SF 497

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; making policy changes to income 
  1.3             and withholding taxes, sales and use taxes, 
  1.4             MinnesotaCare taxes, and tax collections; providing 
  1.5             civil penalties; amending Minnesota Statutes 1996, 
  1.6             sections 60A.15, subdivision 1; 116.07, subdivision 
  1.7             10; 270.02, subdivision 3; 270.063; 270.10, 
  1.8             subdivision 5; 270.101, subdivisions 2, 3, and by 
  1.9             adding a subdivision; 270.271, by adding a 
  1.10            subdivision; 270.273, subdivision 2; 270.276, 
  1.11            subdivision 2; 270.67, subdivision 2; 270.68, 
  1.12            subdivision 1; 270.69, subdivision 11; 270.701, 
  1.13            subdivisions 2 and 5; 270.708, subdivision 1; 270.721; 
  1.14            270.73, subdivision 1; 270A.07, subdivision 1; 271.06, 
  1.15            subdivision 2; 271.08, subdivision 1; 271.10, 
  1.16            subdivision 2; 287.31, subdivision 1; 287.37; 289A.02, 
  1.17            subdivision 7; 289A.08, subdivisions 3 and 7; 289A.09, 
  1.18            subdivision 2; 289A.20, subdivisions 1 and 2; 289A.26, 
  1.19            subdivisions 2, 3, 6, and 7; 289A.31, subdivisions 1, 
  1.20            5, and 7; 289A.36, subdivision 4; 289A.37, subdivision 
  1.21            1; 289A.40, subdivisions 1 and 2; 289A.60, subdivision 
  1.22            15; 290.01, subdivisions 19, 19c, 19d, and 31; 
  1.23            290.095, subdivision 3; 290.35, subdivision 2; 
  1.24            291.005, subdivision 1; 295.50, subdivisions 3, 6, and 
  1.25            14; 295.52, subdivision 4; 295.53, subdivision 4; 
  1.26            295.55, subdivision 2; 297A.01, subdivisions 3, 15, 
  1.27            and by adding a subdivision; 297A.041; 297A.07, 
  1.28            subdivision 3; 297A.09; 297A.24, by adding a 
  1.29            subdivision; 297A.25, subdivisions 2, 7, 12, and 41; 
  1.30            297A.45, subdivision 4, and by adding a subdivision; 
  1.31            297B.035, subdivision 3; 297B.11; 297E.04, subdivision 
  1.32            3; 298.01, subdivision 4c; 299F.21; 349.12, 
  1.33            subdivision 26a; and 349.163, subdivision 8; Laws 
  1.34            1995, chapter 264, article 10, section 15; proposing 
  1.35            coding for new law in Minnesota Statutes, chapters 
  1.36            270; 287; and 290. 
  1.37  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.38                             ARTICLE 1
  1.39                           FEDERAL UPDATE
  1.40     Section 1.  Minnesota Statutes 1996, section 289A.02, 
  1.41  subdivision 7, is amended to read: 
  2.1      Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
  2.2   defined otherwise, "Internal Revenue Code" means the Internal 
  2.3   Revenue Code of 1986, as amended through March 22 December 31, 
  2.4   1996, and includes the provisions of section 1(a) and (b) of 
  2.5   Public Law Number 104-117. 
  2.6      Sec. 2.  Minnesota Statutes 1996, section 290.01, 
  2.7   subdivision 19, is amended to read: 
  2.8      Subd. 19.  [NET INCOME.] The term "net income" means the 
  2.9   federal taxable income, as defined in section 63 of the Internal 
  2.10  Revenue Code of 1986, as amended through the date named in this 
  2.11  subdivision, incorporating any elections made by the taxpayer in 
  2.12  accordance with the Internal Revenue Code in determining federal 
  2.13  taxable income for federal income tax purposes, and with the 
  2.14  modifications provided in subdivisions 19a to 19f. 
  2.15     In the case of a regulated investment company or a fund 
  2.16  thereof, as defined in section 851(a) or 851(h) of the Internal 
  2.17  Revenue Code, federal taxable income means investment company 
  2.18  taxable income as defined in section 852(b)(2) of the Internal 
  2.19  Revenue Code, except that:  
  2.20     (1) the exclusion of net capital gain provided in section 
  2.21  852(b)(2)(A) of the Internal Revenue Code does not apply; and 
  2.22     (2) the deduction for dividends paid under section 
  2.23  852(b)(2)(D) of the Internal Revenue Code must be applied by 
  2.24  allowing a deduction for capital gain dividends and 
  2.25  exempt-interest dividends as defined in sections 852(b)(3)(C) 
  2.26  and 852(b)(5) of the Internal Revenue Code; and 
  2.27     (3) the deduction for dividends paid must also be applied 
  2.28  in the amount of any undistributed capital gains which the 
  2.29  regulated investment company elects to have treated as provided 
  2.30  in section 852(b)(3)(D) of the Internal Revenue Code.  
  2.31     The net income of a real estate investment trust as defined 
  2.32  and limited by section 856(a), (b), and (c) of the Internal 
  2.33  Revenue Code means the real estate investment trust taxable 
  2.34  income as defined in section 857(b)(2) of the Internal Revenue 
  2.35  Code.  
  2.36     The net income of a designated settlement fund as defined 
  3.1   in section 468B(d) of the Internal Revenue Code means the gross 
  3.2   income as defined in section 468B(b) of the Internal Revenue 
  3.3   Code. 
  3.4      The Internal Revenue Code of 1986, as amended through 
  3.5   December 31, 1986, shall be in effect for taxable years 
  3.6   beginning after December 31, 1986.  The provisions of sections 
  3.7   10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
  3.8   10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
  3.9   Omnibus Budget Reconciliation Act of 1987, Public Law Number 
  3.10  100-203, the provisions of sections 1001, 1002, 1003, 1004, 
  3.11  1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
  3.12  1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
  3.13  6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
  3.14  1988, Public Law Number 100-647, and the provisions of sections 
  3.15  7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
  3.16  1989, Public Law Number 101-239, and the provisions of sections 
  3.17  1305, 1704(r), and 1704(e)(1) of the Small Business Job 
  3.18  Protection Act, Public Law Number 104-188, shall be effective at 
  3.19  the time they become effective for federal income tax purposes.  
  3.20     The Internal Revenue Code of 1986, as amended through 
  3.21  December 31, 1987, shall be in effect for taxable years 
  3.22  beginning after December 31, 1987.  The provisions of sections 
  3.23  4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
  3.24  6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
  3.25  6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
  3.26  Act of 1988, Public Law Number 100-647, the provisions of 
  3.27  sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
  3.28  of 1989, Public Law Number 101-239, and the provisions of 
  3.29  section 11702 of the Revenue Reconciliation Act of 1990, Public 
  3.30  Law Number 101-508, shall become effective at the time they 
  3.31  become effective for federal tax purposes.  
  3.32     The Internal Revenue Code of 1986, as amended through 
  3.33  December 31, 1988, shall be in effect for taxable years 
  3.34  beginning after December 31, 1988.  The provisions of sections 
  3.35  7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
  3.36  7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
  4.1   7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
  4.2   Reconciliation Act of 1989, Public Law Number 101-239, the 
  4.3   provision of section 1401 of the Financial Institutions Reform, 
  4.4   Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
  4.5   and the provisions of sections 11701 and 11703 of the Revenue 
  4.6   Reconciliation Act of 1990, Public Law Number 101-508, and the 
  4.7   provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 
  4.8   Small Business Job Protection Act, Public Law Number 104-188, 
  4.9   shall become effective at the time they become effective for 
  4.10  federal tax purposes.  
  4.11     The Internal Revenue Code of 1986, as amended through 
  4.12  December 31, 1989, shall be in effect for taxable years 
  4.13  beginning after December 31, 1989.  The provisions of sections 
  4.14  11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
  4.15  the Revenue Reconciliation Act of 1990, Public Law Number 
  4.16  101-508, and the provisions of sections 13224 and 13261 of the 
  4.17  Omnibus Budget Reconciliation Act of 1993, Public Law Number 
  4.18  103-66, shall become effective at the time they become effective 
  4.19  for federal purposes.  
  4.20     The Internal Revenue Code of 1986, as amended through 
  4.21  December 31, 1990, shall be in effect for taxable years 
  4.22  beginning after December 31, 1990. 
  4.23     The provisions of section 13431 of the Omnibus Budget 
  4.24  Reconciliation Act of 1993, Public Law Number 103-66, shall 
  4.25  become effective at the time they became effective for federal 
  4.26  purposes.  
  4.27     The Internal Revenue Code of 1986, as amended through 
  4.28  December 31, 1991, shall be in effect for taxable years 
  4.29  beginning after December 31, 1991.  
  4.30     The provisions of sections 1936 and 1937 of the 
  4.31  Comprehensive National Energy Policy Act of 1992, Public Law 
  4.32  Number 102-486, and the provisions of sections 13101, 13114, 
  4.33  13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 
  4.34  the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
  4.35  103-66, shall become effective at the time they become effective 
  4.36  for federal purposes.  
  5.1      The Internal Revenue Code of 1986, as amended through 
  5.2   December 31, 1992, shall be in effect for taxable years 
  5.3   beginning after December 31, 1992.  
  5.4      The provisions of sections 13116, 13121, 13206, 13210, 
  5.5   13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
  5.6   the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
  5.7   103-66, and the provisions of sections 1703(a), 1703(d), 
  5.8   1703(i), 1703(l), and 1703(m) of the Small Business Job 
  5.9   Protection Act, Public Law Number 104-188, shall become 
  5.10  effective at the time they become effective for federal purposes.
  5.11     The Internal Revenue Code of 1986, as amended through 
  5.12  December 31, 1993, shall be in effect for taxable years 
  5.13  beginning after December 31, 1993. 
  5.14     The provision of section 741 of Legislation to Implement 
  5.15  Uruguay Round of General Agreement on Tariffs and Trade, Public 
  5.16  Law Number 103-465, and the provisions of sections 1, 2, and 3, 
  5.17  of the Self-Employed Health Insurance Act of 1995, Public Law 
  5.18  Number 104-7, the provision of section 501(b)(2) of the Health 
  5.19  Insurance Portability and Accountability Act, Public Law Number 
  5.20  104-191, and the provisions of sections 1604 and 1704(p)(1) and 
  5.21  (2) of the Small Business Job Protection Act, Public Law Number 
  5.22  104-188, shall become effective at the time they become 
  5.23  effective for federal purposes. 
  5.24     The Internal Revenue Code of 1986, as amended through 
  5.25  December 31, 1994, shall be in effect for taxable years 
  5.26  beginning after December 31, 1994. 
  5.27     The provisions of sections 1119(a), 1120, 1121, 1202(a), 
  5.28  1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 
  5.29  Business Job Protection Act, Public Law Number 104-188, and the 
  5.30  provision of section 511 of the Health Insurance Portability and 
  5.31  Accountability Act, Public Law Number 104-191, shall become 
  5.32  effective at the time they become effective for federal purposes.
  5.33     The Internal Revenue Code of 1986, as amended through March 
  5.34  22, 1996, is in effect for taxable years beginning after 
  5.35  December 31, 1995. 
  5.36     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
  6.1   1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
  6.2   1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
  6.3   Protection Act, Public Law Number 104-188, and the provisions of 
  6.4   Public Law Number 104-117 become effective at the time they 
  6.5   become effective for federal purposes. 
  6.6      The Internal Revenue Code of 1986, as amended through 
  6.7   December 31, 1996, shall be in effect for taxable years 
  6.8   beginning after December 31, 1996. 
  6.9      Except as otherwise provided, references to the Internal 
  6.10  Revenue Code in subdivisions 19a to 19g mean the code in effect 
  6.11  for purposes of determining net income for the applicable year. 
  6.12     Sec. 3.  Minnesota Statutes 1996, section 290.01, 
  6.13  subdivision 31, is amended to read: 
  6.14     Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
  6.15  defined otherwise, "Internal Revenue Code" means the Internal 
  6.16  Revenue Code of 1986, as amended through March 22 December 31, 
  6.17  1996, and includes the provisions of section 1(a) and (b) of 
  6.18  Public Law Number 104-117. 
  6.19     Sec. 4.  [290.9743] [ELECTION BY FASIT.] 
  6.20     An entity having a valid election as a Financial Asset 
  6.21  Securitization Investment Trust in effect for a taxable year 
  6.22  under section 860L(a) of the Internal Revenue Code shall not be 
  6.23  subject to the taxes imposed by this chapter, except the tax 
  6.24  imposed under section 290.92. 
  6.25     Sec. 5.  [290.9744] [FASIT INCOME TAXABLE TO HOLDERS OF 
  6.26  INTERESTS.] 
  6.27     The income of a FASIT is taxable to the holders of 
  6.28  interests in the FASIT as provided in sections 860H to 860L of 
  6.29  the Internal Revenue Code.  The income of the holders must be 
  6.30  computed under the provisions of this chapter. 
  6.31     Sec. 6.  Minnesota Statutes 1996, section 291.005, 
  6.32  subdivision 1, is amended to read: 
  6.33     Subdivision 1.  Unless the context otherwise clearly 
  6.34  requires, the following terms used in this chapter shall have 
  6.35  the following meanings: 
  6.36     (1) "Federal gross estate" means the gross estate of a 
  7.1   decedent as valued and otherwise determined for federal estate 
  7.2   tax purposes by federal taxing authorities pursuant to the 
  7.3   provisions of the Internal Revenue Code. 
  7.4      (2) "Minnesota gross estate" means the federal gross estate 
  7.5   of a decedent after (a) excluding therefrom any property 
  7.6   included therein which has its situs outside Minnesota and (b) 
  7.7   including therein any property omitted from the federal gross 
  7.8   estate which is includable therein, has its situs in Minnesota, 
  7.9   and was not disclosed to federal taxing authorities.  
  7.10     (3) "Personal representative" means the executor, 
  7.11  administrator or other person appointed by the court to 
  7.12  administer and dispose of the property of the decedent.  If 
  7.13  there is no executor, administrator or other person appointed, 
  7.14  qualified, and acting within this state, then any person in 
  7.15  actual or constructive possession of any property having a situs 
  7.16  in this state which is included in the federal gross estate of 
  7.17  the decedent shall be deemed to be a personal representative to 
  7.18  the extent of the property and the Minnesota estate tax due with 
  7.19  respect to the property. 
  7.20     (4) "Resident decedent" means an individual whose domicile 
  7.21  at the time of death was in Minnesota. 
  7.22     (5) "Nonresident decedent" means an individual whose 
  7.23  domicile at the time of death was not in Minnesota. 
  7.24     (6) "Situs of property" means, with respect to real 
  7.25  property, the state or country in which it is located; with 
  7.26  respect to tangible personal property, the state or country in 
  7.27  which it was normally kept or located at the time of the 
  7.28  decedent's death; and with respect to intangible personal 
  7.29  property, the state or country in which the decedent was 
  7.30  domiciled at death. 
  7.31     (7) "Commissioner" means the commissioner of revenue or any 
  7.32  person to whom the commissioner has delegated functions under 
  7.33  this chapter. 
  7.34     (8) "Internal Revenue Code" means the United States 
  7.35  Internal Revenue Code of 1986, as amended through March 22 
  7.36  December 31, 1996, and includes the provisions of section 
  8.1   1(a)(4) of Public Law Number 104-117. 
  8.2      Sec. 7.  [FEDERAL CHANGES.] 
  8.3      The changes made by sections 1118(a), 1305, 1603, 1702(e), 
  8.4   and 1702(f) of the Small Business Job Protection Act, Public Law 
  8.5   Number 104-188, sections 451(a), 451(b), 909, and 910 of the 
  8.6   Personal Responsibility and Work Opportunity Reconciliation Act, 
  8.7   Public Law Number 104-193, and the federal changes to taxable 
  8.8   income of section 2 of this article which affect the Minnesota 
  8.9   definition of wages under Minnesota Statutes, section 290.92, 
  8.10  subdivision 1, S corporation status under Minnesota Statutes, 
  8.11  section 290.9725, unrelated business income tax under Minnesota 
  8.12  Statutes, section 290.05, subdivision 3, corporate alternative 
  8.13  minimum tax under Minnesota Statutes, section 290.0921, 
  8.14  subdivision 3, estate tax under Minnesota Statutes, sections 
  8.15  291.005 and 291.03, the Minnesota working family credit under 
  8.16  Minnesota Statutes, section 290.0671, subdivision 1, and the 
  8.17  definition of income under Minnesota Statutes, section 290A.03, 
  8.18  subdivision 3, shall become effective at the same time the 
  8.19  changes become effective for federal purposes. 
  8.20     Sec. 8.  [INSTRUCTION TO REVISOR.] 
  8.21     In the next edition of Minnesota Statutes, the revisor of 
  8.22  statutes shall substitute the phrase "Internal Revenue Code of 
  8.23  1986, as amended through December 31, 1996," for the words 
  8.24  "Internal Revenue Code of 1986, as amended through April 15, 
  8.25  1995," wherever the phrase occurs in chapters 290A, 297, 298, 
  8.26  and 469. 
  8.27     Sec. 9.  [EFFECTIVE DATE.] 
  8.28     Sections 4 and 5 and the provision of section 2 dealing 
  8.29  with regulated investment companies are effective for tax years 
  8.30  beginning after December 31, 1996.  The remainder of this 
  8.31  article is effective at the same time and for the same years as 
  8.32  the federal changes made in 1996 were effective for federal 
  8.33  purposes. 
  8.34                             ARTICLE 2  
  8.35                       INCOME AND WITHHOLDING 
  8.36     Section 1.  Minnesota Statutes 1996, section 289A.08, 
  9.1   subdivision 3, is amended to read: 
  9.2      Subd. 3.  [CORPORATIONS.] A corporation that is subject to 
  9.3   the state's jurisdiction to tax under section 290.014, 
  9.4   subdivision 5, must file a return, except that a foreign 
  9.5   operating corporation as defined in section 290.01, subdivision 
  9.6   6b, is not required to file a return.  The commissioner shall 
  9.7   adopt rules for the filing of one return on behalf of the 
  9.8   members of an affiliated group of corporations that are required 
  9.9   to file a combined report.  All members of an affiliated group 
  9.10  that elect to are required to file a combined report must file 
  9.11  one return on behalf of the members of the group under rules 
  9.12  adopted by the commissioner may change or rescind the election 
  9.13  by filing the form required by the commissioner.  
  9.14     Sec. 2.  Minnesota Statutes 1996, section 289A.08, 
  9.15  subdivision 7, is amended to read: 
  9.16     Subd. 7.  [COMPOSITE INCOME TAX RETURNS FOR NONRESIDENT 
  9.17  PARTNERS, SHAREHOLDERS, AND BENEFICIARIES.] (a) The commissioner 
  9.18  may allow a partnership with nonresident partners to file a 
  9.19  composite return and to pay the tax on behalf of nonresident 
  9.20  partners who have no other Minnesota source income.  This 
  9.21  composite return must include the names, addresses, social 
  9.22  security numbers, income allocation, and tax liability for the 
  9.23  nonresident partners electing to be covered by the composite 
  9.24  return.  
  9.25     (b) The computation of a partner's tax liability must be 
  9.26  determined by multiplying the income allocated to that partner 
  9.27  by the highest rate used to determine the tax liability for 
  9.28  individuals under section 290.06, subdivision 2c eight percent.  
  9.29     The term "income" as used in this paragraph means those 
  9.30  items of income, loss, and deduction that are used in computing 
  9.31  an individual's federal adjusted gross income, as defined in 
  9.32  section 62 of the Internal Revenue Code, after applying the 
  9.33  allocation and assignability provisions of sections 290.081 and 
  9.34  290.17.  Nonbusiness deductions, standard deductions, or 
  9.35  personal exemptions are not allowed. 
  9.36     (c) The partnership must submit a request to use this 
 10.1   composite return filing method for nonresident partners.  The 
 10.2   requesting partnership must file a composite return in the form 
 10.3   prescribed by the commissioner of revenue.  The filing of a 
 10.4   composite return is considered a request to use the composite 
 10.5   return filing method. 
 10.6      (d) The electing partner must not have any Minnesota source 
 10.7   income other than the income from the partnership and other 
 10.8   electing partnerships.  If it is determined that the electing 
 10.9   partner has other Minnesota source income, the inclusion of the 
 10.10  income and tax liability for that partner under this provision 
 10.11  will not constitute a return to satisfy the requirements of 
 10.12  subdivision 1.  The tax paid for the individual as part of the 
 10.13  composite return is allowed as a payment of the tax by the 
 10.14  individual on the date on which the composite return payment was 
 10.15  made.  If the electing nonresident partner has no other 
 10.16  Minnesota source income, filing of the composite return is a 
 10.17  return for purposes of subdivision 1. 
 10.18     (e) This subdivision does not negate the requirement that 
 10.19  an individual pay estimated tax if the individual's liability 
 10.20  would exceed the requirements set forth in section 289A.25.  A 
 10.21  composite estimate may, however, be filed in a manner similar to 
 10.22  and containing the information required under paragraph (a). 
 10.23     (f) If an electing partner's share of the partnership's 
 10.24  gross income from Minnesota sources is less than the filing 
 10.25  requirements for a nonresident under this subdivision, the tax 
 10.26  liability is zero.  However, a statement showing the partner's 
 10.27  share of gross income must be included as part of the composite 
 10.28  return. 
 10.29     (g) The election provided in this subdivision is not 
 10.30  available to any partner other than a full-year nonresident 
 10.31  individual who has no other Minnesota source income. 
 10.32     (h) A corporation defined in section 290.9725 and its 
 10.33  nonresident shareholders may make an election under this 
 10.34  paragraph.  The provisions covering the partnership apply to the 
 10.35  corporation and the provisions applying to the partner apply to 
 10.36  the shareholder. 
 11.1      (i) Estates and trusts distributing current income only and 
 11.2   the nonresident individual beneficiaries of the estates or 
 11.3   trusts may make an election under this paragraph.  The 
 11.4   provisions covering the partnership apply to the estate or 
 11.5   trust.  The provisions applying to the partner apply to the 
 11.6   beneficiary.  
 11.7      Sec. 3.  Minnesota Statutes 1996, section 289A.26, 
 11.8   subdivision 2, is amended to read: 
 11.9      Subd. 2.  [AMOUNT AND TIME FOR PAYMENT OF INSTALLMENTS.] 
 11.10  The estimated tax payment required under subdivision 1 must be 
 11.11  paid in four equal installments on or before the 15th day of the 
 11.12  third fourth, sixth, ninth, and 12th month of the taxable year.  
 11.13     Sec. 4.  Minnesota Statutes 1996, section 289A.26, 
 11.14  subdivision 3, is amended to read: 
 11.15     Subd. 3.  [SHORT TAXABLE YEAR.] (a) An entity with a short 
 11.16  taxable year of less than 12 months, but at least four months, 
 11.17  must pay estimated tax in equal installments on or before the 
 11.18  15th day of the third fourth, sixth, ninth, and final month of 
 11.19  the short taxable year, to the extent applicable based on the 
 11.20  number of months in the short taxable year.  
 11.21     (b) An entity is not required to make estimated tax 
 11.22  payments for a short taxable year unless its tax liability 
 11.23  before the first day of the last month of the taxable year can 
 11.24  reasonably be expected to exceed $500.  
 11.25     (c) No payment is required for a short taxable year of less 
 11.26  than four months. 
 11.27     Sec. 5.  Minnesota Statutes 1996, section 289A.26, 
 11.28  subdivision 6, is amended to read: 
 11.29     Subd. 6.  [PERIOD OF UNDERPAYMENT.] The period of the 
 11.30  underpayment runs from the date the installment was required to 
 11.31  be paid to the earlier of the following dates: 
 11.32     (1) the 15th day of the third fourth month following the 
 11.33  close of the taxable year for corporations, and the 15th day of 
 11.34  the fifth month following the close of the taxable year for 
 11.35  entities subject to tax under section 290.05, subdivision 3; or 
 11.36     (2) with respect to any part of the underpayment, the date 
 12.1   on which that part is paid.  For purposes of this clause, a 
 12.2   payment of estimated tax shall be credited against unpaid 
 12.3   required installments in the order in which those installments 
 12.4   are required to be paid. 
 12.5      Sec. 6.  Minnesota Statutes 1996, section 289A.26, 
 12.6   subdivision 7, is amended to read: 
 12.7      Subd. 7.  [REQUIRED INSTALLMENTS.] (a) Except as otherwise 
 12.8   provided in this subdivision, the amount of a required 
 12.9   installment is 25 percent of the required annual payment. 
 12.10     (b) Except as otherwise provided in this subdivision, the 
 12.11  term "required annual payment" means the lesser of: 
 12.12     (1) 100 percent of the tax shown on the return for the 
 12.13  taxable year, or, if no return is filed, 100 percent of the tax 
 12.14  for that year; or 
 12.15     (2) 100 percent of the tax shown on the return of the 
 12.16  entity for the preceding taxable year provided the return was 
 12.17  for a full 12-month period, showed a liability, and was filed by 
 12.18  the entity. 
 12.19     (c) Except for determining the first required installment 
 12.20  for any taxable year, paragraph (b), clause (2), does not apply 
 12.21  in the case of a large corporation.  The term "large 
 12.22  corporation" means a corporation or any predecessor corporation 
 12.23  that had taxable net income of $1,000,000 or more for any 
 12.24  taxable year during the testing period.  The term "testing 
 12.25  period" means the three taxable years immediately preceding the 
 12.26  taxable year involved.  A reduction allowed to a large 
 12.27  corporation for the first installment that is allowed by 
 12.28  applying paragraph (b), clause (2), must be recaptured by 
 12.29  increasing the next required installment by the amount of the 
 12.30  reduction. 
 12.31     (d) In the case of a required installment, if the 
 12.32  corporation establishes that the annualized income installment 
 12.33  is less than the amount determined in paragraph (a), the amount 
 12.34  of the required installment is the annualized income installment 
 12.35  and the recapture of previous quarters' reductions allowed by 
 12.36  this paragraph must be recovered by increasing later required 
 13.1   installments to the extent the reductions have not previously 
 13.2   been recovered. 
 13.3      (e) The "annualized income installment" is the excess, if 
 13.4   any, of: 
 13.5      (1) an amount equal to the applicable percentage of the tax 
 13.6   for the taxable year computed by placing on an annualized basis 
 13.7   the taxable income: 
 13.8      (i) for the first two three months of the taxable year, in 
 13.9   the case of the first required installment; 
 13.10     (ii) for the first two three months or for the first five 
 13.11  months of the taxable year, in the case of the second required 
 13.12  installment; 
 13.13     (iii) for the first six months or for the first eight 
 13.14  months of the taxable year, in the case of the third required 
 13.15  installment; and 
 13.16     (iv) for the first nine months or for the first 11 months 
 13.17  of the taxable year, in the case of the fourth required 
 13.18  installment, over 
 13.19     (2) the aggregate amount of any prior required installments 
 13.20  for the taxable year.  
 13.21     (3) For the purpose of this paragraph, the annualized 
 13.22  income shall be computed by placing on an annualized basis the 
 13.23  taxable income for the year up to the end of the month preceding 
 13.24  the due date for the quarterly payment multiplied by 12 and 
 13.25  dividing the resulting amount by the number of months in the 
 13.26  taxable year (2, 5, 6, 8, 9, or 11 as the case may be) referred 
 13.27  to in clause (1). 
 13.28     (4) The "applicable percentage" used in clause (1) is: 
 13.29  For the following                 The applicable
 13.30  required installments:            percentage is:
 13.31          1st                               25 
 13.32          2nd                               50  
 13.33          3rd                               75  
 13.34          4th                              100   
 13.35     (f)(1) If this paragraph applies, the amount determined for 
 13.36  any installment must be determined in the following manner: 
 14.1      (i) take the taxable income for the months during the 
 14.2   taxable year preceding the filing month; 
 14.3      (ii) divide that amount by the base period percentage for 
 14.4   the months during the taxable year preceding the filing month; 
 14.5      (iii) determine the tax on the amount determined under item 
 14.6   (ii); and 
 14.7      (iv) multiply the tax computed under item (iii) by the base 
 14.8   period percentage for the filing month and the months during the 
 14.9   taxable year preceding the filing month.  
 14.10     (2) For purposes of this paragraph: 
 14.11     (i) the "base period percentage" for a period of months is 
 14.12  the average percent that the taxable income for the 
 14.13  corresponding months in each of the three preceding taxable 
 14.14  years bears to the taxable income for the three preceding 
 14.15  taxable years; 
 14.16     (ii) the term "filing month" means the month in which the 
 14.17  installment is required to be paid; 
 14.18     (iii) this paragraph only applies if the base period 
 14.19  percentage for any six consecutive months of the taxable year 
 14.20  equals or exceeds 70 percent; and 
 14.21     (iv) the commissioner may provide by rule for the 
 14.22  determination of the base period percentage in the case of 
 14.23  reorganizations, new corporations, and other similar 
 14.24  circumstances.  
 14.25     (3) In the case of a required installment determined under 
 14.26  this paragraph, if the entity determines that the installment is 
 14.27  less than the amount determined in paragraph (a), the amount of 
 14.28  the required installment is the amount determined under this 
 14.29  paragraph and the recapture of previous quarters' reductions 
 14.30  allowed by this paragraph must be recovered by increasing later 
 14.31  required installments to the extent the reductions have not 
 14.32  previously been recovered.  
 14.33     Sec. 7.  Minnesota Statutes 1996, section 290.01, 
 14.34  subdivision 19c, is amended to read: 
 14.35     Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
 14.36  INCOME.] For corporations, there shall be added to federal 
 15.1   taxable income: 
 15.2      (1) the amount of any deduction taken for federal income 
 15.3   tax purposes for income, excise, or franchise, or environmental 
 15.4   taxes based on net income or related minimum taxes paid by the 
 15.5   corporation to Minnesota, another state, a political subdivision 
 15.6   of another state, the District of Columbia, or any foreign 
 15.7   country or possession of the United States; 
 15.8      (2) interest not subject to federal tax upon obligations 
 15.9   of:  the United States, its possessions, its agencies, or its 
 15.10  instrumentalities; the state of Minnesota or any other state, 
 15.11  any of its political or governmental subdivisions, any of its 
 15.12  municipalities, or any of its governmental agencies or 
 15.13  instrumentalities; the District of Columbia; or Indian tribal 
 15.14  governments; 
 15.15     (3) exempt-interest dividends received as defined in 
 15.16  section 852(b)(5) of the Internal Revenue Code; 
 15.17     (4) the amount of any windfall profits tax deducted under 
 15.18  section 164 or 471 of the Internal Revenue Code; 
 15.19     (5) the amount of any net operating loss deduction taken 
 15.20  for federal income tax purposes under section 172 or 832(c)(10) 
 15.21  of the Internal Revenue Code or operations loss deduction under 
 15.22  section 810 of the Internal Revenue Code; 
 15.23     (6) (5) the amount of any special deductions taken for 
 15.24  federal income tax purposes under sections 241 to 247 of the 
 15.25  Internal Revenue Code; 
 15.26     (7) (6) losses from the business of mining, as defined in 
 15.27  section 290.05, subdivision 1, clause (a), that are not subject 
 15.28  to Minnesota income tax; 
 15.29     (8) (7) the amount of any capital losses deducted for 
 15.30  federal income tax purposes under sections 1211 and 1212 of the 
 15.31  Internal Revenue Code; 
 15.32     (9) (8) the amount of any charitable contributions deducted 
 15.33  for federal income tax purposes under section 170 of the 
 15.34  Internal Revenue Code; 
 15.35     (10) (9) the exempt foreign trade income of a foreign sales 
 15.36  corporation under sections 921(a) and 291 of the Internal 
 16.1   Revenue Code; 
 16.2      (11) the amount of percentage depletion deducted under 
 16.3   sections 611 through 614 and 291 of the Internal Revenue Code; 
 16.4      (12) (10) for certified pollution control facilities placed 
 16.5   in service in a taxable year beginning before December 31, 1986, 
 16.6   and for which amortization deductions were elected under section 
 16.7   169 of the Internal Revenue Code of 1954, as amended through 
 16.8   December 31, 1985, the amount of the amortization deduction 
 16.9   allowed in computing federal taxable income for those 
 16.10  facilities; and 
 16.11     (13) (11) the amount of any deemed dividend from a foreign 
 16.12  operating corporation determined pursuant to section 290.17, 
 16.13  subdivision 4, paragraph (g). 
 16.14     Sec. 8.  Minnesota Statutes 1996, section 290.01, 
 16.15  subdivision 19d, is amended to read: 
 16.16     Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
 16.17  TAXABLE INCOME.] For corporations, there shall be subtracted 
 16.18  from federal taxable income after the increases provided in 
 16.19  subdivision 19c:  
 16.20     (1) the amount of foreign dividend gross-up added to gross 
 16.21  income for federal income tax purposes under section 78 of the 
 16.22  Internal Revenue Code; 
 16.23     (2) the amount of salary expense not allowed for federal 
 16.24  income tax purposes due to claiming the federal jobs credit 
 16.25  under section 51 of the Internal Revenue Code; 
 16.26     (3) any dividend (not including any distribution in 
 16.27  liquidation) paid within the taxable year by a national or state 
 16.28  bank to the United States, or to any instrumentality of the 
 16.29  United States exempt from federal income taxes, on the preferred 
 16.30  stock of the bank owned by the United States or the 
 16.31  instrumentality; 
 16.32     (4) amounts disallowed for intangible drilling costs due to 
 16.33  differences between this chapter and the Internal Revenue Code 
 16.34  in taxable years beginning before January 1, 1987, as follows: 
 16.35     (i) to the extent the disallowed costs are represented by 
 16.36  physical property, an amount equal to the allowance for 
 17.1   depreciation under Minnesota Statutes 1986, section 290.09, 
 17.2   subdivision 7, subject to the modifications contained in 
 17.3   subdivision 19e; and 
 17.4      (ii) to the extent the disallowed costs are not represented 
 17.5   by physical property, an amount equal to the allowance for cost 
 17.6   depletion under Minnesota Statutes 1986, section 290.09, 
 17.7   subdivision 8; 
 17.8      (5) the deduction for capital losses pursuant to sections 
 17.9   1211 and 1212 of the Internal Revenue Code, except that: 
 17.10     (i) for capital losses incurred in taxable years beginning 
 17.11  after December 31, 1986, capital loss carrybacks shall not be 
 17.12  allowed; 
 17.13     (ii) for capital losses incurred in taxable years beginning 
 17.14  after December 31, 1986, a capital loss carryover to each of the 
 17.15  15 taxable years succeeding the loss year shall be allowed; 
 17.16     (iii) for capital losses incurred in taxable years 
 17.17  beginning before January 1, 1987, a capital loss carryback to 
 17.18  each of the three taxable years preceding the loss year, subject 
 17.19  to the provisions of Minnesota Statutes 1986, section 290.16, 
 17.20  shall be allowed; and 
 17.21     (iv) for capital losses incurred in taxable years beginning 
 17.22  before January 1, 1987, a capital loss carryover to each of the 
 17.23  five taxable years succeeding the loss year to the extent such 
 17.24  loss was not used in a prior taxable year and subject to the 
 17.25  provisions of Minnesota Statutes 1986, section 290.16, shall be 
 17.26  allowed; 
 17.27     (6) an amount for interest and expenses relating to income 
 17.28  not taxable for federal income tax purposes, if (i) the income 
 17.29  is taxable under this chapter and (ii) the interest and expenses 
 17.30  were disallowed as deductions under the provisions of section 
 17.31  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
 17.32  federal taxable income; 
 17.33     (7) in the case of mines, oil and gas wells, other natural 
 17.34  deposits, and timber for which percentage depletion was 
 17.35  disallowed pursuant to subdivision 19c, clause (11), a 
 17.36  reasonable allowance for depletion based on actual cost.  In the 
 18.1   case of leases the deduction must be apportioned between the 
 18.2   lessor and lessee in accordance with rules prescribed by the 
 18.3   commissioner.  In the case of property held in trust, the 
 18.4   allowable deduction must be apportioned between the income 
 18.5   beneficiaries and the trustee in accordance with the pertinent 
 18.6   provisions of the trust, or if there is no provision in the 
 18.7   instrument, on the basis of the trust's income allocable to 
 18.8   each; 
 18.9      (8) for certified pollution control facilities placed in 
 18.10  service in a taxable year beginning before December 31, 1986, 
 18.11  and for which amortization deductions were elected under section 
 18.12  169 of the Internal Revenue Code of 1954, as amended through 
 18.13  December 31, 1985, an amount equal to the allowance for 
 18.14  depreciation under Minnesota Statutes 1986, section 290.09, 
 18.15  subdivision 7; 
 18.16     (9) (8) the amount included in federal taxable income 
 18.17  attributable to the credits provided in Minnesota Statutes 1986, 
 18.18  section 273.1314, subdivision 9, or Minnesota Statutes, section 
 18.19  469.171, subdivision 6; 
 18.20     (10) (9) amounts included in federal taxable income that 
 18.21  are due to refunds of income, excise, or franchise, or 
 18.22  environmental taxes based on net income or related minimum taxes 
 18.23  paid by the corporation to Minnesota, another state, a political 
 18.24  subdivision of another state, the District of Columbia, or a 
 18.25  foreign country or possession of the United States to the extent 
 18.26  that the taxes were added to federal taxable income under 
 18.27  section 290.01, subdivision 19c, clause (1), in a prior taxable 
 18.28  year; 
 18.29     (11) (10) the following percentage of royalties, fees, or 
 18.30  other like income accrued or received from a foreign operating 
 18.31  corporation or a foreign corporation which is part of the same 
 18.32  unitary business as the receiving corporation: 
 18.33        Taxable Year 
 18.34        Beginning After .......... Percentage 
 18.35        December 31, 1988 ........ 50 percent 
 18.36        December 31, 1990 ........ 80 percent;    
 19.1      (12) (11) income or gains from the business of mining as 
 19.2   defined in section 290.05, subdivision 1, clause (a), that are 
 19.3   not subject to Minnesota franchise tax; 
 19.4      (13) (12) the amount of handicap access expenditures in the 
 19.5   taxable year which are not allowed to be deducted or capitalized 
 19.6   under section 44(d)(7) of the Internal Revenue Code; 
 19.7      (14) (13) the amount of qualified research expenses not 
 19.8   allowed for federal income tax purposes under section 280C(c) of 
 19.9   the Internal Revenue Code, but only to the extent that the 
 19.10  amount exceeds the amount of the credit allowed under section 
 19.11  290.068; and 
 19.12     (15) (14) the amount of salary expenses not allowed for 
 19.13  federal income tax purposes due to claiming the Indian 
 19.14  employment credit under section 45A(a) of the Internal Revenue 
 19.15  Code. 
 19.16     Sec. 9.  Minnesota Statutes 1996, section 290.095, 
 19.17  subdivision 3, is amended to read: 
 19.18     Subd. 3.  [CARRYOVER.] (a) A net operating loss incurred in 
 19.19  a taxable year:  (i) beginning after December 31, 1986, shall be 
 19.20  a net operating loss carryover to each of the 15 taxable years 
 19.21  following the taxable year of such loss; (ii) beginning before 
 19.22  January 1, 1987, shall be a net operating loss carryover to each 
 19.23  of the five taxable years following the taxable year of such 
 19.24  loss subject to the provisions of Minnesota Statutes 1986, 
 19.25  section 290.095; and (iii) beginning before January 1, 1987, 
 19.26  shall be a net operating loss carryback to each of the three 
 19.27  taxable years preceding the loss year subject to the provisions 
 19.28  of Minnesota Statutes 1986, section 290.095. 
 19.29     (b) The entire amount of the net operating loss for any 
 19.30  taxable year shall be carried to the earliest of the taxable 
 19.31  years to which such loss may be carried.  The portion of such 
 19.32  loss which shall be carried to each of the other taxable years 
 19.33  shall be the excess, if any, of the amount of such loss over the 
 19.34  sum of the taxable net income, adjusted by the modifications 
 19.35  specified in subdivision 4, for each of the taxable years to 
 19.36  which such loss may be carried. 
 20.1      (c) Where a corporation does business both within and 
 20.2   without Minnesota, and apportions its income under the 
 20.3   provisions of section 290.191, the net operating loss deduction 
 20.4   incurred in any taxable year shall be allowed to the extent of 
 20.5   the apportionment ratio of the loss year. 
 20.6      (d) The provisions of sections 381, 382, and 384 of the 
 20.7   Internal Revenue Code apply to carryovers in certain corporate 
 20.8   acquisitions and special limitations on net operating loss 
 20.9   carryovers.  The limitation amount determined under section 382 
 20.10  shall be applied to net income, before apportionment, in each 
 20.11  post change year to which a loss is carried. 
 20.12     Sec. 10.  Minnesota Statutes 1996, section 290.35, 
 20.13  subdivision 2, is amended to read: 
 20.14     Subd. 2.  [APPORTIONMENT OF TAXABLE NET INCOME.] The 
 20.15  commissioner shall compute therefrom the taxable net income of 
 20.16  such companies by assigning to this state that proportion 
 20.17  thereof which the gross premiums collected by them during the 
 20.18  taxable year from old and new business within this state bears 
 20.19  to the total gross premiums collected by them during that year 
 20.20  from their entire old and new business, including reinsurance 
 20.21  premiums; provided, the commissioner shall add to the taxable 
 20.22  net income so apportioned to this state the amount of any taxes 
 20.23  on premiums paid by the company by virtue of any law of this 
 20.24  state (other than the surcharge on premiums imposed by sections 
 20.25  69.54 to 69.56 and the surcharge imposed by section 168A.40, 
 20.26  subdivision 3) which shall have been deducted from gross income 
 20.27  by the company in arriving at its total net income under the 
 20.28  provisions of such act of Congress. 
 20.29     (a) For purposes of determining the Minnesota apportionment 
 20.30  percentage, premiums from reinsurance contracts in connection 
 20.31  with property in or liability arising out of activity in, or in 
 20.32  connection with the lives or health of Minnesota residents shall 
 20.33  be assigned to Minnesota and premiums from reinsurance contracts 
 20.34  in connection with property in or liability arising out of 
 20.35  activity in, or in connection with the lives or health of 
 20.36  non-Minnesota residents shall be assigned outside of Minnesota. 
 21.1   Reinsurance premiums are presumed to be received for a Minnesota 
 21.2   risk and are assigned to Minnesota, if:  
 21.3      (1) the reinsurance contract is assumed for a company 
 21.4   domiciled in Minnesota; and 
 21.5      (2) the taxpayer, upon request of the commissioner, fails 
 21.6   to provide reliable records indicating the reinsured contract 
 21.7   covered non-Minnesota risks. 
 21.8   For purposes of this paragraph, "Minnesota risk" means coverage 
 21.9   in connection with property in or liability arising out of 
 21.10  activity in Minnesota, or in connection with the lives or health 
 21.11  of Minnesota residents. 
 21.12     (b) The apportionment method prescribed by paragraph (a) 
 21.13  shall be presumed to fairly and correctly determine the 
 21.14  taxpayer's taxable net income.  If the method prescribed in 
 21.15  paragraph (a) does not fairly reflect all or any part of taxable 
 21.16  net income, the taxpayer may petition for or the commissioner 
 21.17  may require the determination of taxable net income by use of 
 21.18  another method if that method fairly reflects taxable net 
 21.19  income.  A petition within the meaning of this section must be 
 21.20  filed by the taxpayer on such form as the commissioner shall 
 21.21  require. 
 21.22     Sec. 11.  Minnesota Statutes 1996, section 298.01, 
 21.23  subdivision 4c, is amended to read: 
 21.24     Subd. 4c.  [SPECIAL DEDUCTIONS.] (a) For purposes of 
 21.25  determining taxable income under subdivision 4, the following 
 21.26  modifications are allowed: 
 21.27     (1) the provisions of section 290.01, subdivisions 19c, 
 21.28  clauses (7) and (11) clause (6), and 19d, clauses (7) and 
 21.29  (12) clause (11), are not used to determine taxable income; and 
 21.30     (2) for assets placed in service before January 1, 1990, 
 21.31  the deduction for depreciation will be the same amount allowed 
 21.32  under chapter 290, except that after an asset has been fully 
 21.33  depreciated for federal income tax purposes any remaining 
 21.34  depreciable basis is allowed as a deduction using the 
 21.35  straight-line method over the following number of years: 
 21.36     (i) three-year property, one year; 
 22.1      (ii) five- and seven-year property, two years; 
 22.2      (iii) ten-year property, five years; and 
 22.3      (iv) all other property, seven years. 
 22.4      No deduction is allowed if an asset is fully depreciated 
 22.5   for occupation tax purposes before January 1990. 
 22.6      (b) For purposes of determining the deduction allowed under 
 22.7   paragraph (a), clause (2), the remaining depreciable basis of 
 22.8   property placed in service before January 1, 1990, is calculated 
 22.9   as follows: 
 22.10     (1) the adjusted basis of the property on December 31, 
 22.11  1989, which was used to calculate the hypothetical corporate 
 22.12  franchise tax under Minnesota Statutes 1988, section 298.40, 
 22.13  including salvage value; less 
 22.14     (2) deductions for depreciation allowed under section 
 22.15  290.01, subdivision 19e. 
 22.16     (c) The basis for determining gain or loss on sale or 
 22.17  disposition of assets placed in service before January 1, 1990, 
 22.18  is the basis determined under paragraph (b), less the deductions 
 22.19  allowed under paragraph (a), clause (2). 
 22.20     (d) The amount of net operating loss incurred in a taxable 
 22.21  year beginning before January 1, 1990, that may be carried over 
 22.22  to a taxable year beginning after December 31, 1989, is the 
 22.23  amount of net operating loss carryover determined in the 
 22.24  calculation of the hypothetical corporate franchise tax under 
 22.25  Minnesota Statutes 1988, sections 298.40 and 298.402. 
 22.26     Sec. 12.  Laws 1995, chapter 264, article 10, section 15, 
 22.27  is amended to read: 
 22.28     Sec. 15.  [EFFECTIVE DATE.] 
 22.29     Section 1 is effective for returns due after December 31, 
 22.30  1995.  Section 2 as it relates to quarterly withholding deposits 
 22.31  is effective for withholding done after December 31, 1995, and 
 22.32  the remainder of section 2 is effective for payments due after 
 22.33  December 31, 1995.  Sections 3 and 5 are effective for federal 
 22.34  determinations after December 31, 1995.  Section 4 is effective 
 22.35  for estates of decedents dying after the date of final 
 22.36  enactment.  Section 6 is effective for deaths after December 31, 
 23.1   1995, and trusts that become irrevocable after December 31, 
 23.2   1995, or are first administered in Minnesota after December 31, 
 23.3   1995.  Sections 7 and 9 to 11 are effective for tax years 
 23.4   beginning after December 31, 1995.  Section 12 is effective for 
 23.5   wages paid after December 31, 1995.  Sections 8 and 13 are 
 23.6   effective for tax years beginning after December 31, 1994. 
 23.7      Sec. 13.  [EFFECTIVE DATES.] 
 23.8      Sections 1 and 3 to 6 are effective for tax years beginning 
 23.9   after December 31, 1997. 
 23.10     Sections 2 and 9 to 11 are effective for tax years 
 23.11  beginning after December 31, 1996. 
 23.12     Sections 7, clause (11), and 8, clause (7) are effective 
 23.13  for assets placed in service after December 31, 1996.  The 
 23.14  remainder of sections 7 and 8 are effective for tax years 
 23.15  beginning after December 31, 1996. 
 23.16     Section 12 is effective for trusts first administered in 
 23.17  Minnesota after December 31, 1995, and tax years beginning after 
 23.18  December 31, 1996. 
 23.19                             ARTICLE 3
 23.20                      SALES AND SPECIAL TAXES 
 23.21     Section 1.  Minnesota Statutes 1996, section 116.07, 
 23.22  subdivision 10, is amended to read: 
 23.23     Subd. 10.  [SOLID WASTE GENERATOR ASSESSMENTS.] (a) For the 
 23.24  purposes of this subdivision: 
 23.25     (1) "assessed waste" means mixed municipal solid waste as 
 23.26  defined in section 115A.03, subdivision 21, infectious waste as 
 23.27  defined in section 116.76, subdivision 12, pathological waste as 
 23.28  defined in section 116.76, subdivision 14, industrial waste as 
 23.29  defined in section 115A.03, subdivision 13a, and construction 
 23.30  debris as defined in section 115A.03, subdivision 7; provided 
 23.31  that all types of assessed waste listed in this clause do not 
 23.32  include: 
 23.33     (i) materials that are separated for recycling by the 
 23.34  generator and that are collected separately from other waste and 
 23.35  delivered to a waste facility for the purpose of recycling and 
 23.36  recycled; 
 24.1      (ii) materials that are separated for recycling by the 
 24.2   generator, collected and delivered to a waste facility that 
 24.3   recycles at least 85 percent of its waste, and are collected 
 24.4   with mixed municipal solid waste that is segregated in leakproof 
 24.5   bags, provided that the mixed municipal solid waste does not 
 24.6   exceed five percent of the total weight of the materials 
 24.7   delivered to the facility and is ultimately delivered to a 
 24.8   facility designated under sections 115A.80 to 115A.893; and 
 24.9      (iii) waste generated outside of Minnesota; 
 24.10     (2) "noncompacted cubic yard" means a loose cubic yard of 
 24.11  assessed waste; 
 24.12     (3) "nonresidential customer" means: 
 24.13     (i) an owner or operator of a business, including a home 
 24.14  operated business, industry, church, nursing home, nonprofit 
 24.15  organization, school, or any other commercial or institutional 
 24.16  enterprise; 
 24.17     (ii) an owner of a building or site containing multiple 
 24.18  residences, including a townhome or manufactured home park, 
 24.19  where no resident has separate trash pickup, and no resident is 
 24.20  separately assessed for such service billed by the person that 
 24.21  collects assessed waste; and 
 24.22     (iii) any other generator of assessed waste that is not a 
 24.23  residential customer as defined in clause (6); 
 24.24     (4) "periodic waste collection" means each time a waste 
 24.25  container is emptied by the person that collects the assessed 
 24.26  waste; 
 24.27     (5) "person that collects assessed waste" means each person 
 24.28  that is required to pay sales tax on solid waste collection 
 24.29  services under section 297A.45, or would pay sales tax under 
 24.30  that section if the assessed waste was mixed municipal solid 
 24.31  waste; and 
 24.32     (6) "residential customer" means: 
 24.33     (i) a detached single family residence that generates only 
 24.34  household mixed municipal solid waste; and 
 24.35     (ii) a person residing in a building or at a site 
 24.36  containing multiple residences, including a townhome or a 
 25.1   manufactured home park, where each resident either (A) is 
 25.2   separately assessed for waste collection billed by the person 
 25.3   that collects assessed waste; or (B) has separate waste 
 25.4   collection for each resident, even if the resident pays to the 
 25.5   owner or an association a monthly maintenance fee which includes 
 25.6   the expense of waste collection, and the owner or association 
 25.7   pays the waste collector for waste collection in one lump sum; 
 25.8   or (C) in the case of a manufactured home park has a separate 
 25.9   waste collection for each resident. 
 25.10     (b) A residential customer and a nonresidential customer 
 25.11  shall pay the solid waste generator assessment imposed under 
 25.12  this subdivision to the person that collects the assessed waste 
 25.13  from the customer. 
 25.14     (c) A person that collects assessed waste shall collect and 
 25.15  remit to the commissioner of revenue a solid waste generator 
 25.16  assessment from each of the person's customers as provided in 
 25.17  paragraphs (c) and (d) and (e).  A waste management facility 
 25.18  that accepts assessed waste shall collect and remit to the 
 25.19  commissioner of revenue the solid waste assessment as provided 
 25.20  in paragraph (e) (f). 
 25.21     (c) (d) Except as provided in paragraph (f) (g), the amount 
 25.22  of the assessment for each residential customer is $2 per year.  
 25.23  Each person that collects assessed waste shall collect the 
 25.24  assessment annually from each residential customer that is 
 25.25  receiving mixed municipal solid waste collection service on July 
 25.26  1 of each year and shall remit the amount actually collected 
 25.27  along with the person's first remittance of the sales tax on 
 25.28  solid waste collection services, described in section 297A.45, 
 25.29  made after October 1 of each year.  For buildings or sites that 
 25.30  contain multiple residences that are not separately billed for 
 25.31  collection services, the person who that collects assessed waste 
 25.32  shall collect the assessment for all the residences from the 
 25.33  person who is billed for the collection service.  Any amount of 
 25.34  the assessment that is received by the person that collects 
 25.35  assessed waste after October 1 of each year must be remitted 
 25.36  along with the person's next remittance of sales tax after 
 26.1   receipt of the assessment. 
 26.2      (d) (e)(1) Except as provided in clause (2), the amount of 
 26.3   the assessment for each nonresidential customer is 60 cents per 
 26.4   noncompacted cubic yard of periodic waste collection capacity 
 26.5   purchased by the customer, based on the size of the container 
 26.6   for the assessed waste.  For a residential customer that 
 26.7   generates assessed waste that is not mixed municipal solid 
 26.8   waste, the amount of the assessment is 60 cents per noncompacted 
 26.9   cubic yard of collection capacity purchased for the waste that 
 26.10  is not mixed municipal solid waste, based on the size of the 
 26.11  container for the waste.  If the capacity purchased is for 
 26.12  compacted cubic yards of mixed municipal solid waste, the 
 26.13  noncompacted capacity purchased is based on the compaction ratio 
 26.14  of 3:1.  The commissioner of revenue, after consultation with 
 26.15  the commissioner of the pollution control agency, shall 
 26.16  determine, and may publish by notice, compaction rates for other 
 26.17  types of waste where they exist and conversion schedules for 
 26.18  waste that is managed by measurements other than cubic yards.  
 26.19  Each person that collects assessed waste shall collect the 
 26.20  assessment from each nonresidential customer as part of each 
 26.21  statement for payment of waste collection charges and shall 
 26.22  remit the amount actually collected along with the next 
 26.23  remittance of sales tax after receipt of the assessment. 
 26.24     (2) The assessment for nonresidential customers for the 
 26.25  mixed municipal solid waste that is collected with 
 26.26  source-separated recyclable materials as described in paragraph 
 26.27  (a), clause (1), item (ii), is three-tenths of a cent per 
 26.28  gallon.  The customer must pay by purchasing specific collection 
 26.29  bags or stickers that include the cost of the collection service 
 26.30  and assessment. 
 26.31     (e) (f) A person who transports assessed waste generated by 
 26.32  that person or by another person without compensation shall pay 
 26.33  an assessment of 60 cents per noncompacted cubic yard or the 
 26.34  equivalent to the operator of the waste management facility to 
 26.35  which the waste is delivered.  The operator shall remit the 
 26.36  assessments actually collected under this paragraph to the 
 27.1   commissioner of revenue.  This subdivision does not apply to a 
 27.2   person who transports industrial waste generated by that person 
 27.3   to a facility owned and operated by that person. 
 27.4      (f) (g) The amount of the assessment for each residential 
 27.5   customer that is subject to a mixed municipal solid waste 
 27.6   collection service for which the customer pays, based on the 
 27.7   volume of waste collected, by purchasing specific collection 
 27.8   bags or stickers from the waste collector, municipality, or 
 27.9   other vendor is either: 
 27.10     (1) determined by a method developed by the waste collector 
 27.11  or municipality and approved by the commissioner of revenue, 
 27.12  which yields the equivalent of approximately a $2 annual 
 27.13  assessment per household; or 
 27.14     (2) three cents per each 35 gallon unit or less.  If the 
 27.15  per unit fee method under this clause is used, it is the 
 27.16  responsibility of the waste collector or the municipality who is 
 27.17  selling the bags or stickers to remit the amount of the 
 27.18  assessment to the department of revenue, according to a payment 
 27.19  schedule provided by the commissioner of revenue.  The 
 27.20  collection service and assessment under this clause shall be 
 27.21  included in the price of the bag or sticker.  
 27.22     (g) (h) The commissioner of revenue shall redesign sales 
 27.23  tax forms for persons that collect assessed waste to accommodate 
 27.24  payment of the assessment.  The amounts remitted under this 
 27.25  subdivision must be deposited in the state treasury and credited 
 27.26  to the solid waste fund established in section 115B.42. 
 27.27     (h) (i) For persons that collect assessed waste and 
 27.28  operators of waste management facilities who are required to 
 27.29  collect the solid waste generator assessments under this 
 27.30  subdivision, and persons who are required to remit the 
 27.31  assessment under paragraph (f) (g), and who do not collect and 
 27.32  remit the sales tax on solid waste collection services under 
 27.33  section 297A.45, the commissioner of revenue shall determine 
 27.34  when and in what manner the persons and operators must remit the 
 27.35  assessment amounts actually collected. 
 27.36     (i) (j) For the purposes of this subdivision, the 
 28.1   requirement to "collect" the solid waste generator assessment 
 28.2   under paragraph (b) (c) means that the person to whom the 
 28.3   requirement applies shall: 
 28.4      (i) include (1) separately and accurately state the amount 
 28.5   of the assessment in the appropriate statement of charges for 
 28.6   waste collection and waste management services and in any action 
 28.7   to enforce payment on delinquent accounts; 
 28.8      (ii) (2) accurately account for and remit assessments 
 28.9   received; 
 28.10     (iii) (3) indicate to generators that payment of the 
 28.11  assessment by the waste generator is required by law and inform 
 28.12  generators, using information supplied by the commissioner of 
 28.13  the agency, of the purposes for which revenue from the 
 28.14  assessment will be spent; and 
 28.15     (iv) (4) cooperate fully with the commissioner of revenue 
 28.16  to identify generators of assessed waste who fail to remit 
 28.17  payment of the assessment. 
 28.18     (j) (k) The audit, assessment, penalty, interest, 
 28.19  enforcement, collection remedies, appeal rights, and 
 28.20  administrative provisions applicable to taxes imposed under 
 28.21  chapter 297A apply to the assessments imposed under this 
 28.22  subdivision required to be paid under paragraphs (b) and (f). 
 28.23     (l) A person that collects assessed waste who fails to 
 28.24  comply with the provisions of paragraph (c), is liable for an 
 28.25  amount equal to the solid waste generator assessment that was 
 28.26  either: 
 28.27     (1) received by the person but not timely remitted to the 
 28.28  commissioner of revenue; or 
 28.29     (2) not received by the person and the person failed to 
 28.30  separately and accurately state the amount of the assessment in 
 28.31  the appropriate statement of charges for waste collection and 
 28.32  waste management services and in any action to enforce payment 
 28.33  on delinquent accounts.  The audit, assessment, penalty, 
 28.34  interest, enforcement, collection remedies, appeal rights, and 
 28.35  administrative provisions applicable to taxes imposed under 
 28.36  chapter 297A apply to the liability imposed under this 
 29.1   paragraph.  A person who is liable under this paragraph is not 
 29.2   prohibited from recovering from that person's customer the 
 29.3   amount of the liability paid to the commissioner of revenue that 
 29.4   is equal to the solid waste generator assessment owed by the 
 29.5   customer. 
 29.6      (k) (m) If less than $25,000,000 is projected to be 
 29.7   available for new encumbrances in any fiscal year after fiscal 
 29.8   year 1996 from all existing dedicated revenue sources for 
 29.9   landfill cleanup and reimbursement costs under sections 115B.39 
 29.10  to 115B.46, by April 1 before the next fiscal year in which the 
 29.11  shortfall is projected the commissioner of the agency shall 
 29.12  certify to the commissioner of revenue the amount of the 
 29.13  shortfall.  To provide for the shortfall, the commissioner of 
 29.14  revenue shall increase the assessment under paragraphs (d) 
 29.15  and (e) and (f) by an amount sufficient to generate revenue 
 29.16  equal to the amount of the shortfall effective the following 
 29.17  July 1 and shall provide notice of the increased assessment by 
 29.18  May 1 following certification to persons who are required to 
 29.19  collect and remit the solid waste generator assessments under 
 29.20  this subdivision. 
 29.21     Sec. 2.  Minnesota Statutes 1996, section 289A.40, 
 29.22  subdivision 2, is amended to read: 
 29.23     Subd. 2.  [BAD DEBT LOSS.] If a claim relates to an 
 29.24  overpayment because of a failure to deduct a loss due to a bad 
 29.25  debt or to a security becoming worthless, the claim is 
 29.26  considered timely if filed within seven years from the date 
 29.27  prescribed for the filing of the return.  The refund or credit 
 29.28  is limited to the amount of overpayment attributable to the loss.
 29.29  and must be filed within 3-1/2 years from the date prescribed 
 29.30  for filing the return, plus any extensions granted for filing 
 29.31  the return, but only if filed within the extended time, or 
 29.32  within one year from the date the taxpayer's federal income tax 
 29.33  return is filed claiming the bad debt reduction, whichever 
 29.34  period expires later. 
 29.35     Sec. 3.  Minnesota Statutes 1996, section 289A.60, 
 29.36  subdivision 15, is amended to read: 
 30.1      Subd. 15.  [ACCELERATED PAYMENT OF JUNE SALES TAX 
 30.2   LIABILITY; PENALTY FOR UNDERPAYMENT.] If a vendor is required by 
 30.3   law to submit an estimation of June sales tax liabilities and 75 
 30.4   percent payment by a certain date, the vendor shall pay a 
 30.5   penalty equal to ten percent of the amount of actual June 
 30.6   liability required to be paid in June less the amount remitted 
 30.7   in June.  The penalty must not be imposed, however, if the 
 30.8   amount remitted in June equals the lesser of:  (1) 70 percent of 
 30.9   the actual June liability, (2) 75 percent of the preceding May's 
 30.10  liability, or (3) 75 percent of the average monthly liability 
 30.11  for the previous calendar year. 
 30.12     Sec. 4.  Minnesota Statutes 1996, section 297A.01, 
 30.13  subdivision 3, is amended to read: 
 30.14     Subd. 3.  A "sale" and a "purchase" includes, but is not 
 30.15  limited to, each of the following transactions: 
 30.16     (a) Any transfer of title or possession, or both, of 
 30.17  tangible personal property, whether absolutely or conditionally, 
 30.18  and the leasing of or the granting of a license to use or 
 30.19  consume tangible personal property other than manufactured homes 
 30.20  used for residential purposes for a continuous period of 30 days 
 30.21  or more, for a consideration in money or by exchange or barter; 
 30.22     (b) The production, fabrication, printing, or processing of 
 30.23  tangible personal property for a consideration for consumers who 
 30.24  furnish either directly or indirectly the materials used in the 
 30.25  production, fabrication, printing, or processing; 
 30.26     (c) The furnishing, preparing, or serving for a 
 30.27  consideration of food, meals, or drinks.  "Sale" or "purchase" 
 30.28  does not include: 
 30.29     (1) meals or drinks served to patients, inmates, or persons 
 30.30  residing at hospitals, sanitariums, nursing homes, senior 
 30.31  citizens homes, and correctional, detention, and detoxification 
 30.32  facilities; 
 30.33     (2) meals or drinks purchased for and served exclusively to 
 30.34  individuals who are 60 years of age or over and their spouses or 
 30.35  to the handicapped and their spouses by governmental agencies, 
 30.36  nonprofit organizations, agencies, or churches or pursuant to 
 31.1   any program funded in whole or part through 42 USCA sections 
 31.2   3001 through 3045, wherever delivered, prepared or served; or 
 31.3      (3) meals and lunches served at public and private schools, 
 31.4   universities, or colleges. 
 31.5   Notwithstanding section 297A.25, subdivision 2, taxable food or 
 31.6   meals include, but are not limited to, the following:  
 31.7      (i) heated food or drinks; prepared by the retailer for 
 31.8   immediate consumption either on or off the retailer's premises.  
 31.9   For purposes of this subdivision, "food or drinks prepared for 
 31.10  immediate consumption" includes any food product upon which an 
 31.11  act of preparation including, but not limited to, cooking, 
 31.12  mixing, sandwich making, blending, heating, or pouring has been 
 31.13  performed by the retailer so the food product may be immediately 
 31.14  consumed by the purchaser.  For purposes of this subdivision, 
 31.15  "premises" means the total space and facilities, including 
 31.16  buildings, grounds, and parking lots that are made available or 
 31.17  that are available for use by the retailer or customer for the 
 31.18  purpose of sale or consumption of prepared food and drinks.  
 31.19  Food and drinks sold within a building or grounds which require 
 31.20  an admission charge for entrance are presumed to be sold for 
 31.21  consumption on the premises.  The premises of a caterer is the 
 31.22  place where the catered food or drinks are served; 
 31.23     (ii) sandwiches prepared by the retailer; 
 31.24     (iii) single sales of prepackaged ice cream or ice milk 
 31.25  novelties prepared by the retailer; 
 31.26     (iv) hand-prepared or dispensed ice cream or ice milk (ii) 
 31.27  ice cream, ice milk, or frozen yogurt products including 
 31.28  novelties, cones, sundaes, and snow cones, sold in single or 
 31.29  individual servings.  For purposes of this subdivision, "single 
 31.30  or individual servings" do not include products prepackaged and 
 31.31  sold in bulk containers or packaging; 
 31.32     (v) (iii) soft drinks and other beverages prepared or 
 31.33  served by the retailer; including all carbonated and 
 31.34  noncarbonated beverages or drinks sold in liquid form except 
 31.35  beverages or drinks which contain a primary dairy product or 
 31.36  dairy ingredient base, beverages or drinks containing 15 or more 
 32.1   percent fruit juice, or bottled water other than noncarbonated 
 32.2   and noneffervescent bottled water sold in individual containers 
 32.3   of one-half gallon or more in size; 
 32.4      (vi) (iv) gum;, candy, and candy products, except when sold 
 32.5   for fundraising purposes by a nonprofit organization that 
 32.6   provides educational and social activities primarily for young 
 32.7   people 18 years of age and under; 
 32.8      (vii) (v) ice; 
 32.9      (viii) (vi) all food sold in from vending machines, 
 32.10  pushcarts, lunch carts, motor vehicles, or any other form of 
 32.11  vehicle except home delivery vehicles; 
 32.12     (ix) (vii) party trays prepared by the retailers; and 
 32.13     (x) (viii) all meals and single servings of packaged snack 
 32.14  food, single cans or bottles of pop, sold in restaurants and 
 32.15  bars; and 
 32.16     (ix) bakery products, sold in single or individual servings.
 32.17  For purposes of this subdivision, "single or individual 
 32.18  servings" do not include products prepackaged and sold in bulk 
 32.19  containers or packaging. 
 32.20     (d) The granting of the privilege of admission to places of 
 32.21  amusement, recreational areas, or athletic events, except a 
 32.22  world championship football game sponsored by the national 
 32.23  football league, and the privilege of having access to and the 
 32.24  use of amusement devices, tanning facilities, reducing salons, 
 32.25  steam baths, turkish baths, health clubs, and spas or athletic 
 32.26  facilities; 
 32.27     (e) The furnishing for a consideration of lodging and 
 32.28  related services by a hotel, rooming house, tourist court, motel 
 32.29  or trailer camp and of the granting of any similar license to 
 32.30  use real property other than the renting or leasing thereof for 
 32.31  a continuous period of 30 days or more; 
 32.32     (f) The furnishing for a consideration of electricity, gas, 
 32.33  water, or steam for use or consumption within this state, or 
 32.34  local exchange telephone service, intrastate toll service, and 
 32.35  interstate toll service, if that service originates from and is 
 32.36  charged to a telephone located in this state.  Telephone service 
 33.1   includes paging services and private communication service, as 
 33.2   defined in United States Code, title 26, section 4252(d) as 
 33.3   amended through December 31, 1991, except for private 
 33.4   communication service purchased by an agent acting on behalf of 
 33.5   the state lottery.  The furnishing for a consideration of access 
 33.6   to telephone services by a hotel to its guests is a sale under 
 33.7   this clause.  Sales by municipal corporations in a proprietary 
 33.8   capacity are included in the provisions of this clause.  The 
 33.9   furnishing of water and sewer services for residential use shall 
 33.10  not be considered a sale.  The sale of natural gas to be used as 
 33.11  a fuel in vehicles propelled by natural gas shall not be 
 33.12  considered a sale for the purposes of this section; 
 33.13     (g) The furnishing for a consideration of cable television 
 33.14  services, including charges for basic service, charges for 
 33.15  premium service, and any other charges for any other 
 33.16  pay-per-view, monthly, or similar television services; 
 33.17     (h) The furnishing for a consideration of parking services, 
 33.18  whether on a contractual, hourly, or other periodic basis, 
 33.19  except for parking at a meter; 
 33.20     (i) The furnishing for a consideration of services listed 
 33.21  in this paragraph: 
 33.22     (i) laundry and dry cleaning services including cleaning, 
 33.23  pressing, repairing, altering, and storing clothes, linen 
 33.24  services and supply, cleaning and blocking hats, and carpet, 
 33.25  drapery, upholstery, and industrial cleaning.  Laundry and dry 
 33.26  cleaning services do not include services provided by coin 
 33.27  operated facilities operated by the customer; 
 33.28     (ii) motor vehicle washing, waxing, and cleaning services, 
 33.29  including services provided by coin-operated facilities operated 
 33.30  by the customer, and rustproofing, undercoating, and towing of 
 33.31  motor vehicles; 
 33.32     (iii) building and residential cleaning, maintenance, and 
 33.33  disinfecting and exterminating services; 
 33.34     (iv) detective services, security services, burglar, fire 
 33.35  alarm, and armored car services not including services performed 
 33.36  within the jurisdiction they serve by off-duty licensed peace 
 34.1   officers as defined in section 626.84, subdivision 1; 
 34.2      (v) pet grooming services; 
 34.3      (vi) lawn care, fertilizing, mowing, spraying and sprigging 
 34.4   services; garden planting and maintenance; tree, bush, and shrub 
 34.5   pruning, bracing, spraying, and surgery; indoor plant care; 
 34.6   tree, bush, shrub and stump removal; and tree trimming for 
 34.7   public utility lines.  Services performed under a construction 
 34.8   contract for the installation of shrubbery, plants, sod, trees, 
 34.9   bushes, and similar items are not taxable; 
 34.10     (vii) mixed municipal solid waste management services as 
 34.11  described in section 297A.45; 
 34.12     (viii) massages, except when provided by a licensed health 
 34.13  care facility or professional or upon written referral from a 
 34.14  licensed health care facility or professional for treatment of 
 34.15  illness, injury, or disease; and 
 34.16     (ix) the furnishing for consideration of lodging, board and 
 34.17  care services for animals in kennels and other similar 
 34.18  arrangements, but excluding veterinary and horse boarding 
 34.19  services. 
 34.20  The services listed in this paragraph are taxable under section 
 34.21  297A.02 if the service is performed wholly within Minnesota or 
 34.22  if the service is performed partly within and partly without 
 34.23  Minnesota and the greater proportion of the service is performed 
 34.24  in Minnesota, based on the cost of performance.  In applying the 
 34.25  provisions of this chapter, the terms "tangible personal 
 34.26  property" and "sales at retail" include taxable services and the 
 34.27  provision of taxable services, unless specifically provided 
 34.28  otherwise.  Services performed by an employee for an employer 
 34.29  are not taxable under this paragraph.  Services performed by a 
 34.30  partnership or association for another partnership or 
 34.31  association are not taxable under this paragraph if one of the 
 34.32  entities owns or controls more than 80 percent of the voting 
 34.33  power of the equity interest in the other entity.  Services 
 34.34  performed between members of an affiliated group of corporations 
 34.35  are not taxable.  For purposes of this section, "affiliated 
 34.36  group of corporations" includes those entities that would be 
 35.1   classified as a member of an affiliated group under United 
 35.2   States Code, title 26, section 1504, as amended through December 
 35.3   31, 1987, and who are eligible to file a consolidated tax return 
 35.4   for federal income tax purposes; 
 35.5      (j) A "sale" and a "purchase" includes the transfer of 
 35.6   computer software, meaning information and directions that 
 35.7   dictate the function performed by data processing equipment.  A 
 35.8   "sale" and a "purchase" does not include the design, 
 35.9   development, writing, translation, fabrication, lease, or 
 35.10  transfer for a consideration of title or possession of a custom 
 35.11  computer program; and 
 35.12     (k) The granting of membership in a club, association, or 
 35.13  other organization if: 
 35.14     (1) the club, association, or other organization makes 
 35.15  available for the use of its members sports and athletic 
 35.16  facilities (without regard to whether a separate charge is 
 35.17  assessed for use of the facilities); and 
 35.18     (2) use of the sports and athletic facilities is not made 
 35.19  available to the general public on the same basis as it is made 
 35.20  available to members.  
 35.21  Granting of membership includes both one-time initiation fees 
 35.22  and periodic membership dues.  Sports and athletic facilities 
 35.23  include golf courses, tennis, racquetball, handball and squash 
 35.24  courts, basketball and volleyball facilities, running tracks, 
 35.25  exercise equipment, swimming pools, and other similar athletic 
 35.26  or sports facilities.  The provisions of this paragraph do not 
 35.27  apply to camps or other recreation facilities owned and operated 
 35.28  by an exempt organization under section 501(c)(3) of the 
 35.29  Internal Revenue Code of 1986, as amended through December 31, 
 35.30  1992, for educational and social activities for young people 
 35.31  primarily age 18 and under.  
 35.32     Sec. 5.  Minnesota Statutes 1996, section 297A.01, 
 35.33  subdivision 15, is amended to read: 
 35.34     Subd. 15.  "Farm machinery" means new or used machinery, 
 35.35  equipment, implements, accessories, and contrivances used 
 35.36  directly and principally in the production for sale, but not 
 36.1   including the processing, of livestock, dairy animals, dairy 
 36.2   products, poultry and poultry products, fruits, 
 36.3   vegetables, flowering or ornamental plants including nursery 
 36.4   stock, forage, grains and bees and apiary products.  "Farm 
 36.5   machinery" includes: 
 36.6      (1) machinery for the preparation, seeding or cultivation 
 36.7   of soil for growing agricultural crops, as defined in section 
 36.8   97A.028, and sod, harvesting and threshing of agricultural 
 36.9   products, harvesting or mowing of sod, and certain machinery for 
 36.10  dairy, livestock and poultry farms; 
 36.11     (2) barn cleaners, milking systems, grain dryers, automatic 
 36.12  feeding systems and similar installations, whether or not the 
 36.13  equipment is installed by the seller and becomes part of the 
 36.14  real property; 
 36.15     (3) irrigation equipment sold for exclusively agricultural 
 36.16  use, including pumps, pipe fittings, valves, sprinklers and 
 36.17  other equipment necessary to the operation of an irrigation 
 36.18  system when sold as part of an irrigation system, whether or not 
 36.19  the equipment is installed by the seller and becomes part of the 
 36.20  real property; 
 36.21     (4) logging equipment, including chain saws used for 
 36.22  commercial logging; 
 36.23     (5) fencing used for the containment of farmed cervidae, as 
 36.24  defined in section 17.451, subdivision 2; and 
 36.25     (6) primary and backup generator units used to generate 
 36.26  electricity for the purpose of operating farm machinery, as 
 36.27  defined in this subdivision, or providing light or space heating 
 36.28  necessary for the production of livestock, dairy animals, dairy 
 36.29  products, or poultry and poultry products.  
 36.30     Repair or replacement parts for farm machinery shall not be 
 36.31  included in the definition of farm machinery.  
 36.32     Tools, shop equipment, grain bins, feed bunks, fencing 
 36.33  material except fencing material covered by clause (5), 
 36.34  communication equipment and other farm supplies shall not be 
 36.35  considered to be farm machinery.  "Farm machinery" does not 
 36.36  include motor vehicles taxed under chapter 297B, snowmobiles, 
 37.1   snow blowers, lawn mowers except those used in the production of 
 37.2   sod for sale, garden-type tractors or garden tillers and the 
 37.3   repair and replacement parts for those vehicles and machines. 
 37.4      Sec. 6.  Minnesota Statutes 1996, section 297A.01, is 
 37.5   amended by adding a subdivision to read: 
 37.6      Subd. 22.  [LEASING.] "Leasing" includes all transfers of 
 37.7   possession of tangible personal property or the use thereof by 
 37.8   the lessee for a consideration when title remains with the 
 37.9   lessor throughout the term of the lease.  If a contract 
 37.10  designated as a lease binds the lessee for a fixed term and the 
 37.11  lessee is to obtain title at the term of the agreement or has 
 37.12  the option at that time to purchase the property for a nominal 
 37.13  amount, the contract is regarded as a sale and not as a lease.  
 37.14  For purposes of this chapter, a lease of tangible personal 
 37.15  property is a series of transactions that impose upon the lessee 
 37.16  multiple payment obligations.  A taxable transaction is 
 37.17  considered to have occurred when an obligation to make a lease 
 37.18  payment becomes due under the terms of the agreement or trade 
 37.19  practices of the lessor.  For purposes of this subdivision, 
 37.20  "nominal amount" means an amount so small, slight, or negligible 
 37.21  that it is not economically significant and bears no relation to 
 37.22  the real value of the item being purchased. 
 37.23     Sec. 7.  Minnesota Statutes 1996, section 297A.041, is 
 37.24  amended to read: 
 37.25     297A.041 [OPERATOR OF FLEA MARKETS; SELLER'S PERMITS 
 37.26  REQUIRED.] 
 37.27     The operator of a flea market, craft show, antique show, 
 37.28  coin show, stamp show, comic book show, convention exhibit area, 
 37.29  or similar selling event, as a prerequisite to renting or 
 37.30  leasing space on the premises owned or controlled by the 
 37.31  operator to a person desiring to engage in or conduct business 
 37.32  as a seller, shall obtain evidence that the seller is the holder 
 37.33  of a valid seller's permit issued under section 297A.04, or a 
 37.34  written statement from the seller that the seller is not 
 37.35  offering for sale any item that is taxable under this chapter.  
 37.36     Flea market, craft show, antique show, coin show, stamp 
 38.1   show, comic book show, convention exhibit area, or similar 
 38.2   selling event, as used in this section, means an activity 
 38.3   involving a series of sales sufficient in number, scope, and 
 38.4   character to constitute a regular course of business, and that 
 38.5   would not qualify as an isolated or occasional sale under 
 38.6   section 297A.25, subdivision 12.  
 38.7      This section does not apply to an operator of a flea 
 38.8   market, craft show, antique show, coin show, stamp show, comic 
 38.9   book show, convention exhibit area, or similar selling event 
 38.10  that is:  (1) held in conjunction with a community sponsored 
 38.11  festival that has a duration of four or fewer consecutive days 
 38.12  no more than once a year; or (2) conducted by a nonprofit 
 38.13  organization annually or less frequently.  
 38.14     Sec. 8.  Minnesota Statutes 1996, section 297A.09, is 
 38.15  amended to read: 
 38.16     297A.09 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 
 38.17     For the purpose of the proper administration of sections 
 38.18  297A.01 to 297A.44 and to prevent evasion of the tax, it shall 
 38.19  be presumed that all gross receipts are subject to the tax until 
 38.20  the contrary is established.  The burden of proving that a sale 
 38.21  is not a sale at retail is upon the person who makes the sale, 
 38.22  but that person may take from the purchaser, at the time the 
 38.23  exempt purchase occurs, an exemption certificate to the effect 
 38.24  that the property purchased is for resale or that the sale is 
 38.25  otherwise exempt from the application of the tax imposed by 
 38.26  sections 297A.01 to 297A.44.  A person asserting a claim that 
 38.27  certain sales are exempt, who does not have the required 
 38.28  exemption certificates in their possession, shall acquire the 
 38.29  certificates within 60 days after receiving written notice from 
 38.30  the commissioner that the certificates are required.  If the 
 38.31  certificates are not obtained within the 60-day period, the 
 38.32  sales are deemed taxable sales under this chapter. 
 38.33     Sec. 9.  Minnesota Statutes 1996, section 297A.24, is 
 38.34  amended by adding a subdivision to read: 
 38.35     Subd. 3.  [LOCAL TAXES.] If an item has been subjected to a 
 38.36  sales tax imposed by a political subdivision of this state and 
 39.1   is used, stored, or consumed in another political subdivision 
 39.2   imposing a local use tax, a credit shall be given for all 
 39.3   legally imposed sales taxes paid by the purchaser with respect 
 39.4   to that item. 
 39.5      Sec. 10.  Minnesota Statutes 1996, section 297A.25, 
 39.6   subdivision 2, is amended to read: 
 39.7      Subd. 2.  [FOOD PRODUCTS.] The gross receipts from the sale 
 39.8   of food products including but not limited to cereal and cereal 
 39.9   products, butter, cheese, milk and milk products, oleomargarine, 
 39.10  meat and meat products, fish and fish products, eggs and egg 
 39.11  products, vegetables and vegetable products, fruit and fruit 
 39.12  products, spices and salt, sugar and sugar products, coffee and 
 39.13  coffee substitutes, tea, cocoa and cocoa products, and food 
 39.14  products which are not taxable pursuant to section 297A.01, 
 39.15  subdivision 3, clause (c) are exempt.  This exemption does not 
 39.16  include the following:  
 39.17     (1) candy and candy products, except when sold for 
 39.18  fundraising purposes by a nonprofit organization that provides 
 39.19  educational and social activities for young people primarily 
 39.20  aged 18 and under; 
 39.21     (2) carbonated beverages, beverages commonly referred to as 
 39.22  soft drinks containing less than 15 percent fruit juice, or 
 39.23  bottled water other than noncarbonated and noneffervescent 
 39.24  bottled water sold in individual containers of one-half gallon 
 39.25  or more in size. 
 39.26     Sec. 11.  Minnesota Statutes 1996, section 297A.25, 
 39.27  subdivision 7, is amended to read: 
 39.28     Subd. 7.  [PETROLEUM PRODUCTS.] The gross receipts from the 
 39.29  sale of and storage, use or consumption of the following 
 39.30  petroleum products are exempt:  
 39.31     (1) products upon which a tax has been imposed and paid 
 39.32  under the provisions of chapter 296, and no refund has been or 
 39.33  will be allowed because the buyer used the fuel for nonhighway 
 39.34  use; 
 39.35     (2) products which are used in the improvement of 
 39.36  agricultural land by constructing, maintaining, and repairing 
 40.1   drainage ditches, tile drainage systems, grass waterways, water 
 40.2   impoundment, and other erosion control structures; 
 40.3      (3) products purchased by a transit system receiving 
 40.4   financial assistance under section 174.24 or 473.384; or 
 40.5      (4) products used in a passenger snowmobile, as defined in 
 40.6   section 296.01, subdivision 27a, for off-highway business use as 
 40.7   part of the operations of a resort as provided under section 
 40.8   296.18, subdivision 1, clause (2); or 
 40.9      (5) products purchased by a state or a political 
 40.10  subdivision of a state for use in emergency rescue vehicles and 
 40.11  fire trucks and apparatus. 
 40.12     Sec. 12.  Minnesota Statutes 1996, section 297A.25, 
 40.13  subdivision 12, is amended to read: 
 40.14     Subd. 12.  [OCCASIONAL SALES.] (a) The gross receipts from 
 40.15  the isolated or occasional sale of tangible personal property in 
 40.16  Minnesota not made in the normal course of business of selling 
 40.17  that kind of property, and the storage, use, or consumption of 
 40.18  property acquired as a result of such a sale are exempt.  
 40.19     (b) This exemption does not apply to sales of tangible 
 40.20  personal property primarily used in a trade or business unless 
 40.21  (1) the sale occurs in a transaction subject to or described in 
 40.22  section 118, 331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 
 40.23  1031, or 1033 of the Internal Revenue Code of 1986, as amended 
 40.24  through December 31, 1990; (2) the sale is between members of a 
 40.25  controlled group as defined in section 1563(a) of the Internal 
 40.26  Revenue Code of 1986, as amended through December 31, 1990; (3) 
 40.27  the sale is a sale of farm machinery; (4) the sale is a farm 
 40.28  auction sale; (5) the sale is a sale of substantially all of the 
 40.29  assets of a trade or business; or (6) the total amount of gross 
 40.30  receipts from the sale of trade or business property made during 
 40.31  the calendar month of the sale and the preceding 11 calendar 
 40.32  months does not exceed $1,000. 
 40.33     (c) For purposes of this subdivision, the following terms 
 40.34  have the meanings given.  
 40.35     (1) A "farm auction" is a public auction conducted by a 
 40.36  licensed auctioneer if substantially all of the property sold 
 41.1   consists of property used in the trade or business of farming 
 41.2   and property not used primarily in a trade or business. 
 41.3      (2) "Trade or business" includes the assets of a separate 
 41.4   division, branch, or identifiable segment of a trade or business 
 41.5   if, before the sale, the income and expenses attributable to the 
 41.6   separate division, branch, or identifiable segment could be 
 41.7   separately ascertained from the books of account or record (the 
 41.8   lease or rental of an identifiable segment does not qualify for 
 41.9   the exemption). 
 41.10     (3) A "sale of substantially all of the assets of a trade 
 41.11  or business" must occur as a single transaction or a series of 
 41.12  related transactions occurring within the 12-month period 
 41.13  beginning on the date of the first sale of assets intended to 
 41.14  qualify for the exemption provided in paragraph (b), clause (5). 
 41.15     For purposes of this subdivision, "normal course of 
 41.16  business" means activities that demonstrate a commercial 
 41.17  continuity or consistency of making sales or performing services 
 41.18  for the purposes of attaining profit or producing income.  
 41.19  Factors that indicate that a person is acting in the normal 
 41.20  course of business include: 
 41.21     (1) systematic solicitation of sales through advertising 
 41.22  media; 
 41.23     (2) entering into contracts to perform services or provide 
 41.24  tangible personal property; 
 41.25     (3) maintaining a place of business; or 
 41.26     (4) use of exemption certificates to purchase goods exempt 
 41.27  from the sales tax. 
 41.28     Sec. 13.  Minnesota Statutes 1996, section 297A.25, 
 41.29  subdivision 41, is amended to read: 
 41.30     Subd. 41.  [BULLET-PROOF VESTS.] The gross receipts from 
 41.31  the sale of bullet-resistant soft body armor that is flexible, 
 41.32  concealable, and custom-fitted to provide provides the wearer 
 41.33  with ballistic and trauma protection are exempt if purchased by 
 41.34  a law enforcement agency of the state or a political subdivision 
 41.35  of the state, or a licensed peace officer, as defined in section 
 41.36  626.84, subdivision 1.  The bullet-resistant soft body armor 
 42.1   must meet or exceed the requirements of standard 0101.01 of the 
 42.2   National Institute of Law Enforcement and Criminal Justice in 
 42.3   effect on December 30, 1986, or meet or exceed the requirements 
 42.4   of the standard except wet armor conditioning. 
 42.5      Sec. 14.  Minnesota Statutes 1996, section 297A.45, 
 42.6   subdivision 4, is amended to read: 
 42.7      Subd. 4.  [CITY LOCAL SALES TAX MAY NOT BE IMPOSED.] 
 42.8   Notwithstanding any other law or charter provision to the 
 42.9   contrary, a home rule charter or statutory city political 
 42.10  subdivision that imposes a general sales tax may shall not 
 42.11  impose the sales tax on solid waste management services that are 
 42.12  subject to the tax under this section.  
 42.13     Sec. 15.  Minnesota Statutes 1996, section 297A.45, is 
 42.14  amended by adding a subdivision to read: 
 42.15     Subd. 6.  [SALES PRICE OF BAG, STICKER, OR OTHER 
 42.16  INDICIA.] When the sales price of a bag, sticker, or other 
 42.17  indicia includes the mixed municipal solid waste management 
 42.18  service, the sales tax on such bags stickers, and indicia sold 
 42.19  by retailers on behalf of a political subdivision or a waste 
 42.20  hauler shall be collected when the bag, sticker, or other 
 42.21  indicia are sold to the retailer by the political subdivision or 
 42.22  hauler.  The sales tax on such sales of bags, stickers, and 
 42.23  indicia shall be based on the political subdivision's or 
 42.24  hauler's gross receipts from the sale of the bag, sticker, or 
 42.25  other indicia. 
 42.26     Sec. 16.  Minnesota Statutes 1996, section 297E.04, 
 42.27  subdivision 3, is amended to read: 
 42.28     Subd. 3.  [PADDLETICKET CARD MASTER FLARES.] Each sealed 
 42.29  grouping of 100 ten paddleticket cards must have its own 
 42.30  individual master flare.  The manufacturer of the paddleticket 
 42.31  cards must affix to or imprint at the bottom of each master 
 42.32  flare a bar code that provides: 
 42.33     (1) the name of the manufacturer; 
 42.34     (2) the first paddleticket card number in the group; 
 42.35     (3) the number of paddletickets attached to each 
 42.36  paddleticket card in the group; and 
 43.1      (4) all other information required by the commissioner.  
 43.2   This subdivision applies to paddleticket cards (i) sold by a 
 43.3   manufacturer after June 30, 1995, for use or resale in Minnesota 
 43.4   or (ii) shipped into or caused to be shipped into Minnesota by a 
 43.5   manufacturer after June 30, 1995.  Paddleticket cards that are 
 43.6   subject to this subdivision may not have a registration stamp 
 43.7   affixed to the master flare. 
 43.8      Sec. 17.  Minnesota Statutes 1996, section 349.12, 
 43.9   subdivision 26a, is amended to read: 
 43.10     Subd. 26a.  [MASTER FLARE.] "Master flare" is the posted 
 43.11  display, with registration stamp affixed or bar code imprinted 
 43.12  or affixed, that is used in conjunction with sealed groupings of 
 43.13  100 ten sequentially numbered paddleticket cards. 
 43.14     Sec. 18.  Minnesota Statutes 1996, section 349.163, 
 43.15  subdivision 8, is amended to read: 
 43.16     Subd. 8.  [PADDLETICKET CARD MASTER FLARES.] Each sealed 
 43.17  grouping of 100 ten paddleticket cards must have its own 
 43.18  individual master flare.  The manufacturer must affix to or 
 43.19  imprint at the bottom of the master flare a bar code that 
 43.20  provides all information required by the commissioner of revenue 
 43.21  under section 297E.04, subdivision 3. 
 43.22     This subdivision applies to paddleticket cards sold by a 
 43.23  manufacturer after June 30, 1995, for use or resale in Minnesota 
 43.24  or shipped into or caused to be shipped into Minnesota by a 
 43.25  manufacturer after June 30, 1995.  Paddleticket cards which are 
 43.26  subject to this subdivision shall not have a registration stamp 
 43.27  affixed to the master flare. 
 43.28     Sec. 19.  [EFFECTIVE DATE.] 
 43.29     Section 1 is effective for services provided after December 
 43.30  31, 1996. 
 43.31     Section 2 is effective for refund claims filed for bad 
 43.32  debts recognized for federal income tax purposes after June 30, 
 43.33  1997. 
 43.34     Section 3 is effective for returns filed after January 1, 
 43.35  1998. 
 43.36     Sections 4, 5, 10 to 13, and 15 are effective for sales and 
 44.1   purchases occurring after June 30, 1997. 
 44.2      Sections 6 to 9, and 14 are effective July 1, 1997. 
 44.3      Sections 16 to 18 are effective for sales of paddleticket 
 44.4   cards by a manufacturer after December 31, 1997. 
 44.5                              ARTICLE 4
 44.6                            MINNESOTACARE 
 44.7      Section 1.  Minnesota Statutes 1996, section 295.50, 
 44.8   subdivision 3, is amended to read: 
 44.9      Subd. 3.  [GROSS REVENUES.] "Gross revenues" are total 
 44.10  amounts received in money or otherwise by: 
 44.11     (1) a hospital for patient services; 
 44.12     (2) a surgical center for patient services; 
 44.13     (3) a health care provider, other than a staff model health 
 44.14  carrier, for patient services; 
 44.15     (4) a wholesale drug distributor for sale or distribution 
 44.16  of legend drugs that are delivered:  (i) to a Minnesota resident 
 44.17  by a wholesale drug distributor who is a nonresident pharmacy 
 44.18  directly, by common carrier, or by mail; or (ii) in Minnesota by 
 44.19  the wholesale drug distributor, by common carrier, or by mail, 
 44.20  unless the legend drugs are delivered to another wholesale drug 
 44.21  distributor who sells legend drugs exclusively at wholesale.  
 44.22  Legend drugs do not include nutritional products as defined in 
 44.23  Minnesota Rules, part 9505.0325; 
 44.24     (5) a staff model health plan company as gross premiums for 
 44.25  enrollees, copayments, deductibles, coinsurance, and fees for 
 44.26  patient services covered under its contracts with groups and 
 44.27  enrollees; and 
 44.28     (6) a pharmacy for medical supplies, appliances, and 
 44.29  equipment. 
 44.30     Sec. 2.  Minnesota Statutes 1996, section 295.50, 
 44.31  subdivision 6, is amended to read: 
 44.32     Subd. 6.  [HOME HEALTH CARE SERVICES.] "Home health care 
 44.33  services" are services: 
 44.34     (1) defined under the state medical assistance program as 
 44.35  home health agency services provided by a home health agency, 
 44.36  personal care services and supervision of personal care 
 45.1   services, private duty nursing services, and waivered 
 45.2   services or services by home care providers required to be 
 45.3   licensed under chapter 144A; and 
 45.4      (2) provided at a recipient's residence, if the recipient 
 45.5   does not live in a hospital, nursing facility, as defined in 
 45.6   section 62A.46, subdivision 3, or intermediate care facility for 
 45.7   persons with mental retardation as defined in section 256B.055, 
 45.8   subdivision 12, paragraph (d). 
 45.9      Home health care services include medical supplies only 
 45.10  when used in providing home health care services. 
 45.11     Sec. 3.  Minnesota Statutes 1996, section 295.50, 
 45.12  subdivision 14, is amended to read: 
 45.13     Subd. 14.  [WHOLESALE DRUG DISTRIBUTOR.] "Wholesale drug 
 45.14  distributor" means a wholesale drug distributor required to be 
 45.15  licensed under sections 151.42 to 151.51 or a nonresident 
 45.16  pharmacy required to be registered under section 151.19. 
 45.17     Sec. 4.  Minnesota Statutes 1996, section 295.52, 
 45.18  subdivision 4, is amended to read: 
 45.19     Subd. 4.  [USE TAX; PRESCRIPTION DRUGS.] A person that 
 45.20  receives prescription drugs for resale or use in Minnesota, 
 45.21  other than from a wholesale drug distributor that paid the tax 
 45.22  under subdivision 3, is subject to a tax equal to two percent of 
 45.23  the price paid.  Liability for the tax is incurred when 
 45.24  prescription drugs are received or delivered in Minnesota by the 
 45.25  person. 
 45.26     Sec. 5.  Minnesota Statutes 1996, section 295.53, 
 45.27  subdivision 4, is amended to read: 
 45.28     Subd. 4.  [DEDUCTION FOR RESEARCH.] (a) In addition to the 
 45.29  exemptions allowed under subdivision 1, a hospital or health 
 45.30  care provider which is exempt under section 501(c)(3) of the 
 45.31  Internal Revenue Code of 1986 or is owned and operated under 
 45.32  authority of a governmental unit, may deduct from its gross 
 45.33  revenues subject to the hospital or health care provider taxes 
 45.34  under sections 295.50 to 295.57 revenues equal to expenditures 
 45.35  for qualifying research conducted by an allowable research 
 45.36  programs program.  
 46.1      (b) For purposes of this subdivision, the following 
 46.2   requirements apply: 
 46.3      (1) expenditures for allowable research programs are the 
 46.4   direct and general must be for program costs for activities 
 46.5   which are part of qualifying research conducted by an allowable 
 46.6   research program; 
 46.7      (2) an allowable research program must be a formal program 
 46.8   of medical and health care research approved by the governing 
 46.9   body of the hospital or health care provider which also includes 
 46.10  active solicitation of research funds from government and 
 46.11  private sources.  Allowable conducted by an entity which is 
 46.12  exempt under section 501(c)(3) of the Internal Revenue Code of 
 46.13  1986 or is owned and operated under authority of a governmental 
 46.14  unit; 
 46.15     (3) qualifying research must:  
 46.16     (A) be approved in writing by the governing body of the 
 46.17  hospital or health care provider which is taking the deduction 
 46.18  under this subdivision; 
 46.19     (1) (B) have as its purpose the development of new 
 46.20  knowledge in basic or applied science relating to the diagnosis 
 46.21  and treatment of conditions affecting the human body; 
 46.22     (2) (C) be subject to review by individuals with expertise 
 46.23  in the subject matter of the proposed study but who have no 
 46.24  financial interest in the proposed study and are not involved in 
 46.25  the conduct of the proposed study; and 
 46.26     (3) (D) be subject to review and supervision by an 
 46.27  institutional review board operating in conformity with federal 
 46.28  regulations if the research involves human subjects or an 
 46.29  institutional animal care and use committee operating in 
 46.30  conformity with federal regulations if the research involves 
 46.31  animal subjects.  Research expenses are not exempt if the study 
 46.32  is a routine evaluation of health care methods or products used 
 46.33  in a particular setting conducted for the purpose of making a 
 46.34  management decision.  Costs of clinical research activities paid 
 46.35  directly for the benefit of an individual patient are excluded 
 46.36  from this exemption.  Basic research in fields including 
 47.1   biochemistry, molecular biology, and physiology are also 
 47.2   included if such programs are subject to a peer review process. 
 47.3      (c) No deduction shall be allowed under this subdivision 
 47.4   for any revenue received by the hospital or health care provider 
 47.5   in the form of a grant, gift, or otherwise, whether from a 
 47.6   government or nongovernment source, on which the tax liability 
 47.7   under section 295.52 is not imposed or for which the tax 
 47.8   liability under section 295.52 has been received from a third 
 47.9   party as provided for in section 295.582. 
 47.10     (d) Effective beginning with calendar year 1995, the 
 47.11  taxpayer shall not take the deduction under this section into 
 47.12  account in determining estimated tax payments or the payment 
 47.13  made with the annual return under section 295.55.  The total 
 47.14  deduction allowable to all taxpayers under this section for 
 47.15  calendar years beginning after December 31, 1994, may not exceed 
 47.16  $65,000,000.  To implement this limit, each qualifying hospital 
 47.17  and qualifying health care provider shall submit to the 
 47.18  commissioner by March 15 its total expenditures qualifying for 
 47.19  the deduction under this section for the previous calendar 
 47.20  year.  The commissioner shall sum the total expenditures of all 
 47.21  taxpayers qualifying under this section for the calendar year.  
 47.22  If the resulting amount exceeds $65,000,000, the commissioner 
 47.23  shall allocate a part of the $65,000,000 deduction limit to each 
 47.24  qualifying hospital and health care provider in proportion to 
 47.25  its share of the total deductions.  The commissioner shall pay a 
 47.26  refund to each qualifying hospital or provider equal to its 
 47.27  share of the deduction limit multiplied by two percent.  The 
 47.28  commissioner shall pay the refund no later than May 15 of the 
 47.29  calendar year. 
 47.30     Sec. 6.  Minnesota Statutes 1996, section 295.55, 
 47.31  subdivision 2, is amended to read: 
 47.32     Subd. 2.  [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 
 47.33  Each hospital or surgical center must make estimated payments of 
 47.34  the taxes for the calendar year in monthly installments to the 
 47.35  commissioner within ten 15 days after the end of the month. 
 47.36     (b) Estimated tax payments are not required of hospitals or 
 48.1   surgical centers if the tax for the calendar year is less than 
 48.2   $500 or if a hospital has been allowed a grant under section 
 48.3   144.1484, subdivision 2, for the year. 
 48.4      (c) Underpayment of estimated installments bear interest at 
 48.5   the rate specified in section 270.75, from the due date of the 
 48.6   payment until paid or until the due date of the annual return at 
 48.7   the rate specified in section 270.75.  An underpayment of an 
 48.8   estimated installment is the difference between the amount paid 
 48.9   and the lesser of (1) 90 percent of one-twelfth of the tax for 
 48.10  the calendar year or (2) the tax for the actual gross revenues 
 48.11  received during the month. 
 48.12     Sec. 7.  [EFFECTIVE DATE.] 
 48.13     Sections 1, 3, and 4 are effective for gross revenues 
 48.14  received on or after July 1, 1997.  Section 2 is effective for 
 48.15  gross revenues received after December 31, 1997.  Section 5 is 
 48.16  effective for research expenditures incurred on or after January 
 48.17  1, 1997.  Section 6 is effective for estimated payments due 
 48.18  after July 1, 1997.  
 48.19                             ARTICLE 5
 48.20                            COLLECTIONS
 48.21     Section 1.  Minnesota Statutes 1996, section 270.063, is 
 48.22  amended to read: 
 48.23     270.063 [COLLECTION OF DELINQUENT TAXES; COSTS.] 
 48.24     Subdivision 1.  [APPROPRIATION.] For the purpose of 
 48.25  collecting delinquent state tax liabilities, there is 
 48.26  appropriated to the commissioner of revenue an amount 
 48.27  representing the cost of collection by contract with collection 
 48.28  agencies, revenue departments of other states, or attorneys to 
 48.29  enable the commissioner to reimburse these agencies, 
 48.30  departments, or attorneys for this service.  The commissioner 
 48.31  shall report quarterly on the status of this program to the 
 48.32  chair of the house tax and appropriation committees and senate 
 48.33  tax and finance committees.  
 48.34     Subd. 2.  [PREPAYMENT.] Notwithstanding section 16A.15, 
 48.35  subdivision 3, the commissioner of revenue may authorize the 
 48.36  prepayment of sheriff's fees, attorney fees, fees charged by 
 49.1   revenue departments of other states, or court costs to be 
 49.2   incurred in connection with the collection of delinquent tax 
 49.4   liabilities owed to the commissioner of revenue. 
 49.5      Subd. 3.  [COLLECTION OF FINANCIAL INSTITUTION FEES.] The 
 49.6   commissioner shall collect from a taxpayer any collection fees 
 49.7   or costs charged by financial institutions and incurred by the 
 49.8   commissioner. 
 49.9      Sec. 2.  Minnesota Statutes 1996, section 270.101, 
 49.10  subdivision 3, is amended to read: 
 49.11     Subd. 3.  [PROCEDURE FOR ASSESSMENT.] The commissioner may 
 49.12  assess liability for the taxes described in subdivision 1 
 49.13  against a person liable under this section.  The assessment may 
 49.14  be based upon information available to the commissioner.  It 
 49.15  must be made within the prescribed period of limitations for 
 49.16  assessing the underlying tax, or within one year after the date 
 49.17  of an order assessing underlying tax, whichever period expires 
 49.18  later.  An order assessing personal liability under this section 
 49.19  is reviewable under section 289A.65 and is appealable to tax 
 49.20  court. 
 49.21     If a person has been assessed under this section for an 
 49.22  amount for a given period and the time for appeal has expired or 
 49.23  there has been a final determination that the person is liable, 
 49.24  collection action is not stayed pursuant to section 270.10, 
 49.25  subdivision 5, for subsequent assessments of additional amounts 
 49.26  for the same person for the same period and tax type. 
 49.27     Sec. 3.  Minnesota Statutes 1996, section 270.68, 
 49.28  subdivision 1, is amended to read: 
 49.29     Subdivision 1.  [LEGAL ACTION.] In addition to all other 
 49.30  methods authorized by law for the collection of tax, if any tax 
 49.31  payable to the commissioner of revenue or to the department of 
 49.32  revenue, including penalties and interest thereon, is not paid 
 49.33  within 60 days after it is required by law to be paid, the 
 49.34  commissioner of revenue may proceed under this subdivision.  
 49.35  Within five years after the date of assessment of the tax or at 
 49.36  any time a lien filed under section 270.69 is enforceable, or, 
 49.37  if the action is to renew or enforce a judgment, at any time 
 50.1   before the judgment's expiration, the commissioner may bring an 
 50.2   action at law against the person liable for the payment or 
 50.3   collection of the tax, in the name of the state, for the 
 50.4   recovery of the tax and interest and penalties due in respect 
 50.5   thereof.  The action shall be brought in the district court of 
 50.6   the judicial district in which lies the county of the residence 
 50.7   or principal place of business within this state of the 
 50.8   taxpayer, or, in the case of an estate or trust, of the place of 
 50.9   its principal administration, and for this purpose the place 
 50.10  named as such in the return, if any, made by the taxpayer shall 
 50.11  be conclusive against the taxpayer in this matter.  If no place 
 50.12  is named in the return, the action may be commenced in Ramsey 
 50.13  county.  The action shall be commenced by filing with the court 
 50.14  administrator a statement showing the name and address of the 
 50.15  taxpayer, if known, an itemized summary of the taxable periods 
 50.16  and the type of tax, the tax due and unpaid and the interest and 
 50.17  penalties due with respect thereto under the provisions of law 
 50.18  applicable to the tax, and shall contain a prayer that the court 
 50.19  adjudge the taxpayer to be indebted on account of the taxes, 
 50.20  interest, and penalties in the amount specified in the 
 50.21  statement; a copy of the statement shall be furnished to the 
 50.22  court administrator therewith.  The court administrator shall 
 50.23  mail a copy of the statement by certified mail to the taxpayer 
 50.24  at the address given in the return, if any; and to the 
 50.25  taxpayer's last known address, within five days after the same 
 50.26  is filed, except that, if the taxpayer's address is not known, 
 50.27  notice shall be made by posting a copy of the statement for ten 
 50.28  days in the place in the courthouse where public notices are 
 50.29  regularly posted.  To litigate the claim, or any part of it, the 
 50.30  taxpayer shall serve an answer upon the commissioner on or 
 50.31  before the 20th day after the date of mailing the statement; or, 
 50.32  if notice has been given by posting, on or before the 20th day 
 50.33  after the expiration of the period during which the notice was 
 50.34  required to be posted.  If no answer is served within the 
 50.35  specified time, the court administrator, upon the filing of an 
 50.36  affidavit of default, shall enter judgment for the state in the 
 51.1   amount prayed for, plus costs of $10.  If an answer is filed, 
 51.2   the issues raised shall stand for trial as soon as possible 
 51.3   after the filing of the answer, and the court shall determine 
 51.4   the issues and direct judgment accordingly; and, if the taxes, 
 51.5   interest, or penalties are sustained to any extent over the 
 51.6   amount rendered by the taxpayer, shall assess $10 costs against 
 51.7   the taxpayer.  The court shall disregard all technicalities and 
 51.8   matters of form not affecting the substantial merits.  The 
 51.9   commissioner may call upon the county attorney or the attorney 
 51.10  general to conduct the proceedings on behalf of the state.  If a 
 51.11  proceeding is referred to a county attorney, and the county 
 51.12  attorney fails to issue or cause to be issued an indictment or 
 51.13  criminal complaint within 30 days after the referral by the 
 51.14  commissioner, the attorney general may conduct the proceeding.  
 51.15  Execution shall be issued upon the judgment at the request of 
 51.16  the commissioner, and the execution shall, in all other 
 51.17  respects, be governed by the laws applicable to executions 
 51.18  issued on judgments.  Only the homestead and household goods of 
 51.19  the judgment debtor shall be exempt from seizure and sale upon 
 51.20  the execution.  
 51.21     In addition to the procedure in this subdivision, legal 
 51.22  action may be commenced by the commissioner in district court in 
 51.23  the same manner or venue as any other civil action. 
 51.24     Sec. 4.  Minnesota Statutes 1996, section 270.701, 
 51.25  subdivision 2, is amended to read: 
 51.26     Subd. 2.  [NOTICE OF SALE.] The commissioner shall as soon 
 51.27  as practicable after the seizure of the property give notice of 
 51.28  sale of the property to the owner, in the manner of service 
 51.29  prescribed in subdivision 1.  In the case of personal property, 
 51.30  the notice shall be served at least 10 days prior to the sale. 
 51.31  In the case of real property, the notice shall be served at 
 51.32  least four weeks prior to the sale.  The commissioner shall also 
 51.33  cause public notice of each sale to be made.  In the case of 
 51.34  personal property, notice shall be posted at least 10 days prior 
 51.35  to the sale at the post office nearest the place county 
 51.36  courthouse for the county where the seizure is made, and in not 
 52.1   less than two other public places. In the case of real property, 
 52.2   six weeks' published notice shall be given prior to the sale, in 
 52.3   a newspaper published or generally circulated in the county.  
 52.4   The notice of sale provided in this subdivision shall specify 
 52.5   the property to be sold, and the time, place, manner and 
 52.6   conditions of the sale.  Whenever levy is made without regard to 
 52.7   the ten-day period provided in section 270.70, subdivision 2, 
 52.8   public notice of sale of the property seized shall not be made 
 52.9   within the ten-day period unless section 270.702 (relating to 
 52.10  sale of perishable goods) is applicable.  
 52.11     Sec. 5.  Minnesota Statutes 1996, section 270.701, 
 52.12  subdivision 5, is amended to read: 
 52.13     Subd. 5.  [MANNER AND CONDITIONS OF SALE.] (a) Before the 
 52.14  sale the commissioner shall determine a minimum price for which 
 52.15  the property shall be sold, and if no person offers for the 
 52.16  property at the sale the amount of the minimum price, the 
 52.17  property shall be declared to be purchased at the minimum price 
 52.18  for the state of Minnesota; otherwise the property shall be 
 52.19  declared to be sold to the highest bidder.  In determining the 
 52.20  minimum price, the commissioner shall take into account the 
 52.21  expense of making the levy and sale.  The announcement of the 
 52.22  minimum price determined by the commissioner may be delayed 
 52.23  until the receipt of the highest bid.  
 52.24     (b) The sale shall not be conducted in any manner other 
 52.25  than:  
 52.26     (i) by public auction, or 
 52.27     (ii) by public sale under sealed bids., or 
 52.28     (iii) in the case of items which individually or in usually 
 52.29  marketable units have a value of $50 or less, by public or 
 52.30  private proceedings as a unit or in parcels at any time and 
 52.31  place and on any terms, but every aspect of the disposition 
 52.32  including the method, manner, time, place, and terms must be 
 52.33  commercially reasonable.  
 52.34     (c) In the case of seizure of several items of property, 
 52.35  the items may be offered separately, in groups, or in the 
 52.36  aggregate, and shall be sold under whichever method produces the 
 53.1   highest aggregate amount, except that sales under paragraph (b), 
 53.2   item (iii), must produce a reasonable amount under the 
 53.3   circumstances.  
 53.4      (d) Payment in full shall be required at the time of 
 53.5   acceptance of a bid, except that a part of the payment may be 
 53.6   deferred by the commissioner for a period not to exceed 30 days. 
 53.7      (e) Other methods (including advertising) in addition to 
 53.8   those prescribed in subdivision 2 may be used in giving notice 
 53.9   of the sale.  
 53.10     (f) The commissioner may adjourn the sale from time to time 
 53.11  for a period not to exceed 30 days.  
 53.12     (g) If payment in full is required at the time of 
 53.13  acceptance of a bid and is not then and there paid, the 
 53.14  commissioner shall forthwith proceed to again sell the property 
 53.15  in the manner provided in this section.  If the conditions of 
 53.16  the sale permit part of the payment to be deferred, and if the 
 53.17  part is not paid within the prescribed period, suit may be 
 53.18  instituted against the purchaser for the purchase price or that 
 53.19  part thereof as has not been paid, together with interest at the 
 53.20  rate specified in section 549.09 from the date of the sale; or, 
 53.21  in the discretion of the commissioner, the sale may be declared 
 53.22  by the commissioner to be null and void for failure to make full 
 53.23  payment of the purchase price and the property may again be 
 53.24  advertised and sold as provided in this section.  In the event 
 53.25  of a readvertisement and sale, any new purchaser shall receive 
 53.26  the property or rights to property free and clear of any claim 
 53.27  or right of the former defaulting purchaser, of any nature 
 53.28  whatsoever, and the amount paid upon the bid price by the 
 53.29  defaulting purchaser shall be forfeited.  
 53.30     Sec. 6.  Minnesota Statutes 1996, section 270.708, 
 53.31  subdivision 1, is amended to read: 
 53.32     Subdivision 1.  [COLLECTION OF LIABILITY.] Any money 
 53.33  realized by proceedings under this chapter, whether by seizure, 
 53.34  by surrender under section 270.70 (except pursuant to 
 53.35  subdivision 9 thereof), by sale of seized property, or by sale 
 53.36  of property redeemed by the state of Minnesota (if the interest 
 54.1   of the state of Minnesota in the property was a lien arising 
 54.2   under the provisions of section 270.69), or by agreement, 
 54.3   arrangement, or any other means shall be applied as follows: 
 54.4      (a) First, against the expenses of the proceedings; then 
 54.5      (b) If the property seized and sold is subject to a tax 
 54.6   administered by the commissioner of revenue which has not been 
 54.7   paid, the amount remaining after applying clause (a) shall next 
 54.8   be applied against the tax liability (and, if the tax was not 
 54.9   previously assessed, it shall then be assessed); and 
 54.10     (c) The amount, if any, remaining after applying clauses 
 54.11  (a) and (b) shall be applied against the tax liability in 
 54.12  respect of which the levy was made or the sale was conducted.  
 54.13     Sec. 7.  Minnesota Statutes 1996, section 270.721, is 
 54.14  amended to read: 
 54.15     270.721 [REVOCATION OF CORPORATE CERTIFICATES OF AUTHORITY 
 54.16  TO DO BUSINESS IN THIS STATE.] 
 54.17     When a foreign corporation authorized to do business in 
 54.18  this state under chapter 303, or a foreign limited liability 
 54.19  company or partnership authorized to do business in this state 
 54.20  under chapter 322B, fails to comply with any tax laws 
 54.21  administered by the commissioner of revenue, the commissioner 
 54.22  may serve the secretary of state with a certified copy of an 
 54.23  order finding such failure to comply.  The secretary of state, 
 54.24  upon receipt of the order, shall revoke the certificate of 
 54.25  authority of the corporation to do business in this state, and 
 54.26  shall reinstate the certificate under section 303.19 or section 
 54.27  322B.960, subdivision 6, only when the corporation or limited 
 54.28  liability company or partnership has obtained from the 
 54.29  commissioner an order finding that the corporation or limited 
 54.30  liability company or partnership is in compliance with state tax 
 54.31  law.  An order requiring revocation of a certificate shall not 
 54.32  be issued unless the commissioner gives the corporation or 
 54.33  limited liability company or partnership 30 days' written notice 
 54.34  of the proposed order, specifying the violations of state tax 
 54.35  law, and affording the corporation an opportunity to request a 
 54.36  contested case hearing under chapter 14. 
 55.1      Sec. 8.  Minnesota Statutes 1996, section 270.73, 
 55.2   subdivision 1, is amended to read: 
 55.3      Subdivision 1.  [POSTING, NOTICE.] Pursuant to the 
 55.4   authority to disclose under section 270B.12, subdivision 4, the 
 55.5   commissioner shall, by the 15th of each month, submit to the 
 55.6   commissioner of public safety a list of all taxpayers who are 
 55.7   required to pay, withhold, or collect the tax imposed by section 
 55.8   290.02, 290.92, or 297A.02, or local sales and use tax payable 
 55.9   to the commissioner of revenue, or a local option tax 
 55.10  administered and collected by the commissioner of revenue, and 
 55.11  who are 30 ten days or more delinquent in either filing a tax 
 55.12  return or paying the tax. 
 55.13     The commissioner of revenue is under no obligation to list 
 55.14  a taxpayer whose business is inactive.  At least ten days before 
 55.15  notifying the commissioner of public safety, the commissioner of 
 55.16  revenue shall notify the taxpayer of the intended action. 
 55.17     The commissioner of public safety shall post the list in 
 55.18  the same manner as provided in section 340A.318, subdivision 3.  
 55.19  The list will prominently show the date of posting.  If a 
 55.20  taxpayer previously listed cures the delinquency by filing files 
 55.21  all returns and paying pays all taxes then due, the commissioner 
 55.22  shall notify the commissioner of public safety within two 
 55.23  business days that the delinquency was cured. 
 55.24     Sec. 9.  Minnesota Statutes 1996, section 289A.31, 
 55.25  subdivision 5, is amended to read: 
 55.26     Subd. 5.  [WITHHOLDING TAX, WITHHOLDING FROM PAYMENTS TO 
 55.27  OUT-OF-STATE CONTRACTORS, AND WITHHOLDING BY PARTNERSHIPS AND 
 55.28  SMALL BUSINESS CORPORATIONS.] (a) Except as provided in 
 55.29  paragraph (b), an employer or person withholding tax under 
 55.30  section 290.92 or 290.923, subdivision 2, who fails to pay to or 
 55.31  deposit with the commissioner a sum or sums required by those 
 55.32  sections to be deducted, withheld, and paid, is personally and 
 55.33  individually liable to the state for the sum or sums, and added 
 55.34  penalties and interest, and is not liable to another person for 
 55.35  that payment or payments.  The sum or sums deducted and withheld 
 55.36  under section 290.92, subdivision 2a or 3, or 290.923, 
 56.1   subdivision 2, must be held as a special fund in trust for the 
 56.2   state of Minnesota.  
 56.3      (b) If the employer or person withholding tax under section 
 56.4   290.92 or 290.923, subdivision 2, fails to deduct and withhold 
 56.5   the tax in violation of those sections, and later the taxes 
 56.6   against which the tax may be credited are paid, the tax required 
 56.7   to be deducted and withheld will not be collected from the 
 56.8   employer.  This does not, however, relieve the employer from 
 56.9   liability for any penalties and interest otherwise applicable 
 56.10  for failure to deduct and withhold.  
 56.11     (c) Liability for payment of withholding taxes includes a 
 56.12  responsible person or entity described in the personal liability 
 56.13  provisions of section 270.101.  
 56.14     (d) Liability for payment of withholding taxes includes a 
 56.15  third party lender or surety described in section 290.92, 
 56.16  subdivision 22.  
 56.17     (e) A partnership or S corporation required to withhold and 
 56.18  remit tax under section 290.92, subdivisions 4b and 4c, is 
 56.19  liable for payment of the tax to the commissioner, and a person 
 56.20  having control of or responsibility for the withholding of the 
 56.21  tax or the filing of returns due in connection with the tax is 
 56.22  personally liable for the tax due. 
 56.23     (f) A payor of sums required to be withheld under section 
 56.24  290.9705, subdivision 1, is liable to the state for the amount 
 56.25  required to be deducted, and is not liable to an out-of-state 
 56.26  contractor for the amount of the payment. 
 56.27     (g) A husband and wife who complete an application pursuant 
 56.28  to section 290.92, subdivision 24, listing both husband and wife 
 56.29  as sole proprietors are jointly and severally liable under this 
 56.30  subdivision. 
 56.31     Sec. 10.  Minnesota Statutes 1996, section 289A.31, 
 56.32  subdivision 7, is amended to read: 
 56.33     Subd. 7.  [SALES AND USE TAX.] (a) The sales and use tax 
 56.34  required to be collected by the retailer under chapter 297A 
 56.35  constitutes a debt owed by the retailer to Minnesota, and the 
 56.36  sums collected must be held as a special fund in trust for the 
 57.1   state of Minnesota. 
 57.2      A retailer who does not maintain a place of business within 
 57.3   this state as defined by section 297A.21, subdivision 1, shall 
 57.4   not be indebted to Minnesota for amounts of tax that it was 
 57.5   required to collect but did not collect unless the retailer knew 
 57.6   or had been advised by the commissioner of its obligation to 
 57.7   collect the tax.  
 57.8      (b) The use tax required to be paid by a purchaser is a 
 57.9   debt owed by the purchaser to Minnesota. 
 57.10     (c) The tax imposed by sections 297A.01 to 297A.44, and 
 57.11  interest and penalties, is a personal debt of the individual 
 57.12  required to file a return from the time the liability arises, 
 57.13  irrespective of when the time for payment of that liability 
 57.14  occurs.  The debt is, in the case of the executor or 
 57.15  administrator of the estate of a decedent and in the case of a 
 57.16  fiduciary, that of the individual in an official or fiduciary 
 57.17  capacity unless the individual has voluntarily distributed the 
 57.18  assets held in that capacity without reserving sufficient assets 
 57.19  to pay the tax, interest, and penalties, in which case the 
 57.20  individual is personally liable for the deficiency. 
 57.21     (d) Liability for payment of sales and use taxes includes 
 57.22  any responsible person or entity described in the personal 
 57.23  liability provisions of section 270.101. 
 57.24     (e) A husband and wife who complete an application pursuant 
 57.25  to section 297A.04 listing both husband and wife as sole 
 57.26  proprietors are jointly and severally liable under this 
 57.27  subdivision. 
 57.28     Sec. 11.  Minnesota Statutes 1996, section 289A.36, 
 57.29  subdivision 4, is amended to read: 
 57.30     Subd. 4.  [THIRD PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 
 57.31  IS KNOWN.] An investigation may extend to a person that the 
 57.32  commissioner determines has access to information that may be 
 57.33  relevant to the examination or investigation.  When a subpoena 
 57.34  requiring the production of records as described in subdivision 
 57.35  2 is served on a third-party record keeper, written notice of 
 57.36  the subpoena must be mailed to the taxpayer and to any other 
 58.1   person who is identified in the subpoena.  The notices must be 
 58.2   given within three days of the day on which the subpoena is 
 58.3   served.  Notice to the taxpayer required by this section is 
 58.4   sufficient if it is mailed to the last address on record with 
 58.5   the commissioner. 
 58.6      The provisions of this subdivision relating to notice to 
 58.7   the taxpayer or other parties identified in the subpoena do not 
 58.8   apply if there is reasonable cause to believe that the giving of 
 58.9   notice may lead to attempts to conceal, destroy, or alter 
 58.10  records or assets relevant to the examination, to prevent the 
 58.11  communication of information from other persons through 
 58.12  intimidation, bribery, or collusion, or to flee to avoid 
 58.13  prosecution, testifying, or production of records. 
 58.14     Sec. 12.  Minnesota Statutes 1996, section 297A.07, 
 58.15  subdivision 3, is amended to read: 
 58.16     Subd. 3.  [NEW PERMITS AFTER REVOCATION.] The commissioner 
 58.17  shall not issue a new permit or reinstate a revoked permit after 
 58.18  revocation unless the taxpayer applies for a permit and provides 
 58.19  reasonable evidence of intention to comply with the sales and 
 58.20  use tax laws and rules.  The commissioner may require the 
 58.21  applicant to supply security, in addition to that authorized by 
 58.22  section 297A.28, as is reasonably necessary to insure compliance 
 58.23  with the sales and use tax laws and rules. 
 58.24     If a taxpayer has had a permit or permits revoked three 
 58.25  times in a five-year period, the commissioner shall not issue a 
 58.26  new permit or reinstate the revoked permit until 24 months have 
 58.27  elapsed after revocation and the taxpayer has satisfied the 
 58.28  conditions for reinstatement of a revoked permit or issuance of 
 58.29  a new permit imposed by this section and rules adopted hereunder.
 58.30     For purposes of this subdivision, the term "taxpayer" means 
 58.31  an individual, if a revoked permit was issued to or in the name 
 58.32  of an individual, or a corporation or partnership, if a revoked 
 58.33  permit was issued to or in the name of a corporation or 
 58.34  partnership.  Taxpayer also means an officer of a corporation, a 
 58.35  member of a partnership, or an individual who is liable for 
 58.36  delinquent sales taxes, either for the entity for which the new 
 59.1   or reinstated permit is at issue, or for another entity for 
 59.2   which a permit was previously revoked, or personally as a permit 
 59.3   holder. 
 59.4      Sec. 13.  [EFFECTIVE DATES.] 
 59.5      Section 1 is effective for fees and costs incurred on or 
 59.6   after the day following final enactment. 
 59.7      Section 2 is effective for assessments made on or after the 
 59.8   day following final enactment. 
 59.9      Section 3 is effective for causes of action arising before 
 59.10  the day following final enactment which are not barred by the 
 59.11  statute of limitations as of that date, and for causes of action 
 59.12  arising thereafter. 
 59.13     Sections 4 to 8, 11, and 12 are effective the day following 
 59.14  final enactment. 
 59.15     Sections 9 and 10 are effective for liabilities incurred on 
 59.16  or after the day following final enactment. 
 59.17                             ARTICLE 6
 59.18                           MISCELLANEOUS 
 59.19     Section 1.  Minnesota Statutes 1996, section 60A.15, 
 59.20  subdivision 1, is amended to read: 
 59.21     Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
 59.22  before April 1, June 1, and December 1 of each year, every 
 59.23  domestic and foreign company, including town and farmers' mutual 
 59.24  insurance companies, domestic mutual insurance companies, marine 
 59.25  insurance companies, health maintenance organizations, 
 59.26  integrated service networks, community integrated service 
 59.27  networks, and nonprofit health service plan corporations, shall 
 59.28  pay to the commissioner of revenue installments equal to 
 59.29  one-third of the insurer's total estimated tax for the current 
 59.30  year.  Except as provided in paragraphs (d) and (e), 
 59.31  installments must be based on a sum equal to two percent of the 
 59.32  premiums described in paragraph (b). 
 59.33     (b) Installments under paragraph (a), (d), or (e) are 
 59.34  percentages of gross premiums less return premiums on all direct 
 59.35  business received by the insurer in this state, or by its agents 
 59.36  for it, in cash or otherwise, during such year. 
 60.1      (c) Failure of a company to make payments of at least 
 60.2   one-third of either (1) the total tax paid during the previous 
 60.3   calendar year or (2) 80 percent of the actual tax for the 
 60.4   current calendar year shall subject the company to the penalty 
 60.5   and interest provided in this section, unless the total tax for 
 60.6   the current tax year is $500 or less. 
 60.7      (d) For health maintenance organizations, nonprofit health 
 60.8   services plan corporations, integrated service networks, and 
 60.9   community integrated service networks, the installments must be 
 60.10  based on an amount equal to one percent of premiums described in 
 60.11  paragraph (b) that are paid after December 31, 1995. 
 60.12     (e) For purposes of computing installments for town and 
 60.13  farmers' mutual insurance companies and for mutual property 
 60.14  casualty companies with total assets on December 31, 1989, of 
 60.15  $1,600,000,000 or less, the following rates apply: 
 60.16     (1) for all life insurance, two percent; 
 60.17     (2) for town and farmers' mutual insurance companies and 
 60.18  for mutual property and casualty companies with total assets of 
 60.19  $5,000,000 or less, on all other coverages, one percent; and 
 60.20     (3) for mutual property and casualty companies with total 
 60.21  assets on December 31, 1989, of $1,600,000,000 or less, on all 
 60.22  other coverages, 1.26 percent. 
 60.23     (f) If the aggregate amount of premium tax payments under 
 60.24  this section and the fire marshal tax payments under section 
 60.25  299F.21 made during a calendar year is equal to or exceeds 
 60.26  $120,000, all tax payments in the subsequent calendar year must 
 60.27  be paid by means of a funds transfer as defined in section 
 60.28  336.4A-104, paragraph (a).  The funds transfer payment date, as 
 60.29  defined in section 336.4A-401, must be on or before the date the 
 60.30  payment is due.  If the date the payment is due is not a funds 
 60.31  transfer business day, as defined in section 336.4A-105, 
 60.32  paragraph (a), clause (4), the payment date must be on or before 
 60.33  the funds transfer business day next following the date the 
 60.34  payment is due.  
 60.35     (g) Premiums under medical assistance, general assistance 
 60.36  medical care, the MinnesotaCare program, and the Minnesota 
 61.1   comprehensive health insurance plan are not subject to tax under 
 61.2   this section. 
 61.3      Sec. 2.  Minnesota Statutes 1996, section 270.02, 
 61.4   subdivision 3, is amended to read: 
 61.5      Subd. 3.  [POWERS, ORGANIZATION, ASSISTANTS.] Subject to 
 61.6   the provisions of this chapter and other applicable laws the 
 61.7   commissioner shall have power to organize the department with 
 61.8   such divisions and other agencies as the commissioner deems 
 61.9   necessary and to appoint one deputy commissioner, a department 
 61.10  secretary, directors of divisions, and such other officers, 
 61.11  employees, and agents as the commissioner may deem necessary to 
 61.12  discharge the functions of the department, define the duties of 
 61.13  such officers, employees, and agents, and delegate to them any 
 61.14  of the commissioner's powers or duties, subject to the 
 61.15  commissioner's control and under such conditions as the 
 61.16  commissioner may prescribe.  Appointments to exercise delegated 
 61.17  power to sign documents which require the signature of the 
 61.18  commissioner or a delegate by law shall be by written order 
 61.19  filed with the secretary of state. 
 61.20     Sec. 3.  Minnesota Statutes 1996, section 270.10, 
 61.21  subdivision 5, is amended to read: 
 61.22     Subd. 5.  [APPEAL; PAYMENT OF ORDER.] Except for orders 
 61.23  relating to property tax matters, no collection action may be 
 61.24  taken, including the filing of liens under section 270.69, and 
 61.25  no late payment penalties may be imposed when a return has been 
 61.26  filed for the tax type and period upon which the order is based, 
 61.27  if an order of the commissioner, excluding orders relating to 
 61.28  property tax matters, is paid: 
 61.29     (1) within 60 days after notice and demand for payment of 
 61.30  the order have has been mailed to the taxpayer; or 
 61.31     (2) if an administrative appeal or a tax court appeal under 
 61.32  chapter 271 is timely filed, within 60 days following final 
 61.33  determination of the appeal if the appeal is based upon a 
 61.34  constitutional challenge to the tax, and if not, when the 
 61.35  decision of the tax court is made. 
 61.36     Sec. 4.  Minnesota Statutes 1996, section 270.101, 
 62.1   subdivision 2, is amended to read: 
 62.2      Subd. 2.  [PERSON DEFINED.] The term "person" includes, but 
 62.3   is not limited to, a corporation, estate, trust, organization, 
 62.4   or association, whether organized for profit or not, an officer 
 62.5   or director of a corporation, a member of a partnership, an 
 62.6   employee, a third party (including, but not limited to, a 
 62.7   financial institution, lender, or surety), and any other 
 62.8   individual or entity.  "Person" does not include an unpaid, 
 62.9   volunteer member of a board of trustees or directors of an 
 62.10  organization exempt from taxation under section 290.05, if the 
 62.11  member is solely serving in an honorary capacity, does not 
 62.12  participate in the day-to-day or financial operations of the 
 62.13  organization, and has no actual knowledge of the failure to file 
 62.14  returns or remit taxes. 
 62.15     Sec. 5.  Minnesota Statutes 1996, section 270.101, is 
 62.16  amended by adding a subdivision to read: 
 62.17     Subd. 4.  [RIGHT OF CONTRIBUTION.] A person who has paid 
 62.18  all or part of a liability assessed under this section has a 
 62.19  cause of action against other liable persons to recover the 
 62.20  amount paid in excess of that person's share of the liability.  
 62.21  A claim for recovery of contribution may be made only in a 
 62.22  proceeding which is separate from, and cannot be joined or 
 62.23  consolidated with, an administrative or judicial proceeding or 
 62.24  investigation involving the commissioner's administration or 
 62.25  enforcement of this section.  An order assessing liability under 
 62.26  this section against the person from whom contribution is being 
 62.27  sought is not a prerequisite for bringing an action for recovery 
 62.28  of contribution, nor is the issuance of an order binding on the 
 62.29  court in which the proceeding is brought.  The court can 
 62.30  determine whether each person would be liable under this section 
 62.31  and the share of liability.  The commissioner cannot be made a 
 62.32  party to any proceeding for recovery of contribution, nor is a 
 62.33  determination in such a proceeding binding on the commissioner 
 62.34  for the purpose of administering or enforcing this section.  An 
 62.35  action for contribution arises when the liability under this 
 62.36  section is paid in full, or the liability of the person seeking 
 63.1   contribution has been determined by agreement between the 
 63.2   commissioner and such person and paid, and must be brought 
 63.3   within the time period prescribed in section 541.05. 
 63.4      Sec. 6.  Minnesota Statutes 1996, section 270.271, is 
 63.5   amended by adding a subdivision to read: 
 63.6      Subd. 5.  [PRIVATE DELIVERY SERVICES.] A reference in this 
 63.7   section to the United States mail shall be treated as including 
 63.8   a reference to any designated delivery service, and any 
 63.9   reference in this section to a postmark by the United States 
 63.10  Postal Service shall be treated as including a reference to any 
 63.11  date recorded or marked by any designated delivery service in 
 63.12  accordance with section 7502(f) of the Internal Revenue Code. 
 63.13     Sec. 7.  Minnesota Statutes 1996, section 270.273, 
 63.14  subdivision 2, is amended to read: 
 63.15     Subd. 2.  [TERMS OF A TAXPAYER ASSISTANCE ORDER.] A 
 63.16  taxpayer assistance order may require the department within a 
 63.17  specified time period to release property of the taxpayer levied 
 63.18  on, cease any action, take any action as permitted by law, or 
 63.19  refrain from taking any action to enforce the state tax laws 
 63.20  against the taxpayer, until the issue or issues giving rise to 
 63.21  the order have been resolved. 
 63.22     Sec. 8.  Minnesota Statutes 1996, section 270.276, 
 63.23  subdivision 2, is amended to read: 
 63.24     Subd. 2.  [DAMAGES.] On a finding of liability on the part 
 63.25  of the defendant in an action brought under subdivision 1, the 
 63.26  defendant is liable to the plaintiff in an amount equal to the 
 63.27  lesser of $100,000 $200,000, or the sum of (1) actual, direct 
 63.28  economic damages sustained by the plaintiff as a proximate 
 63.29  result of the reckless or intentional actions of the employee 
 63.30  and (2) the costs of the action.  Damages must be paid in 
 63.31  accordance with section 3.736, subdivision 7. 
 63.32     Sec. 9.  Minnesota Statutes 1996, section 270.67, 
 63.33  subdivision 2, is amended to read: 
 63.34     Subd. 2.  [EXTENSION AGREEMENTS.] When any portion of any 
 63.35  tax payable to the commissioner of revenue together with 
 63.36  interest and penalty thereon, if any, has not been paid, the 
 64.1   commissioner may extend the time for payment for a further 
 64.2   period.  When the authority of this section is invoked, the 
 64.3   extension shall be evidenced by written agreement signed by the 
 64.4   taxpayer and the commissioner, stating the amount of the tax 
 64.5   with penalty and interest, if any, and providing for the payment 
 64.6   of the amount in regular weekly, semimonthly or monthly 
 64.7   installments.  The agreement shall may contain a confession of 
 64.8   judgment for the amount and for any unpaid portion thereof and 
 64.9   shall provide that the commissioner may forthwith enter judgment 
 64.10  against the taxpayer in the district court of the county of 
 64.11  residence as shown upon the taxpayer's tax return for the unpaid 
 64.12  portion of the amount specified in the extension agreement.  The 
 64.13  agreement shall provide that it can be terminated, after notice 
 64.14  by the commissioner, if information provided by the taxpayer 
 64.15  prior to the agreement was inaccurate or incomplete, collection 
 64.16  of the tax covered by the agreement is in jeopardy, there is a 
 64.17  subsequent change in the taxpayer's financial condition, the 
 64.18  taxpayer has failed to make a payment due under the agreement, 
 64.19  or has failed to pay any other tax or file a tax return coming 
 64.20  due after the agreement.  The notice must be given at least 14 
 64.21  calendar days prior to termination, and shall advise the 
 64.22  taxpayer of the right to request a reconsideration from the 
 64.23  commissioner of whether termination is reasonable and 
 64.24  appropriate under the circumstances.  A request for 
 64.25  reconsideration does not stay collection action beyond the 
 64.26  14-day notice period.  The commissioner may accept other 
 64.27  collateral the commissioner considers appropriate to secure 
 64.28  satisfaction of the tax liability.  The principal sum specified 
 64.29  in the agreement shall bear interest at the rate specified in 
 64.30  section 270.75 on all unpaid portions thereof until the same has 
 64.31  been fully paid or the unpaid portion thereof has been entered 
 64.32  as a judgment.  The judgment shall bear interest at the rate 
 64.33  specified in section 270.75.  If it appears to the commissioner 
 64.34  that the tax reported by the taxpayer is in excess of the amount 
 64.35  actually owing by the taxpayer, the extension agreement or the 
 64.36  judgment entered pursuant thereto shall be corrected.  If after 
 65.1   making the extension agreement or entering judgment with respect 
 65.2   thereto, the commissioner determines that the tax as reported by 
 65.3   the taxpayer is less than the amount actually due, the 
 65.4   commissioner shall assess a further tax in accordance with the 
 65.5   provisions of law applicable to the tax.  The authority granted 
 65.6   to the commissioner by this section is in addition to any other 
 65.7   authority granted to the commissioner by law to extend the time 
 65.8   of payment or the time for filing a return and shall not be 
 65.9   construed in limitation thereof.  
 65.10     Sec. 10.  Minnesota Statutes 1996, section 270.69, 
 65.11  subdivision 11, is amended to read: 
 65.12     Subd. 11.  [ERRONEOUS LIENS.] After the filing of a notice 
 65.13  of lien under this section on the property or rights to property 
 65.14  of a person, the person may appeal to the commissioner, in the 
 65.15  form and at the time prescribed by the commissioner, alleging an 
 65.16  error in the filing of the lien and requesting its release.  If 
 65.17  the commissioner determines that the filing of the notice of any 
 65.18  lien was erroneous, within 14 days after the determination, the 
 65.19  commissioner must issue a certificate of release of the lien.  
 65.20  The certificate must include a statement that the filing of the 
 65.21  lien was erroneous.  In the event that the lien is erroneous and 
 65.22  is not released within the 14-day period, reasonable attorney 
 65.23  fees shall be paid.  Damages must be paid in accordance with 
 65.24  section 3.736, subdivision 7.  Even if a lien is not erroneous, 
 65.25  the commissioner may withdraw the lien if the filing of the lien 
 65.26  was premature or not in accordance with administrative 
 65.27  procedures of the commissioner, or withdrawal of the lien will 
 65.28  facilitate the collection of the tax liability. 
 65.29     Sec. 11.  [270.771] [PAYMENTS REQUIRED TO BE MADE BY 
 65.30  ELECTRONIC FUNDS TRANSFER.] 
 65.31     (a) If a taxpayer is required to make payment of a tax to 
 65.32  the commissioner by means of electronic funds transfer as 
 65.33  defined in section 336.4A-104, paragraph (a), the taxpayer shall 
 65.34  make all payments of all taxes and fees paid to the commissioner 
 65.35  by means of electronic funds transfer. 
 65.36     (b) Paragraph (a) does not apply to payments required to be 
 66.1   made for individual income taxes under section 289A.20, 
 66.2   subdivision 1, paragraph (a), or 289A.25.  
 66.3      Sec. 12.  Minnesota Statutes 1996, section 270A.07, 
 66.4   subdivision 1, is amended to read: 
 66.5      Subdivision 1.  [NOTIFICATION REQUIREMENT.] Any claimant 
 66.6   agency, seeking collection of a debt through setoff against a 
 66.7   refund due, shall submit to the commissioner information 
 66.8   indicating the amount of each debt and information identifying 
 66.9   the debtor, as required by section 270A.04, subdivision 3.  
 66.10     For each setoff of a debt against a refund due, the 
 66.11  commissioner shall charge a fee of $10 $5.  The claimant agency 
 66.12  may add the fee to the amount of the debt.  
 66.13     The claimant agency shall notify the commissioner when a 
 66.14  debt has been satisfied or reduced by at least $200 within 30 
 66.15  days after satisfaction or reduction. 
 66.16     The fee under this subdivision shall be adjusted by the 
 66.17  commissioner by June 1 of every odd-numbered year, to be 
 66.18  effective July 1 of that year.  The fee shall most nearly equal 
 66.19  the costs of the commissioner to process setoffs of debts 
 66.20  against refunds due as required by this chapter.  The 
 66.21  determination of the fee under this subdivision is not 
 66.22  rulemaking under chapter 14.  In no event shall the fee exceed 
 66.23  $10. 
 66.24     Sec. 13.  Minnesota Statutes 1996, section 271.06, 
 66.25  subdivision 2, is amended to read: 
 66.26     Subd. 2.  [TIME; NOTICE; INTERVENTION.] Except as otherwise 
 66.27  provided by law, within 60 days after notice of the making and 
 66.28  filing of an order of the commissioner of revenue, the 
 66.29  appellant, or the appellant's attorney, shall serve a notice of 
 66.30  appeal upon the commissioner and file the original, with proof 
 66.31  of such service, with the tax court administrator or with the 
 66.32  court administrator of district court acting as court 
 66.33  administrator of the tax court; provided, that the tax court, 
 66.34  for cause shown, may by written order extend the time for 
 66.35  appealing for an additional period not exceeding 30 days.  The 
 66.36  notice of appeal shall be in the form prescribed by the tax 
 67.1   court.  Within five days after receipt, the commissioner shall 
 67.2   transmit a copy of the notice of appeal to the attorney general 
 67.3   in all cases where the amount at issue exceeds $100.  The 
 67.4   attorney general shall represent the commissioner, if requested, 
 67.5   upon all such appeals except in cases where the attorney general 
 67.6   has appealed in behalf of the state, or in other cases where the 
 67.7   attorney general deems it against the interests of the state to 
 67.8   represent the commissioner, in which event the attorney general 
 67.9   may intervene or be substituted as an appellant in behalf of the 
 67.10  state at any stage of the proceedings. 
 67.11     Upon a final determination of any other matter over which 
 67.12  the court is granted jurisdiction under section 271.01, 
 67.13  subdivision 5, the taxpayer or the taxpayer's attorney shall 
 67.14  file a petition or notice of appeal as provided by law with the 
 67.15  court administrator of district court, acting in the capacity of 
 67.16  court administrator of the tax court, with proof of service of 
 67.17  the petition or notice of appeal as required by law and within 
 67.18  the time required by law.  As used in this subdivision, "final 
 67.19  determination" includes a notice of assessment and equalization 
 67.20  for the year in question received from the local assessor, an 
 67.21  order of the local board of equalization, or an order of a 
 67.22  county board of equalization. 
 67.23     The tax court shall prescribe a filing system so that the 
 67.24  notice of appeal or petition filed with the district court 
 67.25  administrator acting as court administrator of the tax court is 
 67.26  forwarded to the tax court administrator.  In the case of an 
 67.27  appeal or a petition concerning property valuation for which the 
 67.28  assessor, a local board of equalization, a county board of 
 67.29  equalization or the commissioner of revenue has issued an order, 
 67.30  the officer issuing the order shall be notified of the filing of 
 67.31  the appeal.  The notice of appeal or petition shall be in the 
 67.32  form prescribed by the tax court. 
 67.33     Sec. 14.  Minnesota Statutes 1996, section 271.08, 
 67.34  subdivision 1, is amended to read: 
 67.35     Subdivision 1.  [WRITTEN ORDER.] The tax court, except in 
 67.36  small claims division, shall determine every appeal by written 
 68.1   order containing findings of fact and the decision of the tax 
 68.2   court.  A memorandum of the grounds of the decision shall be 
 68.3   appended.  A certified copy of the order shall be transmitted to 
 68.4   the commissioner of revenue or the appropriate unit of 
 68.5   government and filed in that office.  Notice of the entry of the 
 68.6   order and of the substance of the decision shall be given by 
 68.7   mail mailed to all other parties who have appeared, and also, in 
 68.8   all cases where the amount at issue exceeds $100, to the 
 68.9   attorney general.  A motion for rehearing, which includes a 
 68.10  motion for amended findings of fact, conclusions of law, or a 
 68.11  new trial, must be served by the moving party within 15 days 
 68.12  after mailing of the notice by the court as specified in this 
 68.13  subdivision, and the motion must be heard within 30 days 
 68.14  thereafter, unless the time for hearing is extended by the court 
 68.15  within the 30-day period for good cause shown. 
 68.16     Sec. 15.  Minnesota Statutes 1996, section 271.10, 
 68.17  subdivision 2, is amended to read: 
 68.18     Subd. 2.  [SERVICE OF WRIT.] Within 60 days after notice of 
 68.19  the making and filing of the order of the tax court, or the 
 68.20  making and filing of an order on a petition motion for 
 68.21  rehearing, which includes a motion for amended findings of fact, 
 68.22  conclusions of law, or a new trial, the petitioner for review 
 68.23  shall obtain from the supreme court a writ of certiorari, and 
 68.24  shall serve the same upon all other parties appearing in the 
 68.25  proceedings before the tax court, and shall file the original, 
 68.26  with proof of such service, with the court administrator of the 
 68.27  tax court.  Every petitioner, except the attorney general, the 
 68.28  commissioner of revenue, the state and its political 
 68.29  subdivisions, shall also pay to the court administrator the fee 
 68.30  prescribed by rule 103.01 of the rules of civil appellate 
 68.31  procedure which shall be disposed of in the manner provided by 
 68.32  that rule, and file a bond or make a deposit in like manner and 
 68.33  amount as in case of an appeal from the district court.  The fee 
 68.34  shall be disposed of as in such case.  Return upon the writ 
 68.35  shall be made to the supreme court and the matter shall be heard 
 68.36  and determined by the court as in other certiorari cases, 
 69.1   subject to the provisions hereof and to such rules as the court 
 69.2   may prescribe for cases arising hereunder. 
 69.3      Sec. 16.  [287.13] [VIOLATIONS; PENALTIES.] 
 69.4      Subdivision 1.  [FAILURE TO PAY FULL AMOUNT.] Any person 
 69.5   liable for the tax imposed by section 287.05 who fails to pay 
 69.6   the full amount of tax imposed under sections 287.01 to 287.12, 
 69.7   unless such failure is shown to be due to reasonable cause, is 
 69.8   liable for a civil penalty of $250 for each such failure. 
 69.9      Subd. 2.  [ADDITIONAL PENALTY.] Any person who willfully 
 69.10  attempts to evade or defeat the tax imposed under sections 
 69.11  287.01 to 287.12, or the payment thereof, shall, in addition to 
 69.12  the penalty provided in subdivision 1, be liable for a penalty 
 69.13  of 50 percent of the total amount of the underpayment of the tax.
 69.14     Sec. 17.  Minnesota Statutes 1996, section 287.31, 
 69.15  subdivision 1, is amended to read: 
 69.16     Subdivision 1.  [FAILURE TO COMPLY.] Any person liable for 
 69.17  the tax imposed by section 287.21 who fails to comply with the 
 69.18  provisions of section 287.25 relating to the attachment or 
 69.19  cancellation of documentary stamps, unless such failure is shown 
 69.20  to be due to reasonable cause, shall be liable to a civil 
 69.21  penalty of $50 $250 for each such failure. 
 69.22     Sec. 18.  Minnesota Statutes 1996, section 289A.09, 
 69.23  subdivision 2, is amended to read: 
 69.24     Subd. 2.  [WITHHOLDING STATEMENT TO EMPLOYEE OR PAYEE AND 
 69.25  TO COMMISSIONER.] (a) A person required to deduct and withhold 
 69.26  from an employee a tax under section 290.92, subdivision 2a or 
 69.27  3, or 290.923, subdivision 2, or who would have been required to 
 69.28  deduct and withhold a tax under section 290.92, subdivision 2a 
 69.29  or 3, or persons required to withhold tax under section 290.923, 
 69.30  subdivision 2, determined without regard to section 290.92, 
 69.31  subdivision 19, if the employee or payee had claimed no more 
 69.32  than one withholding exemption, or who paid wages or made 
 69.33  payments not subject to withholding under section 290.92, 
 69.34  subdivision 2a or 3, or 290.923, subdivision 2, to an employee 
 69.35  or person receiving royalty payments in excess of $600, or who 
 69.36  has entered into a voluntary withholding agreement with a payee 
 70.1   under section 290.92, subdivision 20, must give every employee 
 70.2   or person receiving royalty payments in respect to the 
 70.3   remuneration paid by the person to the employee or person 
 70.4   receiving royalty payments during the calendar year, on or 
 70.5   before January 31 of the succeeding year, or, if employment is 
 70.6   terminated before the close of the calendar year, within 30 days 
 70.7   after the date of receipt of a written request from the employee 
 70.8   if the 30-day period ends before January 31, a written statement 
 70.9   showing the following: 
 70.10     (1) name of the person; 
 70.11     (2) the name of the employee or payee and the employee's or 
 70.12  payee's social security account number; 
 70.13     (3) the total amount of wages as that term is defined in 
 70.14  section 290.92, subdivision 1, paragraph (1); the total amount 
 70.15  of remuneration subject to withholding under section 290.92, 
 70.16  subdivision 20; the amount of sick pay as required under section 
 70.17  6051(f) of the Internal Revenue Code; and the amount of 
 70.18  royalties subject to withholding under section 290.923, 
 70.19  subdivision 2; and 
 70.20     (4) the total amount deducted and withheld as tax under 
 70.21  section 290.92, subdivision 2a or 3, or 290.923, subdivision 2. 
 70.22     (b) The statement required to be furnished by this 
 70.23  paragraph with respect to any remuneration must be furnished at 
 70.24  those times, must contain the information required, and must be 
 70.25  in the form the commissioner prescribes. 
 70.26     (c) The commissioner may prescribe rules providing for 
 70.27  reasonable extensions of time, not in excess of 30 days, to 
 70.28  employers or payers required to give the statements to their 
 70.29  employees or payees under this subdivision. 
 70.30     (d) A duplicate of any statement made under this 
 70.31  subdivision and in accordance with rules prescribed by the 
 70.32  commissioner, along with a reconciliation in the form the 
 70.33  commissioner prescribes of the statements for the calendar year, 
 70.34  including a reconciliation of the quarterly returns required to 
 70.35  be filed under subdivision 1, must be filed with the 
 70.36  commissioner on or before February 28 of the year after the 
 71.1   payments were made.  
 71.2      (e) The employer must submit the statements required to be 
 71.3   sent to the commissioner on magnetic media, if the magnetic 
 71.4   media was required to satisfy the federal reporting requirements 
 71.5   of section 6011(e) of the Internal Revenue Code and the 
 71.6   regulations issued under it. 
 71.7      (f) A "provider of payroll services" as defined in section 
 71.8   289A.20, subdivision 2, paragraph (f), must submit the returns 
 71.9   required by this subdivision and subdivision 1, paragraph (a), 
 71.10  with the commissioner by electronic means. 
 71.11     Sec. 19.  Minnesota Statutes 1996, section 289A.20, 
 71.12  subdivision 1, is amended to read: 
 71.13     Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
 71.14  MINING COMPANY, CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] 
 71.15  (a) Individual income, fiduciary, mining company, and corporate 
 71.16  franchise taxes must be paid to the commissioner on or before 
 71.17  the date the return must be filed under section 289A.18, 
 71.18  subdivision 1, or the extended due date as provided in section 
 71.19  289A.19, unless an earlier date for payment is provided.  
 71.20     Notwithstanding any other law, a taxpayer whose unpaid 
 71.21  liability for income or corporate franchise taxes, as reflected 
 71.22  upon the return, is $1 or less need not pay the tax.  
 71.23     (b) Entertainment taxes must be paid on or before the date 
 71.24  the return must be filed under section 289A.18, subdivision 1. 
 71.25     (c) If a fiduciary administers 100 or more trusts, 
 71.26  fiduciary income taxes for all trusts administered by the 
 71.27  fiduciary must be paid by funds transfer as defined in section 
 71.28  336.4A-104, paragraph (a).  The funds transfer payment date, as 
 71.29  defined in section 336.4A-401, must be on or before the date the 
 71.30  tax payment is due.  If the date the payment is due is not a 
 71.31  funds transfer business day, as defined in section 336.4A-105, 
 71.32  paragraph (a), clause (4), the payment date must be on or before 
 71.33  the funds transfer business day next following the date the 
 71.34  payment is due. 
 71.35     Sec. 20.  Minnesota Statutes 1996, section 289A.20, 
 71.36  subdivision 2, is amended to read: 
 72.1      Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
 72.2   WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
 72.3   WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 
 72.4   (a) A tax required to be deducted and withheld during the 
 72.5   quarterly period must be paid on or before the last day of the 
 72.6   month following the close of the quarterly period, unless an 
 72.7   earlier time for payment is provided.  A tax required to be 
 72.8   deducted and withheld from compensation of an entertainer and 
 72.9   from a payment to an out-of-state contractor must be paid on or 
 72.10  before the date the return for such tax must be filed under 
 72.11  section 289A.18, subdivision 2.  Taxes required to be deducted 
 72.12  and withheld by partnerships and S corporations must be paid on 
 72.13  or before the date the return must be filed under section 
 72.14  289A.18, subdivision 2. 
 72.15     (b) An employer who, during the previous quarter, withheld 
 72.16  more than $1,500 of tax under section 290.92, subdivision 2a or 
 72.17  3, or 290.923, subdivision 2, must deposit tax withheld under 
 72.18  those sections with the commissioner within the time allowed to 
 72.19  deposit the employer's federal withheld employment taxes under 
 72.20  Treasury Regulation, section 31.6302-1, without regard to the 
 72.21  safe harbor or de minimus rules in subparagraph (f) or the 
 72.22  one-day rule in subsection (c), clause (3).  Taxpayers must 
 72.23  submit a copy of their federal notice of deposit status to the 
 72.24  commissioner upon request by the commissioner. 
 72.25     (c) The commissioner may prescribe by rule other return 
 72.26  periods or deposit requirements.  In prescribing the reporting 
 72.27  period, the commissioner may classify payors according to the 
 72.28  amount of their tax liability and may adopt an appropriate 
 72.29  reporting period for the class that the commissioner judges to 
 72.30  be consistent with efficient tax collection.  In no event will 
 72.31  the duration of the reporting period be more than one year. 
 72.32     (d) If less than the correct amount of tax is paid to the 
 72.33  commissioner, proper adjustments with respect to both the tax 
 72.34  and the amount to be deducted must be made, without interest, in 
 72.35  the manner and at the times the commissioner prescribes.  If the 
 72.36  underpayment cannot be adjusted, the amount of the underpayment 
 73.1   will be assessed and collected in the manner and at the times 
 73.2   the commissioner prescribes. 
 73.3      (e) If the aggregate amount of the tax withheld during a 
 73.4   fiscal year ending June 30 under section 290.92, subdivision 2a 
 73.5   or 3, is equal to or exceeds $50,000 the amounts established for 
 73.6   remitting federal withheld taxes pursuant to the regulations 
 73.7   promulgated under section 6302(h) of the Internal Revenue Code, 
 73.8   the employer must remit each required deposit in the subsequent 
 73.9   calendar year by means of a funds transfer as defined in section 
 73.10  336.4A-104, paragraph (a).  The funds transfer payment date, as 
 73.11  defined in section 336.4A-401, must be on or before the date the 
 73.12  deposit is due.  If the date the deposit is due is not a funds 
 73.13  transfer business day, as defined in section 336.4A-105, 
 73.14  paragraph (a), clause (4), the payment date must be on or before 
 73.15  the funds transfer business day next following the date the 
 73.16  deposit is due. 
 73.17     (f) Providers of payroll services who remit withholding 
 73.18  deposits on behalf of 50 or more employers, or on behalf of any 
 73.19  employer with aggregate amounts over the threshold in paragraph 
 73.20  (e), must remit all deposits by means of a funds transfer as 
 73.21  provided in paragraph (e), regardless of the aggregate amount of 
 73.22  tax withheld during a fiscal year for all of the employers.  For 
 73.23  the purposes of this paragraph, "providers of payroll services" 
 73.24  means persons who have custody of or control over another 
 73.25  employer's funds for the purpose of paying on behalf of the 
 73.26  other employer's Minnesota withholding taxes. 
 73.27     Sec. 21.  Minnesota Statutes 1996, section 289A.31, 
 73.28  subdivision 1, is amended to read: 
 73.29     Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
 73.30  MINING COMPANY, CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] 
 73.31  (a) Individual income, fiduciary income, mining company, and 
 73.32  corporate franchise taxes, and interest and penalties, must be 
 73.33  paid by the taxpayer upon whom the tax is imposed, except in the 
 73.34  following cases:  
 73.35     (1) The tax due from a decedent for that part of the 
 73.36  taxable year in which the decedent died during which the 
 74.1   decedent was alive and the taxes, interest, and penalty due for 
 74.2   the prior years must be paid by the decedent's personal 
 74.3   representative, if any.  If there is no personal representative, 
 74.4   the taxes, interest, and penalty must be paid by the 
 74.5   transferees, as defined in section 289A.38, subdivision 13, to 
 74.6   the extent they receive property from the decedent; 
 74.7      (2) The tax due from an infant or other incompetent person 
 74.8   must be paid by the person's guardian or other person authorized 
 74.9   or permitted by law to act for the person; 
 74.10     (3) The tax due from the estate of a decedent must be paid 
 74.11  by the estate's personal representative; 
 74.12     (4) The tax due from a trust, including those within the 
 74.13  definition of a corporation, as defined in section 290.01, 
 74.14  subdivision 4, must be paid by a trustee; and 
 74.15     (5) The tax due from a taxpayer whose business or property 
 74.16  is in charge of a receiver, trustee in bankruptcy, assignee, or 
 74.17  other conservator, must be paid by the person in charge of the 
 74.18  business or property so far as the tax is due to the income from 
 74.19  the business or property. 
 74.20     (b) Entertainment taxes are the joint and several liability 
 74.21  of the entertainer and the entertainment entity.  The payor is 
 74.22  liable to the state for the payment of the tax required to be 
 74.23  deducted and withheld under section 290.9201, subdivision 7, and 
 74.24  is not liable to the entertainer for the amount of the payment. 
 74.25     (c) The tax imposed under section 290.0922 on partnerships 
 74.26  is the joint and several liability of the partnership and the 
 74.27  general partners. 
 74.28     Sec. 22.  Minnesota Statutes 1996, section 289A.37, 
 74.29  subdivision 1, is amended to read: 
 74.30     Subdivision 1.  [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 
 74.31  TAXPAYER.] (a) When a return has been filed and the commissioner 
 74.32  determines that the tax disclosed by the return is different 
 74.33  than the tax determined by the examination, the commissioner 
 74.34  shall send an order of assessment to the taxpayer.  When no 
 74.35  return has been filed, the commissioner may make a return for 
 74.36  the taxpayer under section 289A.35 or may send an order of 
 75.1   assessment under this subdivision.  The order must explain the 
 75.2   basis for the assessment and must explain the taxpayer's appeal 
 75.3   rights.  An order of assessment is final when made but may be 
 75.4   reconsidered by the commissioner under section 289A.65. 
 75.5      (b) No collection action can be taken, including the filing 
 75.6   of liens under section 270.69, and the penalty under section 
 75.7   289A.60, subdivision 1, is not imposed and no collection action 
 75.8   can be taken, including the filing of liens under section 270.69 
 75.9   when a return has been filed for the tax type and period upon 
 75.10  which the order is based, if the amount shown on the order is 
 75.11  paid to the commissioner:  (1) within 60 days after notice of 
 75.12  the amount and demand for its payment have the order has been 
 75.13  mailed to the taxpayer by the commissioner; or (2) if an 
 75.14  administrative appeal is filed under section 289A.65 or a tax 
 75.15  court appeal is filed under chapter 271, within 60 days 
 75.16  following final determination of the appeal if the appeal is 
 75.17  based upon a constitutional challenge to the tax, and if not, 
 75.18  when the decision of the tax court is made. 
 75.19     Sec. 23.  Minnesota Statutes 1996, section 289A.40, 
 75.20  subdivision 1, is amended to read: 
 75.21     Subdivision 1.  [TIME LIMIT; GENERALLY.] Unless otherwise 
 75.22  provided in this chapter, a claim for a refund of an overpayment 
 75.23  of state tax must be filed within 3-1/2 years from the date 
 75.24  prescribed for filing the return, plus any extension of time 
 75.25  granted for filing the return, but only if filed within the 
 75.26  extended time, or one year from the date of an order assessing 
 75.27  tax under section 289A.37, subdivision 1, or one year from the 
 75.28  date of a return made by the commissioner under section 289A.35, 
 75.29  upon payment in full of the tax, penalties, and interest shown 
 75.30  on the order or return made by the commissioner, whichever 
 75.31  period expires later.  Claims for refund, except for taxes under 
 75.32  chapter 297A, filed after the 3-1/2 year period but within the 
 75.33  one-year period are limited to the amount of the tax, penalties, 
 75.34  and interest on the order or return made by the commissioner and 
 75.35  to issues determined by the order or return made by the 
 75.36  commissioner. 
 76.1      In the case of assessments under section 289A.38, 
 76.2   subdivision 5 or 6, claims for refund under chapter 297A filed 
 76.3   after the 3-1/2 year period but within the one-year period are 
 76.4   limited to the amount of the tax, penalties, and interest on the 
 76.5   order or return made by the commissioner that are due for the 
 76.6   period before the 3-1/2 year period. 
 76.7      Sec. 24.  Minnesota Statutes 1996, section 297B.035, 
 76.8   subdivision 3, is amended to read: 
 76.9      Subd. 3.  [SALES IN VIOLATION OF LICENSING REQUIREMENTS.] 
 76.10  Motor vehicles sold by a new motor vehicle dealer in 
 76.11  contravention of section 168.27, subdivision 10, clause (1)(b) 
 76.12  shall not be considered to have been acquired or purchased for 
 76.13  resale in the ordinary or regular course of business for the 
 76.14  purposes of this chapter, and the dealer shall be required to 
 76.15  pay the excise tax due on the purchase of those vehicles.  The 
 76.16  sale by a lessor of a new motor vehicle under lease within 120 
 76.17  days of the commencement of the lease is deemed a sale in 
 76.18  contravention of section 168.27, subdivision 10, clause (1)(b) 
 76.19  unless the lessor holds a valid contract or franchise with the 
 76.20  manufacturer or distributor of the vehicle.  Notwithstanding 
 76.21  section 297B.11, the rights of a dealer to appeal any amounts 
 76.22  owed by the dealer under this subdivision are governed 
 76.23  exclusively by the hearing procedure under section 168.27, 
 76.24  subdivision 13. 
 76.25     Sec. 25.  Minnesota Statutes 1996, section 297B.11, is 
 76.26  amended to read: 
 76.27     297B.11 [REGISTRAR AS AGENT OF COMMISSIONER OF REVENUE; 
 76.28  POWERS.] 
 76.29     The state commissioner of revenue is charged with the 
 76.30  administration of the sales tax on motor vehicles.  The 
 76.31  commissioner may prescribe all rules not inconsistent with the 
 76.32  provisions of this chapter, necessary and advisable for the 
 76.33  proper and efficient administration of the law.  The collection 
 76.34  of this sales tax on motor vehicles shall be carried out by the 
 76.35  motor vehicle registrar who shall act as the agent of the 
 76.36  commissioner and who shall be subject to all rules not 
 77.1   inconsistent with the provisions of this chapter, that may be 
 77.2   prescribed by the commissioner.  
 77.3      The provisions of chapters 289A and 297A relating to the 
 77.4   commissioner's authority to audit, assess, and collect the tax, 
 77.5   and to refunds and appeals, are applicable to the sales tax on 
 77.6   motor vehicles.  The commissioner may impose civil penalties as 
 77.7   provided in chapters 289A and 297A, and the additional tax and 
 77.8   penalties are subject to interest at the rate provided in 
 77.9   section 270.75.  
 77.10     Sec. 26.  Minnesota Statutes 1996, section 299F.21, is 
 77.11  amended to read: 
 77.12     299F.21 [FIRE INSURANCE COMPANIES PAY TAX.] 
 77.13     Subdivision 1.  [ESTIMATED INSTALLMENT PAYMENTS.] On or 
 77.14  before April 1, June 1, and December 1 of each year, every 
 77.15  licensed insurance company, including reciprocals or 
 77.16  interinsurance exchanges, doing business in the state, excepting 
 77.17  farmers' mutual fire insurance companies and township mutual 
 77.18  fire insurance companies, shall pay to the commissioner of 
 77.19  revenue installments equal to one-third of, a tax upon its fire 
 77.20  premiums or assessments or both, based on a sum equal to 
 77.21  one-half of one percent of the estimated fire premiums and 
 77.22  assessments, less return premiums and dividends, on all direct 
 77.23  business received by it in this state, or by its agents for it, 
 77.24  in cash or otherwise, during the year, including premiums on 
 77.25  policies covering fire risks only on automobiles, whether 
 77.26  written under floater form or otherwise.  In the case of a 
 77.27  mutual company or reciprocal exchange the dividends or savings 
 77.28  paid or credited to members in this state shall be construed to 
 77.29  be return premiums.  The money so received into the state 
 77.30  treasury shall be credited to the general fund.  A company that 
 77.31  fails to make payments of at least one-third of either (1) the 
 77.32  total tax paid during the previous calendar year or (2) 80 
 77.33  percent of the actual tax for the current calendar year is 
 77.34  subject to the penalty and interest provided in this chapter, 
 77.35  unless the total tax for the current tax year is $500 or less.  
 77.36     Subd. 1a.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the 
 78.1   aggregate amount of fire marshal tax payments under this section 
 78.2   and the premium tax payments under section 60A.15 made during a 
 78.3   calendar year is equal to or exceeds $120,000, all tax payments 
 78.4   in the subsequent calendar year must be paid by means of a funds 
 78.5   transfer as defined in section 336.4A-104, paragraph (a).  The 
 78.6   funds transfer payment date, as defined in section 336.4A-401, 
 78.7   must be on or before the date the payment is due.  If the date 
 78.8   the payment is due is not a funds transfer business day, as 
 78.9   defined in section 336.4A-105, paragraph (a), clause (4), the 
 78.10  payment date must be on or before the funds transfer business 
 78.11  day next following the date the payment is due. 
 78.12     Subd. 1b.  [ADDITION TO TAX.] In case of an underpayment of 
 78.13  installments by an insurer, there must be added to the tax for 
 78.14  the taxable year an amount determined at the rate specified in 
 78.15  section 270.75 upon the amount of underpayment. 
 78.16     Subd. 1b. 1c.  [AMOUNT OF UNDERPAYMENT.] For purposes of 
 78.17  subdivision 1a, the amount of the underpayment is the excess 
 78.18  of:  (1) the amount of the installment; over (2) the amount, if 
 78.19  any, of the installment paid on or before the last date 
 78.20  prescribed for payment. 
 78.21     Subd. 1c. 1d.  [PERIOD OF UNDERPAYMENT.] The period of the 
 78.22  underpayment runs from the date the installment was required to 
 78.23  be paid to the earliest of the following dates: 
 78.24     (1) on March 1 following the close of the taxable year; 
 78.25     (2) with respect to any portion of the underpayment, the 
 78.26  date on which that portion is paid.  For purposes of this 
 78.27  clause, a payment of estimated tax on any installment date is 
 78.28  considered a payment of any previous underpayment only to the 
 78.29  extent the payment exceeds the amount of the installment 
 78.30  determined under clause (1), for the installment date. 
 78.31     Subd. 1d. 1e.  [DEFINITION OF TAX.] The term "tax" means 
 78.32  the tax imposed by this chapter. 
 78.33     Subd. 1e. 1f.  [FAILURE TO FILE ESTIMATE.] In the case of 
 78.34  an insurer that fails to file an estimated tax statement for a 
 78.35  taxable year when one is required, the period of the 
 78.36  underpayment runs from the installment dates as set forth in 
 79.1   subdivision 1 to whichever of the periods set forth in 
 79.2   subdivision 1c is the earlier. 
 79.3      Subd. 2.  [ANNUAL RETURNS.] (a) Every insurer required to 
 79.4   pay a tax under this section shall make and file a statement of 
 79.5   estimated taxes for the period covered by the installment tax 
 79.6   payment.  The statement shall be in the form prescribed by the 
 79.7   commissioner of revenue.  
 79.8      (b) On or before March 1, annually every insurer subject to 
 79.9   taxation under this section shall make an annual return for the 
 79.10  preceding calendar year setting forth information the 
 79.11  commissioner of revenue may reasonably require on forms 
 79.12  prescribed by the commissioner.  
 79.13     (c) On March 1, the insurer shall pay any additional amount 
 79.14  due for the preceding calendar year; if there has been an 
 79.15  overpayment, the overpayment may be credited without interest on 
 79.16  the estimated tax due April 15.  
 79.17     (d) If unpaid by this date, penalties as provided in 
 79.18  section 289A.60, subdivision 1, as related to withholding and 
 79.19  sales or use taxes, shall be imposed. 
 79.20     Sec. 27.  [STATUS OF EXEMPT RULES.] 
 79.21     Notwithstanding Minnesota Statutes 1995 Supplement, section 
 79.22  14.387, the following statutes, and any rules adopted or 
 79.23  determinations, actions, or positions taken pursuant to these 
 79.24  statutes, have the force and effect of law on and after July 1, 
 79.25  1997:  Minnesota Statutes, sections 124.2131, subdivision 1, 
 79.26  paragraph (b); 270.75, subdivision 5; 270.76; 270.79, 
 79.27  subdivision 4, paragraph (g); 290.06, subdivision 2d; 290A.04, 
 79.28  subdivision 6; and 297E.15, subdivision 11. 
 79.29     Sec. 28.  [EFFECTIVE DATES.] 
 79.30     Sections 1, 11, and 26 are effective for all payments due 
 79.31  after December 31, 1997. 
 79.32     Sections 2, 4, 6 to 10, 13 to 15, 21, 24, 25, and 27 are 
 79.33  effective the day following final enactment. 
 79.34     Sections 3 and 22 are effective for orders of assessment 
 79.35  issued on or after the day following final enactment. 
 79.36     Section 5 is effective for causes of action arising before 
 80.1   the day following final enactment which are not barred by the 
 80.2   statute of limitations as of that date, and for causes of action 
 80.3   arising thereafter. 
 80.4      Section 12 is effective for fees beginning on July 1, 1997, 
 80.5   and thereafter. 
 80.6      Sections 16 and 17 are effective for taxes becoming due and 
 80.7   payable after June 30, 1997. 
 80.8      Section 18 is effective for returns for amounts withheld 
 80.9   for periods after December 31, 1997. 
 80.10     Section 19 is effective for tax payments for the taxable 
 80.11  years beginning after December 31, 1997. 
 80.12     Section 20 is effective for withholding on wages after 
 80.13  December 31, 1997. 
 80.14     Section 23 is effective for claims for refund filed on or 
 80.15  after the day following final enactment.