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Minnesota Legislature

Office of the Revisor of Statutes

SF 2064

as introduced - 89th Legislature (2015 - 2016) Posted on 04/14/2015 08:29am

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

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; modifying tax rates and brackets;
amending Minnesota Statutes 2014, section 290.06, subdivisions 2c, 2d.

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

Section 1.

Minnesota Statutes 2014, section 290.06, subdivision 2c, is amended to read:


Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income
taxes imposed by this chapter upon married individuals filing joint returns and surviving
spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
applying to their taxable net income the following schedule of rates:

(1) On the first deleted text begin$35,480, 5.35deleted text endnew text begin $36,650, 4.85new text end percent;

(2) On all over deleted text begin$35,480deleted text endnew text begin $36,650new text end, but not over deleted text begin$140,960, 7.05deleted text endnew text begin $145,620, 6.55new text end percent;

(3) On all over deleted text begin$140,960deleted text endnew text begin $145,620new text end, but not over deleted text begin$250,000, 7.85deleted text endnew text begin $258,260, 7.35
new text endpercent;

(4) On all over deleted text begin$250,000, 9.85deleted text endnew text begin $258,260, 9.35new text end percent.

Married individuals filing separate returns, estates, and trusts must compute their
income tax by applying the above rates to their taxable income, except that the income
brackets will be one-half of the above amounts.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin$24,270, 5.35deleted text endnew text begin $25,070, 4.85new text end percent;

(2) On all over deleted text begin$24,270deleted text endnew text begin $25,070new text end, but not over deleted text begin$79,730, 7.05deleted text endnew text begin $82,360, 6.55new text end percent;

(3) On all over deleted text begin$79,730deleted text endnew text begin $82,360new text end, but not over deleted text begin$150,000, 7.85deleted text endnew text begin $154,950, 7.35new text end percent;

(4) On all over deleted text begin$150,000, 9.85deleted text endnew text begin $154,950, 9.35new text end percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying
as a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin$29,880, 5.35deleted text endnew text begin $30,870, 4.85new text end percent;

(2) On all over deleted text begin$29,880deleted text endnew text begin $30,870new text end, but not over deleted text begin$120,070, 7.05deleted text endnew text begin $124,040, 6.55new text end percent;

(3) On all over deleted text begin$120,070deleted text endnew text begin $124,040new text end, but not over deleted text begin$200,000, 7.85deleted text endnew text begin $206,610, 7.35
new text endpercent;

(4) On all over deleted text begin$200,000, 9.85deleted text endnew text begin $206,610, 9.35new text end percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the
tax of any individual taxpayer whose taxable net income for the taxable year is less than
an amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not
more than $100. The amount of tax for each bracket shall be computed at the rates set
forth in this subdivision, provided that the commissioner may disregard a fractional part of
a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute
the individual's Minnesota income tax as provided in this subdivision. After the
application of the nonrefundable credits provided in this chapter, the tax liability must
then be multiplied by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income
as defined in section 62 of the Internal Revenue Code and increased by the additions
required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), and (11)
to (14), and reduced by the Minnesota assignable portion of the subtraction for United
States government interest under section 290.01, subdivision 19b, clause (1), and the
subtractions under section 290.01, subdivision 19b, clauses (8), (9), (13), (14), (16),
and (17), after applying the allocation and assignability provisions of section 290.081,
clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in
section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), and (11) to (14), and
reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), (8), (9),
(13), (14), (16), and (17).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 2.

Minnesota Statutes 2014, section 290.06, subdivision 2d, is amended to read:


Subd. 2d.

Inflation adjustment of brackets.

(a) For taxable years beginning after
December 31, deleted text begin2013deleted text endnew text begin 2015new text end, the minimum and maximum dollar amounts for each rate
bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the
percentage determined under paragraph (b). For the purpose of making the adjustment as
provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the
rate brackets as they existed for taxable years beginning after December 31, deleted text begin2012deleted text endnew text begin 2014new text end,
and before January 1, deleted text begin2014deleted text endnew text begin 2016new text end. The rate applicable to any rate bracket must not be
changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes
in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10
amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.

(b) The commissioner shall adjust the rate brackets and by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B) the word deleted text begin"2012"deleted text endnew text begin "2014"new text end shall be substituted for the word "1992." For
deleted text begin2014deleted text endnew text begin 2016new text end, the commissioner shall then determine the percent change from the 12 months
ending on August 31, deleted text begin2012deleted text endnew text begin 2014new text end, to the 12 months ending on August 31, deleted text begin2013deleted text endnew text begin 2015new text end, and
in each subsequent year, from the 12 months ending on August 31, deleted text begin2012deleted text endnew text begin 2015new text end, to the 12
months ending on August 31 of the year preceding the taxable year. The determination of
the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
not be subject to the Administrative Procedure Act contained in chapter 14.

No later than December 15 of each year, the commissioner shall announce the
specific percentage that will be used to adjust the tax rate brackets.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end