Minnesota Legislature
SF 1338
as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am
Current Version - as introduced
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A bill for an act
relating to taxation; providing filing requirements
for use tax; limiting the de minimus exemption;
providing instructions to the commissioner; amending
Minnesota Statutes 2004, sections 289A.11, subdivision
1; 289A.18, subdivision 4, by adding a subdivision;
297A.67, subdivision 21; 297A.83, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2004, section 289A.11,
subdivision 1, is amended to read:
Subdivision 1.
Return required.
Except as provided in
section 289A.18, deleted text begin subdivision deleted text end new text begin subdivisions new text end 4 new text begin and 4anew text end , for the
month in which taxes imposed by chapter 297A are payable, or for
which a return is due, a return for the preceding reporting
period must be filed with the commissioner in the form and
manner the commissioner prescribes. A person making sales at
retail at two or more places of business may file a consolidated
return subject to rules prescribed by the commissioner. In
computing the dollar amount of items on the return, the amounts
are rounded off to the nearest whole dollar, disregarding
amounts less than 50 cents and increasing amounts of 50 cents to
99 cents to the next highest dollar.
deleted text begin
Notwithstanding this subdivision, a person who is not
required to hold a sales tax permit under chapter 297A and who
makes annual purchases of less than $18,500 that are subject to
the use tax imposed by section 297A.63, may file an annual use
tax return on a form prescribed by the commissioner. If a
person who qualifies for an annual use tax reporting period is
required to obtain a sales tax permit or makes use tax purchases
in excess of $18,500 during the calendar year, the reporting
period must be considered ended at the end of the month in which
the permit is applied for or the purchase in excess of $18,500
is made and a return must be filed for the preceding reporting
period.
deleted text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for purchases
made on and after July 1, 2005.
new text end
Sec. 2.
Minnesota Statutes 2004, section 289A.18,
subdivision 4, is amended to read:
Subd. 4.
Sales and use tax returns.
(a) Sales and use
tax returns must be filed on or before the 20th day of the month
following the close of the preceding reporting period,
except deleted text begin that annual use tax deleted text end returns provided for under deleted text begin section
289A.11, subdivision 1, must be filed by April 15 following the
close of the calendar year deleted text end new text begin subdivision 4anew text end , in the case of
individuals. Annual use tax returns of businesses, including
sole proprietorships, and annual sales tax returns must be filed
by February 5 following the close of the calendar year.
(b) Returns for the June reporting period filed by
retailers required to remit their June liability under section
289A.20, subdivision 4, paragraph (b), are due on or before
August 20.
(c) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $500 per month in any
quarter of a calendar year, and has substantially complied with
the tax laws during the preceding four calendar quarters, the
retailer may request authorization to file and pay the taxes
quarterly in subsequent calendar quarters. The authorization
remains in effect during the period in which the retailer's
quarterly returns reflect sales and use tax liabilities of less
than $1,500 and there is continued compliance with state tax
laws.
(d) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $100 per month during a
calendar year, and has substantially complied with the tax laws
during that period, the retailer may request authorization to
file and pay the taxes annually in subsequent years. The
authorization remains in effect during the period in which the
retailer's annual returns reflect sales and use tax liabilities
of less than $1,200 and there is continued compliance with state
tax laws.
(e) The commissioner may also grant quarterly or annual
filing and payment authorizations to retailers if the
commissioner concludes that the retailers' future tax
liabilities will be less than the monthly totals identified in
paragraphs (c) and (d). An authorization granted under this
paragraph is subject to the same conditions as an authorization
granted under paragraphs (c) and (d).
(f) A taxpayer who is a materials supplier may report gross
receipts either on:
(1) the cash basis as the consideration is received; or
(2) the accrual basis as sales are made.
As used in this paragraph, "materials supplier" means a person
who provides materials for the improvement of real property; who
is primarily engaged in the sale of lumber and building
materials-related products to owners, contractors,
subcontractors, repairers, or consumers; who is authorized to
file a mechanics lien upon real property and improvements under
chapter 514; and who files with the commissioner an election to
file sales and use tax returns on the basis of this paragraph.
(g) Notwithstanding paragraphs (a) to (f), a seller that is
not a Model 1, 2, or 3 seller, as those terms are used in the
Streamlined Sales and Use Tax Agreement, that does not have a
legal requirement to register in Minnesota, and that is
registered under the agreement, must file a return by February 5
following the close of the calendar year in which the seller
initially registers, and must file subsequent returns on
February 5 on an annual basis in succeeding years.
Additionally, a return must be submitted on or before the 20th
day of the month following any month by which sellers have
accumulated state and local tax funds for the state in the
amount of $1,000 or more.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for purchases
on and after July 1, 2005.
new text end
Sec. 3.
Minnesota Statutes 2004, section 289A.18, is
amended by adding a subdivision to read:
new text begin Subd. 4a.new text end
new text begin Use tax returns for individuals.new text end
new text begin Individuals
who are subject to the use tax imposed under section 297A.63 may
file and pay use tax owed on purchases for personal use under
their Social Security number as follows:
new text end
new text begin
(1) on the individual income tax return for the calendar
year in which the purchases are made;
new text end
new text begin
(2) on the form for making payments of the individual
income tax estimated payments under section 289A.25 for the
calendar quarter in which the purchases are made; or
new text end
new text begin
(3) on the individual use tax return, in the form
prescribed by the commissioner, for purchases made in a calendar
quarter, to be filed on or before the 20th day of the month
following the close of the preceding quarter.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for purchases
made on and after July 1, 2005, and for income tax returns
required to be filed for tax years beginning after December 31,
2004.
new text end
Sec. 4.
Minnesota Statutes 2004, section 297A.67,
subdivision 21, is amended to read:
Subd. 21.
De minimis exemption.
A purchase subject to
use tax under section 297A.63 is exempt if (1) the purchase is
made by an individual for personal use, deleted text begin and deleted text end (2) the total
purchases that are subject to the use tax do not exceed $770 in
the calendar yearnew text begin , and (3) the gross income as defined in
section 290.01, subdivision 20, of the individual does not
exceed $40,000 for a single individual, or $60,000 for married
individuals filing a joint income tax returnnew text end . For purposes of
this subdivision, "personal use" includes purchases for gifts.
If an individual makes purchases subject to use tax of more than
$770 in the calendar year, the individual must pay the use tax
on the entire amount. This exemption does not apply to
purchases made from retailers who are required or registered to
collect taxes under this chapter.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for purchases
on and after July 1, 2005.
new text end
Sec. 5.
Minnesota Statutes 2004, section 297A.83,
subdivision 1, is amended to read:
Subdivision 1.
Persons applying.
(a) A retailer required
to collect and remit sales taxes under section 297A.66 shall
file with the commissioner an application for a permit.
(b) A retailer making retail sales from outside this state
to a destination within this state who is not required to obtain
a permit under paragraph (a) may nevertheless voluntarily file
an application for a permit.
(c) The commissioner may require any person or class of
persons obligated to file a use tax return under section
289A.11, subdivision 3, to file an application for a permitnew text begin ,
except an individual allowed to file and pay use tax under
section 289A.18, subdivision 4a, is not required to obtain a
permitnew text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for purchases
on and after July 1, 2005.
new text end
Sec. 6. new text begin USE TAX ENFORCEMENT.
new text end
new text begin
The commissioner shall establish a use tax enforcement unit
within the Department of Revenue to conduct direct compliance
activities that will increase payment of use tax. The
commissioner shall inform and educate taxpayers about the
requirement to pay use tax. The commissioner shall also conduct
an information campaign targeted to higher income individuals,
attorneys, accountants, and tax preparers to advise individuals
and tax professionals of the obligation to report and pay use
tax.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2005.
new text end