumed,
through the use of a heating element, power source, electronic circuit, or other electronic,
chemical, or mechanical means that produces vapor or aerosol.

(c) Nicotine solution products includes any electronic cigarette, electronic cigar, electronic
cigarillo, electronic pipe, new text beginelectronic nicotine delivery system, electronic vaping device,
electronic vape pen, electronic oral device, electronic delivery device, new text endor similar product
or device deleted text begin, and deleted text end new text beginmeant to be used in the consumption of a solution containing nicotine
regardless of whether sold with a solution containing nicotine. Nicotine solution products
include new text endany batteries, heating elements, deleted text beginor other deleted text end components, parts, deleted text beginor deleted text end accessories deleted text beginsold with
and meant to be used in the consumption of a solution containing nicotine deleted text end new text begin, apparel, or other
items that are packaged with, connected to, attached to, or contained within the product or
device new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2022.
new text end

Sec. 5.

Minnesota Statutes 2020, section 297F.01, subdivision 23, is amended to read:

Subd. 23.

Wholesale sales price.

(a) "Wholesale sales price" means the price at which
a distributor purchases a tobacco product.

(b) When a distributor sells a cartridge, bottle, or other package of a solution containing
nicotine that is part of a kit that also includes a product, device, component, part, deleted text beginor deleted text end accessory
deleted text begin described in subdivision 22b:
deleted text end

deleted text begin (1) deleted text end new text begin, or other item, new text end the wholesale sales price is the price at which the distributor purchases
the kit deleted text begin; except that deleted text end new text begin.
new text end

deleted text begin (2) if the distributor also separately sells the same package of solution containing nicotine
that is sold with the kit and can isolate the cost of the package of solution containing nicotine,
then the wholesale sales price includes only the price at which the distributor separately
purchases the package of the solution containing nicotine and any taxes, charges, and costs
listed in paragraph (c).
deleted text end

new text begin (c) When a distributor sells a heat device that is part of a kit that also includes a product,
device, component, part, accessory, or other item, the wholesale sales price is the price at
which the distributor purchases the kit.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end Wholesale sales price includes the applicable federal excise tax, freight charges,
or packaging costs, regardless of whether they were included in the purchase price.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for kits purchased by distributors after
December 31, 2021.
new text end

Sec. 6.

Minnesota Statutes 2020, section 297F.031, is amended to read:

297F.031 REGISTRATION REQUIREMENT.

Prior to making delivery sales deleted text beginor shipping cigarettes or tobacco products in connection
with any sales deleted text end, an out-of-state retailer deleted text beginshall deleted text end new text begin must new text end file with the Department of Revenue a
statement setting forth the out-of-state retailer's name, trade name, deleted text beginand the deleted text end address deleted text beginof the
out-of-state retailer's deleted text end new text begin, new text end principal place of business new text begin, new text end and any other place of business.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after
December 31, 2021.
new text end

Sec. 7.

Minnesota Statutes 2020, section 297F.05, is amended by adding a subdivision to
read:

new text begin Subd. 4b. new text end

new text begin Retailer collection and remittance of use tax. new text end

new text begin A retailer or out-of-state
retailer must, for any delivery sale, collect and pay to the state any use tax imposed by this
section. The retailer or out-of-state retailer must give the purchaser a receipt for the tax paid.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after
December 31, 2021.
new text end

Sec. 8.

Minnesota Statutes 2020, section 297F.09, subdivision 3, is amended to read:

Subd. 3.

Use tax return; cigarette or tobacco products consumer new text begin and retailers
making delivery sales new text end.

new text begin(a) new text endOn or before the 18th day of each calendar month, a consumer
who, during the preceding calendar month, has acquired title to or possession of cigarettes
or tobacco products for use or storage in this state, upon which cigarettes or tobacco products
the tax imposed by this chapter has not been paid, shall file a return with the commissioner
showing the quantity of cigarettes or tobacco products so acquired. The return must be made
in the form and manner prescribed by the commissioner, and must contain any other
information required by the commissioner. The return must be accompanied by a remittance
for the full unpaid tax liability shown by it.

new text begin (b) On or before the 18th day of each calendar month, a retailer or out-of-state retailer
who, during the preceding calendar month, made delivery sales must file a return with the
commissioner showing the quantity of cigarettes or tobacco products so delivered. The
commissioner shall prescribe the content, format, and manner of returns pursuant to section
270C.30. The return must be accompanied by a remittance for the full unpaid tax liability.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after
December 31, 2021.
new text end

Sec. 9.

Minnesota Statutes 2020, section 297F.09, subdivision 4a, is amended to read:

Subd. 4a.

Reporting requirements.

No later than the 18th day of each calendar month,
deleted text begin an deleted text end new text begin a retailer or new text end out-of-state retailer that has made deleted text begina delivery of cigarettes or tobacco products
or shipped or delivered cigarettes or tobacco products into the state in deleted text end a delivery sale in the
previous calendar month shall file with the Department of Revenue deleted text beginreports deleted text end new text begin a report new text end in the
form and in the manner prescribed by the commissioner of revenue that provides for each
delivery sale, the name and address of the purchaser and the brand or brands and quantity
of cigarettes or tobacco products sold. A deleted text begintobacco deleted text end retailer new text beginor out-of-state retailer new text endthat meets
the requirements of United States Code, title 15, section 375 et seq. satisfies the requirements
of this subdivision. new text begin The filing of a return under subdivision 3, paragraph (b), satisfies the
requirements of this subdivision for the applicable month.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after
December 31, 2021.
new text end

Sec. 10.

Minnesota Statutes 2020, section 297F.09, subdivision 7, is amended to read:

Subd. 7.

Electronic payment.

A cigarette deleted text beginor deleted text end new text begin distributor, new text end tobacco products distributor new text begin,
retailer, or out-of-state retailer new text end having a liability of $10,000 or more during a fiscal year
ending June 30 must remit all liabilities in all subsequent calendar years by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after
December 31, 2021.
new text end

Sec. 11.

Minnesota Statutes 2020, section 297F.09, subdivision 10, is amended to read:

Subd. 10.

Accelerated tax payment deleted text begin; cigarette or tobacco products distributor deleted text end.

A
cigarette deleted text beginor deleted text end new text begin distributor, new text end tobacco products distributor new text begin, retailer, or out-of-state retailer new text end having
a liability of $250,000 or more during a fiscal year ending June 30, shall remit the June
liability for the next year in the following manner:

(a) Two business days before June 30 of calendar years 2020 and 2021, the distributor
shall remit the actual May liability and 87.5 percent of the estimated June liability to the
commissioner and file the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the distributor new text begin, retailer, or out-of-state retailer new text end
shall submit a return showing the actual June liability and pay any additional amount of tax
not remitted in June. A penalty is imposed equal to ten percent of the amount of June liability
required to be paid in June, less the amount remitted in June. However, the penalty is not
imposed if the amount remitted in June equals the lesser of:

(1) 87.5 percent of the actual June liability for the calendar year 2020 and 2021 June
liabilities and 84.5 of the actual June liability for June 2022 and thereafter; or

(2) 87.5 percent of the preceding May liability for the calendar year 2020 and 2021 June
liabilities and 84.5 percent of the preceding May liability for June 2022 and thereafter.

(c) For calendar year 2022 and thereafter, the percent of the estimated June liability the
vendor must remit by two business days before June 30 is 84.5 percent.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after
December 31, 2021.
new text end

Sec. 12.

Minnesota Statutes 2020, section 325F.781, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given, unless the language or context clearly provides otherwise.

(b) "Consumer" means an individual who purchases, receives, or possesses tobacco
products for personal consumption and not for resale.

(c) "Delivery sale" means:

(1) a sale of tobacco products to a consumer in this state when:

(i) the purchaser submits the order for the sale by means of a telephonic or other method
of voice transmission, the mail or any other delivery service, or the Internet or other online
service; or

(ii) the tobacco products are delivered by use of the mail or other delivery service; or

(2) a sale of tobacco products that satisfies the criteria in clause (1), item (i), regardless
of whether the seller is located inside or outside of the state.

A sale of tobacco products to an individual in this state must be treated as a sale to a
consumer, unless the individual is licensed as a distributor or retailer of tobacco products.

(d) "Delivery service" means a person, including the United States Postal Service, that
is engaged in the commercial delivery of letters, packages, or other containers.

(e) "Distributor" means a person, whether located inside or outside of this state, other
than a retailer, who sells or distributes tobacco products in the state. Distributor does not
include a tobacco products manufacturer, export warehouse proprietor, or importer with a
valid permit under United States Code, title 26, section 5712 (1997), if the person sells or
distributes tobacco products in this state only to distributors who hold valid and current
licenses under the laws of a state, or to an export warehouse proprietor or another
manufacturer. Distributor does not include a common or contract carrier that is transporting
tobacco products under a proper bill of lading or freight bill that states the quantity, source,
and destination of tobacco products, or a person who ships tobacco products through this
state by common or contract carrier under a bill of lading or freight bill.

(f) "Retailer" means a person, whether located inside or outside this state, who sells or
distributes tobacco products to a consumer in this state.

(g) "Tobacco products" means deleted text begin: deleted text end new text begin cigarettes and tobacco products as defined in section
297F.01.
new text end

deleted text begin (1) cigarettes, as defined in section 297F.01, subdivision 3;
deleted text end

deleted text begin (2) smokeless tobacco as defined in section 325F.76; and
deleted text end

deleted text begin (3) premium cigars as defined in section 297F.01, subdivision 13a.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2022.
new text end

Sec. 13.

Minnesota Statutes 2020, section 325F.781, subdivision 5, is amended to read:

Subd. 5.

Registration requirement.

Prior to making delivery sales deleted text beginor shipping tobacco
products in connection with any sales deleted text end, an out-of-state retailer must deleted text beginmeet the requirements
of deleted text end new text begin register with the commissioner of revenue as required under new text end section 297F.031.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after
December 31, 2021.
new text end

Sec. 14.

Minnesota Statutes 2020, section 325F.781, subdivision 6, is amended to read:

Subd. 6.

Collection of taxes.

(a) deleted text beginPrior to shipping any tobacco products to a purchaser
in this state, the out-of-state deleted text end new text begin A new text end retailer deleted text beginshall comply with all requirements of deleted text end new text begin making delivery
sales must file all returns and reports, collect and pay all taxes, and maintain all records
required under new text end chapter 297F deleted text beginand shall ensure that all state excise taxes and fees that apply
to such tobacco products have been collected and paid to the state and that all related state
excise tax stamps or other indicators of state excise tax payment have been properly affixed
to those tobacco products deleted text end.

(b) In addition to any penalties under chapter 297F, deleted text begina distributor deleted text end new text begin a retailer making delivery
sales new text end who fails to pay any tax due deleted text beginaccording to paragraph (a) deleted text end new text begin under chapter 297F, new text end shall pay,
in addition to any other penalty, a penalty of 50 percent of the tax due but unpaid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after
December 31, 2021.
new text end

ARTICLE 6

SPECIAL TAXES

Section 1.

Minnesota Statutes 2020, section 297H.04, subdivision 2, is amended to read:

Subd. 2.

Rate.

(a) Commercial generators that generate nonmixed municipal solid waste
shall pay a solid waste management tax of 60 cents per noncompacted cubic yard of periodic
waste collection capacity purchased by the generator, based on the size of the container for
the nonmixed municipal solid waste, the actual volume, or the weight-to-volume conversion
schedule in paragraph (c). However, the tax must be calculated by the waste management
service provider using the same method for calculating the waste management service fee
so that both are calculated according to container capacity, actual volume, or weight.

(b) Notwithstanding section 297H.02, a residential generator that generates nonmixed
municipal solid waste shall pay a solid waste management tax in the same manner as provided
in paragraph (a).

(c) The deleted text beginweight-to-volume conversion schedule deleted text end new text begin tax new text end for:

(1) construction debris as defined in section 115A.03, subdivision 7, is equal to 60 cents
per cubic yard. The commissioner of revenue, after consultation with the commissioner of
the Pollution Control Agency, shall determine and deleted text beginmay deleted text end publish by notice a new text beginweight-to-volume
new text end conversion schedule for construction debris;

(2) industrial waste as defined in section 115A.03, subdivision 13a, is equal to 60 cents
per cubic yard. The commissioner of revenue after consultation with the commissioner of
the Pollution Control Agency, shall determine deleted text begin, deleted text end and deleted text beginmay deleted text end publish by notice deleted text begin, deleted text end a
new text begin weight-to-volume new text endconversion schedule for various industrial wastes; and

(3) infectious waste as defined in section 116.76, subdivision 12, and pathological waste
as defined in section 116.76, subdivision 14, is 150 pounds equals one cubic yard, or 60
cents per 150 pounds.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 2.

Minnesota Statutes 2020, section 297H.05, is amended to read:

297H.05 SELF-HAULERS.

(a) A self-hauler of mixed municipal solid waste shall pay the tax to the operator of the
waste management facility to which the waste is delivered at the rate imposed under section
297H.03, based on the sales price of the waste management services.

(b) A self-hauler of nonmixed municipal solid waste shall pay the tax to the operator of
the waste management facility to which the waste is delivered at the rate imposed under
section 297H.04.

(c) The tax imposed on the self-hauler of nonmixed municipal solid waste may be based
either on the capacity of the container, the actual volume, or the weight-to-volume conversion
schedule in paragraph (d). However, the tax must be calculated by the operator using the
same method for calculating the tipping fee so that both are calculated according to container
capacity, actual volume, or weight.

(d) The deleted text beginweight-to-volume conversion schedule deleted text end new text begin tax new text end for:

(1) construction debris as defined in section 115A.03, subdivision 7, is deleted text beginone ton equals
3.33 cubic yards, or $2 per ton deleted text end new text begin equal to 60 cents per cubic yard. The commissioner of
revenue, after consultation with the commissioner of the Pollution Control Agency, shall
determine and publish by notice a weight-to-volume conversion schedule for construction
debris new text end;

(2) industrial waste as defined in section 115A.03, subdivision 13a, is equal to 60 cents
per cubic yard. The commissioner of revenue, after consultation with the commissioner of
the Pollution Control Agency, shall determine deleted text begin, deleted text end and deleted text beginmay deleted text end publish by notice deleted text begin, deleted text end a
new text begin weight-to-volume new text endconversion schedule for various industrial wastes; and

(3) infectious waste as defined in section 116.76, subdivision 12, and pathological waste
as defined in section 116.76, subdivision 14, is 150 pounds equals one cubic yard, or 60
cents per 150 pounds.

(e) For mixed municipal solid waste the tax is imposed upon the difference between the
market price and the tip fee at a processing or disposal facility if the tip fee is less than the
market price and the political subdivision subsidizes the cost of service at the facility. The
political subdivision is liable for the tax.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, except the new rate for
construction debris applies to waste delivered after June 30, 2021.
new text end

Sec. 3.

Minnesota Statutes 2020, section 297I.05, subdivision 7, is amended to read:

Subd. 7.

Nonadmitted insurance premium tax.

(a) A tax is imposed on surplus lines
brokers. The rate of tax is equal to three percent of the gross premiums less return premiums
paid by an insured whose home state is Minnesota.

(b) A tax is imposed on a person, firm, corporation, or purchasing group as defined in
section 60E.02, or any member of a purchasing group, that procures insurance directly from
a nonadmitted insurer. The rate of tax is equal to deleted text begintwo deleted text end new text begin three new text end percent of the gross premiums
less return premiums paid by an insured whose home state is Minnesota.

(c) No state other than the home state of an insured may require any premium tax payment
for nonadmitted insurance. When Minnesota is the home state of the insured, as provided
under section 297I.01, 100 percent of the gross premiums are taxable in Minnesota with no
allocation of the tax to other states.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for policies with an effective date after
December 31, 2021.
new text end

Sec. 4.

Minnesota Statutes 2020, section 298.001, is amended by adding a subdivision to
read:

new text begin Subd. 13. new text end

new text begin Merchantable iron ore concentrate. new text end

new text begin "Merchantable iron ore concentrate"
means iron-bearing material that has been treated in Minnesota by any means of beneficiation,
separation, concentration, or refinement for the purpose of making it salable for its iron ore
content.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2022 and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2020, section 298.24, subdivision 1, is amended to read:

Subdivision 1.

Imposed; calculation.

(a) For concentrate produced in 2013, there is
imposed upon taconite and iron sulphides, and upon the mining and quarrying thereof, and
upon the production of iron ore concentrate therefrom, and upon the concentrate so produced,
a tax of $2.56 per gross ton of merchantable iron ore concentrate produced therefrom.

(b) For concentrates produced in 2014 and subsequent years, the tax rate shall be equal
to the preceding year's tax rate plus an amount equal to the preceding year's tax rate multiplied
by the percentage increase in the implicit price deflator from the fourth quarter of the second
preceding year to the fourth quarter of the preceding year. "Implicit price deflator" means
the implicit price deflator for the gross domestic product prepared by the Bureau of Economic
Analysis of the United States Department of Commerce.

(c) An additional tax is imposed equal to three cents per gross ton of merchantable iron
ore concentrate for each one percent that the iron content of the product exceeds 72 percent,
when dried at 212 degrees Fahrenheit.

(d) The tax on taconite and iron sulphides shall be imposed on the average of the
production for the current year and the previous two years. The rate of the tax imposed will
be the current year's tax rate. This clause shall not apply in the case of the closing of a
taconite facility if the property taxes on the facility would be higher if this clause and section
298.25 were not applicable.

(e) The tax under paragraph (a) is also imposed upon other iron-bearing material new text begin as
described in section 298.405 on the tonnage of merchantable iron ore concentrate produced
therefrom new text end. The tax on other iron-bearing material shall be imposed on the current year
production. The rate of the tax imposed is the current year's tax rate.

(f) If the tax or any part of the tax imposed by this subdivision is held to be
unconstitutional, a tax of $2.56 per gross ton of merchantable iron ore concentrate produced
shall be imposed.

(g) Consistent with the intent of this subdivision to impose a tax based upon the weight
of merchantable iron ore concentrate, the commissioner of revenue may indirectly determine
the weight of merchantable iron ore concentrate included in fluxed pellets by subtracting
the weight of the limestone, dolomite, or olivine derivatives or other basic flux additives
included in the pellets from the weight of the pellets. For purposes of this paragraph, "fluxed
pellets" are pellets produced in a process in which limestone, dolomite, olivine, or other
basic flux additives are combined with merchantable iron ore concentrate. No subtraction
from the weight of the pellets shall be allowed for binders, mineral and chemical additives
other than basic flux additives, or moisture.

(h)(1) Notwithstanding any other provision of this subdivision, for the first two years
of a plant's commercial production of direct reduced ore from ore mined in this state, no
tax is imposed under this section. For the third year of a plant's commercial production of
direct reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate
otherwise determined under this subdivision. For the fourth commercial production year,
the rate is 50 percent of the rate otherwise determined under this subdivision; for the fifth
commercial production year, the rate is 75 percent of the rate otherwise determined under
this subdivision; and for all subsequent commercial production years, the full rate is imposed.

(2) Subject to clause (1), production of direct reduced ore in this state is subject to the
tax imposed by this section, but if that production is not produced by a producer of taconite,
iron sulfides, or other iron-bearing material, the production of taconite, iron sulfides, or
other iron-bearing material, that is consumed in the production of direct reduced ore in this
state is not subject to the tax imposed by this section on taconite, iron sulfides, or other
iron-bearing material.

(3) Notwithstanding any other provision of this subdivision, no tax is imposed on direct
reduced ore under this section during the facility's noncommercial production of direct
reduced ore. The taconite or iron sulphides consumed in the noncommercial production of
direct reduced ore is subject to the tax imposed by this section on taconite and iron sulphides.
Three-year average production of direct reduced ore does not include production of direct
reduced ore in any noncommercial year.

(4) Three-year average production for a direct reduced ore facility that has noncommercial
production is the average of the commercial production of direct reduced ore for the current
year and the previous two commercial years.

(5) As used in this paragraph, "commercial production" means production of more than
50,000 tons of direct reduced ore in the current year or in any prior year, and "noncommercial
production" means production of 50,000 tons or less of direct reduced ore in any year.

(6) This paragraph applies only to plants for which all environmental permits have been
obtained and construction has begun before July 1, 2008.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2022 and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2020, section 298.405, subdivision 1, is amended to read:

Subdivision 1.

Definition.

Iron-bearing material new text begin, new text end other than taconite and semitaconite,
having not more than 46.5 percent natural iron content on the average, is subject to taxation
under section 298.24. The tax under that section applies to material that is deleted text begin:
deleted text end

deleted text begin (1) finer than or ground to 90 percent passing 20 mesh; and
deleted text end

deleted text begin (2) deleted text end treated in Minnesota for the purpose of deleted text beginseparating the iron particles from silica,
alumina, or other detrimental compounds or elements unless used in a direct reduction
process: deleted text end new text begin making the iron-bearing material merchantable by any means of beneficiation,
separation, concentration, or refinement. The tax under section 298.24 does not apply to
unmined iron ore and low-grade iron-bearing formations as described in section 273.13,
subdivision 31, clause (1).
new text end

deleted text begin (i) by electrostatic separation, roasting and magnetic separation, or flotation;
deleted text end

deleted text begin (ii) by a direct reduction process;
deleted text end

deleted text begin (iii) by any combination of such processes; or
deleted text end

deleted text begin (iv) by any other process or method not presently employed in gravity separation plants
employing only crushing, screening, washing, jigging, heavy media separation, spirals,
cyclones, drying or any combination thereof.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2022 and thereafter.
new text end

ARTICLE 7

PROPERTY TAXES

Section 1.

Minnesota Statutes 2020, section 270B.12, subdivision 8, is amended to read:

Subd. 8.

County assessors; homestead classification and renter credit.

The
commissioner may disclose names and Social Security numbers new text beginor names and individual
taxpayer identification numbers new text endof individuals who have applied for both homestead
classification under section 273.13 and a property tax refund as a renter under chapter 290A
for the purpose of and to the extent necessary to administer section 290A.25.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for allowed disclosures made in 2021
and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2020, section 270B.12, subdivision 9, is amended to read:

Subd. 9.

County assessors; homestead application, determination, and income tax
status.

(a) If, as a result of an audit, the commissioner determines that a person is a Minnesota
nonresident or part-year resident for income tax purposes, the commissioner may disclose
the person's name, address, and Social Security number new text beginor the person's name, address, and
individual taxpayer identification number new text endto the assessor of any political subdivision in the
state, when there is reason to believe that the person may have claimed or received homestead
property tax benefits for a corresponding assessment year in regard to property apparently
located in the assessor's jurisdiction.

(b) To the extent permitted by section 273.124, subdivision 1, paragraph (a), the
Department of Revenue may verify to a county assessor whether an individual who is
requesting or receiving a homestead classification has filed a Minnesota income tax return
as a resident for the most recent taxable year for which the information is available.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for allowed disclosures made in 2021
and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2020, section 272.02, is amended by adding a subdivision to
read:

new text begin Subd. 104. new text end

new text begin Certain property owned by an Indian Tribe. new text end

new text begin (a) Property is exempt that:
new text end

new text begin (1) is located in a county with a population greater than 28,000 but less than 29,000 as
of the 2010 federal census;
new text end

new text begin (2) was on January 2, 2018, and is for the current assessment owned by a federally
recognized Indian Tribe or its instrumentality, that is located in Minnesota;
new text end

new text begin (3) was on January 2, 2018, erroneously treated as exempt under subdivision 7; and
new text end

new text begin (4) is used for the same purpose as the property was used on January 2, 2018.
new text end

new text begin (b) The owner of property exempt under paragraph (a) may apply to the county for a
refund of any state general tax paid for property taxes payable in 2020 and 2021. The county
may prescribe the form and manner of the application. The county auditor must certify to
the commissioner of revenue the amount needed for refunds under this section, which the
commissioner must pay to the county. An amount necessary for refunds under this paragraph
is appropriated from the general fund to the commissioner of revenue in fiscal year 2022.
This paragraph expires June 30, 2022.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) The amendments in paragraph (a) are effective beginning
with assessment year 2021. For assessment year 2021, an exemption application under this
section must be filed with the county assessor by August 1, 2021.
new text end

new text begin (b) The amendments in paragraph (b) are effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2020, section 272.115, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

Except as otherwise provided in subdivision 5, 6, or 7,
whenever any real estate is sold for a consideration in excess of $3,000, whether by warranty
deed, quitclaim deed, contract for deed or any other method of sale, the grantor, grantee or
the legal agent of either shall file a certificate of value with the county auditor in the county
in which the property is located when the deed or other document is presented for recording.
Contract for deeds are subject to recording under section 507.235, subdivision 1. Value
shall, in the case of any deed not a gift, be the amount of the full actual consideration thereof,
paid or to be paid, including the amount of any lien or liens assumed. The items and value
of personal property transferred with the real property must be listed and deducted from the
sale price. The certificate of value shall include the classification to which the property
belongs for the purpose of determining the fair market value of the property, and shall
include any proposed change in use of the property known to the person filing the certificate
that could change the classification of the property. The certificate shall include financing
terms and conditions of the sale which are necessary to determine the actual, present value
of the sale price for purposes of the sales ratio study. If the property is being acquired as
part of a like-kind exchange under section 1031 of the Internal Revenue Code of 1986, as
amended through December 31, 2006, that must be indicated on the certificate. The
commissioner of revenue shall promulgate administrative rules specifying the financing
terms and conditions which must be included on the certificate. The certificate of value
must include the Social Security number new text begin, individual tax identification number, new text end or the federal
employer identification number of the grantors and grantees. However, a married person
who is not an owner of record and who is signing a conveyance instrument along with the
person's spouse solely to release and convey their marital interest, if any, in the real property
being conveyed is not a grantor for the purpose of the preceding sentence. A statement in
the deed that is substantially in the following form is sufficient to allow the county auditor
to accept a certificate for filing without the Social Security number new text begin or individual tax
identification number new text end of the named spouse: "(Name) claims no ownership interest in the
real property being conveyed and is executing this instrument solely to release and convey
a marital interest, if any, in that real property." The identification numbers of the grantors
and grantees are private data on individuals or nonpublic data as defined in section 13.02,
subdivisions 9 and 12, but, notwithstanding that section, the private or nonpublic data may
be disclosed to the commissioner of revenue for purposes of tax administration. The
information required to be shown on the certificate of value is limited to the information
required as of the date of the acknowledgment on the deed or other document to be recorded.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2020, section 273.124, subdivision 1, is amended to read:

Subdivision 1.

General rule.

(a) Residential real estate that is occupied and used for
the purposes of a homestead by its owner, who must be a Minnesota resident, is a residential
homestead.

Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and used
as a homestead by its owner, who must be a Minnesota resident, is an agricultural homestead.

Dates for establishment of a homestead and homestead treatment provided to particular
types of property are as provided in this section.

Property held by a trustee under a trust is eligible for homestead classification if the
requirements under this chapter are satisfied.

The assessor shall require proof, as provided in subdivision 13, of the facts upon which
classification as a homestead may be determined. Notwithstanding any other law, the assessor
may at any time require a homestead application to be filed in order to verify that any
property classified as a homestead continues to be eligible for homestead status.
Notwithstanding any other law to the contrary, the Department of Revenue may, upon
request from an assessor, verify whether an individual who is requesting or receiving
homestead classification has filed a Minnesota income tax return as a resident for the most
recent taxable year for which the information is available.

When there is a name change or a transfer of homestead property, the assessor may
reclassify the property in the next assessment unless a homestead application is filed to
verify that the property continues to qualify for homestead classification.

(b) For purposes of this section, homestead property shall include property which is used
for purposes of the homestead but is separated from the homestead by a road, street, lot,
waterway, or other similar intervening property. The term "used for purposes of the
homestead" shall include but not be limited to uses for gardens, garages, or other outbuildings
commonly associated with a homestead, but shall not include vacant land held primarily
for future development. In order to receive homestead treatment for the noncontiguous
property, the owner must use the property for the purposes of the homestead, and must apply
to the assessor, both by the deadlines given in subdivision 9. After initial qualification for
the homestead treatment, additional applications for subsequent years are not required.

(c) Residential real estate that is occupied and used for purposes of a homestead by a
relative of the owner is a homestead but only to the extent of the homestead treatment that
would be provided if the related owner occupied the property. For purposes of this paragraph
and paragraph (g), "relative" means a parent, stepparent, child, stepchild, grandparent,
grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship may be by blood
or marriage. Property that has been classified as seasonal residential recreational property
at any time during which it has been owned by the current owner or spouse of the current
owner will not be reclassified as a homestead unless it is occupied as a homestead by the
owner; this prohibition also applies to property that, in the absence of this paragraph, would
have been classified as seasonal residential recreational property at the time when the
residence was constructed. Neither the related occupant nor the owner of the property may
claim a property tax refund under chapter 290A for a homestead occupied by a relative. In
the case of a residence located on agricultural land, only the house, garage, and immediately
surrounding one acre of land shall be classified as a homestead under this paragraph, except
as provided in paragraph (d).

(d) Agricultural property that is occupied and used for purposes of a homestead by a
relative of the owner, is a homestead, only to the extent of the homestead treatment that
would be provided if the related owner occupied the property, and only if all of the following
criteria are met:

(1) the relative who is occupying the agricultural property is a grandchild, child, sibling,
deleted text begin or deleted text end parent new text begin, grandparent, stepparent, stepchild, uncle, aunt, nephew, or niece new text end of the owner of
the agricultural property or of the spouse of the owner;

(2) the owner of the agricultural property must be a Minnesota resident;

(3) the owner of the agricultural property must not receive homestead treatment on any
other agricultural property in Minnesota; and

(4) the owner of the agricultural property is limited to only one agricultural homestead
per family under this paragraph.

Neither the related occupant nor the owner of the property may claim a property tax
refund under chapter 290A for a homestead occupied by a relative qualifying under this
paragraph. For purposes of this paragraph, "agricultural property" means the house, garage,
other farm buildings and structures, and agricultural land.

Application must be made to the assessor by the owner of the agricultural property to
receive homestead benefits under this paragraph. The assessor may require the necessary
proof that the requirements under this paragraph have been met.

(e) In the case of property owned by a property owner who is married, the assessor must
not deny homestead treatment in whole or in part if only one of the spouses occupies the
property and the other spouse is absent due to: (1) marriage dissolution proceedings, (2)
legal separation, (3) employment or self-employment in another location, or (4) other
personal circumstances causing the spouses to live separately, not including an intent to
obtain two homestead classifications for property tax purposes. To qualify under clause (3),
the spouse's place of employment or self-employment must be at least 50 miles distant from
the other spouse's place of employment, and the homesteads must be at least 50 miles distant
from each other.

(f) The assessor must not deny homestead treatment in whole or in part if:

(1) in the case of a property owner who is not married, the owner is absent due to
residence in a nursing home, boarding care facility, or an elderly assisted living facility
property as defined in section 273.13, subdivision 25a, and the property is not otherwise
occupied; or

(2) in the case of a property owner who is married, the owner or the owner's spouse or
both are absent due to residence in a nursing home, boarding care facility, or an elderly
assisted living facility property as defined in section 273.13, subdivision 25a, and the property
is not occupied or is occupied only by the owner's spouse.

(g) If an individual is purchasing property with the intent of claiming it as a homestead
and is required by the terms of the financing agreement to have a relative shown on the deed
as a co-owner, the assessor shall allow a full homestead classification. This provision only
applies to first-time purchasers, whether married or single, or to a person who had previously
been married and is purchasing as a single individual for the first time. The application for
homestead benefits must be on a form prescribed by the commissioner and must contain
the data necessary for the assessor to determine if full homestead benefits are warranted.

(h) If residential or agricultural real estate is occupied and used for purposes of a
homestead by a child of a deceased owner and the property is subject to jurisdiction of
probate court, the child shall receive relative homestead classification under paragraph (c)
or (d) to the same extent they would be entitled to it if the owner was still living, until the
probate is completed. For purposes of this paragraph, "child" includes a relationship by
blood or by marriage.

(i) If a single-family home, duplex, or triplex classified as either residential homestead
or agricultural homestead is also used to provide licensed child care, the portion of the
property used for licensed child care must be classified as a part of the homestead property.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2022 and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2020, section 273.124, subdivision 3a, is amended to read:

Subd. 3a.

Manufactured home park cooperative.

(a) When a manufactured home park
is owned by a corporation or association organized under chapter 308A or 308B, and each
person who owns a share or shares in the corporation or association is entitled to occupy a
lot within the park, the corporation or association may claim homestead treatment for the
park. Each lot must be designated by legal description or number, and each lot is limited to
not more than one-half acre of land.

(b) The manufactured home park shall be entitled to homestead treatment if all of the
following criteria are met:

(1) the occupant or the cooperative corporation or association is paying the ad valorem
property taxes and any special assessments levied against the land and structure either
directly, or indirectly through dues to the corporation or association; and

(2) the corporation or association organized under chapter 308A or 308B is wholly
owned by persons having a right to occupy a lot owned by the corporation or association.

(c) A charitable corporation, organized under the laws of Minnesota with no outstanding
stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status,
qualifies for homestead treatment with respect to a manufactured home park if its members
hold residential participation warrants entitling them to occupy a lot in the manufactured
home park.

(d) "Homestead treatment" under this subdivision means the classification rate provided
for class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause
(5), deleted text beginitem (ii), deleted text end and the homestead market value exclusion under section 273.13, subdivision
35, does not apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2023 and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2020, section 273.124, subdivision 6, is amended to read:

Subd. 6.

Leasehold cooperatives.

When one or more dwellings or one or more buildings
which each contain several dwelling units is owned by a nonprofit corporation subject to
the provisions of chapter 317A and qualifying under section 501(c)(3) or 501(c)(4) of the
Internal Revenue Code, or a limited partnership which corporation or partnership operates
the property in conjunction with a cooperative association, and has received public financing,
homestead treatment may be claimed by the cooperative association on behalf of the members
of the cooperative for each dwelling unit occupied by a member of the cooperative. The
cooperative association must provide the assessor with the Social Security numbers new text beginor
individual tax identification numbers new text endof those members. To qualify for the treatment provided
by this subdivision, the following conditions must be met:

(a) the cooperative association must be organized under chapter 308A or 308B and all
voting members of the board of directors must be resident tenants of the cooperative and
must be elected by the resident tenants of the cooperative;

(b) the cooperative association must have a lease for occupancy of the property for a
term of at least 20 years, which permits the cooperative association, while not in default on
the lease, to participate materially in the management of the property, including material
participation in establishing budgets, setting rent levels, and hiring and supervising a
management agent;

(c) to the extent permitted under state or federal law, the cooperative association must
have a right under a written agreement with the owner to purchase the property if the owner
proposes to sell it; if the cooperative association does not purchase the property it is offered
for sale, the owner may not subsequently sell the property to another purchaser at a price
lower than the price at which it was offered for sale to the cooperative association unless
the cooperative association approves the sale;

(d) a minimum of 40 percent of the cooperative association's members must have incomes
at or less than 60 percent of area median gross income as determined by the United States
Secretary of Housing and Urban Development under section 142(d)(2)(B) of the Internal
Revenue Code. For purposes of this clause, "member income" means the income of a member
existing at the time the member acquires cooperative membership;

(e) if a limited partnership owns the property, it must include as the managing general
partner a nonprofit organization operating under the provisions of chapter 317A and
qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code and the limited
partnership agreement must provide that the managing general partner have sufficient powers
so that it materially participates in the management and control of the limited partnership;

(f) prior to becoming a member of a leasehold cooperative described in this subdivision,
a person must have received notice that (1) describes leasehold cooperative property in plain
language, including but not limited to the effects of classification under this subdivision on
rents, property taxes and tax credits or refunds, and operating expenses, and (2) states that
copies of the articles of incorporation and bylaws of the cooperative association, the lease
between the owner and the cooperative association, a sample sublease between the
cooperative association and a tenant, and, if the owner is a partnership, a copy of the limited
partnership agreement, can be obtained upon written request at no charge from the owner,
and the owner must send or deliver the materials within seven days after receiving any
request;

(g) if a dwelling unit of a building was occupied on the 60th day prior to the date on
which the unit became leasehold cooperative property described in this subdivision, the
notice described in paragraph (f) must have been sent by first class mail to the occupant of
the unit at least 60 days prior to the date on which the unit became leasehold cooperative
property. For purposes of the notice under this paragraph, the copies of the documents
referred to in paragraph (f) may be in proposed version, provided that any subsequent
material alteration of those documents made after the occupant has requested a copy shall
be disclosed to any occupant who has requested a copy of the document. Copies of the
articles of incorporation and certificate of limited partnership shall be filed with the secretary
of state after the expiration of the 60-day period unless the change to leasehold cooperative
status does not proceed;

(h) the county attorney of the county in which the property is located must certify to the
assessor that the property meets the requirements of this subdivision;

(i) the public financing received must be from at least one of the following sources:

(1) tax increment financing proceeds used for the acquisition or rehabilitation of the
building or interest rate write-downs relating to the acquisition of the building;

(2) government issued bonds exempt from taxes under section 103 of the Internal Revenue
Code, the proceeds of which are used for the acquisition or rehabilitation of the building;

(3) programs under section 221(d)(3), 202, or 236, of Title II of the National Housing
Act;

(4) rental housing program funds under Section 8 of the United States Housing Act of
1937, as amended, or the market rate family graduated payment mortgage program funds
administered by the Minnesota Housing Finance Agency that are used for the acquisition
or rehabilitation of the building;

(5) low-income housing credit under section 42 of the Internal Revenue Code;

(6) public financing provided by a local government used for the acquisition or
rehabilitation of the building, including grants or loans from (i) federal community
development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued
under chapter 474A; or

(7) other rental housing program funds provided by the Minnesota Housing Finance
Agency for the acquisition or rehabilitation of the building;

(j) at the time of the initial request for homestead classification or of any transfer of
ownership of the property, the governing body of the municipality in which the property is
located must hold a public hearing and make the following findings:

(1) that the granting of the homestead treatment of the apartment's units will facilitate
safe, clean, affordable housing for the cooperative members that would otherwise not be
available absent the homestead designation;

(2) that the owner has presented information satisfactory to the governing body showing
that the savings garnered from the homestead designation of the units will be used to reduce
tenant's rents or provide a level of furnishing or maintenance not possible absent the
designation; and

(3) that the requirements of paragraphs (b), (d), and (i) have been met.

Homestead treatment must be afforded to units occupied by members of the cooperative
association and the units must be assessed as provided in subdivision 3, provided that any
unit not so occupied shall be classified and assessed pursuant to the appropriate class. No
more than three acres of land may, for assessment purposes, be included with each dwelling
unit that qualifies for homestead treatment under this subdivision.

When dwelling units no longer qualify under this subdivision, the current owner must
notify the assessor within 60 days. Failure to notify the assessor within 60 days shall result
in the loss of benefits under this subdivision for taxes payable in the year that the failure is
discovered. For these purposes, "benefits under this subdivision" means the difference in
the net tax capacity of the units which no longer qualify as computed under this subdivision
and as computed under the otherwise applicable law, times the local tax rate applicable to
the building for that taxes payable year. Upon discovery of a failure to notify, the assessor
shall inform the auditor of the difference in net tax capacity for the building or buildings in
which units no longer qualify, and the auditor shall calculate the benefits under this
subdivision. Such amount, plus a penalty equal to 100 percent of that amount, shall then be
demanded of the building's owner. The property owner may appeal the county's determination
by serving copies of a petition for review with county officials as provided in section 278.01
and filing a proof of service as provided in section 278.01 with the Minnesota Tax Court
within 60 days of the date of the notice from the county. The appeal shall be governed by
the Tax Court procedures provided in chapter 271, for cases relating to the tax laws as
defined in section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and
278.03, but including section 278.05, subdivision 2. If the amount of the benefits under this
subdivision and penalty are not paid within 60 days, and if no appeal has been filed, the
county auditor shall certify the amount of the benefit and penalty to the succeeding year's
tax list to be collected as part of the property taxes on the affected buildings.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2021
and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2020, section 273.124, subdivision 9, is amended to read:

Subd. 9.

Homestead established after assessment date.

Any property that was not
used for the purpose of a homestead on the assessment date, but which was used for the
purpose of a homestead on December deleted text begin1 deleted text end new text begin 31 new text end of a year, constitutes class 1 or class 2a.

Any taxpayer meeting the requirements of this subdivision must notify the county
assessor, or the assessor who has the powers of the county assessor under section 273.063,
in writing, by December deleted text begin15 deleted text end new text begin 31 new text end of the year of occupancy in order to qualify under this
subdivision. The assessor must not deny full homestead treatment to a property that is
partially homesteaded on January 2 but occupied for the purpose of a full homestead on
December deleted text begin1 deleted text end new text begin 31 new text end of a year.

The county assessor and the county auditor may make the necessary changes on their
assessment and tax records to provide for proper homestead classification as provided in
this subdivision.

If homestead classification has not been requested as of December deleted text begin15 deleted text end new text begin 31 new text end, the assessor
will classify the property as nonhomestead for the current assessment year for taxes payable
in the following year, provided that the owner of any property qualifying under this
subdivision, which has not been accorded the benefits of this subdivision, may be entitled
to receive homestead classification by proper application as provided in section 375.192.

The county assessor may publish in a newspaper of general circulation within the county
a notice requesting the public to file an application for homestead as soon as practicable
after acquisition of a homestead, but no later than December deleted text begin15 deleted text end new text begin 31 new text end.

The county assessor shall publish in a newspaper of general circulation within the county
no later than December 1 of each year a notice informing the public of the requirement to
file an application for homestead by December deleted text begin15 deleted text end new text begin 31 new text end.

In the case of manufactured homes assessed as personal property, the homestead must
be established, and a homestead classification requested, by May 29 of the assessment year.
The assessor may include information on these deadlines for manufactured homes assessed
as personal property in the published notice or notices.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessments in 2021.
new text end

Sec. 9.

Minnesota Statutes 2020, section 273.124, subdivision 13, is amended to read:

Subd. 13.

Homestead application.

(a) A person who meets the homestead requirements
under subdivision 1 must file a homestead application with the county assessor to initially
obtain homestead classification.

(b) The commissioner shall prescribe the content, format, and manner of the homestead
application required to be filed under this chapter pursuant to section 270C.30. The
application must clearly inform the taxpayer that this application must be signed by all
owners who occupy the property or by the qualifying relative and returned to the county
assessor in order for the property to receive homestead treatment.

(c) Every property owner applying for homestead classification must furnish to the
county assessor the Social Security number new text beginor individual tax identification number new text endof each
occupant who is listed as an owner of the property on the deed of record, the name and
address of each owner who does not occupy the property, and the name and Social Security
number new text beginor individual tax identification number new text endof the spouse of each occupying owner. The
application must be signed by each owner who occupies the property and by each owner's
spouse who occupies the property, or, in the case of property that qualifies as a homestead
under subdivision 1, paragraph (c), by the qualifying relative.

If a property owner occupies a homestead, the property owner's spouse may not claim
another property as a homestead unless the property owner and the property owner's spouse
file with the assessor an affidavit or other proof required by the assessor stating that the
property qualifies as a homestead under subdivision 1, paragraph (e).

Owners or spouses occupying residences owned by their spouses and previously occupied
with the other spouse, either of whom fail to include the other spouse's name and Social
Security number new text beginor individual tax identification number new text endon the homestead application or
provide the affidavits or other proof requested, will be deemed to have elected to receive
only partial homestead treatment of their residence. The remainder of the residence will be
classified as nonhomestead residential. When an owner or spouse's name and Social Security
number new text beginor individual tax identification number new text endappear on homestead applications for two
separate residences and only one application is signed, the owner or spouse will be deemed
to have elected to homestead the residence for which the application was signed.

(d) If residential real estate is occupied and used for purposes of a homestead by a relative
of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in order for
the property to receive homestead status, a homestead application must be filed with the
assessor. The Social Security number new text beginor individual tax identification number new text endof each relative
occupying the property and the name and Social Security number new text beginor individual tax
identification number new text endof the spouse of a relative occupying the property shall be required
on the homestead application filed under this subdivision. If a different relative of the owner
subsequently occupies the property, the owner of the property must notify the assessor
within 30 days of the change in occupancy. The Social Security number new text beginor individual tax
identification number new text endof a relative occupying the property or the spouse of a relative
occupying the property is private data on individuals as defined by section 13.02, subdivision
12, but may be disclosed to the commissioner of revenue, or, for the purposes of proceeding
under the Revenue Recapture Act to recover personal property taxes owing, to the county
treasurer.

(e) The homestead application shall also notify the property owners that if the property
is granted homestead status for any assessment year, that same property shall remain
classified as homestead until the property is sold or transferred to another person, or the
owners, the spouse of the owner, or the relatives no longer use the property as their
homestead. Upon the sale or transfer of the homestead property, a certificate of value must
be timely filed with the county auditor as provided under section 272.115. Failure to notify
the assessor within 30 days that the property has been sold, transferred, or that the owner,
the spouse of the owner, or the relative is no longer occupying the property as a homestead,
shall result in the penalty provided under this subdivision and the property will lose its
current homestead status.

(f) If a homestead application has not been filed with the county by December deleted text begin15 deleted text end new text begin 31 new text end,
the assessor shall classify the property as nonhomestead for the current assessment year for
taxes payable in the following year, provided that the owner may be entitled to receive the
homestead classification by proper application under section 375.192.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessments in 2021.
new text end

Sec. 10.

Minnesota Statutes 2020, section 273.124, subdivision 13a, is amended to read:

Subd. 13a.

Occupant list.

At the request of the commissioner, each county must give
the commissioner a list that includes the name and Social Security number new text begin or individual
tax identification number new text end of each occupant of homestead property who is the property owner,
property owner's spouse, qualifying relative of a property owner, or a spouse of a qualifying
relative. The commissioner shall use the information provided on the lists as appropriate
under the law, including for the detection of improper claims by owners, or relatives of
owners, under chapter 290A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2021
and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2020, section 273.124, subdivision 13c, is amended to read:

Subd. 13c.

Property lists.

In addition to lists of homestead properties, the commissioner
may ask the counties to furnish lists of all properties and the record owners. The Social
Security numbers new text begin, individual tax identification numbers, new text end and federal identification numbers
that are maintained by a county or city assessor for property tax administration purposes,
and that may appear on the lists retain their classification as private or nonpublic data; but
may be viewed, accessed, and used by the county auditor or treasurer of the same county
for the limited purpose of assisting the commissioner in the preparation of microdata samples
under section 270C.12. The commissioner shall use the information provided on the lists
as appropriate under the law, including for the detection of improper claims by owners, or
relatives of owners, under chapter 290A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for homestead data provided to the
commissioner of revenue in 2022 and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2020, section 273.124, subdivision 13d, is amended to read:

Subd. 13d.

Homestead data.

On or before April 30 each