1st Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; making tax policy, collection, 1.3 and administrative changes; imposing penalties; 1.4 amending Minnesota Statutes 1994, sections 60A.15, 1.5 subdivision 12; 60A.199, subdivisions 8 and 10; 1.6 168.012, subdivision 9; 270.72, subdivisions 1, 2, and 1.7 3; 270.79, subdivision 4; 273.124, subdivisions 1, 3, 1.8 6, 11, and 13; 274.14; 275.07, subdivision 1; 275.08, 1.9 subdivision 1b; 289A.18, subdivision 2; 289A.20, 1.10 subdivision 2; 289A.25, by adding a subdivision; 1.11 289A.26, subdivision 2a; 289A.38, subdivision 7; 1.12 289A.40, subdivision 1; 289A.43; 289A.55, subdivision 1.13 7; 289A.60, subdivisions 2, 12, and by adding a 1.14 subdivision; 290.01, subdivision 7b; 290.015, 1.15 subdivision 1; 290.067, subdivision 1, as amended; 1.16 290.191, subdivisions 1, 5, and 6; 290.92, 1.17 subdivisions 1 and 23; 290.9201, subdivision 3; 1.18 290A.03, subdivisions 6 and 13; 290A.04, subdivision 1.19 3; 290A.07, subdivision 2a; 294.09, subdivisions 1 and 1.20 4; 296.12, subdivisions 3, 4, and 11; 296.141, 1.21 subdivisions 1, 2, and 6; 296.17, subdivisions 1, 3, 1.22 5, and 11; 296.18, subdivisions 1, 2, and 5; 297.08, 1.23 subdivisions 1 and 3; 297.35, subdivision 1; 297.43, 1.24 subdivision 2; 297C.02, subdivision 2; 297C.07; 1.25 297C.14, subdivision 2; 297E.11, subdivision 4; 1.26 297E.12, subdivision 2; 299F.26, subdivisions 1 and 4; 1.27 and 477A.015; proposing coding for new law in 1.28 Minnesota Statutes, chapters 270 and 296; repealing 1.29 Minnesota Statutes 1994, sections 270.70, subdivisions 1.30 8, 9, and 10; 297A.212; and 297A.38. 1.31 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.32 ARTICLE 1 1.33 INCOME TAX AND BUSINESS TAXES 1.34 Section 1. Minnesota Statutes 1994, section 289A.18, 1.35 subdivision 2, is amended to read: 1.36 Subd. 2. [WITHHOLDING RETURNS, ENTERTAINER WITHHOLDING 1.37 RETURNS, RETURNS FOR WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE 1.38 CONTRACTORS, AND WITHHOLDING RETURNS FROM PARTNERSHIPS AND S 2.1 CORPORATIONS.] Withholding returns are due on or before the last 2.2 day of the month following the close of the quarterly period. 2.3 However, if the return shows timely deposits in full payment of 2.4 the taxes due for that period, thereturnreturns for the first, 2.5 second, and third quarters may be filed on or before the tenth 2.6 day of the second calendar month following the period and the 2.7 return for the fourth quarter may be filed on or before the 28th 2.8 day of the second calendar month following the period. An 2.9 employer, in preparing a quarterly return, may take credit for 2.10 monthly deposits previously made for that quarter. Entertainer 2.11 withholding tax returns are due within 30 days after each 2.12 performance. Returns for withholding from payments to 2.13 out-of-state contractors are due within 30 days after the 2.14 payment to the contractor. Returns for withholding by 2.15 partnerships are due on or before the due date specified for 2.16 filing partnership returns. Returns for withholding by S 2.17 corporations are due on or before the due date specified for 2.18 filing corporate franchise tax returns. 2.19 Sec. 2. Minnesota Statutes 1994, section 289A.20, 2.20 subdivision 2, is amended to read: 2.21 Subd. 2. [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 2.22 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 2.23 WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 2.24 (a) A tax required to be deducted and withheld during the 2.25 quarterly period must be paid on or before the last day of the 2.26 month following the close of the quarterly period, unless an 2.27 earlier time for payment is provided. A tax required to be 2.28 deducted and withheld from compensation of an entertainer and 2.29 from a payment to an out-of-state contractor must be paid on or 2.30 before the date the return for such tax must be filed under 2.31 section 289A.18, subdivision 2. Taxes required to be deducted 2.32 and withheld by partnerships and S corporations must be paid on 2.33 or before the date the return must be filed under section 2.34 289A.18, subdivision 2. 2.35 (b) An employer who, during the previous quarter, withheld 2.36 more than$500$1,500 of tax under section 290.92, subdivision 3.1 2a or 3, or 290.923, subdivision 2, must deposit tax withheld 3.2 under those sections with the commissioner within the time 3.3 allowed to deposit the employer's federal withheld employment 3.4 taxes under Treasury Regulation, section 31.6302-1, without 3.5 regard to the safe harbor or de minimus rules in subparagraph 3.6 (f) or the one-day rule in subsection (c), clause (3). 3.7 Taxpayers must submit a copy of their federal notice of deposit 3.8 status to the commissioner upon request by the commissioner. 3.9 (c) The commissioner may prescribe by rule other return 3.10 periods or deposit requirements. In prescribing the reporting 3.11 period, the commissioner may classify payors according to the 3.12 amount of their tax liability and may adopt an appropriate 3.13 reporting period for the class that the commissioner judges to 3.14 be consistent with efficient tax collection. In no event will 3.15 the duration of the reporting period be more than one year. 3.16 (d) If less than the correct amount of tax is paid to the 3.17 commissioner, proper adjustments with respect to both the tax 3.18 and the amount to be deducted must be made, without interest, in 3.19 the manner and at the times the commissioner prescribes. If the 3.20 underpayment cannot be adjusted, the amount of the underpayment 3.21 will be assessed and collected in the manner and at the times 3.22 the commissioner prescribes. 3.23 (e) If the aggregate amount of the tax withheld during a 3.24 fiscal year ending June 30 under section 290.92, subdivision 2a 3.25 or 3, is equal to or exceeds$120,000$50,000, the employer must 3.26 remit each required deposit in the subsequent calendar year by 3.27 means of a funds transfer as defined in section 336.4A-104, 3.28 paragraph (a). The funds transfer payment date, as defined in 3.29 section 336.4A-401, must be on or before the date the deposit is 3.30 due. If the date the deposit is due is not a funds transfer 3.31 business day, as defined in section 336.4A-105, paragraph (a), 3.32 clause (4), the payment date must be on or before the funds 3.33 transfer business day next following the date the deposit is due. 3.34 (f) Providers of payroll services who remit withholding 3.35 deposits on behalf of 50 or more employers, or on behalf of any 3.36 employer with aggregate amounts over the threshold in paragraph 4.1 (e), must remit all deposits by means of a funds transfer as 4.2 provided in paragraph (e), regardless of the aggregate amount of 4.3 tax withheld during a fiscal year for all of the employers. 4.4 Sec. 3. Minnesota Statutes 1994, section 289A.38, 4.5 subdivision 7, is amended to read: 4.6 Subd. 7. [FEDERAL TAX CHANGES.] If the amount of income, 4.7 items of tax preference, deductions, or credits for any year of 4.8 a taxpayer as reported to the Internal Revenue Service is 4.9 changed or corrected by the commissioner of Internal Revenue or 4.10 other officer of the United States or other competent authority, 4.11 or where a renegotiation of a contract or subcontract with the 4.12 United States results in a change in income, items of tax 4.13 preference, deductions, or credits, or, in the case of estate 4.14 tax, where there are adjustments to the taxable estate resulting 4.15 in a change to the credit for state death taxes, the taxpayer 4.16 shall report the change or correction or renegotiation results 4.17 in writing to the commissioner, in the form required by the4.18commissioner. The report must be submitted within90180 days 4.19 after the final determination and mustconcede the accuracy of4.20the determination or state how it is wrongbe in the form of 4.21 either an amended Minnesota return conceding the accuracy of the 4.22 federal determination or a letter detailing how the federal 4.23 determination is incorrect or does not change the Minnesota 4.24 tax. A taxpayer filing an amended federal tax return must also 4.25 file a copy of the amended return with the commissioner of 4.26 revenue within90180 days after filing the amended return. 4.27 Sec. 4. Minnesota Statutes 1994, section 289A.55, 4.28 subdivision 7, is amended to read: 4.29 Subd. 7. [INSTALLMENT PAYMENTS; ESTATE TAX.] Interest must 4.30 be paid on unpaid installment payments of the tax authorized 4.31 under section 289A.30, subdivision 2, beginning on the date the 4.32 tax was due without regard to extensions allowed or extensions 4.33 elected, at the rateof interest in effect undergiven in 4.34 section 270.75, nine months following the date of death. 4.35 Sec. 5. Minnesota Statutes 1994, section 289A.60, is 4.36 amended by adding a subdivision to read: 5.1 Subd. 24. [PENALTY FOR FAILURE TO NOTIFY OF FEDERAL 5.2 CHANGE.] If a person fails to report to the commissioner a 5.3 change or correction of the person's federal return in the 5.4 manner and time prescribed in section 289A.38, subdivision 7, 5.5 there must be added to the tax an amount equal to ten percent of 5.6 the amount of any underpayment of Minnesota tax attributable to 5.7 the federal change. 5.8 Sec. 6. Minnesota Statutes 1994, section 290.01, 5.9 subdivision 7b, is amended to read: 5.10 Subd. 7b. [RESIDENT TRUST.] Resident trust means a trust, 5.11 except a grantor type trust, whichis administered in this state5.12 either (1) was created by a will of a decedent who at his or her 5.13 death was domiciled in this state or (2) is an irrevocable 5.14 trust, the grantor of which was domiciled in this state at the 5.15 time the trust became irrevocable. For the purpose of this 5.16 subdivision, a trust is considered irrevocable to the extent the 5.17 grantor is not treated as the owner thereof under sections 671 5.18 to 678 of the Internal Revenue Code. The term "grantor type 5.19 trust" means a trust where the income or gains of the trust are 5.20 taxable to the grantor or others treated as substantial owners 5.21 under sections 671 to 678 of the Internal Revenue Code. 5.22 Sec. 7. Minnesota Statutes 1994, section 290.015, 5.23 subdivision 1, is amended to read: 5.24 Subdivision 1. [GENERAL RULE.] (a) Except as provided in 5.25 subdivision 3, a person that conducts a trade or business that 5.26 has a place of business in this state, regularly has employees 5.27 or independent contractors conducting business activities on its 5.28 behalf in this state, or owns or leases real property located in 5.29 this state or tangible personal property located in this state 5.30 as defined in section 290.191, subdivision 6, paragraph (e), is 5.31 subject to the taxes imposed by this chapter. 5.32 (b) Except as provided in subdivision 3, a person that 5.33 conducts a trade or business not described in paragraph (a) is 5.34 subject to the taxes imposed by this chapter if the trade or 5.35 business obtains or regularly solicits business from within this 5.36 state, without regard to physical presence in this state. 6.1 (c) For purposes of paragraph (b), business from within 6.2 this state includes, but is not limited to: 6.3 (1) sales of products or services of any kind or nature to 6.4 customers in this state who receive the product or service in 6.5 this state; 6.6 (2) sales of services which are performed from outside this 6.7 state but thebenefits of whichservices areconsumedreceived 6.8 in this state; 6.9 (3) transactions with customers in this state that involve 6.10 intangible property and result in income flowing to the person 6.11 from within this state as provided in section 290.191; 6.12 (4) leases of tangible personal property that is located in 6.13 this state as defined in section 290.191, subdivision 6, 6.14 paragraph (e); 6.15 (5) sales and leases of real property located in this 6.16 state; and 6.17 (6) if a financial institution, deposits received from 6.18 customers in this state. 6.19 (d) For purposes of paragraph (b), solicitation includes, 6.20 but is not limited to: 6.21 (1) the distribution, by mail or otherwise, without regard 6.22 to the state from which such distribution originated or in which 6.23 the materials were prepared, of catalogs, periodicals, 6.24 advertising flyers, or other written solicitations of business 6.25 to customers in this state; 6.26 (2) display of advertisements on billboards or other 6.27 outdoor advertising in this state; 6.28 (3) advertisements in newspapers published in this state; 6.29 (4) advertisements in trade journals or other periodicals, 6.30 the circulation of which is primarily within this state; 6.31 (5) advertisements in a Minnesota edition of a national or 6.32 regional publication or a limited regional edition of which this 6.33 state is included of a broader regional or national publication 6.34 which are not placed in other geographically defined editions of 6.35 the same issue of the same publication; 6.36 (6) advertisements in regional or national publications in 7.1 an edition which is not by its contents geographically targeted 7.2 to Minnesota, but which is sold over the counter in Minnesota or 7.3 by subscription to Minnesota residents; 7.4 (7) advertisements broadcast on a radio or television 7.5 station located in Minnesota; or 7.6 (8) any other solicitation by telegraph, telephone, 7.7 computer database, cable, optic, microwave, or other 7.8 communication system. 7.9 Sec. 8. Minnesota Statutes, 1994, section 290.067, 7.10 subdivision 1, as amended by Laws 1995, chapter 1, section 4, is 7.11 amended to read: 7.12 Subdivision 1. [AMOUNT OF CREDIT.] (a) A taxpayer may take 7.13 as a credit against the tax due from the taxpayer and a spouse, 7.14 if any, under this chapter an amount equal to the dependent care 7.15 credit for which the taxpayer is eligible pursuant to the 7.16 provisions of section 21 of the Internal Revenue Code subject to 7.17 the limitations provided in subdivision 2 except that in 7.18 determining whether the child qualified as a dependent, income 7.19 received as an aid to families with dependent children grant or 7.20 allowance to or on behalf of the child must not be taken into 7.21 account in determining whether the child received more than half 7.22 of the child's support from the taxpayer, and the provisions of 7.23 section 32(b)(1)(D) of the Internal Revenue Code do not apply. 7.24 (b) If a child whois six years of age or lesshas not 7.25 attained the age of six years at the close of the taxable year 7.26 is cared for at a licensed family day care home operated by the 7.27 child's parent, the taxpayer is deemed to have paid 7.28 employment-related expenses. If the child is 16 months old or 7.29 younger at the close of the taxable year, the amount of expenses 7.30 deemed to have been paid equals the maximum limit for one 7.31 qualified individual under section 21(c) and (d) of the Internal 7.32 Revenue Code. If the child is older than 16 months of age 7.33 butnot older than six years of agehas not attained the age of 7.34 six years at the close of the taxable year, the amount of 7.35 expenses deemed to have been paid equals the amount the licensee 7.36 would charge for the care of a child of the same age for the 8.1 same number of hours of care. 8.2 (c) If a married couple: 8.3 (1) has a child who has not attained the age of one year at 8.4 the close of the taxable year; 8.5 (2) files a joint tax return for the taxable year; and 8.6 (3) does not participate in a dependent care assistance 8.7 program as defined in section 129 of the Internal Revenue Code, 8.8 in lieu of the actual employment related expenses paid for that 8.9 child under paragraph (a) or the deemed amount under paragraph 8.10 (b), the lesser of (i) the combined earned income of the couple 8.11 or (ii) $2,400 will be deemed to be the employment related 8.12 expense paid for that child. The earned income limitation of 8.13 section 21(d) of the Internal Revenue Code shall not apply to 8.14 this deemed amount. These deemed amounts apply regardless of 8.15 whether any employment-related expenses have been paid. 8.16 (d) If the taxpayer is not required and does not file a 8.17 federal individual income tax return for the tax year, no credit 8.18 is allowed for any amount paid to any person unless: 8.19 (1) the name, address, and taxpayer identification number 8.20 of the person are included on the return claiming the credit; or 8.21 (2) if the person is an organization described in section 8.22 501(c)(3) of the Internal Revenue Code and exempt from tax under 8.23 section 501(a) of the Internal Revenue Code, the name and 8.24 address of the person are included on the return claiming the 8.25 credit. 8.26 In the case of a failure to provide the information required 8.27 under the preceding sentence, the preceding sentence does not 8.28 apply if it is shown that the taxpayer exercised due diligence 8.29 in attempting to provide the information required. 8.30 In the case of a nonresident, part-year resident, or a 8.31 person who has earned income not subject to tax under this 8.32 chapter, the credit determined under section 21 of the Internal 8.33 Revenue Code must be allocated based on the ratio by which the 8.34 earned income of the claimant and the claimant's spouse from 8.35 Minnesota sources bears to the total earned income of the 8.36 claimant and the claimant's spouse. 9.1 Sec. 9. Minnesota Statutes 1994, section 290.191, 9.2 subdivision 1, is amended to read: 9.3 Subdivision 1. [GENERAL RULE.] (a) Except as otherwise 9.4 provided in section 290.17, subdivision 5, the net income from a 9.5 trade or business carried on partly within and partly without 9.6 this state must be apportioned to this state as provided in this 9.7 section. 9.8 (b) For purposes of this section, "state" means a state of 9.9 the United States, the District of Columbia, the commonwealth of 9.10 Puerto Rico, or any territory or possession of the United States 9.11 or any foreign country. 9.12 Sec. 10. Minnesota Statutes 1994, section 290.191, 9.13 subdivision 5, is amended to read: 9.14 Subd. 5. [DETERMINATION OF SALES FACTOR.] For purposes of 9.15 this section, the following rules apply in determining the sales 9.16 factor. 9.17 (a) The sales factor includes all sales, gross earnings, or 9.18 receipts received in the ordinary course of the business, except 9.19 that the following types of income are not included in the sales 9.20 factor: 9.21 (1) interest; 9.22 (2) dividends; 9.23 (3) sales of capital assets as defined in section 1221 of 9.24 the Internal Revenue Code; 9.25 (4) sales of property used in the trade or business, except 9.26 sales of leased property of a type which is regularly sold as 9.27 well as leased; 9.28 (5) sales of debt instruments as defined in section 9.29 1275(a)(1) of the Internal Revenue Code or sales of stock; and 9.30 (6) royalties, fees, or other like income of a type which 9.31 qualify for a subtraction from federal taxable income under 9.32 section 290.01, subdivision 19(d)(11). 9.33 (b) Sales of tangible personal property are made within 9.34 this state if the property is received by a purchaser at a point 9.35 within this state, and the taxpayer is taxable in this state, 9.36 regardless of the f.o.b. point, other conditions of the sale, or 10.1 the ultimate destination of the property. 10.2 (c) Tangible personal property delivered to a common or 10.3 contract carrier or foreign vessel for delivery to a purchaser 10.4 in another state or nation is a sale in that state or nation, 10.5 regardless of f.o.b. point or other conditions of the sale. 10.6 (d) Notwithstanding paragraphs (b) and (c), when 10.7 intoxicating liquor, wine, fermented malt beverages, cigarettes, 10.8 or tobacco products are sold to a purchaser who is licensed by a 10.9 state or political subdivision to resell this property only 10.10 within the state of ultimate destination, the sale is made in 10.11 that state. 10.12 (e) Sales made by or through a corporation that is 10.13 qualified as a domestic international sales corporation under 10.14 section 992 of the Internal Revenue Code are not considered to 10.15 have been made within this state. 10.16 (f) Sales, rents, royalties, and other income in connection 10.17 with real property is attributed to the state in which the 10.18 property is located. 10.19 (g) Receipts from the lease or rental of tangible personal 10.20 property, including finance leases and true leases, must be 10.21 attributed to this state if the property is located in this 10.22 state and to other states if the property is not located in this 10.23 state. Moving property including, but not limited to, motor 10.24 vehicles, rolling stock, aircraft, vessels, or mobile equipment 10.25 is located in this state if: 10.26 (1) the operation of the property is entirely within this 10.27 state; or 10.28 (2) the operation of the property is in two or more states 10.29 and the principal base of operations from which the property is 10.30 sent out is in this state. 10.31 (h) Royalties and other income not described in paragraph 10.32 (a), clause (6), received for the use of or for the privilege of 10.33 using intangible property, including patents, know-how, 10.34 formulas, designs, processes, patterns, copyrights, trade names, 10.35 service names, franchises, licenses, contracts, customer lists, 10.36 or similar items, must be attributed to the state in which the 11.1 property is used by the purchaser. If the property is used in 11.2 more than one state, the royalties or other income must be 11.3 apportioned to this state pro rata according to the portion of 11.4 use in this state. If the portion of use in this state cannot 11.5 be determined, the royalties or other income must be excluded 11.6 from both the numerator and the denominator. Intangible 11.7 property is used in this state if the purchaser uses the 11.8 intangible property or the rights therein in the regular course 11.9 of its business operations in this state, regardless of the 11.10 location of the purchaser's customers. 11.11 (i) Sales of intangible property are made within the state 11.12 in which the property is used by the purchaser. If the property 11.13 is used in more than one state, the sales must be apportioned to 11.14 this state pro rata according to the portion of use in this 11.15 state. If the portion of use in this state cannot be 11.16 determined, the sale must be excluded from both the numerator 11.17 and the denominator of the sales factor. Intangible property is 11.18 used in this state if the purchaser used the intangible property 11.19 in the regular course of its business operations in this state. 11.20 (j) Receipts from the performance of services must be 11.21 attributed to the statein which the benefits ofwhere the 11.22 services areconsumedreceived.If the benefits are consumed in11.23more than one state, the receipts from those benefits must be11.24apportioned to this state pro rata according to the portion of11.25the benefits consumed in this state. If the extent to which the11.26benefits of services are consumed in this state is not readily11.27determinable, the benefits of theFor the purposes of this 11.28 section, receipts from the performance of services provided to a 11.29 corporation, partnership, or trust may only be attributed to a 11.30 state where it has a fixed place of doing business. If the 11.31 state where the services are received is not readily 11.32 determinable or is a state where the corporation, partnership, 11.33 or trust receiving the service does not have a fixed place of 11.34 doing business, the services shall be deemed to beconsumed11.35 received at the location of the office of the customer from 11.36 which the services were ordered in the regular course of the 12.1 customer's trade or business. If the ordering office cannot be 12.2 determined, thebenefits of theservices shall be deemed to be 12.3consumedreceived at the office of the customer to which the 12.4 services are billed. 12.5 Sec. 11. Minnesota Statutes 1994, section 290.191, 12.6 subdivision 6, is amended to read: 12.7 Subd. 6. [DETERMINATION OF RECEIPTS FACTOR FOR FINANCIAL 12.8 INSTITUTIONS.] (a) For purposes of this section, the rules in 12.9 this subdivision andsubdivisions 7 andsubdivision 8 apply in 12.10 determining the receipts factor for financial institutions. 12.11 (b) "Receipts" for this purpose means gross income, 12.12 including net taxable gain on disposition of assets, including 12.13 securities and money market instruments, when derived from 12.14 transactions and activities in the regular course of the 12.15 taxpayer's trade or business. 12.16 (c) "Money market instruments" means federal funds sold and 12.17 securities purchased under agreements to resell, commercial 12.18 paper, banker's acceptances, and purchased certificates of 12.19 deposit and similar instruments to the extent that the 12.20 instruments are reflected as assets under generally accepted 12.21 accounting principles. 12.22 (d) "Securities" means United States Treasury securities, 12.23 obligations of United States government agencies and 12.24 corporations, obligations of state and political subdivisions, 12.25 corporate stock, bonds, and other securities, participations in 12.26 securities backed by mortgages held by United States or state 12.27 government agencies, loan-backed securities and similar 12.28 investments to the extent the investments are reflected as 12.29 assets under generally accepted accounting principles. 12.30 (e) Receipts from the lease or rental of real or tangible 12.31 personal property, including both finance leases and true 12.32 leases, must be attributed to this state if the property is 12.33 located in this state. Tangible personal property that is 12.34 characteristically moving property, such as motor vehicles, 12.35 rolling stock, aircraft, vessels, mobile equipment, and the 12.36 like, is considered to be located in a state if: 13.1 (1) the operation of the property is entirely within the 13.2 state; or 13.3 (2) the operation of the property is in two or more states, 13.4 but the principal base of operations from which the property is 13.5 sent out is in the state. 13.6 (f) Interest income and other receipts from assets in the 13.7 nature of loans that are secured primarily by real estate or 13.8 tangible personal property must be attributed to this state if 13.9 the security property is located in this state under the 13.10 principles stated in paragraph (e). 13.11 (g) Interest income and other receipts from consumer loans 13.12 not secured by real or tangible personal property that are made 13.13 to residents of this state, whether at a place of business, by 13.14 traveling loan officer, by mail, by telephone or other 13.15 electronic means, must be attributed to this state. 13.16 (h) Interest income and other receipts from commercial 13.17 loans and installment obligations that are unsecured by real or 13.18 tangible personal property or secured by intangible property 13.19 must be attributed to this state if the proceeds of the loan are 13.20 to be applied in this state. If it cannot be determined where 13.21 the funds are to be applied, the income and receipts are 13.22 attributed to the state in which the office of the borrower from 13.23 which the application would be made in the regular course of 13.24 business is located. If this cannot be determined, the 13.25 transaction is disregarded in the apportionment formula. 13.26 (i) Interest income and other receipts from a participating 13.27 financial institution's portion of participation and syndication 13.28 loans must be attributed under paragraphs (e) to (h). A 13.29 participation loan is an arrangement in which a lender makes a 13.30 loan to a borrower and then sells, assigns, or otherwise 13.31 transfers all or a part of the loan to a purchasing financial 13.32 institution. A syndication loan is a loan transaction involving 13.33 multiple financial institutions in which all the lenders are 13.34 named as parties to the loan documentation, are known to the 13.35 borrower, and have privity of contract with the borrower. 13.36 (j) Interest income and other receipts including service 14.1 charges from financial institution credit card and travel and 14.2 entertainment credit card receivables and credit card holders' 14.3 fees must be attributed to the state to which the card charges 14.4 and fees are regularly billed. 14.5 (k) Merchant discount income derived from financial 14.6 institution credit card holder transactions with a merchant must 14.7 be attributed to the state in which the merchant is located. In 14.8 the case of merchants located within and outside the state, only 14.9 receipts from merchant discounts attributable to sales made from 14.10 locations within the state are attributed to this state. It is 14.11 presumed, subject to rebuttal, that the location of a merchant 14.12 is the address shown on the invoice submitted by the merchant to 14.13 the taxpayer. 14.14 (l) Receipts from the performance of fiduciary and other 14.15 services must be attributed to the state in whichthe benefits14.16ofthe services areconsumedreceived.If the benefits are14.17consumed in more than one state, the receipts from those14.18benefits must be apportioned to this state pro rata according to14.19the portion of the benefits consumed in this state.For the 14.20 purposes of this section, services provided to a corporation, 14.21 partnership, or trust must be attributed to a state where it has 14.22 a fixed place of doing business. If theextent to which the14.23benefits ofstate where the services areconsumed in this state14.24 received is not readily determinable or is a state where the 14.25 corporation, partnership, or trust does not have a fixed place 14.26 of doing business, thebenefits of theservices shall be deemed 14.27 to beconsumedreceived at the location of the office of the 14.28 customer from which the services were ordered in the regular 14.29 course of the customer's trade or business. If the ordering 14.30 office cannot be determined, thebenefits of theservices shall 14.31 be deemed to beconsumedreceived at the office of the customer 14.32 to which the services are billed. 14.33 (m) Receipts from the issuance of travelers checks and 14.34 money orders must be attributed to the state in which the checks 14.35 and money orders are purchased. 14.36 (n) Receipts from investments of a financial institution in 15.1 securities and from money market instruments must be apportioned 15.2 to this state based on the ratio that total deposits from this 15.3 state, its residents, including any business with an office or 15.4 other place of business in this state, its political 15.5 subdivisions, agencies, and instrumentalities bear to the total 15.6 deposits from all states, their residents, their political 15.7 subdivisions, agencies, and instrumentalities. In the case of 15.8 an unregulated financial institution subject to this section, 15.9 these receipts are apportioned to this state based on the ratio 15.10 that its gross business income, excluding such receipts, earned 15.11 from sources within this state bears to gross business income, 15.12 excluding such receipts, earned from sources within all states. 15.13 For purposes of this subdivision, deposits made by this state, 15.14 its residents, its political subdivisions, agencies, and 15.15 instrumentalities must be attributed to this state, whether or 15.16 not the deposits are accepted or maintained by the taxpayer at 15.17 locations within this state. 15.18 (o) A financial institution's interest in property 15.19 described in section 290.015, subdivision 3, paragraph (b), is 15.20 included in the receipts factor in the same manner as assets in 15.21 the nature of securities or money market instruments are 15.22 included in paragraph (n). 15.23 Sec. 12. Minnesota Statutes 1994, section 290.92, 15.24 subdivision 1, is amended to read: 15.25 Subdivision 1. [DEFINITIONS.] (1) [WAGES.] For purposes 15.26 of this section, the term "wages" means the same as that term is 15.27 defined in section 3401(a) and (f) of the Internal Revenue Code,15.28except wages shall not include agricultural labor as defined in15.29section 3121(g) of the Internal Revenue Code. 15.30 (2) [PAYROLL PERIOD.] For purposes of this section the 15.31 term "payroll period" means a period for which a payment of 15.32 wages is ordinarily made to the employee by the employee's 15.33 employer, and the term "miscellaneous payroll period" means a 15.34 payroll period other than a daily, weekly, biweekly, 15.35 semimonthly, monthly, quarterly, semiannual, or annual payroll 15.36 period. 16.1 (3) [EMPLOYEE.] For purposes of this section the term 16.2 "employee" means any resident individual performing services for 16.3 an employer, either within or without, or both within and 16.4 without the state of Minnesota, and every nonresident individual 16.5 performing services within the state of Minnesota, the 16.6 performance of which services constitute, establish, and 16.7 determine the relationship between the parties as that of 16.8 employer and employee. As used in the preceding sentence, the 16.9 term "employee" includes an officer of a corporation, and an 16.10 officer, employee, or elected official of the United States, a 16.11 state, or any political subdivision thereof, or the District of 16.12 Columbia, or any agency or instrumentality of any one or more of 16.13 the foregoing. 16.14 (4) [EMPLOYER.] For purposes of this section the term 16.15 "employer" means any person, including individuals, fiduciaries, 16.16 estates, trusts, partnerships, limited liability companies, and 16.17 corporations transacting business in or deriving any income from 16.18 sources within the state of Minnesota for whom an individual 16.19 performs or performed any service, of whatever nature, as the 16.20 employee of such person, except that if the person for whom the 16.21 individual performs or performed the services does not have 16.22 legal control of the payment of the wages for such services, the 16.23 term "employer," except for purposes of paragraph (1), means the 16.24 person having legal control of the payment of such wages. As 16.25 used in the preceding sentence, the term "employer" includes any 16.26 corporation, individual, estate, trust, or organization which is 16.27 exempt from taxation under section 290.05 and further includes, 16.28 but is not limited to, officers of corporations who have legal 16.29 control, either individually or jointly with another or others, 16.30 of the payment of the wages. 16.31 (5) [NUMBER OF WITHHOLDING EXEMPTIONS CLAIMED.] For 16.32 purposes of this section, the term "number of withholding 16.33 exemptions claimed" means the number of withholding exemptions 16.34 claimed in a withholding exemption certificate in effect under 16.35 subdivision 5, except that if no such certificate is in effect, 16.36 the number of withholding exemptions claimed shall be considered 17.1 to be zero. 17.2 Sec. 13. Minnesota Statutes 1994, section 290.9201, 17.3 subdivision 3, is amended to read: 17.4 Subd. 3. [CREDIT AGAINST TAX.] Each calendar year an 17.5 entertainment entity may take a nonrefundable credit 17.6 of$100$120 against the tax imposed by this section. 17.7 Sec. 14. [OMISSIONS FROM INHERITANCE OR ESTATE TAX 17.8 RETURN.] 17.9 Effective for decedents dying before August 1, 1990, the 17.10 provisions of Minnesota Statutes, section 289A.38, subdivision 17.11 6, apply to assets omitted from an inheritance tax return or 17.12 estate tax return rather than the provisions of Minnesota 17.13 Statutes 1988, section 291.11, subdivision 1, clause (2)(c). 17.14 Sec. 15. [EFFECTIVE DATE.] 17.15 Section 1 is effective for returns due after December 31, 17.16 1995. Section 2 as it relates to quarterly withholding deposits 17.17 is effective for withholding done after December 31, 1995, and 17.18 the remainder of section 2 is effective for payments due after 17.19 December 31, 1995. Sections 3 and 5 are effective for federal 17.20 determinations after December 31, 1995. Section 4 is effective 17.21 for estates of decedents dying after the date of final 17.22 enactment. Section 6 is effective for deaths after December 31, 17.23 1995, and trusts that become irrevocable after December 31, 17.24 1995. Sections 7 to 11 are effective for tax years beginning 17.25 after December 31, 1995. Section 12 is effective for wages paid 17.26 after December 31, 1995. Section 13 is effective for tax years 17.27 beginning after December 31, 1994. 17.28 ARTICLE 2 17.29 PROPERTY TAX AND PROPERTY TAX REFUNDS 17.30 Section 1. Minnesota Statutes 1994, section 168.012, 17.31 subdivision 9, is amended to read: 17.32 Subd. 9. [MANUFACTURED HOMES.] Manufactured homes shall 17.33 not be taxed as motor vehicles using the public streets and 17.34 highways and shall be exempt from the motor vehicle tax 17.35 provisions of this chapter. Except as provided in section 17.36 273.125, manufactured homes shall be taxed as personal property. 18.1 The provisions of Minnesota Statutes 1957, section 272.02 or any 18.2 other act providing for tax exemption shall be inapplicable to 18.3 manufactured homes, except such manufactured homes as are held 18.4 by a licensed dealer and exempted as inventory. Travel trailers 18.5 not conspicuously displaying current registration plates on the 18.6 property tax assessment date shall be taxed as manufactured 18.7 homes if occupied as human dwelling places. Park trailersnot18.8used on the highway during any calendar yearmust be taxed as 18.9 manufactured homes if occupied as human dwelling places., and in 18.10 addition, park trailers used on the highway during any calendar 18.11 year must be taxed under section 168.013, subdivision 1j. 18.12 Sec. 2. Minnesota Statutes 1994, section 273.124, 18.13 subdivision 1, is amended to read: 18.14 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 18.15 that is occupied and used for the purposes of a homestead by its 18.16 owner, who must be a Minnesota resident, is a residential 18.17 homestead. 18.18 Agricultural land, as defined in section 273.13, 18.19 subdivision 23, that is occupied and used as a homestead by its 18.20 owner, who must be a Minnesota resident, is an agricultural 18.21 homestead. 18.22 Dates for establishment of a homestead and homestead 18.23 treatment provided to particular types of property are as 18.24 provided in this section. 18.25 Property of a trustee, beneficiary, or grantor of a trust 18.26 is not disqualified from receiving homestead benefits if the 18.27 homestead requirements under this chapter are satisfied. 18.28 The assessor shall require proof, as provided in 18.29 subdivision 13, of the facts upon which classification as a 18.30 homestead may be determined. Notwithstanding any other law, the 18.31 assessor may at any time require a homestead application to be 18.32 filed in order to verify that any property classified as a 18.33 homestead continues to be eligible for homestead status. 18.34 Notwithstanding any other law to the contrary, the department of 18.35 revenue may, upon request from an assessor, verify whether an 18.36 individual who is requesting or receiving homestead 19.1 classification has filed a Minnesota income tax return as a 19.2 resident for the most recent taxable year for which the 19.3 information is available. 19.4 When there is a name change or a transfer of homestead 19.5 property, the assessor may reclassify the property in the next 19.6 assessment unless a homestead application is filed to verify 19.7 that the property continues to qualify for homestead 19.8 classification. 19.9 (b) For purposes of this section, homestead property shall 19.10 include property which is used for purposes of the homestead but 19.11 is separated from the homestead by a road, street, lot, 19.12 waterway, or other similar intervening property. The term "used 19.13 for purposes of the homestead" shall include but not be limited 19.14 to uses for gardens, garages, or other outbuildings commonly 19.15 associated with a homestead, but shall not include vacant land 19.16 held primarily for future development. In order to receive 19.17 homestead treatment for the noncontiguous property, the owner 19.18 shall apply for it to the assessor by July 1 of the year when 19.19 the treatment is initially sought. After initial qualification 19.20 for the homestead treatment, additional applications for 19.21 subsequent years are not required. 19.22 (c) Residential real estate that is occupied and used for 19.23 purposes of a homestead by a relative of the owner is a 19.24 homestead but only to the extent of the homestead treatment that 19.25 would be provided if the related owner occupied the property. 19.26 For purposes of this paragraph, "relative" means a parent, 19.27 stepparent, child, stepchild, grandparent, grandchild, brother, 19.28 sister, uncle, or aunt. This relationship may be by blood or 19.29 marriage. Property that was classified as seasonal recreational 19.30 residential property at the time when treatment under this 19.31 paragraph would first apply shall continue to be classified as 19.32 seasonal recreational residential property for the first four 19.33 assessment years beginning after the date when the relative of 19.34 the owner occupies the property as a homestead; this delay also 19.35 applies to property that, in the absence of this paragraph, 19.36 would have been classified as seasonal recreational residential 20.1 property at the time when the residence was constructed. 20.2 Neither the related occupant nor the owner of the property may 20.3 claim a property tax refund under chapter 290A for a homestead 20.4 occupied by a relative. In the case of a residence located on 20.5 agricultural land, only the house, garage, and immediately 20.6 surrounding one acre of land shall be classified as a homestead 20.7 under this paragraph, except as provided in paragraph (d). 20.8 (d) Agricultural property that is occupied and used for 20.9 purposes of a homestead by a relative of the owner, is a 20.10 homestead, only to the extent of the homestead treatment that 20.11 would be provided if the related owner occupied the property, 20.12 and only if all of the following criteria are met: 20.13 (1) the relative who is occupying the agricultural property 20.14 is a son, daughter, father, or mother of the owner of the 20.15 agricultural property or a son or daughter of the spouse of the 20.16 owner of the agricultural property, 20.17 (2) the owner of the agricultural property must be a 20.18 Minnesota resident, 20.19 (3) the owner of the agricultural property must not receive 20.20 homestead treatment on any other agricultural property in 20.21 Minnesota, and 20.22 (4) the owner of the agricultural property is limited to 20.23 only one agricultural homestead per family under this paragraph. 20.24 Neither the related occupant nor the owner of the property 20.25 may claim a property tax refund under chapter 290A for a 20.26 homestead occupied by a relative qualifying under this 20.27 paragraph. For purposes of this paragraph, "agricultural 20.28 property" means the house, garage, other farm buildings and 20.29 structures, and agricultural land. 20.30 Application must be made to the assessor by the owner of 20.31 the agricultural property to receive homestead benefits under 20.32 this paragraph. The assessor may require the necessary proof 20.33 that the requirements under this paragraph have been met. 20.34 (e) In the case of property owned by a property owner who 20.35 is married, the assessor must not deny homestead treatment in 20.36 whole or in part if only one of the spouses occupies the 21.1 property and the other spouse is absent due to: (1) marriage 21.2 dissolution proceedings, (2) legal separation, (3) employment or 21.3 self-employment in another location as provided under 21.4 subdivision 13, or (4) residence in a nursing home or boarding 21.5 care facility. 21.6 Sec. 3. Minnesota Statutes 1994, section 273.124, 21.7 subdivision 3, is amended to read: 21.8 Subd. 3. [COOPERATIVES AND CHARITABLE CORPORATIONS.] When 21.9 one or more dwellings, or one or more buildings which each 21.10 contain several dwelling units, are owned by a corporation or 21.11 association organized under chapter 308A, and each person who 21.12 owns a share or shares in the corporation or association is 21.13 entitled to occupy a dwelling, or dwelling unit in the building, 21.14 the corporation or association may claim homestead treatment for 21.15 each dwelling, or for each unit in case of a building containing 21.16 several dwelling units, for the dwelling or for the part of the 21.17 value of the building occupied by a shareholder. Each dwelling 21.18 or unit must be designated by legal description or number, and 21.19 the net tax capacity of each dwelling that qualifies for 21.20 assessment under this subdivision must include not more than 21.21 one-half acre of land, if platted, nor more than 80 acres if 21.22 unplatted. The net tax capacity of the building or buildings 21.23 containing several dwelling units is the sum of the net tax 21.24 capacities of each of the respective units comprising the 21.25 building. To qualify for the treatment provided by this 21.26 subdivision, the corporation or association must be wholly owned 21.27 by persons having a right to occupy a dwelling or dwelling unit 21.28 owned by the corporation or association. A charitable 21.29 corporation organized under the laws of Minnesota and not 21.30 otherwise exempt thereunder with no outstanding stock qualifies 21.31 for homestead treatment with respect to member residents of the 21.32 dwelling units who have purchased and hold residential 21.33 participation warrants entitling them to occupy the units. 21.34 When dwelling units no longer qualify under this 21.35 subdivision, the current owner must notify the assessor within 21.36 60 days. Failure to notify the assessor within 60 days shall 22.1 result in the loss of benefits under this subdivision for taxes 22.2 payable in the year that the failure is discovered. For these 22.3 purposes, "benefits under this subdivision" means the difference 22.4 in the net tax capacity of the units which no longer qualify as 22.5 computed under this subdivision and as computed under the 22.6 otherwise applicable law, times the local tax rate applicable to 22.7 the building for that taxes payable year. Upon discovery of a 22.8 failure to notify, the assessor shall inform the auditor of the 22.9 difference in net tax capacity for the building or buildings in 22.10 which units no longer qualify, and the auditor shall calculate 22.11 the benefits under this subdivision. Such amount, plus a 22.12 penalty equal to 100 percent of that amount, shall then be 22.13 demanded of the building's owner. The property owner may appeal 22.14 the county's determination by filing a notice of appeal with the 22.15 Minnesota tax court within 60 days of the date of the notice 22.16 from the county. Unless inconsistent with the provisions of 22.17 this subdivision, and except for the provisions of section 22.18 278.03 requiring partial payments, the tax court shall treat the 22.19 appeal as a chapter 278 property tax appeal. If the amount of 22.20 the benefits under this subdivision and penalty are not paid 22.21 within 60 days, and if no appeal has been filed, the county 22.22 auditor shall certify the amount of the benefit and penalty to 22.23 the succeeding year's tax list to be collected as part of the 22.24 property taxes on the affected buildings. 22.25 Sec. 4. Minnesota Statutes 1994, section 273.124, 22.26 subdivision 6, is amended to read: 22.27 Subd. 6. [LEASEHOLD COOPERATIVES.] When one or more 22.28 dwellings or one or more buildings which each contain several 22.29 dwelling units is owned by a nonprofit corporation subject to 22.30 the provisions of chapter 317A and qualifying under section 22.31 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as 22.32 amended through December 31, 1990, or a limited partnership 22.33 which corporation or partnership operates the property in 22.34 conjunction with a cooperative association, and has received 22.35 public financing, homestead treatment may be claimed by the 22.36 cooperative association on behalf of the members of the 23.1 cooperative for each dwelling unit occupied by a member of the 23.2 cooperative. The cooperative association must provide the 23.3 assessor with the social security numbers of those members. To 23.4 qualify for the treatment provided by this subdivision, the 23.5 following conditions must be met: 23.6 (a) the cooperative association must be organized under 23.7 chapter 308A and all voting members of the board of directors 23.8 must be resident tenants of the cooperative and must be elected 23.9 by the resident tenants of the cooperative; 23.10 (b) the cooperative association must have a lease for 23.11 occupancy of the property for a term of at least 20 years, which 23.12 permits the cooperative association, while not in default on the 23.13 lease, to participate materially in the management of the 23.14 property, including material participation in establishing 23.15 budgets, setting rent levels, and hiring and supervising a 23.16 management agent; 23.17 (c) to the extent permitted under state or federal law, the 23.18 cooperative association must have a right under a written 23.19 agreement with the owner to purchase the property if the owner 23.20 proposes to sell it; if the cooperative association does not 23.21 purchase the property it is offered for sale, the owner may not 23.22 subsequently sell the property to another purchaser at a price 23.23 lower than the price at which it was offered for sale to the 23.24 cooperative association unless the cooperative association 23.25 approves the sale; 23.26 (d) a minimum of 40 percent of the cooperative 23.27 association's members must have incomes at or less than 60 23.28 percent of area median gross income as determined by the United 23.29 States Secretary of Housing and Urban Development under section 23.30 142(d)(2)(B) of the Internal Revenue Code of 1986, as amended 23.31 through December 31, 1991. For purposes of this clause, "member 23.32 income" means the income of a member existing at the time the 23.33 member acquires cooperative membership; 23.34 (e) if a limited partnership owns the property, it must 23.35 include as the managing general partner a nonprofit organization 23.36 operating under the provisions of chapter 317A and qualifying 24.1 under section 501(c)(3) or 501(c)(4) of the Internal Revenue 24.2 Code of 1986, as amended through December 31, 1990, and the 24.3 limited partnership agreement must provide that the managing 24.4 general partner have sufficient powers so that it materially 24.5 participates in the management and control of the limited 24.6 partnership; 24.7 (f) prior to becoming a member of a leasehold cooperative 24.8 described in this subdivision, a person must have received 24.9 notice that (1) describes leasehold cooperative property in 24.10 plain language, including but not limited to the effects of 24.11 classification under this subdivision on rents, property taxes 24.12 and tax credits or refunds, and operating expenses, and (2) 24.13 states that copies of the articles of incorporation and bylaws 24.14 of the cooperative association, the lease between the owner and 24.15 the cooperative association, a sample sublease between the 24.16 cooperative association and a tenant, and, if the owner is a 24.17 partnership, a copy of the limited partnership agreement, can be 24.18 obtained upon written request at no charge from the owner, and 24.19 the owner must send or deliver the materials within seven days 24.20 after receiving any request; 24.21 (g) if a dwelling unit of a building was occupied on the 24.22 60th day prior to the date on which the unit became leasehold 24.23 cooperative property described in this subdivision, the notice 24.24 described in paragraph (f) must have been sent by first class 24.25 mail to the occupant of the unit at least 60 days prior to the 24.26 date on which the unit became leasehold cooperative property. 24.27 For purposes of the notice under this paragraph, the copies of 24.28 the documents referred to in paragraph (f) may be in proposed 24.29 version, provided that any subsequent material alteration of 24.30 those documents made after the occupant has requested a copy 24.31 shall be disclosed to any occupant who has requested a copy of 24.32 the document. Copies of the articles of incorporation and 24.33 certificate of limited partnership shall be filed with the 24.34 secretary of state after the expiration of the 60-day period 24.35 unless the change to leasehold cooperative status does not 24.36 proceed; 25.1 (h) the county attorney of the county in which the property 25.2 is located must certify to the assessor that the property meets 25.3 the requirements of this subdivision; 25.4 (i) the public financing received must be from at least one 25.5 of the following sources: 25.6 (1) tax increment financing proceeds used for the 25.7 acquisition or rehabilitation of the building or interest rate 25.8 write-downs relating to the acquisition of the building; 25.9 (2) government issued bonds exempt from taxes under section 25.10 103 of the Internal Revenue Code of 1986, as amended through 25.11 December 31, 1991, the proceeds of which are used for the 25.12 acquisition or rehabilitation of the building; 25.13 (3) programs under section 221(d)(3), 202, or 236, of Title 25.14 II of the National Housing Act; 25.15 (4) rental housing program funds under Section 8 of the 25.16 United States Housing Act of 1937 or the market rate family 25.17 graduated payment mortgage program funds administered by the 25.18 Minnesota housing finance agency that are used for the 25.19 acquisition or rehabilitation of the building; 25.20 (5) low-income housing credit under section 42 of the 25.21 Internal Revenue Code of 1986, as amended through December 31, 25.22 1991; 25.23 (6) public financing provided by a local government used 25.24 for the acquisition or rehabilitation of the building, including 25.25 grants or loans from (i) federal community development block 25.26 grants; (ii) HOME block grants; or (iii) residential rental 25.27 bonds issued under chapter 474A; or 25.28 (7) other rental housing program funds provided by the 25.29 Minnesota housing finance agency for the acquisition or 25.30 rehabilitation of the building; 25.31 (j) at the time of the initial request for homestead 25.32 classification or of any transfer of ownership of the property, 25.33 the governing body of the municipality in which the property is 25.34 located must hold a public hearing and make the following 25.35 findings: 25.36 (1) that the granting of the homestead treatment of the 26.1 apartment's units will facilitate safe, clean, affordable 26.2 housing for the cooperative members that would otherwise not be 26.3 available absent the homestead designation; 26.4 (2) that the owner has presented information satisfactory 26.5 to the governing body showing that the savings garnered from the 26.6 homestead designation of the units will be used to reduce 26.7 tenant's rents or provide a level of furnishing or maintenance 26.8 not possible absent the designation; and 26.9 (3) that the requirements of paragraphs (b), (d), and (i) 26.10 have been met. 26.11 Homestead treatment must be afforded to units occupied by 26.12 members of the cooperative association and the units must be 26.13 assessed as provided in subdivision 3, provided that any unit 26.14 not so occupied shall be classified and assessed pursuant to the 26.15 appropriate class. No more than three acres of land may, for 26.16 assessment purposes, be included with each dwelling unit that 26.17 qualifies for homestead treatment under this subdivision. 26.18 When dwelling units no longer qualify under this 26.19 subdivision, the current owner must notify the assessor within 26.20 60 days. Failure to notify the assessor within 60 days shall 26.21 result in the loss of benefits under this subdivision for taxes 26.22 payable in the year that the failure is discovered. For these 26.23 purposes, "benefits under this subdivision" means the difference 26.24 in the net tax capacity of the units which no longer qualify as 26.25 computed under this subdivision and as computed under the 26.26 otherwise applicable law, times the local tax rate applicable to 26.27 the building for that taxes payable year. Upon discovery of a 26.28 failure to notify, the assessor shall inform the auditor of the 26.29 difference in net tax capacity for the building or buildings in 26.30 which units no longer qualify, and the auditor shall calculate 26.31 the benefits under this subdivision. Such amount, plus a 26.32 penalty equal to 100 percent of that amount, shall then be 26.33 demanded of the building's owner. The property owner may appeal 26.34 the county's determination by filing a notice of appeal with the 26.35 Minnesota tax court within 60 days of the date of the notice 26.36 from the county. Unless inconsistent with the provisions of 27.1 this subdivision, and except for the provisions of section 27.2 278.03 requiring partial payments, the tax court shall treat the 27.3 appeal as a chapter 278 property tax appeal. If the amount of 27.4 the benefits under this subdivision and penalty are not paid 27.5 within 60 days, and if no appeal has been filed, the county 27.6 auditor shall certify the amount of the benefit and penalty to 27.7 the succeeding year's tax list to be collected as part of the 27.8 property taxes on the affected buildings. 27.9 Sec. 5. Minnesota Statutes 1994, section 273.124, 27.10 subdivision 11, is amended to read: 27.11 Subd. 11. [LIMITATION ON HOMESTEAD CLASSIFICATION.] If the 27.12 assessor has classified a property as both homestead and 27.13 nonhomestead, the greater of the value attributable to the 27.14 portion of the property classified as class 1 or class 2a or the 27.15 value of the first tier of net class rates provided under 27.16 section 273.13, subdivision 22, or 23, paragraph (a), is 27.17 entitled to assessment as a homestead under section 273.13, 27.18 subdivision 22 or 23. The limitation in this subdivision does 27.19 not apply to buildings containing fewer than four residential 27.20 units or to a single rented or leased dwelling unit located 27.21 within or attached to a private garage or similar structure 27.22 owned by the owner of a homestead and located on the premises of 27.23 that homestead. 27.24 If the assessor has classified a property as both homestead 27.25 and nonhomestead,the homestead credit provided in section27.26273.13, subdivisions 22 and 23, andthe reductions in tax 27.27 provided under sections 273.135 and 273.1391 apply to the value 27.28 of both the homestead and the nonhomestead portions of the 27.29 property. 27.30 Sec. 6. Minnesota Statutes 1994, section 273.124, 27.31 subdivision 13, is amended to read: 27.32 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 27.33 the homestead requirements under subdivision 1 must file a 27.34 homestead application with the county assessor to initially 27.35 obtain homestead classification. 27.36 (b) On or before January 2, 1993, each county assessor 28.1 shall mail a homestead application to the owner of each parcel 28.2 of property within the county which was classified as homestead 28.3 for the 1992 assessment year. The format and contents of a 28.4 uniform homestead application shall be prescribed by the 28.5 commissioner of revenue. The commissioner shall consult with 28.6 the chairs of the house and senate tax committees on the 28.7 contents of the homestead application form. The application 28.8 must clearly inform the taxpayer that this application must be 28.9 signed by all owners who occupy the property or by the 28.10 qualifying relative and returned to the county assessor in order 28.11 for the property to continue receiving homestead treatment. The 28.12 envelope containing the homestead application shall clearly 28.13 identify its contents and alert the taxpayer of its necessary 28.14 immediate response. 28.15 (c) Every property owner applying for homestead 28.16 classification must furnish to the county assessor the social 28.17 security number of each occupant who is listed as an owner of 28.18 the property on the deed of record, the name and address of each 28.19 owner who does not occupy the property, and the name and social 28.20 security number of each owner's spouse who occupies the 28.21 property. The application must be signed by each owner who 28.22 occupies the property and by each owner's spouse who occupies 28.23 the property, or, in the case of property that qualifies as a 28.24 homestead under subdivision 1, paragraph (c), by the qualifying 28.25 relative. 28.26 If a property owner occupies a homestead, the property 28.27 owner's spouse may not claim another property as a homestead 28.28 unless the property owner and the property owner's spouse file 28.29 with the assessor an affidavit or other proof required by the 28.30 assessor stating that the property owner's spouse does not 28.31 occupy the homestead because marriage dissolution proceedings 28.32 are pending, the spouses are legally separated, or the spouse's 28.33 employment or self-employment location requires the spouse to 28.34 have a separate homestead. The assessor may require proof of 28.35 employment or self-employment and employment or self-employment 28.36 location, or proof of dissolution proceedings or legal 29.1 separation. 29.2 If the social security number or affidavit or other proof 29.3 is not provided, the county assessor shall classify the property 29.4 as nonhomestead. 29.5 The social security numbers or affidavits or other proofs 29.6 of the property owners and spouses are private data on 29.7 individuals as defined by section 13.02, subdivision 12, but, 29.8 notwithstanding that section, the private data may be disclosed 29.9 to the commissioner of revenue, or, for purposes of proceeding 29.10 under the revenue recapture act to recover personal property 29.11 taxes owing, to the county treasurer. 29.12 (d) If residential real estate is occupied and used for 29.13 purposes of a homestead by a relative of the owner and qualifies 29.14 for a homestead under subdivision 1, paragraph (c), in order for 29.15 the property to receive homestead status, a homestead 29.16 application must be filed with the assessor. The social 29.17 security number of each relative occupying the property and the 29.18 social security number of each owner who is related to an 29.19 occupant of the property shall be required on the homestead 29.20 application filed under this subdivision. If a different 29.21 relative of the owner subsequently occupies the property, the 29.22 owner of the property must notify the assessor within 30 days of 29.23 the change in occupancy. The social security number of a 29.24 relative occupying the property is private data on individuals 29.25 as defined by section 13.02, subdivision 12, but may be 29.26 disclosed to the commissioner of revenue. 29.27 (e) The homestead application shall also notify the 29.28 property owners that the application filed under this section 29.29 will not be mailed annually and that if the property is granted 29.30 homestead status for the 1993 assessment, or any assessment year 29.31 thereafter, that same property shall remain classified as 29.32 homestead until the property is sold or transferred to another 29.33 person, or the owners or the relatives no longer use the 29.34 property as their homestead. Upon the sale or transfer of the 29.35 homestead property, a certificate of value must be timely filed 29.36 with the county auditor as provided under section 272.115. 30.1 Failure to notify the assessor within 30 days that the property 30.2 has been sold,or transferred if no certificate of real estate 30.3 value is filed under section 272.115, or that the owner or the 30.4 relative is no longer occupying the property as a homestead, 30.5 shall result in the penalty provided under this subdivision and 30.6 the property will lose its current homestead status. 30.7 (f) If the homestead application is not returned within 30 30.8 days, the county will send a second application to the present 30.9 owners of record. The notice of proposed property taxes 30.10 prepared under section 275.065, subdivision 3, shall reflect the 30.11 property's classification. Beginning with assessment year 1993 30.12 for all properties, If a homestead application has not been 30.13 filed with the county by December 15, the assessor shall 30.14 classify the property as nonhomestead for the current assessment 30.15 year for taxes payable in the following year, provided that the 30.16 owner may be entitled to receive the homestead classification by 30.17 proper application under section 375.192. 30.18 (g) At the request of the commissioner, each county must 30.19 give the commissioner a list that includes the name and social 30.20 security number of each property owner and the property owner's 30.21 spouse occupying the property, or relative of a property owner, 30.22 applying for homestead classification under this subdivision. 30.23 The commissioner shall use the information provided on the lists 30.24 as appropriate under the law, including for the detection of 30.25 improper claims by owners, or relatives of owners, under chapter 30.26 290A. 30.27 (h) If, in comparing the lists supplied by the counties, 30.28 the commissioner finds that a property owner is claiming more 30.29 than one homestead, the commissioner shall notify the 30.30 appropriate counties. Within 90 days of the notification, the 30.31 county assessor shall investigate to determine if the homestead 30.32 classification was properly claimed. If the property owner does 30.33 not qualify, the county assessor shall notify the county auditor 30.34 who will determine the amount of homestead benefits that had 30.35 been improperly allowed. For the purpose of this section, 30.36 "homestead benefits" means the tax reduction resulting from the 31.1 classification as a homestead under section 273.13, the taconite 31.2 homestead credit under section 273.135, and the supplemental 31.3 homestead credit under section 273.1391. 31.4 The county auditor shall send a notice to theowners of31.5 persons who owned the affected property at the time the 31.6 application related to the improperly allowed homestead was 31.7 submitted, demanding reimbursement of the homestead benefits 31.8 plus a penalty equal to 100 percent of the homestead benefits. 31.9 The property owners may appeal the county's determination by 31.10 filing a notice of appeal with the Minnesota tax court within 60 31.11 days of the date of the notice from the county. Unless 31.12 inconsistent with the provisions of this subdivision, and except 31.13 for the provisions of section 278.03 requiring partial payments, 31.14 the tax court shall treat the appeal as a chapter 278 property 31.15 tax appeal. If the amount of homestead benefits and penalty is 31.16 not paid within 60 days, and if no appeal has been filed, the 31.17 county auditor shall certify the amount of taxes and penalty to 31.18 thesucceeding year's tax list to be collected as part of the31.19property taxes. In the case of a manufactured home, the amount31.20shall be certified to the current year's tax list for collection31.21 treasurer. The treasurer shall assess interest to the total of 31.22 the homestead benefits and penalty according to the provisions 31.23 of section 277.17, and shall have the powers enumerated in 31.24 sections 277.20 and 277.21 to enforce payment of the benefits, 31.25 penalty, interest, and costs as a delinquent personal property 31.26 tax obligation of the owner of the affected property at the time 31.27 the application related to the improperly allowed homestead was 31.28 submitted. 31.29 (i) Any amount of homestead benefits recovered by the 31.30 county from the property owner shall be distributed to the 31.31 county, city or town, and school district where the property is 31.32 located in the same proportion that each taxing district's levy 31.33 was to the total of the three taxing districts' levy for the 31.34 current year. Any amount recovered attributable to taconite 31.35 homestead credit shall be transmitted to the St. Louis county 31.36 auditor to be deposited in the taconite property tax relief 32.1 account. The total amount of penalty collected must be 32.2 deposited in the county general fund. 32.3 (j) If a property owner has applied for more than one 32.4 homestead and the county assessors cannot determine which 32.5 property should be classified as homestead, the county assessors 32.6 will refer the information to the commissioner. The 32.7 commissioner shall make the determination and notify the 32.8 counties within 60 days. 32.9 (k) In addition to lists of homestead properties, the 32.10 commissioner may ask the counties to furnish lists of all 32.11 properties and the record owners. 32.12 Sec. 7. Minnesota Statutes 1994, section 274.14, is 32.13 amended to read: 32.14 274.14 [LENGTH OF SESSION; RECORD.] 32.15 The county board of equalization or the special board of 32.16 equalization appointed by it shall meet duringthe last two32.17weeks in June that containthe last ten meeting days,in June. 32.18 For this purpose, "meeting days" are defined as any day of the 32.19 week excluding Saturday and Sunday. The board may meet on any 32.20 ten consecutive meeting days in June, after the second Friday in 32.21 June, if the actual meeting dates are contained on the valuation 32.22 notices mailed to each property owner in the county under 32.23 section 273.121. No action taken by the county board of review 32.24 after June 30 is valid, except for corrections permitted in 32.25 sections 273.01 and 274.01. The county auditor shall keep an 32.26 accurate record of the proceedings and orders of the board. The 32.27 record must be published like other proceedings of county 32.28 commissioners. A copy of the published record must be sent to 32.29 the commissioner of revenue, with the abstract of assessment 32.30 required by section 274.16. 32.31 Sec. 8. Minnesota Statutes 1994, section 275.07, 32.32 subdivision 1, is amended to read: 32.33 Subdivision 1. The taxes voted by cities, counties, school 32.34 districts, and special districts shall be certified by the 32.35 proper authorities to the county auditor on or before five 32.36 working days after December 20 in each year. A town must 33.1 certify the levy adopted by the town board to the county auditor 33.2 by September 15 each year. If the town board modifies the levy 33.3 at a special town meeting after September 15, the town board 33.4 must recertify its levy to the county auditor on or before five 33.5 working days after December 20. The taxes certified shall not 33.6 be reduced by the aid received undersectionssection 273.1398, 33.7subdivisions 2 andsubdivision 3. If a city, town, county, 33.8 school district, or special district fails to certify its levy 33.9 by that date, its levy shall be the amount levied by it for the 33.10 preceding year. 33.11 Sec. 9. Minnesota Statutes 1994, section 275.08, 33.12 subdivision 1b, is amended to read: 33.13 Subd. 1b. The amounts certified under section 275.07after33.14adjustment under section 275.07, subdivision 3,by an individual 33.15 local government unit, except for any amounts certified under 33.16 sections 124A.03, subdivision 2a, and 275.61, shall be divided 33.17 by the total net tax capacity of all taxable properties within 33.18 the local government unit's taxing jurisdiction. The resulting 33.19 ratio, the local government's local tax rate, multiplied by each 33.20 property's net tax capacity shall be each property's tax for 33.21 that local government unit before reduction by any credits. 33.22 Any amount certified to the county auditor under section 33.23 124A.03, subdivision 2a, or 275.61, after the dates given in 33.24 those sections, shall be divided by the total estimated market 33.25 value of all taxable properties within the taxing district. The 33.26 resulting ratio, the taxing district's new referendum tax rate, 33.27 multiplied by each property's estimated market value shall be 33.28 each property's new referendum tax before reduction by any 33.29 credits. 33.30 Sec. 10. Minnesota Statutes 1994, section 289A.60, 33.31 subdivision 12, is amended to read: 33.32 Subd. 12. [PENALTIES RELATING TO PROPERTY TAX REFUNDS.] 33.33 (a) If the commissioner determines that a property tax refund 33.34 claim is or was excessive and was filed with fraudulent intent, 33.35 the claim must be disallowed in full. If the claim has been 33.36 paid, the amount disallowed may be recovered by assessment and 34.1 collection. 34.2 (b) If it is determined that a property tax refund claim is 34.3 excessive and was negligently prepared, ten percent of the 34.4 corrected claim must be disallowed. If the claim has been paid, 34.5 the amount disallowed must be recovered by assessment and 34.6 collection. 34.7 (c) An owneror managing agentwhoknowinglywithout 34.8 reasonable cause fails to give a certificate of rent 34.9 constituting property tax to a renter, as required by section 34.10 290A.19, paragraph (a), is liable to the commissioner for a 34.11 penalty of $100 for each failure. 34.12 (d) If the owner or managing agent knowingly gives rent 34.13 certificates that report total rent constituting property taxes 34.14 in excess of the amount of actual rent constituting property 34.15 taxes paid on the rented part of a property, the owner or 34.16 managing agent is liable for a penalty equal to the greater of 34.17 (1) $100 or (2) 50 percent of the excess that is reported. An 34.18 overstatement of rent constituting property taxes is presumed to 34.19 be knowingly made if it exceeds by ten percent or more the 34.20 actual rent constituting property taxes. 34.21 (e) No claim is allowed if the initial claim is filed more 34.22 than one year after the original due date for filing the claim. 34.23 Sec. 11. Minnesota Statutes 1994, section 290A.03, 34.24 subdivision 6, is amended to read: 34.25 Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling 34.26 occupied as the claimant's principal residence and so much of 34.27 the land surrounding it, not exceeding ten acres, as is 34.28 reasonably necessary for use of the dwelling as a home and any 34.29 other property used for purposes of a homestead as defined in 34.30 section 273.13, subdivision 22, except for agricultural land 34.31 assessed as part of a homestead pursuant to section 273.13, 34.32 subdivision 23, "homestead" is limited to 320 acres or, where 34.33 the farm homestead is rented, one acre. The homestead may be 34.34 owned or rented and may be a part of a multidwelling or 34.35 multipurpose building and the land on which it is built. A 34.36 manufactured home, as defined in section 273.125, subdivision 8, 35.1 or a park trailer taxed as a manufactured home under section 35.2 168.012, subdivision 9, assessed as personal property may be a 35.3 dwelling for purposes of this subdivision. 35.4 Sec. 12. Minnesota Statutes 1994, section 290A.03, 35.5 subdivision 13, is amended to read: 35.6 Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes 35.7 payable" means the property tax exclusive of special 35.8 assessments, penalties, and interest payable on a claimant's 35.9 homestead before reductions made under section 273.13 but after 35.10 deductions made under sections 273.135, 273.1391, 273.42, 35.11 subdivision 2, and any other state paid property tax credits in 35.12 any calendar year. In the case of a claimant who makes ground 35.13 lease payments, "property taxes payable" includes the amount of 35.14 the payments directly attributable to the property taxes 35.15 assessed against the parcel on which the house is located. No 35.16 apportionment or reduction of the "property taxes payable" shall 35.17 be required for the use of a portion of the claimant's homestead 35.18 for a business purpose if the claimant does not deduct any 35.19 business depreciation expenses for the use of a portion of the 35.20 homestead in the determination of federal adjusted gross 35.21 income. For homesteads which are manufactured homes as defined 35.22 in section 274.19, subdivision 8, and for homesteads which are 35.23 park trailers taxed as manufactured homes under section 168.012, 35.24 subdivision 9, "property taxes payable" shall also include the 35.25 amount of the gross rent paid in the preceding year for the site 35.26 on which the homestead is located, which is attributable to the 35.27 net tax paid on the site. The amount attributable to property 35.28 taxes shall be determined by multiplying the net tax on the 35.29 parcel by a fraction, the numerator of which is the gross rent 35.30 paid for the calendar year for the site and the denominator of 35.31 which is the gross rent paid for the calendar year for the 35.32 parcel. When a homestead is owned by two or more persons as 35.33 joint tenants or tenants in common, such tenants shall determine 35.34 between them which tenant may claim the property taxes payable 35.35 on the homestead. If they are unable to agree, the matter shall 35.36 be referred to the commissioner of revenue whose decision shall 36.1 be final. Property taxes are considered payable in the year 36.2 prescribed by law for payment of the taxes. 36.3 In the case of a claim relating to "property taxes 36.4 payable," the claimant must have owned and occupied the 36.5 homestead on January 2 of the year in which the tax is payable 36.6 and (i) the property must have been classified as homestead 36.7 property pursuant to section 273.13, subdivision 22 or 23, on or 36.8 before December 15 of the assessment year to which the "property 36.9 taxes payable" relate; or (ii) the claimant must provide 36.10 documentation from the local assessor that application for 36.11 homestead classification has been made on or before December 15 36.12 of the year in which the "property taxes payable" were payable 36.13 and that the assessor has approved the application. 36.14 Sec. 13. Minnesota Statutes 1994, section 290A.04, 36.15 subdivision 3, is amended to read: 36.16 Subd. 3. The commissioner of revenue shall construct and 36.17 make available to taxpayers a comprehensive table showing the 36.18 property taxes to be paid and refund allowed at various levels 36.19 of income and assessment. The table shall follow the schedule 36.20 of income percentages, maximums and other provisions specified 36.21 in subdivision 2, except that the commissioner may graduate the 36.22 transition between income brackets. All refunds shall be 36.23 computed in accordance with tables prepared and issued by the 36.24 commissioner of revenue. 36.25 The commissioner shall include on the form an appropriate 36.26 space or method for the claimant to identify if the property 36.27 taxes paid are for a manufactured home, as defined in section 36.28 273.125, subdivision 8, paragraph (c), or a park trailer taxed 36.29 as a manufactured home under section 168.012, subdivision 9. 36.30 Sec. 14. Minnesota Statutes 1994, section 290A.07, 36.31 subdivision 2a, is amended to read: 36.32 Subd. 2a. A claimant who is a renter or a homeowner who 36.33 occupies a manufactured home, as defined in section 273.125, 36.34 subdivision 8, paragraph (c), or a park trailer taxed as a 36.35 manufactured home under section 168.012, subdivision 9, shall 36.36 receive full payment after August 1 and before August 15 or 60 37.1 days after receipt of the application, whichever is later. 37.2 Sec. 15. Minnesota Statutes 1994, section 477A.015, is 37.3 amended to read: 37.4 477A.015 [PAYMENT DATES.] 37.5 The commissioner of revenue shall make the payments of 37.6 local government aid to affected taxing authorities in two 37.7 installments on July 20 and December 26 annually. 37.8The commissioner may pay all or part of the payment due on37.9December 26 at any time after August 15 upon the request of a37.10city that requests such payment as being necessary for meeting37.11its cash flow needs.37.12 Sec. 16. [EFFECTIVE DATE.] 37.13 Sections 1 and 7 are effective for taxes payable in 1997 37.14 and thereafter. Sections 3 to 6 are effective January 1, 1996, 37.15 and thereafter. Section 10 is effective for certificates of rent 37.16 paid required after the date of final enactment. Sections 11 to 37.17 14 are effective for refunds based on property taxes paid in 37.18 1997 and thereafter, and for rent paid in 1996 and thereafter. 37.19 Section 15 is effective July 1, 1996, and thereafter. 37.20 ARTICLE 3 37.21 SALES AND SPECIAL TAXES 37.22 Section 1. Minnesota Statutes 1994, section 297.08, 37.23 subdivision 1, is amended to read: 37.24 Subdivision 1. [CONTRABAND DEFINED.] The following are 37.25 declared to be contraband: 37.26 (1) All packages which do not have stamps affixed to them 37.27 as provided in sections 297.01 to 297.13, including but not 37.28 limited to (i) packages with illegible stamps and packages with 37.29 stamps that are not complete or whole even if the stamps are 37.30 legible, and (ii) all devices for the vending of cigarettes in 37.31 whichsuch unstampedpackages as defined in item (i) are found, 37.32 including all contents contained within the devices. 37.33 (2) Any device for the vending of cigarettes and all 37.34 packages of cigarettes contained therein, where the device does 37.35 not afford at least partial visibility of contents. Where any 37.36 package exposed to view does not carry the stamp required by 38.1 sections 297.01 to 297.13, it shall be presumed that all 38.2 packages contained in the device are unstamped and contraband. 38.3 (3) Any device for the vending of cigarettes to which the 38.4 commissioner or authorized agents have been denied access for 38.5 the inspection of contents. In lieu of seizure, the 38.6 commissioner or an agent may seal the device to prevent its use 38.7 until inspection of contents is permitted. 38.8 (4) Any device for the vending of cigarettes which does not 38.9 carry the name and address of the owner, plainly marked and 38.10 visible from the front of the machine. 38.11 (5) Any device including, but not limited to, motor 38.12 vehicles, trailers, snowmobiles, airplanes, and boats used with 38.13 the knowledge of the owner or of a person operating with the 38.14 consent of the owner for the storage or transportation of more 38.15 than 5,000 cigarettes which are contraband under this 38.16 subdivision. When cigarettes are being transported in the 38.17 course of interstate commerce, or are in movement from either a 38.18 public warehouse to a distributor upon orders from a 38.19 manufacturer or distributor, or from one distributor to another, 38.20 the cigarettes are not contraband, notwithstanding the 38.21 provisions of clause (1). 38.22 (6) All packages obtained in violation of section 297.11, 38.23 subdivision 6. 38.24 (7) All packages offered for sale or held as inventory in 38.25 violation of section 297.11, subdivision 7. 38.26 Sec. 2. Minnesota Statutes 1994, section 297.08, 38.27 subdivision 3, is amended to read: 38.28 Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 38.29 DISPOSITION OF SEIZED PROPERTY.] Within two days after the 38.30 seizure of any alleged contraband, the person making the seizure 38.31 shall deliver an inventory of the property seized to the person 38.32 from whom the seizure was made, if known, and file a copy with 38.33 the commissioner. Within ten days after the date of service of 38.34 the inventory, the person from whom the property was seized or 38.35 any person claiming an ownership or security interest in the 38.36 property may file with the commissioner a demand for a judicial 39.1 determination of the question as to whether the property was 39.2 lawfully subject to seizure and forfeiture. The commissioner, 39.3 within 30 days, shall institute an action in the district court 39.4 of the county where the seizure was made to determine the issue 39.5 of forfeiture. The only issue to be decided by the court is 39.6 whether the alleged contraband is contraband, as defined in 39.7 subdivision 1. The action shall be brought in the name of the 39.8 state and shall be prosecuted by the county attorney or by the 39.9 attorney general. The court shall hear the action without a 39.10 jury and shall try and determine the issues of fact and law 39.11 involved. Whenever a judgment of forfeiture is entered, the 39.12 commissioner may, unless the judgment is stayed pending an 39.13 appeal, either (1) deliver the forfeited property to the 39.14 commissioner of human services for use by patients in state 39.15 institutions; (2) cause it to be destroyed; or (3) cause it to 39.16 be sold at public auction as provided by law. If a demand for 39.17 judicial determination is made and no action is commenced as 39.18 provided in this subdivision, the property shall be released by 39.19 the commissioner and redelivered to the person entitled to it. 39.20 If no demand is made, the property seized shall be deemed 39.21 forfeited to the state by operation of law and may be disposed 39.22 of by the commissioner as provided where there has been a 39.23 judgment of forfeiture.Whenever the commissioner is satisfied39.24that any person from whom property is seized under sections39.25297.01 to 297.13 was acting in good faith and without intent to39.26evade the tax imposed by sections 297.01 to 297.13, the39.27commissioner shall release the property seized, without further39.28legal proceedings.39.29 Sec. 3. Minnesota Statutes 1994, section 297C.02, 39.30 subdivision 2, is amended to read: 39.31 Subd. 2. [FERMENTED MALT BEVERAGES.] There is imposed 39.32 onthe direct or indirect sale of fermented malt beveragesall 39.33 fermented malt beverages that are imported, directly or 39.34 indirectly sold, or possessed in this state the following excise 39.35 tax: 39.36 (1) on fermented malt beverages containing not more than 40.1 3.2 percent alcohol by weight, $2.40 per barrel of 31 gallons; 40.2 (2) on fermented malt beverages containing more than 3.2 40.3 percent alcohol by weight, $4.60 per barrel of 31 gallons. 40.4 The tax is at a proportional rate for fractions of a barrel 40.5 of 31 gallons. 40.6 Sec. 4. Minnesota Statutes 1994, section 297C.07, is 40.7 amended to read: 40.8 297C.07 [EXCEPTIONS.] 40.9 The following are not subject to the excise tax: 40.10 (1) Sales by a manufacturer, brewer, or wholesaler for 40.11 shipment outside the state in interstate commerce. 40.12 (2) Sales of wine for sacramental purposes under section 40.13 340A.316. 40.14 (3) Fruit juices naturally fermented or beer naturally 40.15 brewed in the home for family use. 40.16 (4) Malt beverages served by a brewery for on-premise 40.17 consumption at no charge, or distributed to brewery employees 40.18 for on-premise consumption under a labor contract. 40.19 (5) Alcoholic beverages sold to authorized manufacturers of 40.20 food products or pharmaceutical firms. The alcoholic beverage 40.21 must be used exclusively in the manufacture of food products or 40.22 medicines. For purposes of this part, "manufacturer" means a 40.23 manufacturer of food products intended for sale to wholesalers 40.24 or retailers for ultimate sale to the consumer. 40.25 (6) Sales to common carriers engaged in interstate 40.26 transportation of passengers and qualified approved military 40.27 clubs, except as provided in section 297C.17. 40.28 (7) Alcoholic beverages sold or transferred between 40.29 Minnesota wholesalers. 40.30 (8) Sales to a federal agency, that the state of Minnesota 40.31 is prohibited from taxing under the constitution or laws of the 40.32 United States or under the constitution of Minnesota. 40.33 (9) Shipments of wine to Minnesota residents under section 40.34 340A.417. 40.35 (10) One liter of intoxicating liquor or 288 ounces of malt 40.36 liquor per calendar month imported or possessed by a person 41.1 entering Minnesota from another state, provided the alcoholic 41.2 beverages accompany the person into this state and will not be 41.3 offered for sale or used for any commercial purpose. 41.4 (11) Four liters of intoxicating liquor or ten quarts (320 41.5 ounces) of malt liquor per calendar month imported or possessed 41.6 by a person entering Minnesota from a foreign country, provided 41.7 the alcoholic beverages accompany the person into this state and 41.8 will not be offered for sale or used for any commercial purpose. 41.9 (12) The alcoholic beverage contained in 12 or fewer 41.10 commemorative bottles per calendar month imported into this 41.11 state. 41.12 Sec. 5. [REPEALER.] 41.13 Minnesota Statutes 1994, section 297A.212, is repealed. 41.14 Sec. 6. [EFFECTIVE DATE.] 41.15 Sections 1 to 5, are effective the day following final 41.16 enactment. 41.17 ARTICLE 4 41.18 COLLECTIONS AND COMPLIANCE 41.19 Section 1. Minnesota Statutes 1994, section 60A.15, 41.20 subdivision 12, is amended to read: 41.21 Subd. 12. [OVERPAYMENTS, CLAIMS FOR REFUND.] (1) 41.22 [PROCEDURE, TIME LIMIT, APPROPRIATION.] A company who has paid, 41.23 voluntarily or otherwise, or from whom there has been collected 41.24 an amount of tax for any year in excess of the amount legally 41.25 due for that year, may file with the commissioner of revenue a 41.26 claim for a refund of the excess. Except as provided in 41.27 subdivision 11, no claim or refund shall be allowed or made 41.28 after3-1/2 years from the date prescribed for filing the return41.29(plus any extension of time granted for filing the return but41.30only if filed within the extended time) or after two years from41.31the date of overpayment, whichever period is longer, unless41.32before the expiration of the period a claim is filed by the41.33companythe period prescribed in section 289A.40, subdivision 1. 41.34 For this purpose, a return or amended return claiming an 41.35 overpayment constitutes a claim for refund. 41.36 Upon the filing of a claim, the commissioner shall examine 42.1 it, shall make and file written findings denying or allowing the 42.2 claim in whole or in part, and shall mail a notice thereof to 42.3 the company at the address stated upon the return. If the claim 42.4 is allowed in whole or in part, the commissioner shall issue a 42.5 certificate for the refundment of the excess paid by the 42.6 company, with interest at the rate specified in section 270.76 42.7 computed from the date of the payment of the tax until the date 42.8 the refund is paid or the credit is made to the company. The 42.9 commissioner of finance shall pay the refund out of the proceeds 42.10 of the taxes imposed by this section, as other state moneys are 42.11 expended. As much of the proceeds of the taxes as necessary are 42.12 appropriated for that purpose. 42.13 (2) [DENIAL OF CLAIM, COURT PROCEEDINGS.] If the claim is 42.14 denied in whole or in part, the commissioner shall mail an order 42.15 of denial to the company in the manner prescribed in subdivision 42.16 8. An appeal from this order may be taken to the Minnesota tax 42.17 court in the manner prescribed in section 271.06, or the company 42.18 may commence an action against the commissioner to recover the 42.19 denied overpayment. The action may be brought in the district 42.20 court of the district in the county of its principal place of 42.21 business, or in the district court for Ramsey county. The 42.22 action in the district court must be commenced within 18 months 42.23 following the mailing of the order of denial to the company. If 42.24 a claim for refund is filed by a company and no order of denial 42.25 is issued within six months of the filing, the company may 42.26 commence an action in the district court as in the case of a 42.27 denial, but the action must be commenced within two years of the 42.28 date that the claim for refund was filed. 42.29 (3) [CONSENT TO EXTEND TIME.] If the commissioner and the 42.30 company have, within the periods prescribed in clause (1), 42.31 consented in writing to any extension of time for the assessment 42.32 of the tax, the period within which a claim for refund may be 42.33 filed, or a refund may be made or allowed, if no claim is filed, 42.34 shall be the period within which the commissioner and the 42.35 company have consented to an extension for the assessment of the 42.36 tax and six months thereafter.The period within which a claim43.1for refund may be filed shall not expire prior to two years43.2after the tax was paid.43.3 (4) [OVERPAYMENTS; REFUNDS.] If the amount determined to be 43.4 an overpayment exceeds the taxes imposed by this section, the 43.5 amount of excess shall be considered an overpayment. An amount 43.6 paid as tax constitutes an overpayment even if in fact there was 43.7 no tax liability with respect to which the amount was paid. 43.8 Notwithstanding any other provision of law to the contrary, 43.9 in the case of any overpayment, the commissioner, within the 43.10 applicable period of limitations, shall refund any balance of 43.11 more than one dollar to the company if the company requests the 43.12 refund. 43.13 Sec. 2. Minnesota Statutes 1994, section 60A.199, 43.14 subdivision 8, is amended to read: 43.15 Subd. 8. [REFUND PROCEDURE; TIME LIMIT; APPROPRIATION.] A 43.16 licensee which has paid, voluntarily or otherwise, or from which 43.17 there was collected an amount of tax for any year in excess of 43.18 the amount legally due for that year, may file with the 43.19 commissioner of revenue a claim for a refund of the excess. 43.20 Except as provided in subdivision 3, no claim or refund shall be 43.21 allowed or made after3-1/2 years from the date prescribed for43.22filing the return (plus any extension of time granted for filing43.23the return but only if filed within the extended time) or after43.24two years from the date of overpayment, whichever period is43.25longer, unless before the expiration of the period a claim is43.26filed by the licenseethe period prescribed in section 289A.40, 43.27 subdivision 1. For this purpose, a return or amended return 43.28 claiming an overpayment constitutes a claim for refund. 43.29 Upon the filing of a claim the commissioner shall examine 43.30 it, shall make written findings thereon denying or allowing the 43.31 claim in whole or in part, and shall mail a notice thereof to 43.32 the licensee at the address stated upon the return. If the 43.33 claim is allowed in whole or in part, the commissioner shall 43.34 issue a certificate for a refund of the excess paid by the 43.35 licensee, with interest at the rate specified in section 270.76 43.36 computed from the date of the payment of the tax until the date 44.1 the refund is paid or credit is made to the licensee. The 44.2 commissioner of finance shall cause the refund to be paid as 44.3 other state moneys are expended. So much of the proceeds of the 44.4 taxes as is necessary are appropriated for that purpose. 44.5 Sec. 3. Minnesota Statutes 1994, section 60A.199, 44.6 subdivision 10, is amended to read: 44.7 Subd. 10. [CONSENT TO EXTEND TIME.] If the commissioner 44.8 and the licensee have, within the periods prescribed by this 44.9 section, consented in writing to any extension of time for the 44.10 assessment of the tax, the period within which a claim for 44.11 refund may be filed, or a refund may be made or allowed, if no 44.12 claim is filed, is the period within which the commissioner and 44.13 the licensee have consented to an extension for the assessment 44.14 of the tax and six months thereafter, the period within which a44.15claim for refund may be filed shall not expire prior to two44.16years after the tax was paid. 44.17 Sec. 4. [270.7002] [PERSONAL LIABILITY FOR FAILURE TO 44.18 HONOR A LEVY.] 44.19 Subdivision 1. [SURRENDER OF PROPERTY SUBJECT TO LEVY.] A 44.20 person who fails or refuses to surrender property or rights to 44.21 property subject to a levy served on the person under section 44.22 270.70, 270.7001, or 290.92, subdivision 23, is liable in an 44.23 amount equal to the value of the property or rights not 44.24 surrendered, or the amount of taxes, penalties, and interest for 44.25 the collection of which the levy was made, whichever is less. A 44.26 financial institution need not surrender funds on deposit until 44.27 ten days after service of the levy. 44.28 Subd. 2. [PENALTY.] In addition to the personal liability 44.29 imposed by subdivision 1, if a person required to surrender 44.30 property or rights to property fails to do so without reasonable 44.31 cause, the person is liable for a penalty equal to 25 percent of 44.32 the amount under subdivision 1. 44.33 Subd. 3. [PERSON DEFINED.] The term "person" as used in 44.34 this section includes an officer or employee of a corporation or 44.35 a member or employee of a partnership, who as such officer, 44.36 employee, or member is under a duty to surrender the property or 45.1 rights to property or to respond to the levy. 45.2 Subd. 4. [ORDER ASSESSING LIABILITY.] The liability 45.3 imposed by this section may, after demand to honor a levy has 45.4 been made, be assessed by the commissioner within 60 days after 45.5 service of the demand. The assessment may be based on 45.6 information available to the commissioner. The assessment is 45.7 presumed to be valid, and the burden is on the person assessed 45.8 to show it is incorrect or invalid. An order assessing 45.9 liability for failure to honor a levy is reviewable 45.10 administratively under section 289A.65, and is appealable to tax 45.11 court under chapter 271. The amount assessed, plus interest at 45.12 the rate specified in section 270.75, may be collected by any 45.13 remedy available to the commissioner for the collection of 45.14 taxes. The proceeds collected are applied first to the 45.15 liability of the original taxpayer to the extent of the 45.16 liability under subdivision 1 plus interest, and then to the 45.17 penalty under subdivision 2. 45.18 Sec. 5. Minnesota Statutes 1994, section 270.72, 45.19 subdivision 1, is amended to read: 45.20 Subdivision 1. [TAX CLEARANCE REQUIRED.] The state or a 45.21 political subdivision of the state may not issue, transfer, or 45.22 renew, and must revoke, a license for the conduct of a 45.23 profession, occupation, trade, or business, if the commissioner 45.24 notifies the licensing authority that the applicant owes the 45.25 state delinquent taxes, penalties, or interest. The 45.26 commissioner may not notify the licensing authority unless the 45.27 applicant taxpayer owes $500 or more in delinquent taxes or has 45.28 not filed returns. If the applicant taxpayer does not owe 45.29 delinquent taxes but has not filed returns, the commissioner may 45.30 not notify the licensing authority unless the taxpayer has been 45.31 given 90 days' written notice to file the returns or show that 45.32 the returns are not required to be filed. A licensing authority 45.33 that has received a notice from the commissioner may issue, 45.34 transfer,orrenew, or not revoke the applicant's license only 45.35 if (a) the commissioner issues a tax clearance certificate and 45.36 (b) the commissioner or the applicant forwards a copy of the 46.1 clearance to the authority. The commissioner may issue a 46.2 clearance certificate only if the applicant does not owe the 46.3 state any uncontested delinquent taxes, penalties, or interest 46.4 and has filed all required returns. 46.5 Sec. 6. Minnesota Statutes 1994, section 270.72, 46.6 subdivision 2, is amended to read: 46.7 Subd. 2. [DEFINITIONS.] For purposes of this section, the 46.8 following terms have the meanings given. 46.9 (a) "Taxes" are all taxes payable to the commissioner 46.10 including penalties and interest due on the taxes. 46.11 (b) "Delinquent taxes" do not include a tax liability if 46.12 (i) an administrative or court action which contests the amount 46.13 or validity of the liability has been filed or served, (ii) the 46.14 appeal period to contest the tax liability has not expired, or 46.15 (iii) the applicant has entered into a payment agreement and is 46.16 current with the payments. 46.17 (c) "Applicant" means an individual if the license is 46.18 issued to or in the name of an individual or the corporation or 46.19 partnership if the license is issued to or in the name of a 46.20 corporation or partnership. "Applicant" also means an officer 46.21 of a corporation, a member of a partnership, or an individual 46.22 who is liable for delinquent taxes, either for the entity for 46.23 which the license is at issue or for another entity for which 46.24 the liability was incurred, or personally as a licensee. In the 46.25 case of a license transfer, "applicant" also means both the 46.26 transferor and the transferee of the license. "Applicant" also 46.27 means any holder of a license. 46.28 (d) "License" includes a contract for space rental at the 46.29 Minnesota state fair. 46.30 (e) "Licensing authority" includes the Minnesota state fair 46.31 board. 46.32 Sec. 7. Minnesota Statutes 1994, section 270.72, 46.33 subdivision 3, is amended to read: 46.34 Subd. 3. [NOTICE AND HEARING.] (a) The commissioner, on 46.35 notifying a licensing authority pursuant to subdivision 1 not to 46.36 issue, transfer, or renew a license, must send a copy of the 47.1 notice to the applicant. If the applicant requests, in writing, 47.2 within 30 days of the date of the notice a hearing, a contested 47.3 case hearing must be held. The hearing must be held within 45 47.4 days of the date the commissioner refers the case to the office 47.5 of administrative hearings. Notwithstanding any law to the 47.6 contrary, the applicant must be served with 20 days' notice in 47.7 writing specifying the time and place of the hearing and the 47.8 allegations against the applicant. The notice may be served 47.9 personally or by mail. 47.10 (b) Prior to notifying a licensing authority pursuant to 47.11 subdivision 1 to revoke a license, the commissioner must send a 47.12 notice to the applicant of the commissioner's intent to require 47.13 revocation of the license and of the applicant's right to a 47.14 hearing under paragraph (a). A license is subject to revocation 47.15 when 30 days have passed following the date of the notice in 47.16 this paragraph without the applicant requesting a hearing, or, 47.17 if a hearing is timely requested, upon final determination of 47.18 the hearing under section 14.62, subdivision 1. A license shall 47.19 be revoked by the licensing authority within 30 days after 47.20 receiving notice from the commissioner to revoke. 47.21 (c) A hearing under this subdivision is in lieu of any 47.22 other hearing or proceeding provided by law arising from any 47.23 action taken under subdivision 1. 47.24 Sec. 8. [270.721] [REVOCATION OF CORPORATE CERTIFICATES OF 47.25 AUTHORITY TO DO BUSINESS IN THIS STATE.] 47.26 When a foreign corporation authorized to do business in 47.27 this state under chapter 303 fails to comply with any tax laws 47.28 administered by the commissioner of revenue, the commissioner 47.29 may serve the secretary of state with a certified copy of an 47.30 order finding such failure to comply. The secretary of state, 47.31 upon receipt of the order, shall revoke the certificate of 47.32 authority of the corporation to do business in this state, and 47.33 shall reinstate the certificate under section 303.19 only when 47.34 the corporation has obtained from the commissioner an order 47.35 finding that the corporation is in compliance with state tax 47.36 law. An order requiring revocation of a certificate shall not 48.1 be issued unless the commissioner gives the corporation 30 days' 48.2 written notice of the proposed order, specifying the violations 48.3 of state tax law, and affording the corporation an opportunity 48.4 to request a contested case hearing under chapter 14. 48.5 Sec. 9. Minnesota Statutes 1994, section 270.79, 48.6 subdivision 4, is amended to read: 48.7 Subd. 4. [REFUND PROCEDURES.] (a) If the commissioner 48.8 determines that the cumulative refunds due all affected 48.9 taxpayers will exceed $50,000,000, the refund procedures in this 48.10 subdivision apply. 48.11 (b) The refunds due shall be paid in five installments 48.12beginning after July 1 of. The first installment will be paid 48.13 during the calendar year following the later of the filing of 48.14 the refund claim or the final judicial determination andending48.15in the fifth calendar year or at the time that the return for48.16that calendar year is filedsubsequent installments will be paid 48.17 at any time during each of the four succeeding calendar years. 48.18 (c)The refunds shall be paid in the form of refundable48.19credits claimed on the tax return for the tax type giving rise48.20to the refund.48.21(d) In the case of annual returns the credit allowable must48.22be claimed on the annual return. When returns are filed on48.23other than an annual basis, the allowable credit must be claimed48.24on the first return due after July 1 of a calendar yearThe 48.25 commissioner shall compute the annual refund installment due 48.26 under this subdivision, and notify the taxpayer of the total 48.27 amount of the claim for refund which has been allowed. 48.28(e)(d) Thecredit allowed forinstallment paid each year 48.29 equals 20 percent of theclaimedrefund allowed unless the 48.30 commissioner determines that the cumulative refunds due for a 48.31 particular year under this section will exceed $150,000,000. If 48.32 the refunds payable will exceed that amount,the claimed refunds48.33 they will be reduced pro rata with any balance remaining due 48.34 payable with the final refund installment. 48.35(f)(e) Unless contrary to the provisions in this section, 48.36 the provisions for refunds in the various tax types, including 49.1 provisions related to the payment of interest, apply to the 49.2 refunds subject to these provisions. 49.3(g)(f) The commissioner may establish a de minimis 49.4 individual refund amount below which the installment provisions 49.5 do not apply. The amount established under this paragraph is 49.6 not subject to the provisions of chapter 14. 49.7 (g) If the commissioner of finance determines that it is in 49.8 the best interest of the state, refunds payable under this 49.9 section may be paid in fewer than five installments. 49.10 Sec. 10. Minnesota Statutes 1994, section 289A.25, is 49.11 amended by adding a subdivision to read: 49.12 Subd. 3a. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] (a) If the 49.13 aggregate amount of estimated tax payments made during a 49.14 calendar year is equal to or exceeds $10,000, all estimated tax 49.15 payments in the subsequent calendar year must be paid by means 49.16 of a funds transfer as defined in section 336.4A-104, paragraph 49.17 (a). The funds transfer payment date, as defined in section 49.18 336.4A-401, must be on or before the date the estimated tax 49.19 payment is due. If the date the estimated tax payment is due is 49.20 not a funds transfer business day, as defined in section 49.21 336.4A-105, paragraph (a), clause (4), the payment date must be 49.22 on or before the funds transfer business day next following the 49.23 date the estimated tax payment is due. 49.24 (b) All trust companies required to pay tax under section 49.25 295.37 who remit estimated tax payments on behalf of trusts must 49.26 remit those payments by means of a funds transfer as provided in 49.27 paragraph (a), regardless of the aggregate amount of estimated 49.28 tax payments made during a calendar year for a trust. 49.29 Sec. 11. Minnesota Statutes 1994, section 289A.26, 49.30 subdivision 2a, is amended to read: 49.31 Subd. 2a. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the 49.32 aggregate amount of estimated tax payments made during a 49.33 calendar year is equal to or exceeds$80,000$20,000, all 49.34 estimated tax payments in the subsequent calendar year must be 49.35 paid by means of a funds transfer as defined in section 49.36 336.4A-104, paragraph (a). The funds transfer payment date, as 50.1 defined in section 336.4A-401, must be on or before the date the 50.2 estimated tax payment is due. If the date the estimated tax 50.3 payment is due is not a funds transfer business day, as defined 50.4 in section 336.4A-105, paragraph (a), clause (4), the payment 50.5 date must be on or before the funds transfer business day next 50.6 following the date the estimated tax payment is due. 50.7 Sec. 12. Minnesota Statutes 1994, section 289A.40, 50.8 subdivision 1, is amended to read: 50.9 Subdivision 1. [TIME LIMIT; GENERALLY.] Unless otherwise 50.10 provided in this chapter, a claim for a refund of an overpayment 50.11 of state tax must be filed within 3-1/2 years from the date 50.12 prescribed for filing the return, plus any extension of time 50.13 granted for filing the return, but only if filed within the 50.14 extended time, ortwo yearsone year from thetimedate of an 50.15 order assessing tax under section 289A.37, subdivision 1, upon 50.16 payment in full of the taxis paid in full, penalties, and 50.17 interest shown on the order, whichever period expires 50.18 later. Claims for refund filed after the 3-1/2 year period but 50.19 within the one-year period are limited to the amount of the tax, 50.20 penalties, and interest on the order and to issues determined by 50.21 the order. 50.22 Sec. 13. Minnesota Statutes 1994, section 289A.60, 50.23 subdivision 2, is amended to read: 50.24 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 50.25 a taxpayer fails to make and file a return other than an income 50.26 tax return of an individual, a withholding return, or sales or 50.27 use tax return, within the time prescribed or an extension, a 50.28 penalty is added to the tax. The penalty is three percent of 50.29 the amount of tax not paid on or before the date prescribed for 50.30 payment of the tax including any extensions if the failure is 50.31 for not more than 30 days, with an additional five percent of 50.32 the amount of tax remaining unpaid during each additional 30 50.33 days or fraction of 30 days, during which the failure continues, 50.34 not exceeding 23 percent in the aggregate. 50.35If a taxpayer fails to file a return, other than an income50.36tax return of an individual, within 60 days of the date51.1prescribed for filing of the return (determined with regard to51.2any extension of time for filing), the addition to tax under51.3this subdivision must not be less than the lesser of: (1) $200;51.4or (2) the greater of (a) 25 percent of the amount required to51.5be shown as tax on the return without reduction for any payments51.6made or refundable credits allowable against the tax, or (b) $50.51.7 If a taxpayer fails to file an individual income tax return 51.8 within six months after the date prescribed for filing of the 51.9 return, a penalty of ten percent of the amount of tax not paid 51.10 by the end of that six-month period is added to the tax. 51.11 If a taxpayer fails to file a withholding or sales or use 51.12 tax return within the time prescribed, including an extension, a 51.13 penalty of five percent of the amount of tax not timely paid is 51.14 added to the tax. 51.15 Sec. 14. Minnesota Statutes 1994, section 290.92, 51.16 subdivision 23, is amended to read: 51.17 Subd. 23. [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 51.18 (1) The commissioner may, within five years after the date of 51.19 assessment of the tax, or if a lien has been filed under section 51.20 270.69, within the statutory period for enforcement of the lien, 51.21 give notice to any employer deriving income which has a taxable 51.22 situs in this state regardless of whether the income is exempt 51.23 from taxation, that an employee of that employer is delinquent 51.24 in a certain amount with respect to any state taxes, including 51.25 penalties, interest, and costs. The commissioner can proceed 51.26 under this subdivision only if the tax is uncontested or if the 51.27 time for appeal of the tax has expired. The commissioner shall 51.28 not proceed under this subdivision until the expiration of 30 51.29 days after mailing to the taxpayer, at the taxpayer's last known 51.30 address, a written notice of (a) the amount of taxes, interest, 51.31 and penalties due from the taxpayer and demand for their 51.32 payment, and (b) the commissioner's intention to require 51.33 additional withholding by the taxpayer's employer pursuant to 51.34 this subdivision. The effect of the notice shall expire 180 51.35 days after it has been mailed to the taxpayer provided that the 51.36 notice may be renewed by mailing a new notice which is in 52.1 accordance with this subdivision. The renewed notice shall have 52.2 the effect of reinstating the priority of the original claim. 52.3 The notice to the taxpayer shall be in substantially the same 52.4 form as that provided in section 571.72. The notice shall 52.5 further inform the taxpayer of the wage exemptions contained in 52.6 section 550.37, subdivision 14. If no statement of exemption is 52.7 received by the commissioner within 30 days from the mailing of 52.8 the notice, the commissioner may proceed under this 52.9 subdivision. The notice to the taxpayer's employer may be 52.10 served by mail or by delivery by an employee of the department 52.11 of revenue and shall be in substantially the same form as 52.12 provided in section 571.75. Upon receipt of notice, the 52.13 employer shall withhold from compensation due or to become due 52.14 to the employee, the total amount shown by the notice, subject 52.15 to the provisions of section 571.922. The employer shall 52.16 continue to withhold each pay period until the notice is 52.17 released by the commissioner under section 270.709. Upon 52.18 receipt of notice by the employer, the claim of the state of 52.19 Minnesota shall have priority over any subsequent garnishments 52.20 or wage assignments. The commissioner may arrange between the 52.21 employer and the employee for withholding a portion of the total 52.22 amount due the employee each pay period, until the total amount 52.23 shown by the notice plus accrued interest has been withheld. 52.24 The "compensation due" any employee is defined in 52.25 accordance with the provisions of section 571.921. The maximum 52.26 withholding allowed under this subdivision for any one pay 52.27 period shall be decreased by any amounts payable pursuant to a 52.28 garnishment action with respect to which the employer was served 52.29 prior to being served with the notice of delinquency and any 52.30 amounts covered by any irrevocable and previously effective 52.31 assignment of wages; the employer shall give notice to the 52.32 department of the amounts and the facts relating to such 52.33 assignments within ten days after the service of the notice of 52.34 delinquency on the form provided by the department of revenue as 52.35 noted in this subdivision. 52.36 (2) If the employee ceases to be employed by the employer 53.1 before the full amount set forth in a notice of delinquency plus 53.2 accrued interest has been withheld, the employer shall 53.3 immediately notify the commissioner in writing of the 53.4 termination date of the employee and the total amount withheld. 53.5 No employer may discharge any employee by reason of the fact 53.6 that the commissioner has proceeded under this subdivision. If 53.7 an employer discharges an employee in violation of this 53.8 provision, the employee shall have the same remedy as provided 53.9 in section 571.927, subdivision 2. 53.10 (3) Within ten days after the expiration of such pay 53.11 period, the employer shall remit to the commissioner, on a form 53.12 and in the manner prescribed by the commissioner, the amount 53.13 withheld during each pay period under this subdivision.Should53.14any employer, after notice, willfully fail to withhold in53.15accordance with the notice and this subdivision, or willfully53.16fail to remit any amount withheld as required by this53.17subdivision, the employer shall be liable for the total amount53.18set forth in the notice together with accrued interest which may53.19be collected by any means provided by law relating to taxation.53.20Any amount collected from the employer for failure to withhold53.21or for failure to remit under this subdivision shall be credited53.22to the employee's account in the following manner: penalties,53.23interest, tax, and costs.53.24 (4) Clauses (1), (2), and (3), except provisions imposing a 53.25 liability on the employer for failure to withhold or remit, 53.26 shall apply to cases in which the employer is the United States 53.27 or any instrumentality thereof or this state or any municipality 53.28 or other subordinate unit thereof. 53.29 (5) The commissioner shall refund to the employee excess 53.30 amounts withheld from the employee under this subdivision. If 53.31 any excess results from payments by the employer because of 53.32 willful failure to withhold or remit as prescribed in clause 53.33 (3), the excess attributable to the employer's payment shall be 53.34 refunded to the employer. 53.35 (6) Employers required to withhold delinquent taxes, 53.36 penalties, interest, and costs under this subdivision shall not 54.1 be required to compute any additional interest, costs or other 54.2 charges to be withheld. 54.3 (7) The collection remedy provided to the commissioner by 54.4 this subdivision shall have the same legal effect as if it were 54.5 a levy made pursuant to section 270.70. 54.6 Sec. 15. Minnesota Statutes 1994, section 294.09, 54.7 subdivision 1, is amended to read: 54.8 Subdivision 1. [PROCEDURES; TIME LIMIT.] A company, joint 54.9 stock association, copartnership, corporation, or individual who 54.10 has paid, voluntarily or otherwise, or from whom there has been 54.11 collected (other than by proceedings instituted by the attorney 54.12 general under sections 294.06 and 294.08, subdivision 3) an 54.13 amount of gross earnings tax for any year in excess of the 54.14 amount legally due for that year, may file with the commissioner 54.15 of revenue a claim for a refund of such excess. Except as 54.16 provided in subdivision 4, no such claim shall be entertained 54.17 unless filed withintwo years after such tax was paid or54.18collected, or within 3-1/2 years from the filing of the return,54.19whichever period is the longerthe period prescribed in section 54.20 289A.40, subdivision 1. Upon the filing of a claim the 54.21 commissioner shall examine the same and shall make and file 54.22 written findings thereon denying or allowing the claim in whole 54.23 or in part and shall mail a notice thereof to such company, 54.24 joint stock association, copartnership, corporation, or 54.25 individual at the address stated upon the return. If such claim 54.26 is allowed in whole or in part, the commissioner shall credit 54.27 the amount of the allowance against any tax due the state from 54.28 the claimant and for the balance of said allowance, if any, the 54.29 commissioner shall issue a certificate for the refundment of the 54.30 excess paid. The commissioner of finance shall cause such 54.31 refund to be paid out of the proceeds of the gross earnings 54.32 taxes imposed by Minnesota Statutes 1967, chapters 294 and 295 54.33 as other state moneys are expended. So much of the proceeds as 54.34 may be necessary are hereby appropriated for that purpose. Any 54.35 allowance so made by the commissioner shall include interest at 54.36 the rate specified in section 270.76 computed from the date of 55.1 payment or collection of the tax until the date the refund is 55.2 paid to the claimant. 55.3 Sec. 16. Minnesota Statutes 1994, section 294.09, 55.4 subdivision 4, is amended to read: 55.5 Subd. 4. [CONSENT TO EXTEND TIME.] If the commissioner and 55.6 the taxpayer have within the periods prescribed in subdivision 1 55.7 consented in writing to any extension of time for the assessment 55.8 of the tax under the provisions of section 294.08, subdivision 55.9 4, the period within which a claim for refund may be filed, or a 55.10 refund may be made or allowed, if no claim is filed, shall be 55.11 the period within which the commissioner and the taxpayer have 55.12 consented to an extension for the assessment of the tax and six 55.13 months thereafter, provided, however, that the period within55.14which a claim for refund may be filed shall not expire prior to55.15two years after the tax was paid. 55.16 Sec. 17. Minnesota Statutes 1994, section 297.35, 55.17 subdivision 1, is amended to read: 55.18 Subdivision 1. On or before the 18th day of each calendar 55.19 month every distributor with a place of business in this state 55.20 shall file a return with the commissioner showing the quantity 55.21 and wholesale sales price of each tobacco product (1) brought, 55.22 or caused to be brought, into this state for sale; and (2) made, 55.23 manufactured, or fabricated in this state for sale in this 55.24 state, during the preceding calendar month. Every licensed 55.25 distributor outside this state shall in like manner file a 55.26 return showing the quantity and wholesale sales price of each 55.27 tobacco product shipped or transported to retailers in this 55.28 state to be sold by those retailers, during the preceding 55.29 calendar month. Returns shall be made upon forms furnished and 55.30 prescribed by the commissioner and shall contain such other 55.31 information as the commissioner may require. Each return shall 55.32 be accompanied by a remittance for the full tax liability shown 55.33 therein, less 1.5 percent of such liability as compensation to 55.34 reimburse the distributor for expenses incurred in the 55.35 administration of sections 297.31 to 297.39. The return for the 55.36 May liability and 75 percent of the estimated June liability is 56.1 due on the date payment of the tax is due. 56.2 A distributor having a liability of $120,000 or more during 56.3 acalendarfiscal year ending June 30 must remit all liabilities 56.4 in the subsequentfiscalcalendar yearending June 30by means 56.5 of a funds transfer as defined in section 336.4A-104, paragraph 56.6 (a). The funds transfer payment date, as defined in section 56.7 336.4A-401, must be on or before the date the tax is due. If 56.8 the date the tax is due is not a funds transfer business day, as 56.9 defined in section 336.4A-105, paragraph (a), clause (4), the 56.10 payment date must be on or before the funds transfer business 56.11 day next following the date the tax is due. 56.12 Sec. 18. Minnesota Statutes 1994, section 297.43, 56.13 subdivision 2, is amended to read: 56.14 Subd. 2. [PENALTY FOR FAILURE TO FILE.] If a person fails 56.15 to make and file a return within the time required under 56.16 sections 297.07, 297.23, and 297.35, there shall be added to the 56.17 tax five percent of the amount of tax not paid on or before the 56.18 date prescribed for payment of the tax. The amount so added to 56.19 any tax under this subdivision and subdivision 1 shall be 56.20 collected at the same time and in the same manner and as a part 56.21 of the tax and shall bear interest at the rate specified in 56.22 section 270.75 from the time the tax should have been paid, 56.23 unless the tax has been paid before the discovery of the 56.24 negligence, in which case the amount so added shall be collected 56.25 in the same manner as the tax. 56.26In the case of a failure to file a return within 60 days of56.27the date prescribed for filing of the return (determined with56.28regard to any extension of time for filing), the addition to tax56.29under this subdivision shall not be less than the lesser of (i)56.30$200; or (ii) the greater of (a) 25 percent of the amount56.31required to be shown as tax on the return without reduction for56.32any payments made or refundable credits allowable against the56.33tax; or (b) $50.56.34 Sec. 19. Minnesota Statutes 1994, section 297C.14, 56.35 subdivision 2, is amended to read: 56.36 Subd. 2. [PENALTY FOR FAILURE TO FILE.] If a person fails 57.1 to make and file a return within the time required by this 57.2 chapter or an extension of time, there shall be added to the tax 57.3 five percent of the amount of tax not paid on or before the date 57.4 prescribed for payment of the tax. The amount so added to any 57.5 tax under subdivisions 1 and 2 shall be collected at the same 57.6 time and in the same manner and as a part of the tax and shall 57.7 bear interest at the rate specified in section 270.75 from the 57.8 time the tax should have been paid, unless the tax has been paid 57.9 before the discovery of the negligence, in which case the amount 57.10 so added shall be collected in the same manner as the tax. 57.11In the case of a failure to file a return within 60 days of57.12the date prescribed for filing of the return (determined with57.13regard to any extension of time for filing), the addition to tax57.14under this subdivision shall not be less than the lesser of (i)57.15$200; or (ii) the greater of (a) 25 percent of the amount57.16required to be shown as tax on the return without reduction for57.17any payments made or refundable credits allowable against the57.18tax; or (b) $50.57.19 Sec. 20. Minnesota Statutes 1994, section 297E.11, 57.20 subdivision 4, is amended to read: 57.21 Subd. 4. [TIME LIMIT FOR REFUNDS.] Unless otherwise 57.22 provided in this chapter, a claim for a refund of an overpayment 57.23 of tax must be filed within3-1/2 years from the date prescribed57.24for filing the return, plus any extension of time granted for57.25filing the return, but only if filed within the extended time,57.26or two years from the time the tax is paid, whichever period57.27expires laterthe period prescribed in section 289A.40, 57.28 subdivision 1. Interest on refunds must be computed at the rate 57.29 specified in section 270.76 from the date of payment to the date 57.30 the refund is paid or credited. For purposes of this 57.31 subdivision, the date of payment is the later of the date the 57.32 tax was finally due or was paid. 57.33 Sec. 21. Minnesota Statutes 1994, section 297E.12, 57.34 subdivision 2, is amended to read: 57.35 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 57.36 a taxpayer fails to make and file a return within the time 58.1 prescribed or an extension, a penalty is added to the tax. The 58.2 penalty is five percent of the amount of tax not paid on or 58.3 before the date prescribed for payment of the tax. 58.4If a taxpayer fails to file a return within 60 days of the58.5date prescribed for filing of the return (determined with regard58.6to any extension of time for filing), the addition to tax under58.7this subdivision must be at least the lesser of: (1) $200; or58.8(2) the greater of (i) 25 percent of the amount required to be58.9shown as tax on the return without reduction for any payments58.10made or refundable credits allowable against the tax, or (ii)58.11$50.58.12 Sec. 22. Minnesota Statutes 1994, section 299F.26, 58.13 subdivision 1, is amended to read: 58.14 Subdivision 1. [PROCEDURE, TIME LIMIT, APPROPRIATION.] A 58.15 company which has paid, voluntarily or otherwise, or from which 58.16 there was collected an amount of tax for any year in excess of 58.17 the amount legally due for that year, may file with the 58.18 commissioner of revenue a claim for a refund of the excess. 58.19 Except as provided in subdivision 4, no claim or refund shall be 58.20 allowed or made after3-1/2 years from the date prescribed for58.21filing the return (plus any extension of time granted for filing58.22the return but only if filed within the extended time) or after58.23two years from the date of overpayment, whichever period is58.24longer, unless before the expiration of the period a claim is58.25filed by the companythe period prescribed in section 289A.40, 58.26 subdivision 1. For this purpose a return or amended return 58.27 claiming an overpayment constitutes a claim for refund. 58.28 Upon the filing of a claim the commissioner shall examine 58.29 the same and shall make and file written findings thereon 58.30 denying or allowing the claim in whole or in part and shall mail 58.31 a notice thereof to the company at the address stated upon the 58.32 return. If such claim is allowed in whole or in part, the 58.33 commissioner shall issue a certificate for the refundment of the 58.34 excess paid by the company, with interest at the rate specified 58.35 in section 270.76 computed from the date of the payment of the 58.36 tax until the date the refund is paid or the credit is made to 59.1 the company, and the commissioner of finance shall cause the 59.2 refund to be paid as other state moneys are expended. So much 59.3 of the proceeds of the taxes as is necessary are appropriated 59.4 for that purpose. 59.5 Sec. 23. Minnesota Statutes 1994, section 299F.26, 59.6 subdivision 4, is amended to read: 59.7 Subd. 4. [CONSENT TO EXTEND TIME.] If the commissioner and 59.8 the company have within the periods prescribed in subdivision 1, 59.9 consented in writing to any extension of time for the assessment 59.10 of the tax, the period within a claim for refund may be filed, 59.11 or a refund may be made or allowed, if no claim is filed, shall 59.12 be the period within which the commissioner and the company have 59.13 consented to an extension for the assessment of the tax and six 59.14 months thereafter, provided, however, that the period within59.15which a claim for refund may be filed shall not expire prior to59.16two years after the tax was paid. 59.17 Sec. 24. [REPEALER.] 59.18 Minnesota Statutes 1994, sections 270.70, subdivisions 8, 59.19 9, and 10; and 297A.38, are repealed. 59.20 Sec. 25. [EFFECTIVE DATE.] 59.21 Sections 1, 2, 12, 15, 20, and 22 are effective for claims 59.22 for refund which have not been filed as of the day following 59.23 final enactment and in which the time period for filing the 59.24 claim has not expired under the provisions in effect prior to 59.25 the day following final enactment. The time period for filing 59.26 such claims is the time period prescribed in the enacted 59.27 sections, or one year after the day following final enactment, 59.28 whichever is greater. 59.29 Sections 3, 16, and 23, and the provisions in section 1 59.30 pertaining to consents to extend time, are effective for 59.31 consents to extend time for filing claims for refund entered 59.32 into on or after the day following final enactment. 59.33 Sections 4, 8, 13, 14, 17 to 19, 21, and 24 are effective 59.34 the day following final enactment. 59.35 Sections 5 to 7 are effective July 1, 1995. 59.36 Section 9 is effective for payments of refunds resulting 60.1 from final determinations made on or after April 26, 1994, 60.2 including refunds resulting from appeals filed before that date 60.3 but finally determined after that date. 60.4 Sections 10 and 11 are effective for payments due for tax 60.5 years beginning after December 31, 1995. 60.6 ARTICLE 5 60.7 MISCELLANEOUS 60.8 Section 1. Minnesota Statutes 1994, section 289A.43, is 60.9 amended to read: 60.10 289A.43 [PROHIBITION OF SUITS TO RESTRAIN ASSESSMENT OR 60.11 COLLECTION.] 60.12 Except for the express procedures in this chapter, chapters 60.13 270 and 271, and any other tax statutes for contesting the 60.14 assessment or collection of taxes, penalties, or interest 60.15 administered by the commissioner of revenue, and except for an 60.16 action challenging the constitutionality of a tax statute on its 60.17 face, if it is demonstrated to the court by clear and convincing 60.18 evidence that under no circumstances would the commissioner 60.19 ultimately prevail and that the taxpayer will suffer irreparable 60.20 harm if the relief sought is not granted, no suit to restrain 60.21 assessment or collection, including a declaratory judgment 60.22 action, can be maintained in any court by any person. 60.23 Sec. 2. [296.041] [ELECTRONICALLY FILED RETURNS OR 60.24 REPORTS; SIGNATURES.] 60.25 For purposes of this chapter, the name of the taxpayer, the 60.26 name of the taxpayer's authorized agent, or the taxpayer's 60.27 identification number constitutes a signature when transmitted 60.28 as part of the information on returns or reports filed by 60.29 electronic means by the taxpayer or at the taxpayer's 60.30 direction. "Electronic means" includes, but is not limited to, 60.31 the use of a touch-tone telephone to transmit return or report 60.32 information in a manner prescribed by the commissioner. 60.33 Sec. 3. Minnesota Statutes 1994, section 296.12, 60.34 subdivision 3, is amended to read: 60.35 Subd. 3. [TAX COLLECTION, REPORTING AND PAYMENT.] (a) For 60.36 clear diesel fuel, the tax is imposed on the distributor who 61.1 receives the fuel. 61.2 (b) For all other special fuels, the tax is imposed on the 61.3 distributor, bulk purchaser, or special fuel dealer. The tax 61.4 may be paid upon receipt or sale as follows: 61.5 (1) Distributors and special fuel dealers may, subject to 61.6 the approval of the commissioner, elect to pay to the 61.7 commissioner the special fuel excise tax on all special fuel 61.8 delivered or sold into the supply tank of an aircraft or a 61.9 licensed motor vehicle. Under this option an invoice must be 61.10 issued at the time of each delivery showing the name and address 61.11 of the purchaser, date of sale, number of gallons, price per 61.12 gallon and total amount of sale. A separate sales ticket book 61.13 shall be maintained for special fuel sales; and 61.14 (2) Bulk purchasers shall report and pay the excise tax on 61.15 all special fuel purchased by them for storage, to the 61.16 commissioner in the form and manner prescribed by the 61.17 commissioner. 61.18 (c) Any person delivering special fuel on which the excise 61.19 tax has not previously been paid, into the supply tank of an 61.20 aircraft or a licensed motor vehicle shall report such delivery 61.21 and pay the excise tax on the special fuel so delivered, to the 61.22 commissioner. 61.23 Sec. 4. Minnesota Statutes 1994, section 296.12, 61.24 subdivision 4, is amended to read: 61.25 Subd. 4. [MONTHLY REPORTS; SHRINKAGE ALLOWANCE.] On or 61.26 before the 23rd day of each month, the persons subject to the 61.27 provisions of this section shall filein the office of the61.28commissioner at St. Paul, Minnesota,a report in thefollowing61.29mannerform and manner prescribed by the commissioner. Reports 61.30 shall contain information as follows: 61.31 (1) Distributors of clear diesel fuel must file a monthly 61.32 tax return with the department listing all purchases or receipts 61.33 of clear diesel fuel. Distributors may be allowed to take a 61.34 credit or credits under section 296.14, subdivision 2. 61.35 (2) Distributors and dealers of special fuel other than 61.36 clear diesel fuel shall report the total number of gallons 62.1 delivered to them during the preceding calendar month and shall 62.2 pay the special fuel excise tax due thereon to the commissioner. 62.3 The invoice must show the true and correct name and address of 62.4 the purchaser, and the purchaser's signature. The report shall 62.5 contain such other information as the commissioner may require. 62.6 (3) Distributors and dealers of special fuel other than 62.7 clear diesel fuel who have elected to pay the special fuel 62.8 excise tax on all special fuel delivered into the supply tank of 62.9 an aircraft or licensed motor vehicle as provided in subdivision 62.10 3, shall report the total number of gallons delivered into the 62.11 supply tank of an aircraft or licensed motor vehicle during the 62.12 preceding calendar month and shall pay the special fuel excise 62.13 tax due thereon to the commissioner. 62.14 (4) Bulk purchasers shall report and pay the special fuel 62.15 excise tax on all special fuel except clear diesel fuel 62.16 purchased by them for storage, during the preceding calendar 62.17 month. In such cases as the commissioner may permit, credit for 62.18 the excise tax due or previously paid on special fuel not used 62.19 in aircraft or licensed motor vehicles, may be allowed in 62.20 computing tax liability. The report shall contain such other 62.21 information as the commissioner may require. 62.22 (5) In computing the special fuel excise tax due, a 62.23 deduction of one percent of the quantity of special fuel on 62.24 which tax is due shall be made for evaporation and loss. 62.25 (6) Each report shall contain a confession of judgment for 62.26 the amount of the tax shown due thereon to the extent not timely 62.27 paid. 62.28 Sec. 5. Minnesota Statutes 1994, section 296.12, 62.29 subdivision 11, is amended to read: 62.30 Subd. 11. [QUALIFIED BULK PURCHASERS.] Notwithstanding any 62.31 other provision of law to the contrary, the commissioner of 62.32 revenue may allow any bulk purchaser who receives special fuel 62.33 other than clear diesel fuel in bulk storage for subsequent 62.34 delivery into the supply tank of licensed motor vehicles or 62.35 aircraft operated by the bulk purchaser to purchase bulk special 62.36 fuel on a tax paid basis from any consenting supplier licensed 63.1 as a distributor or special fuel dealer under this section or 63.2 section 296.06. Bulk purchasers qualifying under this provision 63.3 must become registered in a manner approved by the commissioner 63.4 but shall be exempt from the bulk purchaser license 63.5 requirements. Every licensed distributor or special fuel dealer 63.6 who sells or delivers special fuel other than clear diesel fuel 63.7 on a tax paid basis to persons registered under this provision 63.8 must report on or before the 23rd day of each month sales made 63.9 during the preceding calendar month and shall pay the special 63.10 fuel excise tax due thereon to the commissioner. The report 63.11 shall be in the form and manner prescribed by the commissioner, 63.12 and shall contain information as the commissioner may require. 63.13 Sec. 6. Minnesota Statutes 1994, section 296.141, 63.14 subdivision 1, is amended to read: 63.15 Subdivision 1. [PAYMENT OF GASOLINE TAX AND PETROLEUM TANK 63.16 RELEASE CLEANUP FEE; SHRINKAGE ALLOWANCE.] On or before the 23rd 63.17 day of each month, every person who is required to pay a 63.18 gasoline tax shall filein the office ofwith the commissioner 63.19at St. Paul, Minnesota,a report, inathe form and manner 63.20 approved by the commissioner, showing the number of gallons of 63.21 petroleum products received by the reporter during the preceding 63.22 calendar month, and other information the commissioner may 63.23 require. The number of gallons of gasoline must be reported in 63.24 United States standard liquid gallons (231 cubic inches), except 63.25 that the commissioner may upon written application and for cause 63.26 shown permit the distributor to report the number of gallons of 63.27 gasoline as corrected to a 60 degree Fahrenheit temperature. If 63.28 the application is granted, all gasoline covered in the 63.29 application and allowed by the commissioner must continue to be 63.30 reported by the distributor on the adjusted basis for a period 63.31 of one year from the date of the granting of the application. 63.32 The number of gallons of petroleum products other than gasoline 63.33 must be reported as originally invoiced. 63.34 Each report must show separately the number of gallons of 63.35 aviation gasoline received by the reporter during such calendar 63.36 month. 64.1 Each report must include the amount of gasoline tax on 64.2 gasoline received by the reporter during the preceding month; 64.3 provided that in computing the tax a deduction of three percent 64.4 of the quantity of gasoline received by a distributor shall be 64.5 made for evaporation and loss; provided further that at the time 64.6 of reporting, the distributor shall submit satisfactory evidence 64.7 that one-third of the three percent deduction has been credited 64.8 or paid to dealers on quantities sold to them.TheA written 64.9 report is deemed to have been filed as required in this 64.10 subdivision if postmarked on or before the 23rd day of the month 64.11 in which payable. 64.12 Sec. 7. Minnesota Statutes 1994, section 296.141, 64.13 subdivision 2, is amended to read: 64.14 Subd. 2. [INSPECTION FEES.] Persons required to pay an 64.15 inspection fee under section 239.101 must file a report. Each 64.16 report must include the amount of inspection fees due on 64.17 petroleum products.TheReports must be filed with the 64.18 commissioner in the form and manner the commissioner 64.19 prescribes. A written report is considered filed as required if 64.20 postmarked on or before the 23rd day of the month in which 64.21 payable. 64.22 Sec. 8. Minnesota Statutes 1994, section 296.141, 64.23 subdivision 6, is amended to read: 64.24 Subd. 6. [ON-FARM BULK STORAGE OF GASOLINE OR SPECIAL 64.25 FUEL; ETHYL ALCOHOL FOR PERSONAL USE.] Notwithstanding the 64.26 provisions of this section, the producer of ethyl alcohol which 64.27 is produced for personal use and not for sale in the usual 64.28 course of business and a farmer who uses gasoline or any special 64.29 fuel on which a tax has not been paid shall report and pay the 64.30 tax on all ethyl alcohol, gasoline, or special fuel delivered 64.31 into the supply tank of a licensed motor vehicle during the 64.32 preceding calendar year. The tax must be reported in the form 64.33 and manner prescribed by the commissioner and paid together with 64.34 any refund claim filed by the taxpayer under section 296.18. If 64.35 no refund claim is filed, the tax must be reported and paid 64.36 annually by March 15 or more frequently, as the commissioner may 65.1 prescribe. Any producer qualifying under this subdivision is 65.2 exempt from the licensing requirements contained in section 65.3 296.06, subdivision 1. 65.4 Sec. 9. Minnesota Statutes 1994, section 296.17, 65.5 subdivision 1, is amended to read: 65.6 Subdivision 1. [UNREPORTED FUEL.] It shall be the duty of 65.7 every distributor, dealer, and person who sells or uses gasoline 65.8 manufactured, produced, received, or stored by the distributor, 65.9 dealer, or person, and of every person using gasoline in motor 65.10 vehicles or special fuel in licensed motor vehicles, if the same 65.11 has not been reported or if the tax on account thereof has not 65.12 been paid to the commissioner, to report to the commissioner in 65.13 the form and manner prescribed by the commissioner, the quantity 65.14 of such gasoline so sold or used or such special fuel used, and 65.15 such person shall become liable for the payment of the tax. All 65.16 provisions of sections 296.01 to 296.421 relating to the 65.17 calculation, collection and payment of the tax shall be 65.18 applicable to any such person, dealer or distributor. 65.19 Sec. 10. Minnesota Statutes 1994, section 296.17, 65.20 subdivision 3, is amended to read: 65.21 Subd. 3. [REFUNDS ON FUEL USED IN OTHER STATES.] Every 65.22 person regularly or habitually operating motor vehicles upon the 65.23 public highways of any other state or states and using in said 65.24 motor vehicles gasoline or special fuel purchased or obtained in 65.25 this state, shall be allowed a credit or refund equal to the tax 65.26 on said gasoline or special fuel paid to this state on the 65.27 gasoline or special fuel actually used in the other state or 65.28 states. No credit or refund shall be allowed under this 65.29 subdivision for taxes paid to any state which imposes a tax upon 65.30 gasoline or special fuel purchased or obtained in this state and 65.31 used on the highways of such other state, and which does not 65.32 allow a similar credit or refund for the tax paid to this state 65.33 on gasoline or special fuel purchased or acquired in such other 65.34 state and used on the highways of this state. Every person 65.35 claiming a credit or refund under this subdivision shall file a, 65.36 claimon ain the form and manner prescribed by the commissioner 66.1 or take the credit on a subsequent tax return within one year of 66.2 the last day of the month following the end of the quarter when 66.3 the overpayment occurred. 66.4 Sec. 11. Minnesota Statutes 1994, section 296.17, 66.5 subdivision 5, is amended to read: 66.6 Subd. 5. [UNREPORTED AVIATION GASOLINE.] The provisions of 66.7 subdivision 1 do not apply to aviation gasoline. It shall be 66.8 the duty of every distributor, dealer, and person who receives, 66.9 sells, stores, or withdraws from storage in this state aviation 66.10 gasoline manufactured, produced, received, or stored by the 66.11 distributor, dealer, or person, if the same has not been 66.12 reported or if a tax provided for in section 296.02 on account 66.13 thereof, has not been paid to the commissioner, to report to the 66.14 commissioner, in the form and manner prescribed by the 66.15 commissioner, the quantity of such gasoline so received, sold, 66.16 stored, or withdrawn from storage, and such person shall become 66.17 liable for the payment of the tax. 66.18 All provisions of sections 296.01 to 296.421 relating to 66.19 the calculation, collections, and payment of the tax shall be 66.20 applicable to any such person, dealer, or distributor. 66.21 Sec. 12. Minnesota Statutes 1994, section 296.17, 66.22 subdivision 11, is amended to read: 66.23 Subd. 11. [MOTOR CARRIER REPORTS.] Every motor carrier 66.24 subject to the road tax shall, on or before the last day of 66.25 April, July, October, and January, file with the commissioner 66.26suchin the form and manner prescribed by the commissioner, 66.27 reports of operations during the previous three monthsas the66.28commissioner may require, and such other reports from time to 66.29 time as the commissioner may deem necessary. The commissioner 66.30 by rule may exempt from the quarterly reporting requirements of 66.31 this section those motor carriers whose mileage is all or 66.32 substantially all and those motor carriers whose mileage is 66.33 minimal within this state, or states with which Minnesota has 66.34 reciprocity and require in such instances an annual report 66.35 reflecting the operations of the carrier during the previous 66.36 year along with payment of any taxes due. 67.1 Each report shall contain a confession of judgment for the 67.2 amount of the tax shown due thereon to the extent not timely 67.3 paid. 67.4 Sec. 13. Minnesota Statutes 1994, section 296.18, 67.5 subdivision 1, is amended to read: 67.6 Subdivision 1. [CLAIM; FUEL USED IN OTHER VEHICLES.] Any 67.7 person who shall buy and use gasoline for a qualifying purpose 67.8 other than use in motor vehicles, snowmobiles except as provided 67.9 in clause (2), or motorboats, or special fuel for a qualifying 67.10 purpose other than use in licensed motor vehicles, and who shall 67.11 have paid the Minnesota excise tax directly or indirectly 67.12 through the amount of the tax being included in the price of the 67.13 gasoline or special fuel, or otherwise, shall be reimbursed and 67.14 repaid the amount of the tax paid upon filing with the 67.15 commissioner asignedclaimin writingin the form and manner 67.16 prescribed by the commissioner, and containing the information 67.17 the commissioner shall requireand accompanied by the original67.18invoice thereof. By signing any such claim which is false or 67.19 fraudulent, the applicant shall be subject to the penalties 67.20 provided in this section for knowingly making a false claim. 67.21 The claim shall set forth the total amount of the gasoline so 67.22 purchased and used by the applicant other than in motor 67.23 vehicles, or special fuel so purchased and used by the applicant 67.24 other than in licensed motor vehicles, and shall state when and 67.25 for what purpose it was used. When a claim contains an error in 67.26 computation or preparation, the commissioner is authorized to 67.27 adjust the claim in accordance with the evidence shown on the 67.28 claim or other information available to the commissioner. The 67.29 commissioner, on being satisfied that the claimant is entitled 67.30 to the payments, shall approve the claim and transmit it to the 67.31 commissioner of finance. No repayment shall be made unless the 67.32 claim and invoice shall be filed with the commissioner within 67.33 one year from the date of the purchase. The postmark on the 67.34 envelope in whichthea written claim is mailed shall determine 67.35theits date of filing. The words "gasoline" or "special fuel" 67.36 as used in this subdivision do not include aviation gasoline or 68.1 special fuel for aircraft. Gasoline or special fuel bought and 68.2 used for a "qualifying purpose" means: 68.3 (1) Gasoline or special fuel used in carrying on a trade or 68.4 business, used on a farm situated in Minnesota, and used for a 68.5 farming purpose. "Farm" and "farming purpose" have the meanings 68.6 given them in section 6420(c)(2), (3), and (4) of the Internal 68.7 Revenue Code of 1986, as amended through December 31, 1988. 68.8 (2) Gasoline or special fuel used for off-highway business 68.9 use. "Off-highway business use" means any use by a person in 68.10 that person's trade, business, or activity for the production of 68.11 income. "Off-highway business use" includes use of a passenger 68.12 snowmobile off the public highways as part of the operations of 68.13 a resort as defined in section 157.01, subdivision 1. 68.14 "Off-highway business use" does not include use as a fuel in a 68.15 motor vehicle which, at the time of use, is registered or is 68.16 required to be registered for highway use under the laws of any 68.17 state or foreign country. 68.18 (3) Gasoline or special fuel placed in the fuel tanks of 68.19 new motor vehicles, manufactured in Minnesota, and shipped by 68.20 interstate carrier to destinations in other states or foreign 68.21 countries. 68.22 Sec. 14. Minnesota Statutes 1994, section 296.18, 68.23 subdivision 2, is amended to read: 68.24 Subd. 2. [FAILURE TO USE OR SELL FOR INTENDED PURPOSE; 68.25 REPORTS REQUIRED.] (1) Any person who shall buy aviation 68.26 gasoline or special fuel for aircraft use and who shall have 68.27 paid the excise taxes due thereon directly or indirectly through 68.28 the amount of the tax being included in the price thereof, or 68.29 otherwise, and shall use said gasoline or special fuel in motor 68.30 vehicles or shall knowingly sell it to any person for use in 68.31 motor vehicles shall, on or before the twenty-third day of the 68.32 month following that in which such gasoline or special fuel was 68.33 so used or sold, report the fact of such use or sale to the 68.34 commissioner in such form and manner as the commissioner may 68.35 prescribe. 68.36 (2) Any person who shall buy gasoline other than aviation 69.1 gasoline and who shall have paid the motor vehicle gasoline 69.2 excise tax directly or indirectly through the amount of the tax 69.3 being included in the price of the gasoline, or otherwise, who 69.4 shall knowingly sell such gasoline to any person to be used for 69.5 the purpose of producing or generating power for propelling 69.6 aircraft, or who shall receive, store, or withdraw from storage 69.7 such gasoline to be used for that purpose, shall, on or before 69.8 the 23rd day of the month following that in which such gasoline 69.9 was so sold, stored, or withdrawn from storage, report the fact 69.10 of such sale, storage, or withdrawal from storage to the 69.11 commissioner in such form and manner as the commissioner may 69.12 prescribe. 69.13 (3) Any person who shall buy aviation gasoline or special 69.14 fuel for aircraft use and who shall have paid the excise taxes 69.15 directly or indirectly through the amount of the tax being 69.16 included in the price thereof, or otherwise, who shall not use 69.17 it in motor vehicles or receive, sell, store, or withdraw it 69.18 from storage for the purpose of producing or generating power 69.19 for propelling aircraft, shall be reimbursed and repaid the 69.20 amount of the tax paid upon filing with the commissioner a 69.21signedclaimin writingin such form andcontaining such69.22information as the commissioner shall require and accompanied by69.23the original invoice thereofmanner as the commissioner may 69.24 prescribe. Bysigning any suchfiling a claim which is false or 69.25 fraudulent, the applicant shall be subject to the penalties 69.26 provided in section 296.25 for knowingly or willfully making a 69.27 false claim. The claim shall set forth the total amount of the 69.28 aviation gasoline or special fuel for aircraft use so purchased 69.29 and used by the applicant, and shall state when and for what 69.30 purpose it was used. When a claim contains an error in 69.31 computation or preparation, the commissioner is authorized to 69.32 adjust the claim in accordance with the evidence shown on the 69.33 claim or other information available to the commissioner. The 69.34 commissioner, on being satisfied that the claimant is entitled 69.35 to payment, shall approve the claim and transmit it to the 69.36 commissioner of finance. No repayment shall be made unless the 70.1 claim and invoice shall be filed with the commissioner within 70.2 one year from the date of the purchase. The postmark on the 70.3 envelope in whichthea written claim is mailed shall determine 70.4theits date of filing. 70.5 Sec. 15. Minnesota Statutes 1994, section 296.18, 70.6 subdivision 5, is amended to read: 70.7 Subd. 5. [GRADUATED REDUCTION-BASIS REFUND CLAIM, 70.8 REQUIREMENTS.] Any distributor or other person claiming to be 70.9 entitled to any refund provided for in subdivision 4 shall 70.10 receive such refund upon filing with the commissioner a verified 70.11 claim in such form and manner, and, containing such information,70.12and accompanied by such invoices or other proofas the 70.13 commissioner shall require. The claim shall set forth, among 70.14 other things, the total number of gallons of aviation gasoline 70.15 or special fuel for aircraft use upon which the claimant has 70.16 directly or indirectly paid the excise tax provided for in 70.17 sections 296.02, subdivision 2, or 296.025, subdivision 2, 70.18 during the calendar year, which has been received, stored, or 70.19 withdrawn from storage by the claimant in this state and not 70.20 sold or otherwise disposed of to others. The commissioner, on 70.21 being satisfied that the claimant is entitled to the refund, 70.22 shall approve the claim and transmit it to the commissioner of 70.23 finance, and it shall be paid as provided for in section 70.24 296.421, subdivision 2. All claims for refunds under this 70.25 subdivision shall be made on or before April 15 following the 70.26 end of the calendar year for which the refund is claimed. 70.27 Claims for aviation gasoline and special fuel tax refund filed 70.28 within 15 days beyond the due date prescribed by this 70.29 subdivision shall be honored by the commissioner less a penalty 70.30 of 25 percent of the amount of the approved claim. 70.31 Sec. 16. [EFFECTIVE DATE.] 70.32 Sections 2 to 15 are effective the day following final 70.33 enactment. 70.34 Section 1 is effective for lawsuits initiated on or after 70.35 the day following final enactment.