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SF 1218

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 03/31/2017 10:33am

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A bill for an act
relating to taxation; making policy changes to property taxes, local government
aids, sales and use taxes, special taxes, paid preparers, and other taxes and tax
provisions;amending Minnesota Statutes 2016, sections 84.82, subdivision 10;
84.922, subdivision 11; 86B.401, subdivision 12; 270.074, subdivision 1; 270B.14,
by adding a subdivision; 270C.445, subdivisions 2, 3, 5a, 6, 6a, 6b, 6c, 7, 8, by
adding a subdivision; 270C.446, subdivisions 2, 3, 4, 5; 270C.447, subdivisions
1, 2, 3, by adding a subdivision; 272.025, subdivision 1; 272.0295, by adding a
subdivision; 272.115, subdivisions 1, 2, 3; 273.0755; 273.124, subdivisions 13,
13d; 274.014, subdivision 3; 274.135, subdivision 3; 289A.50, subdivision 2a;
289A.60, subdivisions 13, 28; 297I.30, subdivision 7; proposing coding for new
law in Minnesota Statutes, chapter 297A; repealing Minnesota Statutes 2016,
sections 270.074, subdivision 2; 270C.445, subdivision 1; 270C.447, subdivision
4.

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

ARTICLE 1

PROPERTY TAX AND LOCAL GOVERNMENT AIDS

Section 1.

Minnesota Statutes 2016, section 270.074, subdivision 1, is amended to read:


Subdivision 1.

Valuation.

The commissioner shall determine the market valuation of
all flight property operated or used by every airline company in air commerce in this state.
The valuation apportioned to this state of such flight property shall be the proportion of the
total valuation thereof determined on the basis of the total of the following percentages:

(1) 33-1/3 percent of the percentage which the total tonnage of passengers, express and
freight first received by the airline company in this state during the preceding calendar year
plus the total tonnage of passengers, express and freight finally discharged by it within this
state during the preceding calendar year is of the total of such tonnage first received by the
airline company or finally discharged by it, within and without this state during the preceding
calendar year.

(2) 33-1/3 percent of the percentage which, in equated plane hours, the total time of all
aircraft of the airline company in flight in this state during the preceding calendar year, is
of the total of such time in flight within and without this state during the preceding calendar
year.

(3) 33-1/3 (1) 50 percent of the percentage which the number of revenue ton miles of
passengers, mail, express and freight flown by the airline company within this state during
the preceding calendar year is of the total number of such miles flown by it within and
without this state during the preceding calendar year.

(2) 50 percent of the percentage that the total departures performed by the airline company
within this state during the preceding calendar year is of the total departures performed
within and without this state during the preceding calendar year.

EFFECTIVE DATE.

This section is effective for assessment year 2018 and thereafter.

Sec. 2.

Minnesota Statutes 2016, section 272.025, subdivision 1, is amended to read:


Subdivision 1.

Statement of exemption.

(a) Except in the case of property owned by
the state of Minnesota or any political subdivision thereof, and property exempt from taxation
under section 272.02, subdivisions 9, 10, 13, 15, 18, 20, and 22 to 25, and at the times
provided in subdivision 3,
a taxpayer claiming an exemption from taxation on property
described in section 272.02, subdivisions 2 to 33, must file a statement of exemption with
the assessor of the assessment district in which the property is located. By February 1, 2018,
and by February 1 of each third year thereafter, the commissioner of revenue shall publish
on its Web site a list of the exemptions for which a taxpayer claiming an exemption must
file a statement of exemption. The commissioner's requirement that a taxpayer file a statement
of exemption pursuant to this subdivision shall not be considered a rule and is not subject
to the Administrative Procedure Act, chapter 14.

(b) A taxpayer claiming an exemption from taxation on property described in section
272.02, subdivision 10, must file a statement of exemption with the commissioner of revenue,
on or before February 15 of each year for which the taxpayer claims an exemption.

(c) In case of sickness, absence or other disability or for good cause, the assessor or the
commissioner may extend the time for filing the statement of exemption for a period not to
exceed 60 days.

(d) The commissioner of revenue shall prescribe the form and contents of the statement
of exemption.

EFFECTIVE DATE.

This section is effective for applications for exemption submitted
in 2018 and thereafter.

Sec. 3.

Minnesota Statutes 2016, section 272.0295, is amended by adding a subdivision
to read:


Subd. 8.

Extension.

The commissioner may, for good cause, extend the time for filing
the report required by subdivision 4. The extension must not exceed 15 days.

EFFECTIVE DATE.

This section is effective for reports filed in 2018 and thereafter.

Sec. 4.

Minnesota Statutes 2016, section 272.115, subdivision 1, is amended to read:


Subdivision 1.

Requirement.

Except as otherwise provided in subdivision 5 or 6,
whenever any real estate is sold for a consideration in excess of $1,000 $1,500, whether by
warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor,
grantee or the legal agent of either shall file a certificate of value with the county auditor
in the county in which the property is located when the deed or other document is presented
for recording. Contract for deeds are subject to recording under section 507.235, subdivision
1
. Value shall, in the case of any deed not a gift, be the amount of the full actual consideration
thereof, paid or to be paid, including the amount of any lien or liens assumed. The items
and value of personal property transferred with the real property must be listed and deducted
from the sale price. The certificate of value shall include the classification to which the
property belongs for the purpose of determining the fair market value of the property, and
shall include any proposed change in use of the property known to the person filing the
certificate that could change the classification of the property. The certificate shall include
financing terms and conditions of the sale which are necessary to determine the actual,
present value of the sale price for purposes of the sales ratio study. If the property is being
acquired as part of a like-kind exchange under section 1031 of the Internal Revenue Code
of 1986, as amended through December 31, 2006, that must be indicated on the certificate.
The commissioner of revenue shall promulgate administrative rules specifying the financing
terms and conditions which must be included on the certificate. The certificate of value
must include the Social Security number or the federal employer identification number of
the grantors and grantees. However, a married person who is not an owner of record and
who is signing a conveyance instrument along with the person's spouse solely to release
and convey their marital interest, if any, in the real property being conveyed is not a grantor
for the purpose of the preceding sentence. A statement in the deed that is substantially in
the following form is sufficient to allow the county auditor to accept a certificate for filing
without the Social Security number of the named spouse: "(Name) claims no ownership
interest in the real property being conveyed and is executing this instrument solely to release
and convey a marital interest, if any, in that real property." The identification numbers of
the grantors and grantees are private data on individuals or nonpublic data as defined in
section 13.02, subdivisions 9 and 12, but, notwithstanding that section, the private or
nonpublic data may be disclosed to the commissioner of revenue for purposes of tax
administration. The information required to be shown on the certificate of value is limited
to the information required as of the date of the acknowledgment on the deed or other
document to be recorded. The commissioner's determination of the amount for which a
certificate of value is required pursuant to this subdivision shall not be considered a rule
and is not subject to the Administrative Procedure Act, chapter 14.

EFFECTIVE DATE.

This section is effective for certificates of value filed after
December 31, 2017.

Sec. 5.

Minnesota Statutes 2016, section 272.115, subdivision 2, is amended to read:


Subd. 2.

Form; information required.

The certificate of value shall require such facts
and information as may be determined by the commissioner to be reasonably necessary in
the administration of the state education aid formulas. The form of the certificate of value
shall be prescribed by the Department of Revenue which shall provide an adequate supply
of forms to each county auditor
.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 6.

Minnesota Statutes 2016, section 272.115, subdivision 3, is amended to read:


Subd. 3.

Copies transmitted; homestead status.

The county auditor shall transmit two
true copies of
the certificate of value to the assessor who shall insert into the certificate of
value
the most recent market value and when available, the year of original construction of
each parcel of property on both copies, and shall transmit one copy the certificate of value
to the Department of Revenue. Upon the request of a city council located within the county,
a copy of each certificate of value for property located in that city shall be made available
to the governing body of the city. The assessor shall remove the homestead classification
for the following assessment year from a property which is sold or transferred, unless the
grantee or the person to whom the property is transferred completes a homestead application
under section 273.124, subdivision 13, and qualifies for homestead status.

EFFECTIVE DATE.

This section is effective for certificates of value filed after
December 31, 2017.

Sec. 7.

Minnesota Statutes 2016, section 273.0755, is amended to read:


273.0755 TRAINING AND EDUCATION OF PROPERTY TAX PERSONNEL.

(a) Beginning with the four-year period starting on July 1, 2000, every person licensed
by the state Board of Assessors at the Accredited Minnesota Assessor level or higher, shall
successfully complete a weeklong Minnesota laws course sponsored by the Department of
Revenue at least once in every four-year period. An assessor need not attend the course if
they successfully pass the test for the course.

(b) The commissioner of revenue may require that each county, and each city for which
the city assessor performs the duties of county assessor, have (i) a person on the assessor's
staff who is certified by the Department of Revenue in sales ratio calculations, (ii) an officer
or employee who is certified by the Department of Revenue in tax calculations, and (iii) an
officer or employee who is certified by the Department of Revenue in the proper preparation
of abstracts of assessment. The commissioner of revenue may require that each county have
an officer or employee who is certified by the Department of Revenue in the proper
preparation of abstracts of tax lists.

(c) Beginning with the four-year educational licensing period starting on July 1, 2004,
every Minnesota assessor licensed by the State Board of Assessors must attend and participate
in a seminar that focuses on ethics, professional conduct and the need for standardized
assessment practices developed and presented by the commissioner of revenue. This
requirement must be met at least once in every subsequent four-year period. This requirement
applies to all assessors licensed for one year or more in the four-year period.

(d) The commissioner of revenue may require that at least one employee of any county
or city that performs functions related to property tax administration complete additional
training that the commissioner deems necessary to promote uniform and equitable
implementation of the property tax laws, as defined in section 270C.01, subdivision 7.

EFFECTIVE DATE.

This section is effective for assessment year 2018 and thereafter.

Sec. 8.

Minnesota Statutes 2016, section 273.124, subdivision 13, is amended to read:


Subd. 13.

Homestead application.

(a) A person who meets the homestead requirements
under subdivision 1 must file a homestead application with the county assessor to initially
obtain homestead classification.

(b) The format and contents of a uniform homestead application shall be prescribed by
the commissioner of revenue. The application must clearly inform the taxpayer that this
application must be signed by all owners who occupy the property or by the qualifying
relative and returned to the county assessor in order for the property to receive homestead
treatment.

(c) Every property owner applying for homestead classification must furnish to the
county assessor the Social Security number of each occupant who is listed as an owner of
the property on the deed of record, the name and address of each owner who does not occupy
the property, and the name and Social Security number of each owner's spouse who occupies
the property
. The application must be signed by each owner who occupies the property and
by each owner's spouse who occupies the property, or, in the case of property that qualifies
as a homestead under subdivision 1, paragraph (c), by the qualifying relative.

If a property owner occupies a homestead, the property owner's spouse may not claim
another property as a homestead unless the property owner and the property owner's spouse
file with the assessor an affidavit or other proof required by the assessor stating that the
property qualifies as a homestead under subdivision 1, paragraph (e).

Owners or spouses occupying residences owned by their spouses and previously occupied
with the other spouse, either of whom fail to include the other spouse's name and Social
Security number on the homestead application or provide the affidavits or other proof
requested, will be deemed to have elected to receive only partial homestead treatment of
their residence. The remainder of the residence will be classified as nonhomestead residential.
When an owner or spouse's name and Social Security number appear on homestead
applications for two separate residences and only one application is signed, the owner or
spouse will be deemed to have elected to homestead the residence for which the application
was signed.

(d) If residential real estate is occupied and used for purposes of a homestead by a relative
of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in order for
the property to receive homestead status, a homestead application must be filed with the
assessor. The Social Security number of each relative occupying the property and the name
and Social Security number of the
spouse of a relative occupying the property shall be
required on the homestead application filed under this subdivision. If a different relative of
the owner subsequently occupies the property, the owner of the property must notify the
assessor within 30 days of the change in occupancy. The Social Security number of a relative
occupying the property or relative's the spouse of a relative occupying the property is private
data on individuals as defined by section 13.02, subdivision 12, but may be disclosed to the
commissioner of revenue, or, for the purposes of proceeding under the Revenue Recapture
Act to recover personal property taxes owing, to the county treasurer.

(e) The homestead application shall also notify the property owners that if the property
is granted homestead status for any assessment year, that same property shall remain
classified as homestead until the property is sold or transferred to another person, or the
owners, the spouse of the owner, or the relatives no longer use the property as their
homestead. Upon the sale or transfer of the homestead property, a certificate of value must
be timely filed with the county auditor as provided under section 272.115. Failure to notify
the assessor within 30 days that the property has been sold, transferred, or that the owner,
the spouse of the owner, or the relative is no longer occupying the property as a homestead,
shall result in the penalty provided under this subdivision and the property will lose its
current homestead status.

(f) If a homestead application has not been filed with the county by December 15, the
assessor shall classify the property as nonhomestead for the current assessment year for
taxes payable in the following year, provided that the owner may be entitled to receive the
homestead classification by proper application under section 375.192.

EFFECTIVE DATE.

This section is effective for applications for homestead filed in
2018 and thereafter.

Sec. 9.

Minnesota Statutes 2016, section 273.124, subdivision 13d, is amended to read:


Subd. 13d.

Homestead data.

On or before April 30 each year beginning in 2007, each
county must provide the commissioner with the following data for each parcel of homestead
property by electronic means as defined in section 289A.02, subdivision 8:

(1) the property identification number assigned to the parcel for purposes of taxes payable
in the current year;

(2) the name and Social Security number of each occupant of homestead property who
is the property owner, property owner's spouse, or qualifying relative of a property owner,
and the spouse of the property owner who occupies homestead property
or spouse of a
qualifying relative of a property owner who occupies homestead property;

(3) the classification of the property under section 273.13 for taxes payable in the current
year and in the prior year;

(4) an indication of whether the property was classified as a homestead for taxes payable
in the current year because of occupancy by a relative of the owner or by a spouse of a
relative;

(5) the property taxes payable as defined in section 290A.03, subdivision 13, for the
current year and the prior year;

(6) the market value of improvements to the property first assessed for tax purposes for
taxes payable in the current year;

(7) the assessor's estimated market value assigned to the property for taxes payable in
the current year and the prior year;

(8) the taxable market value assigned to the property for taxes payable in the current
year and the prior year;

(9) whether there are delinquent property taxes owing on the homestead;

(10) the unique taxing district in which the property is located; and

(11) such other information as the commissioner decides is necessary.

The commissioner shall use the information provided on the lists as appropriate under
the law, including for the detection of improper claims by owners, or relatives of owners,
under chapter 290A.

EFFECTIVE DATE.

This section is effective for applications for homestead filed in
2018 and thereafter.

Sec. 10.

Minnesota Statutes 2016, section 274.014, subdivision 3, is amended to read:


Subd. 3.

Proof of compliance; transfer of duties.

(a) Any city or town that conducts
local boards of appeal and equalization meetings must provide proof to the county assessor
by February 1 that it is in compliance
comply with the training requirements of subdivision
2 by February 1, by having at least one member who has attended an appeals and equalization
course described in subdivision 2 within the last four years
. This notice must also verify
that there was a quorum of voting members at each meeting of the board of appeal and
equalization in the previous year.
A city or town that does not comply with these requirements
is deemed to have transferred its board of appeal and equalization powers to the county for
a minimum of two assessment years,
beginning with the current year's assessment and
continuing thereafter unless the powers are reinstated under paragraph (c).

(b) The county shall notify the taxpayers when the board of appeal and equalization for
a city or town has been transferred to the county under this subdivision and, prior to the
meeting time of the county board of equalization, the county shall make available to those
taxpayers a procedure for a review of the assessments, including, but not limited to, open
book meetings. This alternate review process shall take place in April and May.

(c) A local board whose powers are transferred to the county under this subdivision may
be reinstated by resolution of the governing body of the city or town and upon proof of
compliance with the requirements of subdivision 2. The resolution and proofs must be
provided to the county assessor by February 1 in order to be effective for the following
year's assessment.

(d) A local board whose powers are transferred to the county under this subdivision may
continue to employ a local assessor and is not deemed to have transferred its powers to
make assessments.

EFFECTIVE DATE.

This section is effective for board of appeal and equalization
meetings held in 2018 and thereafter.

Sec. 11.

Minnesota Statutes 2016, section 274.135, subdivision 3, is amended to read:


Subd. 3.

Proof of compliance; transfer of duties.

(a) Any county that conducts county
boards of appeal and equalization meetings must provide proof to the commissioner by
December 1, 2009, and each year thereafter, that it is in compliance
comply with the training
requirements of subdivision 2 by February 1, by having at least one member who has attended
an appeals and equalization course described in subdivision 2 within the last four years
.
Beginning in 2009, this notice must also verify that there was a quorum of voting members
at each meeting of the board of appeal and equalization in the current year.
A county that
does not comply with these requirements is deemed to have transferred its board of appeal
and equalization powers to the special board of equalization appointed pursuant to section
274.13, subdivision 2, for a minimum of two assessment years, beginning with the following
year's assessment and continuing thereafter unless the powers are reinstated under paragraph
(c). A county that does not comply with the requirements of subdivision 2 and has not
appointed a special board of equalization shall appoint a special board of equalization before
the following year's assessment.

(b) The county shall notify the taxpayers when the board of appeal and equalization for
a county has been transferred to the special board of equalization under this subdivision
and, prior to the meeting time of the special board of equalization, the county shall make
available to those taxpayers a procedure for a review of the assessments, including, but not
limited to, open book meetings. This alternate review process must take place in April and
May.

(c) A county board whose powers are transferred to the special board of equalization
under this subdivision may be reinstated by resolution of the county board and upon proof
of compliance with the requirements of subdivision 2. The resolution and proofs must be
provided to the commissioner by December 1 in order to be effective for the following
year's assessment.

(d) If a person who was entitled to appeal to the county board of appeal and equalization
or to the county special board of equalization is not able to do so in a particular year because
the county board or special board did not meet the quorum and training requirements in this
section and section 274.13, or because the special board was not appointed, that person may
instead appeal to the commissioner of revenue, provided that the appeal is received by the
commissioner prior to August 1. The appeal is not subject to either chapter 14 or section
270C.92. The commissioner must issue an appropriate order to the county assessor in
response to each timely appeal, either upholding or changing the valuation or classification
of the property. Prior to October 1 of each year, the commissioner must charge and bill the
county where the property is located $500 for each tax parcel covered by an order issued
under this paragraph in that year. Amounts received by the commissioner under this paragraph
must be deposited in the state's general fund. If payment of a billed amount is not received
by the commissioner before December 1 of the year when billed, the commissioner must
deduct that unpaid amount from any state aid the commissioner would otherwise pay to the
county under chapter 477A in the next year. Late payments may either be returned to the
county uncashed and undeposited or may be accepted. If a late payment is accepted, the
state aid paid to the county under chapter 477A must be adjusted within 12 months to
eliminate any reduction that occurred because the payment was late. Amounts needed to
make these adjustments are included in the appropriation under section 477A.03, subdivision
2
.

EFFECTIVE DATE.

This section is effective for board of appeal and equalization
meetings held in 2018 and thereafter.

Sec. 12. REPEALER.

Minnesota Statutes 2016, section 270.074, subdivision 2, is repealed.

EFFECTIVE DATE.

This section is effective for assessment year 2018 and thereafter.

ARTICLE 2

SALES AND USE, AND SPECIAL TAXES

Section 1.

Minnesota Statutes 2016, section 84.82, subdivision 10, is amended to read:


Subd. 10.

Proof of sales tax payment; collection and refund.

(a) A person applying
for initial registration of a snowmobile must provide a snowmobile purchaser's certificate,
showing a complete description of the snowmobile, the seller's name and address, the full
purchase price of the snowmobile, and the trade-in allowance, if any. The certificate must
include information showing either
receipt, invoice, or other document to prove that:

(1) that the sales and use tax under chapter 297A was paid or;

(2) the purchase was exempt from tax under chapter 297A. The commissioner of public
safety, in consultation with the commissioner and the commissioner of revenue, shall
prescribe the form of the certificate.The certificate is not required if the applicant provides
a receipt, invoice, or other document that shows
; or

(3) the snowmobile was purchased from a retailer that is maintaining a place of business
in this state as defined in section 297A.66, subdivision 1, and is a dealer.

(b) The commissioner or authorized deputy registrars, acting as agents of the
commissioner of revenue under an agreement between the commissioner and the
commissioner of revenue, as provided in section 297A.825:

(1) must collect use tax from the applicant if the applicant does not provide the proof
required under paragraph (a); and

(2) are authorized to issue refunds of use tax paid to them in error.

(c) Subdivision 11 does not apply to refunds under this subdivision.

EFFECTIVE DATE.

This section is effective for snowmobiles registered after June
30, 2017.

Sec. 2.

Minnesota Statutes 2016, section 84.922, subdivision 11, is amended to read:


Subd. 11.

Proof of sales tax payment; collection and refund.

(a) A person applying
for initial registration in Minnesota of an all-terrain vehicle shall must provide a purchaser's
certificate showing a complete description of the all-terrain vehicle, the seller's name and
address, the full purchase price of the all-terrain vehicle, and the trade-in allowance, if any.
The certificate also must include information showing either
receipt, invoice, or other
document to prove
that:

(1) the sales and use tax under chapter 297A was paid, or;

(2) the purchase was exempt from tax under chapter 297A. The certificate is not required
if the applicant provides a receipt, invoice, or other document that shows
; or

(3) the all-terrain vehicle was purchased from a retailer that is maintaining a place of
business in this state as defined in section 297A.66, subdivision 1, and is a dealer.

(b) The commissioner or authorized deputy registrars, acting as agents of the
commissioner of revenue under an agreement between the commissioner and the
commissioner of revenue, as provided in section 297A.825:

(1) must collect use tax from the applicant if the applicant does not provide the proof
required under paragraph (a); and

(2) are authorized to issue refunds of use tax paid to them in error.

(c) Subdivision 12 does not apply to refunds under this subdivision.

EFFECTIVE DATE.

This section is effective for all-terrain vehicles registered after
June 30, 2017.

Sec. 3.

Minnesota Statutes 2016, section 86B.401, subdivision 12, is amended to read:


Subd. 12.

Proof of sales tax payment; collection and refund.

(a) A person applying
for initial licensing of a watercraft must provide a watercraft purchaser's certificate, showing
a complete description of the watercraft, the seller's name and address, the full purchase
price of the watercraft, and the trade-in allowance, if any. The certificate must include
information showing either
receipt, invoice, or other document to prove that:

(1) that the sales and use tax under chapter 297A was paid or;

(2) the purchase was exempt from tax under chapter 297A. The commissioner of public
safety, in consultation with the commissioner and the commissioner of revenue, shall
prescribe the form of the certificate.The certificate is not required if the applicant provides
a receipt, invoice, or other document that shows
; or

(3) the watercraft was purchased from a retailer that is maintaining a place of business
in this state as defined in section 297A.66, subdivision 1, and is a dealer.

(b) The commissioner or authorized deputy registrars, acting as agents of the
commissioner of revenue under an agreement between the commissioner and the
commissioner of revenue, as provided in section 297A.825:

(1) must collect use tax from the applicant if the applicant does not provide the proof
required under paragraph (a); and

(2) are authorized to issue refunds of use tax paid to them in error.

(c) Section 86B.415, subdivision 11, does not apply to refunds under this subdivision.

EFFECTIVE DATE.

This section is effective for watercraft licensed after June 30,
2017.

Sec. 4.

Minnesota Statutes 2016, section 270B.14, is amended by adding a subdivision to
read:


Subd. 20.

Department of Natural Resources; authorized deputy registrars of motor
vehicles.

The commissioner may disclose return information related to the taxes imposed
by chapter 297A to the Department of Natural Resources or an authorized deputy registrar
of motor vehicles only:

(1) if the commissioner has an agreement with the commissioner of natural resources
under section 297A.825, subdivision 1; and

(2) to the extent necessary for the Department of Natural Resources or an authorized
deputy registrar of motor vehicles, as agents for the commissioner, to verify that the
applicable sales or use tax has been paid or that a sales tax exemption applies on the purchase
of a snowmobile, all-terrain vehicle, or watercraft, and to administer sections 84.82,
subdivision 10; 84.922, subdivision 11; 86B.401, subdivision 12; and 297A.825, regarding
either their collection of use tax or their issuance of refunds to applicants of use tax paid to
them in error.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 5.

Minnesota Statutes 2016, section 289A.50, subdivision 2a, is amended to read:


Subd. 2a.

Refund of sales tax to purchasers.

(a) If a vendor has collected from a
purchaser a tax on a transaction that is not subject to the tax imposed by chapter 297A, the
purchaser may apply directly to the commissioner for a refund under this section if:

(1) the purchaser is currently registered or was registered during the period of the claim,
to collect and remit the sales tax or to remit the use tax; and

(2) either

(i) the amount of the refund to be applied for exceeds $500, or

(ii) the amount of the refund to be applied for does not exceed $500, but the purchaser
also applies for a capital equipment claim at the same time, and the total of the two refunds
exceeds $500.

(b) The purchaser may not file more than two applications for refund under this
subdivision in a calendar year.

(c) Refunds shall not be issued for sales for resale where the vendor has a published no
resale policy.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 6.

[297A.825] SNOWMOBILES; ALL-TERRAIN VEHICLES; WATERCRAFT;
PAYMENT OF TAXES; REFUNDS.

Subdivision 1.

Agreement with commissioners of natural resources and public
safety; collection and refunds.

The commissioner may enter into an agreement with the
commissioner of natural resources, in consultation with the commissioner of public safety,
that provides that:

(1) the commissioner of natural resources and authorized deputy registrars of motor
vehicles must collect use tax on snowmobiles, all-terrain vehicles, and watercraft from
persons applying for initial registration or license of the item unless the applicant provides
a receipt, invoice, or other document to prove that:

(i) sales tax was paid on the purchase;

(ii) the purchase was exempt under this chapter;

(iii) use tax was paid to the commissioner in a form prescribed by the commissioner; or

(iv) the item was purchased from a retailer that is maintaining a place of business in this
state as defined in section 297A.66, subdivision 1, and is a dealer as defined in section
84.81, subdivision 10; 84.92, subdivision 3; or 86B.005, subdivision 4; and

(2) the commissioner of natural resources and authorized deputy registrars of motor
vehicles are authorized to issue refunds of use tax paid to them in error, meaning that either
the sales or use tax had already been paid or that the purchase was exempt from tax under
this chapter.

Subd. 2.

Agents.

For the purposes of collecting or refunding the tax under this section,
the commissioner of natural resources and authorized deputy registrars of motor vehicles
are the agents of the commissioner and are subject to, and must strictly comply with, all
rules consistent with this chapter prescribed by the commissioner.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 7.

Minnesota Statutes 2016, section 297I.30, subdivision 7, is amended to read:


Subd. 7.

Surcharge.

(a) By April 30 of each year, every company required to pay the
surcharge under section 297I.10, subdivision 1, shall file a return for the five-month period
ending March 31 in the form prescribed by the commissioner.

(b) (a) By June 30 of each year, every company required to pay the surcharge under
section 297I.10, subdivision 1, shall file a return for the two-month seven-month period
ending May 31 in the form prescribed by the commissioner.

(c) (b) By November 30 of each year, every company required to pay the surcharge
under section 297I.10, subdivision 1, shall file a return for the five-month period ending
October 31 in the form prescribed by the commissioner.

EFFECTIVE DATE.

This section is effective for returns due after October 31, 2017.

ARTICLE 3

PAID PREPARERS

Section 1.

Minnesota Statutes 2016, section 270C.445, subdivision 2, is amended to read:


Subd. 2.

Definitions.

(a) For purposes of this section and sections 270C.4451 to
270C.447
, the following terms have the meanings given.

(b) "Advertise" means to solicit business through any means or medium.

(c) "Client" means an individual a person for whom a tax preparer performs or agrees
to perform tax preparation services.

(d) "Facilitate" means to individually or in conjunction or cooperation with another
person:

(1) accept an application for a refund anticipation loan;

(2) pay to a client the proceeds, through direct deposit, a negotiable instrument, or any
other means, of a refund anticipation loan; or

(3) offer, arrange, process, provide, or in any other manner act to allow the making of,
a refund anticipation loan.

(e) "Person" means an individual, corporation, partnership, limited liability company,
association, trustee, or other legal entity.

(f) (e) "Refund anticipation check" means a negotiable instrument provided to a client
by the tax preparer or another person, which is issued from the proceeds of a taxpayer's
federal or state income tax refund or both and represents the net of the refund minus the tax
preparation fee and any other fees. A refund anticipation check includes a refund transfer.

(g) (f) "Refund anticipation loan" means a loan or any other extension of credit, whether
provided by the tax preparer or another entity such as a financial institution, in anticipation
of, and whose payment is secured by, a client's federal or state income tax refund or both.

(h) (g) "Tax preparation services" means services provided for a fee or other consideration
compensation
to a client to:

(1) assist with preparing or filing state or federal individual income tax returns a return;

(2) assume final responsibility for completed work on an individual income tax a return
on which preliminary work has been done by another; or

(3) sign or include on a return the preparer tax identification number required under
section 6109(a)(4) of the Internal Revenue Code; or

(3) (4) facilitate the provision of a refund anticipation loans and loan or a refund
anticipation checks check.

(i) (h) "Tax preparer" or "preparer" means a person providing tax preparation services
subject to this section. except:

(1) an employee who prepares their employer's return;

(2) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of the
fiduciary estate, testator, trustor, grantor, or beneficiaries of them;

(3) nonprofit organizations providing tax preparation services under the Internal Revenue
Service Volunteer Income Tax Assistance Program or Tax Counseling for the Elderly
Program;

(4) a person who merely furnishes typing, reproducing, or other mechanical assistance;

(5) a third-party bulk filer as defined in section 290.92, subdivision 30, that is currently
registered with the commissioner; and

(6) a certified service provider as defined in section 297A.995, subdivision 2, paragraph
(c), that provides all of the sales tax functions for a retailer not maintaining a place of
business in this state as described in section 297A.66.

(i) Except as otherwise provided, "return" means:

(1) a return as defined in section 270C.01, subdivision 8;

(2) a claim for refund of an overpayment;

(3) a claim filed pursuant to chapter 290A; and

(4) a claim for a credit filed under section 290.0677, subdivision 1.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 2.

Minnesota Statutes 2016, section 270C.445, subdivision 3, is amended to read:


Subd. 3.

Standards of conduct.

No tax preparer shall:

(1) without good cause fail to promptly, diligently, and without unreasonable delay
complete a client's tax return;

(2) obtain the signature of a client to a tax return or authorizing document that contains
blank spaces to be filled in after it has been signed;

(3) fail to sign a client's tax return when payment compensation for services rendered
has been made;

(4) fail to provide on a client's return the preparer tax identification number when required
under section 6109(a)(4) of the Internal Revenue Code or section 289A.60, subdivision 28;

(4) (5) fail or refuse to give a client a copy of any document requiring the client's signature
within a reasonable time after the client signs the document;

(5) (6) fail to retain for at least four years a copy of individual income tax a client's
returns;

(6) (7) fail to maintain a confidential relationship with clients or former clients;

(7) (8) fail to take commercially reasonable measures to safeguard a client's nonpublic
personal information;

(8) (9) make, authorize, publish, disseminate, circulate, or cause to make, either directly
or indirectly, any false, deceptive, or misleading statement or representation relating to or
in connection with the offering or provision of tax preparation services;

(9) (10) require a client to enter into a loan arrangement in order to complete a tax client's
return;

(10) (11) claim credits or deductions on a client's tax return for which the tax preparer
knows or reasonably should know the client does not qualify;

(12) report a household income on a client's claim filed under chapter 290A that the tax
preparer knows or reasonably should know is not accurate;

(13) engage in any conduct that is subject to a penalty under section 289A.60, subdivision
13, 20, 20a, 26, or 28;

(14) whether or not acting as a taxpayer representative, fail to conform to the standards
of conduct required by Minnesota Rules, part 8052.0300, subpart 4;

(15) whether or not acting as a taxpayer representative, engage in any conduct that is
incompetent conduct under Minnesota Rules, part 8052.0300, subpart 5;

(16) whether or not acting as a taxpayer representative, engage in any conduct that is
disreputable conduct under Minnesota Rules, part 8052.0300, subpart 6;

(11) (17) charge, offer to accept, or accept a fee based upon a percentage of an anticipated
refund for tax preparation services;

(12) (18) under any circumstances, withhold or fail to return to a client a document
provided by the client for use in preparing the client's tax return;

(13) (19) establish an account in the preparer's name to receive a client's refund through
a direct deposit or any other instrument unless the client's name is also on the account,
except that a taxpayer may assign the portion of a refund representing the Minnesota
education credit available under section 290.0674 to a bank account without the client's
name, as provided under section 290.0679;

(14) (20) fail to act in the best interests of the client;

(15) (21) fail to safeguard and account for any money handled for the client;

(16) (22) fail to disclose all material facts of which the preparer has knowledge which
might reasonably affect the client's rights and interests;

(17) (23) violate any provision of section 332.37;

(18) (24) include any of the following in any document provided or signed in connection
with the provision of tax preparation services:

(i) a hold harmless clause;

(ii) a confession of judgment or a power of attorney to confess judgment against the
client or appear as the client in any judicial proceeding;

(iii) a waiver of the right to a jury trial, if applicable, in any action brought by or against
a debtor;

(iv) an assignment of or an order for payment of wages or other compensation for
services;

(v) a provision in which the client agrees not to assert any claim or defense otherwise
available;

(vi) a waiver of any provision of this section or a release of any obligation required to
be performed on the part of the tax preparer; or

(vii) a waiver of the right to injunctive, declaratory, or other equitable relief or relief on
a class basis; or

(19) (25) if making, providing, or facilitating a refund anticipation loan, fail to provide
all disclosures required by the federal Truth in Lending Act, United States Code, title 15,
in a form that may be retained by the client.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 3.

Minnesota Statutes 2016, section 270C.445, subdivision 5a, is amended to read:


Subd. 5a.

Nongame wildlife checkoff.

A tax preparer must give written notice of the
option to contribute to the nongame wildlife management account in section 290.431 to
corporate clients that file an income tax return and to individual clients who file an income
tax return or property tax refund claim form under chapter 290A. This notification must be
included with information sent to the client at the same time as the preliminary worksheets
or other documents used in preparing the client's return and must include a line for displaying
contributions.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 4.

Minnesota Statutes 2016, section 270C.445, subdivision 6, is amended to read:


Subd. 6.

Enforcement; administrative order; penalties; cease and desist.

(a) The
commissioner may impose an administrative penalty of not more than $1,000 per violation
of subdivision 3, 3a, 4, 5, or 5b or 5, or section 270C.4451, provided that a penalty may not
be imposed for any conduct that is also subject to the for which a tax return preparer penalties
in
penalty is imposed under section 289A.60, subdivision 13. The commissioner may
terminate a tax preparer's authority to transmit returns electronically to the state, if the
commissioner determines the tax preparer engaged in a pattern and practice of violating
this section. Imposition of a penalty under this subdivision paragraph is subject to the
contested case procedure under chapter 14. The commissioner shall collect the penalty in
the same manner as the income tax. There is no right to make a claim for refund under
section 289A.50 of the penalty imposed under this paragraph.
Penalties imposed under this
subdivision paragraph are public data.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 5.

Minnesota Statutes 2016, section 270C.445, subdivision 6a, is amended to read:


Subd. 6a.

Exchange of data; State Board of Accountancy.

The State Board of
Accountancy shall refer to the commissioner complaints it receives about tax preparers who
are not subject to the jurisdiction of the State Board of Accountancy and who are alleged
to have violated the provisions of subdivisions 3, 3a, 4, 4a, 4b, 5, and 5b this section, except
subdivision 5a, or section 270C.4451
.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 6.

Minnesota Statutes 2016, section 270C.445, subdivision 6b, is amended to read:


Subd. 6b.

Exchange of data; Lawyers Board of Professional Responsibility.

The
Lawyers Board of Professional Responsibility may refer to the commissioner complaints
it receives about tax preparers who are not subject to its jurisdiction and who are alleged to
have violated the provisions of subdivisions 3, 3a, 4, 4a, 4b, 5, and 5b this section, except
subdivision 5a, or section 270C.4451
.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 7.

Minnesota Statutes 2016, section 270C.445, subdivision 6c, is amended to read:


Subd. 6c.

Exchange of data; commissioner.

The commissioner shall refer information
and
complaints about tax preparers who are alleged to have violated the provisions of
subdivisions 3, 3a, 4, 4a, 4b, 5, and 5b this section, except subdivision 5a, or section
270C.4451,
to:

(1) the State Board of Accountancy, if the tax preparer is under its jurisdiction; and

(2) the Lawyers Board of Professional Responsibility, if the tax preparer is under its
jurisdiction.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 8.

Minnesota Statutes 2016, section 270C.445, subdivision 7, is amended to read:


Subd. 7.

Enforcement; civil actions.

(a) Any violation of this section or section
270C.4451
is an unfair, deceptive, and unlawful trade practice within the meaning of section
8.31. An action taken under this section is in the public interest.

(b) A client may bring a civil action seeking redress for a violation of this section in the
conciliation or the district court of the county in which unlawful action is alleged to have
been committed or where the respondent resides or has a principal place of business.

(c) A court finding for the plaintiff must award:

(1) actual damages;

(2) incidental and consequential damages;

(3) statutory damages of twice the sum of: (i) the tax preparation fees; and (ii) if the
plaintiff violated subdivision 3a, 4, or 5b section 270C.4451, subdivision 1, 2, or 5, all
interest and fees for a refund anticipation loan;

(4) reasonable attorney fees;

(5) court costs; and

(6) any other equitable relief as the court considers appropriate.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 9.

Minnesota Statutes 2016, section 270C.445, subdivision 8, is amended to read:


Subd. 8.

Limited exemptions.

(a) Except as provided in paragraph (b), the provisions
of this section, except for subdivisions 3a, 4, and 5b, subdivisions 3; 5; 5a; 6, paragraphs
(a) to (n); and 7,
do not apply to:

(1) an attorney admitted to practice under section 481.01;

(2) a registered accounting practitioner, a registered accounting practitioner firm, a
certified public accountant, or other person who is subject to the jurisdiction of the State
Board of Accountancy
a certified public accountant firm, licensed in accordance with chapter
326A
;

(3) an enrolled agent who has passed the special enrollment examination administered
by the Internal Revenue Service; or

(4) anyone a person who provides, or assists in providing, tax preparation services within
the scope of duties as an employee or supervisor under the direction or supervision of a
person who is exempt under this subdivision.; or

(5) a person acting as a supervisor to a tax preparer who is exempt under this subdivision.

(b) The provisions of subdivisions 3; 6, paragraphs (a) to (n); and 7, apply to a tax
preparer who would otherwise be exempt under paragraph (a) if the tax preparer has:

(1) had a professional license suspended or revoked for cause, not including a failure to
pay a professional licensing fee, by any authority of any state, territory, or possession of
the United States, including a commonwealth, or the District of Columbia, any federal court
of record, or any federal agency, body, or board;

(2) irrespective of whether an appeal has been taken, been convicted of any crime
involving dishonesty or breach of trust;

(3) been censured, suspended, or disbarred under United States Treasury Department
Circular 230;

(4) been sanctioned by a court of competent jurisdiction, whether in a civil or criminal
proceeding, including suits for injunctive relief, relating to any taxpayer's tax liability or
the tax preparer's own tax liability, for:

(i) instituting or maintaining proceedings primarily for delay;

(ii) advancing frivolous or groundless arguments; or

(iii) failing to pursue available administrative remedies; or

(5) demonstrated a pattern of willful disreputable conduct by:

(i) failing to file a return that the tax preparer was required to file annually for two of
the three immediately preceding tax periods; or

(ii) failing to file a return that the tax preparer was required to file more frequently than
annually for three of the six immediately preceding tax periods.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 10.

Minnesota Statutes 2016, section 270C.445, is amended by adding a subdivision
to read:


Subd. 9.

Powers additional.

The powers and authority granted in this section are in
addition to all other powers of the commissioner. The use of the powers granted in this
section does not preclude the use of any other power or authority of the commissioner.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 11.

Minnesota Statutes 2016, section 270C.446, subdivision 2, is amended to read:


Subd. 2.

Required and excluded tax preparers.

(a) Subject to the limitations of
paragraph (b), the commissioner must publish lists of tax preparers as defined in section
289A.60, subdivision 13, paragraph (f) 270C.445, subdivision 2, paragraph (h), who have
been:

(1) convicted under section 289A.63 for returns or claims prepared as a tax preparer or;

(2) assessed penalties in excess of $1,000 under section 289A.60, subdivision 13,
paragraph (a).;

(3) convicted for identity theft under section 609.527, or a similar statute, for a return
filed with the commissioner, the Internal Revenue Service, or another state;

(4) assessed a penalty under section 270C.445, subdivision 6, paragraph (a), in excess
of $1,000;

(5) issued a cease and desist order under section 270C.445, subdivision 6, paragraph
(b), that has become a final order; or

(6) assessed a penalty under section 270C.445, subdivision 6, paragraph (l), for violating
a cease and desist order.

(b) For the purposes of this section, tax preparers are not subject to publication if:

(1) an administrative or court action contesting the or appealing a penalty described in
paragraph (a), clause (2), (4), or (6),
has been filed or served and is unresolved at the time
when notice would be given under subdivision 3;

(2) an appeal period to contest the a penalty described in paragraph (a), clause (2), (4),
or (6),
has not expired; or

(3) the commissioner has been notified that the tax preparer is deceased.;

(4) an appeal period to contest a cease and desist order issued under section 270C.445,
subdivision 6, paragraph (b), has not expired;

(5) an administrative or court action contesting or appealing a cease and desist order
issued under section 270C.445, subdivision 6, paragraph (b), has been filed or served and
is unresolved at the time when notice would be given under subdivision 3;

(6) a direct appeal of a conviction described in paragraph (a), clause (1) or (3), has been
filed or served and is unresolved at the time when the notice would be given under
subdivision 3; or

(7) an appeal period to contest a conviction described in paragraph (a), clause (1) or (3),
has not expired.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 12.

Minnesota Statutes 2016, section 270C.446, subdivision 3, is amended to read:


Subd. 3.

Notice to tax preparer.

(a) At least 30 days before publishing the name of a
tax preparer subject to penalty publication under this section, the commissioner shall mail
a written notice to the tax preparer, detailing the amount and nature of each penalty basis
for the publication
and the intended publication of the information listed in subdivision 4
related to the penalty. The notice must be mailed by first class and certified mail sent to the
tax preparer
addressed to the last known address of the tax preparer. The notice must include
information regarding the exceptions listed in subdivision 2, paragraph (b), and must state
that the tax preparer's information will not be published if the tax preparer provides
information establishing that subdivision 2, paragraph (b), prohibits publication of the tax
preparer's name.

(b) Thirty days after the notice is mailed and if the tax preparer has not proved to the
commissioner that subdivision 2, paragraph (b), prohibits publication, the commissioner
may publish in a list of tax preparers subject to penalty the information about the tax preparer
that is listed in subdivision 4.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 13.

Minnesota Statutes 2016, section 270C.446, subdivision 4, is amended to read:


Subd. 4.

Form of list.

The list may be published by any medium or method. The list
must contain the name, associated business name or names, address or addresses, and
violation or violations for which a penalty was imposed of that make each tax preparer
subject to penalty publication.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 14.

Minnesota Statutes 2016, section 270C.446, subdivision 5, is amended to read:


Subd. 5.

Removal from list.

The commissioner shall remove the name of a tax preparer
from the list of tax preparers published under this section:

(1) when the commissioner determines that the name was included on the list in error;

(2) within 90 days three years after the preparer has demonstrated to the commissioner
that the preparer fully paid all fines and penalties imposed, served any suspension, satisfied
any sentence imposed, successfully completed any probationary period imposed, and
successfully completed any remedial actions required by the commissioner, the State Board
of Accountancy, or the Lawyers Board of Professional Responsibility; or

(3) when the commissioner has been notified that the tax preparer is deceased.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 15.

Minnesota Statutes 2016, section 270C.447, subdivision 1, is amended to read:


Subdivision 1.

Commencement of action.

(a) Whenever it appears to the commissioner
that a tax preparer doing business in Minnesota has engaged in any conduct described in
subdivision 2,
a civil action in the name of the state of Minnesota may be commenced to
enjoin any person who is a tax return preparer doing business in this state from further
engaging in any conduct described in subdivision 2
the conduct and enforce compliance.

(b) An action under this subdivision must be brought by the attorney general in:

(1) the district court for the judicial district of the tax return preparer's residence or
principal place of business, or in which the;

(2) the district court for the judicial district of the residence of any taxpayer with respect
to whose tax return the action is brought resides; or

(3) Ramsey County District Court.

(c) The court may exercise its jurisdiction over the action separate and apart from any
other action brought by the state of Minnesota against the tax return preparer or any taxpayer.
The court must grant a permanent injunction or other appropriate relief if the commissioner
shows that the person has engaged in conduct constituting a violation of a law administered
by the commissioner or a cease and desist order issued by the commissioner. The
commissioner shall not be required to show irreparable harm.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 16.

Minnesota Statutes 2016, section 270C.447, subdivision 2, is amended to read:


Subd. 2.

Injunction prohibiting specific conduct.

In an action under subdivision 1,
the court may enjoin the person from further engaging in that conduct
if the court finds that
a tax return preparer has:

(1) engaged in any conduct subject to a civil penalty under section 289A.60 or, a criminal
penalty under section 289A.63, or a criminal penalty under section 609.527 or a similar
statute for a return filed with the commissioner, the Internal Revenue Service, or another
state
;

(2) misrepresented the preparer's eligibility to practice before the Department of Revenue,
or otherwise misrepresented the preparer's experience or education as a tax return preparer;

(3) guaranteed the payment of any tax refund or the allowance of any tax credit; or

(4) violated a cease and desist order issued by the commissioner; or

(4) (5) engaged in any other fraudulent or deceptive conduct that substantially interferes
with the proper administration of a law administered by the commissioner, and injunctive
relief is appropriate to prevent the recurrence of that conduct,.

the court may enjoin the person from further engaging in that conduct.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 17.

Minnesota Statutes 2016, section 270C.447, subdivision 3, is amended to read:


Subd. 3.

Injunction prohibiting all business activities.

If the court finds that a tax
return preparer has continually or repeatedly engaged in conduct described in subdivision
2, and that an injunction prohibiting that conduct would not be sufficient to prevent the
person's interference with the proper administration of a law administered by the
commissioner, the court may enjoin the person from acting as a tax return preparer. The
court may not enjoin the employer of a tax return preparer for conduct described in
subdivision 2 engaged in by one or more of the employer's employees unless the employer
was also actively involved in that conduct.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 18.

Minnesota Statutes 2016, section 270C.447, is amended by adding a subdivision
to read:


Subd. 3a.

Enforcement of cease and desist orders.

(a) Whenever the commissioner
under subdivision 1 or 3 seeks to enforce compliance with a cease and desist order, the court
must consider the allegations in the cease and desist order conclusively established if the
order is a final order.

(b) If the court finds the tax preparer was not in compliance with a cease and desist order,
the court may impose a further civil penalty against the tax preparer for contempt in an
amount up to $10,000 for each violation and may grant any other relief the court determines
is just and proper in the circumstances. A civil penalty imposed by a court under this section
may be collected and enforced by the commissioner as an income tax liability.

(c) The court may not require the commissioner to post a bond in an action or proceeding
under this section.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 19.

Minnesota Statutes 2016, section 289A.60, subdivision 13, is amended to read:


Subd. 13.

Penalties for tax return preparers.

(a) If an understatement of liability with
respect to a return or claim for refund is due to a reckless disregard of laws and rules or
willful attempt in any manner to understate the liability for a tax by a person who is a tax
return preparer with respect to the return or claim, the person shall pay to the commissioner
a penalty of $500. If a part of a property tax refund claim filed under section 290.0677,
subdivision 1, or chapter 290A
is excessive due to a reckless disregard or willful attempt
in any manner to overstate the claim for relief allowed under chapter 290A by a person who
is a tax refund or return preparer, the person tax preparer shall pay to the commissioner a
penalty of $500 with respect to the claim. These penalties may not be assessed against the
employer of a tax return preparer unless the employer was actively involved in the reckless
disregard or willful attempt to understate the liability for a tax or to overstate the claim for
refund. These penalties are income tax liabilities and may be assessed at any time as provided
in section 289A.38, subdivision 5.

(b) A civil action in the name of the state of Minnesota may be commenced to enjoin
any person who is a tax return preparer doing business in this state as provided in section
270C.447.

(c) The commissioner may terminate or suspend a tax preparer's authority to transmit
returns electronically to the state, if the commissioner determines that the tax preparer has
engaged in a pattern and practice of conduct in violation of paragraph (a) of this subdivision
or has been convicted under section 289A.63.

(d) For purposes of this subdivision, the term "understatement of liability" means an
understatement of the net amount payable with respect to a tax imposed by state tax law,
or an overstatement of the net amount creditable or refundable with respect to a tax. The
determination of whether or not there is an understatement of liability must be made without
regard to any administrative or judicial action involving the taxpayer. For purposes of this
subdivision, the amount determined for underpayment of estimated tax under either section
289A.25 or 289A.26 is not considered an understatement of liability.

(e) For purposes of this subdivision, the term "overstatement of claim" means an
overstatement of the net amount refundable with respect to a claim for property tax relief
provided by
filed under section 290.0677, subdivision 1, or chapter 290A. The determination
of whether or not there is an overstatement of a claim must be made without regard to
administrative or judicial action involving the claimant.

(f) For purposes of this section, the term "tax refund or return preparer" means an
individual who prepares for compensation, or who employs one or more individuals to
prepare for compensation, a return of tax, or a claim for refund of tax. The preparation of
a substantial part of a return or claim for refund is treated as if it were the preparation of
the entire return or claim for refund. An individual is not considered a tax return preparer
merely because the individual:

(1) gives typing, reproducing, or other mechanical assistance;

(2) prepares a return or claim for refund of the employer, or an officer or employee of
the employer, by whom the individual is regularly and continuously employed;

(3) prepares a return or claim for refund of any person as a fiduciary for that person; or

(4) prepares a claim for refund for a taxpayer in response to a tax order issued to the
taxpayer.
"tax preparer" or "preparer" has the meaning given in section 270C.445, subdivision
2, paragraph (h).

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 20.

Minnesota Statutes 2016, section 289A.60, subdivision 28, is amended to read:


Subd. 28.

Preparer identification number.

Any Minnesota individual income tax return
or claim for refund prepared by a "tax refund or return preparer" as defined in subdivision
13, paragraph (f), shall bear the identification number the preparer is required to use federally
under section 6109(a)(4) of the Internal Revenue Code.
(a) Each of the following that is
prepared by a tax preparer must include the tax preparer's tax identification number:

(1) a tax return required to be filed under this chapter;

(2) a claim filed under section 290.0677, subdivision 1, or chapter 290A; and

(3) a claim for refund of an overpayment.

(b) A tax preparer is not required to include their preparer tax identification number on
a filing if the number is not required in the forms or filing requirements provided by the
commissioner.

(c) A tax refund or return preparer who prepares a Minnesota individual income tax
return or claim for refund and
fails to include the required preparer tax identification number
on the return or claim as required by this section is subject to a penalty of $50 for each
failure.

(d) A tax preparer who fails to include the preparer tax identification number as required
by this section, and who is required to have a valid preparer tax identification number issued
under section 6109(a)(4) of the Internal Revenue Code, but does not have one, is subject to
a $500 penalty for each failure. A tax preparer subject to the penalty in this paragraph is
not subject to the penalty in paragraph (c).

(e) For the purposes of this subdivision, "tax preparer" has the meaning given in section
270C.445, subdivision 2, paragraph (h), and "preparer tax identification number" means
the number the tax preparer is required to use federally under section 6109(a)(4) of the
Internal Revenue Code.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

Sec. 21. REVISOR'S INSTRUCTION.

(a) The revisor of statutes shall renumber the provisions of Minnesota Statutes listed in
column A to the references listed in column B.

Column A
Column B
270C.445, subdivision 3a
270C.4451, subdivision 1
270C.445, subdivision 4
270C.4451, subdivision 2
270C.445, subdivision 4a
270C.4451, subdivision 3
270C.445, subdivision 4b
270C.4451, subdivision 4
270C.445, subdivision 5b
270C.4451, subdivision 5

(b) The revisor shall make necessary cross-reference changes in Minnesota Statutes and
Minnesota Rules consistent with the renumbering of Minnesota Statutes, section 270C.445,
subdivisions 3a, 4, 4a, 4b, and 5b.

(c) The revisor shall publish the statutory derivations of the laws renumbered in this act
in Laws of Minnesota and report the derivations in Minnesota Statutes.

(d) If Minnesota Statutes, section 270C.445, subdivisions 3a, 4, 4a, 4b, and 5b, are further
amended in the 2017 legislative session, the revisor shall codify the amendments in a manner
consistent with this act. The revisor may make necessary changes to sentence structure to
preserve the meaning of the text.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 22. REPEALER.

Minnesota Statutes 2016, sections 270C.445, subdivision 1; and 270C.447, subdivision
4,
are repealed.

EFFECTIVE DATE.

This section is effective for claims and returns filed after December
31, 2017.

APPENDIX

Repealed Minnesota Statutes: S1218-1

270.074 VALUATION OF FLIGHT PROPERTY; METHODS OF APPORTIONMENT; RATIO OF TAX.

Subd. 2.

Other apportionment methods.

The method prescribed by subdivision 1 shall be presumed to determine fairly and correctly the value of the flight property of an airline allocable to this state. Any airline aggrieved by the valuation of the flight property or the application to its case of the apportionment methods prescribed by subdivision 1, may petition the commissioner for determination of the valuation or the apportionment thereof to this state by the use of some other method. Thereupon, if the commissioner finds that the application of the methods prescribed by subdivision 1 will be unjust to the airline, the commissioner may allow the use of the methods so petitioned for by the airline, or may determine the valuation or apportionment thereof by other methods if satisfied that such other methods will fairly reflect such valuation or apportionment thereof.

270C.445 TAX PREPARATION SERVICES.

Subdivision 1.

Scope.

This section applies to a person who provides tax preparation services, except:

(1) a person who provides tax preparation services for fewer than ten clients in a calendar year;

(2) a person who provides tax preparation services only to immediate family members. For the purposes of this section, "immediate family members" means a spouse, parent, grandparent, child, or sibling;

(3) an employee who prepares a tax return for an employer's business;

(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of the fiduciary estate, testator, trustor, grantor, or beneficiaries of them; and

(5) nonprofit organizations providing tax preparation services under the Internal Revenue Service Volunteer Income Tax Assistance Program or Tax Counseling for the Elderly Program.

270C.447 LEGAL ACTION TO ENJOIN TAX RETURN PREPARER.

Subd. 4.

Tax return preparer.

For purposes of this section, the term "tax return preparer" means an individual who prepares for compensation, or who employs one or more individuals to prepare for compensation, a return of tax or a claim for refund of tax. The preparation of a substantial part of a return or claim for refund is treated as if it were the preparation of the entire return or claim for refund. An individual is not considered a tax return preparer merely because the individual:

(1) gives typing, reproducing, or other mechanical assistance;

(2) prepares a return or claim for refund of the employer, or an officer or employee of the employer, by whom the individual is regularly and continuously employed;

(3) prepares a return or claim for refund of any person as a fiduciary for that person; or

(4) prepares a claim for refund for a taxpayer in response to a tax order issued to the taxpayer.

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700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569