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SF 160

as introduced - 89th Legislature (2015 - 2016) Posted on 01/21/2015 09:04am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; sales and use; changing thresholds for filing requirements;
providing a vendor allowance; requiring Department of Revenue to develop
an address-based sales tax calculator; amending Minnesota Statutes 2014,
sections 289A.18, subdivision 4; 289A.20, subdivision 4; 297A.77, subdivision
3; 297A.99, subdivision 11; proposing coding for new law in Minnesota Statutes,
chapter 297A.

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

Section 1.

Minnesota Statutes 2014, section 289A.18, subdivision 4, is amended to read:


Subd. 4.

Sales and use tax returns.

(a) Sales and use tax returns must be filed on or
before the 20th day of the month following the close of the preceding reporting period,
except that annual use tax returns provided for under section 289A.11, subdivision 1, must
be filed by April 15 following the close of the calendar year, in the case of individuals.
Annual use tax returns of businesses, including sole proprietorships, and annual sales tax
returns must be filed by February 5 following the close of the calendar year.

(b) Returns for the June reporting period filed by retailers required to remit their
June liability under section 289A.20, subdivision 4, paragraph (b), are due on or before
August 20.

(c) If a retailer has an average sales and use tax liability, including local sales and
use taxes administered by the commissioner, equal to or less than deleted text begin$500deleted text endnew text begin $1,000new text end per month
in any quarter of a calendar year, and has substantially complied with the tax laws during
the preceding four calendar quarters, the retailer may request authorization to file and
pay the taxes quarterly in subsequent calendar quarters. The authorization remains in
effect during the period in which the retailer's new text beginaverage new text endquarterly returns new text beginfor the previous
four quarters
new text endreflect sales and use tax liabilities of less than deleted text begin$1,500deleted text endnew text begin $3,000new text end and there is
continued compliance with state tax laws.

(d) If a retailer has an average sales and use tax liability, including local sales and
use taxes administered by the commissioner, equal to or less than $100 per month during a
calendar year, and has substantially complied with the tax laws during that period, the
retailer may request authorization to file and pay the taxes annually in subsequent years.
The authorization remains in effect during the period in which the retailer's annual returns
reflect sales and use tax liabilities of less than $1,200 and there is continued compliance
with state tax laws.

(e) The commissioner may also grant quarterly or annual filing and payment
authorizations to retailers if the commissioner concludes that the retailers' future tax
liabilities will be less than the monthly totals identified in paragraphs (c) and (d). An
authorization granted under this paragraph is subject to the same conditions as an
authorization granted under paragraphs (c) and (d).

(f) A taxpayer who is a materials supplier may report gross receipts either on:

(1) the cash basis as the consideration is received; or

(2) the accrual basis as sales are made.

As used in this paragraph, "materials supplier" means a person who provides materials
for the improvement of real property; who is primarily engaged in the sale of lumber and
building materials-related products to owners, contractors, subcontractors, repairers,
or consumers; who is authorized to file a mechanics lien upon real property and
improvements under chapter 514; and who files with the commissioner an election to file
sales and use tax returns on the basis of this paragraph.

(g) Notwithstanding paragraphs (a) to (f), a seller that is not a Model 1, 2, or 3
seller, as those terms are used in the Streamlined Sales and Use Tax Agreement, that does
not have a legal requirement to register in Minnesota, and that is registered under the
agreement, must file a return by February 5 following the close of the calendar year in
which the seller initially registers, and must file subsequent returns on February 5 on an
annual basis in succeeding years. Additionally, a return must be submitted on or before
the 20th day of the month following any month by which sellers have accumulated state
and local tax funds for the state in the amount of $1,000 or more.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 2.

Minnesota Statutes 2014, section 289A.20, subdivision 4, is amended to read:


Subd. 4.

Sales and use tax.

(a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following the
month in which the taxable event occurred, or following another reporting period as the
commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
(f) or (g), except that use taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.

(b) A vendor having a liability of $250,000 or more during a fiscal year ending June
30 must remit the June new text beginnet new text endliability for the next year in the following manner:

(1) Two business days before June 30 of the year, the vendor must remit 81.4 percent
of the estimated June new text beginnet new text endliability to the commissioner.

(2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.

(c) A vendor having a liability of:

(1) $10,000 or more, but less than $250,000 during a fiscal year ending June 30,
2013, and fiscal years thereafter, must remit by electronic means all new text beginnet new text endliabilities on
returns due for periods beginning in all subsequent calendar years on or before the 20th
day of the month following the month in which the taxable event occurred, or on or before
the 20th day of the month following the month in which the sale is reported under section
289A.18, subdivision 4; or

(2) $250,000 or more, during a fiscal year ending June 30, 2013, and fiscal years
thereafter, must remit by electronic means all new text beginnet new text endliabilities in the manner provided in
paragraph (a) on returns due for periods beginning in the subsequent calendar year, except
for 81.4 percent of the estimated June new text beginnet new text endliability, which is due two business days before
June 30. The remaining amount of the June liability is due on August 20.

(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
religious beliefs from paying electronically shall be allowed to remit the payment by mail.
The filer must notify the commissioner of revenue of the intent to pay by mail before
doing so on a form prescribed by the commissioner. No extra fee may be charged to a
person making payment by mail under this paragraph. The payment must be postmarked
at least two business days before the due date for making the payment in order to be
considered paid on a timely basis.

new text begin (e) For purposes of this subdivision, "net liability" means the liability minus the
amount of vendor allowance authorized under section 297A.816.
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, 2015.
new text end

Sec. 3.

Minnesota Statutes 2014, section 297A.77, subdivision 3, is amended to read:


Subd. 3.

Tax must be remitted.

The tax collected by a retailer under this sectionnew text begin,
except for the amount allowed to be retained by the seller under section 297A.816,
new text end must
be remitted to the commissioner as provided in chapter 289A and this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 4.

new text begin [297A.816] VENDOR ALLOWANCE.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin A retailer or seller may retain a portion of sales
tax collected as a vendor allowance in compensation for the costs of collecting and
administering the tax under this chapter. This section only applies if the tax minus the
vendor allowance is both reported and remitted to the commissioner in a timely fashion
as required under chapter 289A.
new text end

new text begin Subd. 2. new text end

new text begin Tax not eligible for allowance. new text end

new text begin Use taxes paid by the seller on the seller's
own purchases are not included in calculating the vendor allowance under this section.
All other sales and use taxes collected by a seller are eligible for the vendor allowance
under this section.
new text end

new text begin Subd. 3. new text end

new text begin Calculation of allowance; minimum and maximum amounts. new text end

new text begin The
amount of the vendor allowance is equal to 3.0 percent of the eligible taxes collected in
the reporting period, as defined under section 289A.18, subdivision 4, up to a maximum of
$90 per reporting period. The vendor allowance per reporting period may not be less than
the lesser of $10 or the amount of eligible taxes collected during the reporting period.
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, 2015.
new text end

Sec. 5.

Minnesota Statutes 2014, section 297A.99, subdivision 11, is amended to read:


Subd. 11.

Revenues; cost of collection.

The commissioner shall remit the proceeds
of the tax, less refunds and a proportionate share of the cost of collection, at least quarterly,
to the political subdivision. The commissioner shall deduct from the proceeds remitted an
amount that equals

(1) the direct and indirect costs of the department to administer, audit, and collect the
political subdivision's tax, plus

(2) the political subdivision's proportionate share of the indirect cost of administering
all taxes under this section, plus

(3) the cost of constructing and maintaining a deleted text beginzip code or geo-code database
necessary for local sales tax collections under
deleted text endnew text begin free, electronically accessible address and
five-digit zip code lookup table for local sales tax collection for the state that meets the
requirements of
new text end the Streamlined Sales and Use Tax Agreement in section 297A.995.new text begin The
lookup table must be accessible to sellers by January 1, 2017, and the commissioner may
contract with an outside vendor to provide the required lookup table provided that a link to
the site is prominently displayed on the Department of Revenue's Web site.
new text end

The initial cost of constructing a database under clause (3) shall be distributed
among the cities with a local sales tax based on each city's population. The commissioner
shall develop a method for distributing the cost of maintaining the database among the
cities with a local sales tax based on the number of boundary changes for each city.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end