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SF 2119

as introduced - 88th Legislature (2013 - 2014) Posted on 03/04/2014 08:38am

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; estate and gift; repealing the gift tax; amending Minnesota
Statutes 2013 Supplement, sections 270B.01, subdivision 8; 270B.03, subdivision
1; 291.005, subdivision 1; 291.03, subdivision 1; repealing Minnesota Statutes
2013 Supplement, sections 292.16; 292.17; 292.18; 292.19; 292.20; 292.21.

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

Section 1.

Minnesota Statutes 2013 Supplement, section 270B.01, subdivision 8, is
amended to read:


Subd. 8.

Minnesota tax laws.

For purposes of this chapter only, unless expressly
stated otherwise, "Minnesota tax laws" means:

(1) the taxes, refunds, and fees administered by or paid to the commissioner under
chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24),
290, 290A, 291, deleted text begin 292,deleted text end 295, 297A, 297B, 297H, and 403, or any similar Indian tribal tax
administered by the commissioner pursuant to any tax agreement between the state and
the Indian tribal government, and includes any laws for the assessment, collection, and
enforcement of those taxes, refunds, and fees; and

(2) section 273.1315.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for gifts made after
June 30, 2013.
new text end

Sec. 2.

Minnesota Statutes 2013 Supplement, section 270B.03, subdivision 1, is
amended to read:


Subdivision 1.

Who may inspect.

Returns and return information must, on request,
be made open to inspection by or disclosure to the data subject. The request must be made
in writing or in accordance with written procedures of the chief disclosure officer of the
department that have been approved by the commissioner to establish the identification
of the person making the request as the data subject. For purposes of this chapter, the
following are the data subject:

(1) in the case of an individual return, that individual;

(2) in the case of an income tax return filed jointly, either of the individuals with
respect to whom the return is filed;

(3) in the case of a return filed by a business entity, an officer of a corporation,
a shareholder owning more than one percent of the stock, or any shareholder of an S
corporation; a general partner in a partnership; the owner of a sole proprietorship; a
member or manager of a limited liability company; a participant in a joint venture; the
individual who signed the return on behalf of the business entity; or an employee who is
responsible for handling the tax matters of the business entity, such as the tax manager,
bookkeeper, or managing agent;

(4) in the case of an estate return:

(i) the personal representative or trustee of the estate; and

(ii) any beneficiary of the estate as shown on the federal estate tax return;

(5) in the case of a trust return:

(i) the trustee or trustees, jointly or separately; and

(ii) any beneficiary of the trust as shown in the trust instrument;

(6) if liability has been assessed to a transferee under section 270C.58, subdivision
1
, the transferee is the data subject with regard to the returns and return information
relating to the assessed liability;

(7) in the case of an Indian tribal government or an Indian tribal government-owned
entity,

(i) the chair of the tribal government, or

(ii) any person authorized by the tribal government;new text begin and
new text end

(8) in the case of a successor as defined in section 270C.57, subdivision 1, paragraph
(b), the successor is the data subject and information may be disclosed as provided by
section 270C.57, subdivision 4deleted text begin ; anddeleted text end new text begin .
new text end

deleted text begin (9) in the case of a gift return, the donor.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for gifts made after
June 30, 2013.
new text end

Sec. 3.

Minnesota Statutes 2013 Supplement, section 291.005, subdivision 1, is
amended to read:


Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following
terms used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through January 3, 2013, but without regard to the provisions of section
2011, paragraph (f), of the Internal Revenue Code.

(4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
defined by section 2011(b)(3) of the Internal Revenue Code, plus

(i) the amount of deduction for state death taxes allowed under section 2058 of the
Internal Revenue Code;

deleted text begin (ii) the amount of taxable gifts, as defined in section 292.16, and made by the
decedent within three years of the decedent's date of death;
deleted text end less

deleted text begin (iii)deleted text end new text begin (ii)new text end (A) the value of qualified small business property under section 291.03,
subdivision 9
, and the value of qualified farm property under section 291.03, subdivision
10
, or (B) $4,000,000, whichever is less.

(5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included therein which has its situs outside Minnesota,
and (b) including therein any property omitted from the federal gross estate which is
includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
authorities.

(6) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.

(7) "Personal representative" means the executor, administrator or other person
appointed by the court to administer and dispose of the property of the decedent. If there
is no executor, administrator or other person appointed, qualified, and acting within this
state, then any person in actual or constructive possession of any property having a situs in
this state which is included in the federal gross estate of the decedent shall be deemed
to be a personal representative to the extent of the property and the Minnesota estate tax
due with respect to the property.

(8) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota.

(9) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept
or located at the time of the decedent's death deleted text begin or for a gift of tangible personal property
within three years of death, the state or country in which it was normally kept or located
when the gift was executed
deleted text end ; and

(iii) intangible personal property, the state or country in which the decedent was
domiciled at death deleted text begin or for a gift of intangible personal property within three years of death,
the state or country in which the decedent was domiciled when the gift was executed
deleted text end .

For a nonresident decedent with an ownership interest in a pass-through entity
with assets that include real or tangible personal property, situs of the real or tangible
personal property is determined as if the pass-through entity does not exist and the real
or tangible personal property is personally owned by the decedent. If the pass-through
entity is owned by a person or persons in addition to the decedent, ownership of the
property is attributed to the decedent in proportion to the decedent's capital ownership
share of the pass-through entity.

(10) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of
whether it is taxed as an association or is disregarded for federal income tax purposes
under Code of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includible in the decedent's federal gross estate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for gifts made after
June 30, 2013.
new text end

Sec. 4.

Minnesota Statutes 2013 Supplement, section 291.03, subdivision 1, is
amended to read:


Subdivision 1.

Tax amount.

(a) The tax imposed shall be an amount equal to the
proportion of the maximum credit for state death taxes computed under section 2011 of
the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal
adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal
gross estate. The tax is reduced bydeleted text begin :
deleted text end

deleted text begin (1) the gift tax paid by the decedent under section 292.17 on gifts included in the
Minnesota adjusted taxable estate and not subtracted as qualified farm or small business
property; and
deleted text end

deleted text begin (2)deleted text end any credit allowed under subdivision 1c.

(b) The tax determined under this subdivision must not be greater than the sum of
the following amounts multiplied by a fraction, the numerator of which is the Minnesota
gross estate and the denominator of which is the federal gross estate:

(1) the rates and brackets under section 2001(c) of the Internal Revenue Code
multiplied by the sum of:

(i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus

(ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
Code; less

(iii) the lesser of (A) the sum of the value of qualified small business property
under subdivision 9, and the value of qualified farm property under subdivision 10, or
(B) $4,000,000; less

(2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
Code; and less

(3) the federal credit allowed under section 2010 of the Internal Revenue Code.

(c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 2000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for gifts made after
June 30, 2013.
new text end

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2013 Supplement, sections 292.16; 292.17; 292.18; 292.19;
292.20; and 292.21,
new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for gifts made after
June 30, 2013.
new text end