SF 2188

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxes; providing a sales tax rebate; appropriating money.

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

Section 1. new text begin STATEMENT OF PURPOSE.
new text end

new text begin (a) The state of Minnesota derives revenues from a variety of taxes, fees, and other
sources, including the state sales tax.
new text end

new text begin (b) It is fair and reasonable to refund the existing state budget surplus in the form of
a rebate of nonbusiness consumer sales taxes paid by individuals in calendar year 2005.
new text end

new text begin (c) Information concerning the amount of sales tax paid at various income levels is
contained in the Minnesota tax incidence report, which is written by the commissioner of
revenue and presented to the legislature according to Minnesota Statutes, section 270C.13.
new text end

new text begin (d) It is fair and reasonable to use information contained in the Minnesota tax
incidence report to determine the proportionate share of the sales tax rebate due each
eligible taxpayer since no effective or practical mechanism exists for determining the
amount of actual sales tax paid by each eligible individual.
new text end

Sec. 2. new text begin SALES TAX REBATE.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility; rebate based on income. new text end

new text begin An individual who was a
resident of Minnesota for any part of 2005, and filed a 2005 Minnesota income tax return
on or before November 30, 2007, and had a tax liability before refundable credits on that
return of at least $1 and who was not allowed to be claimed as a dependent on a 2005
federal income tax return filed by another person is eligible for a sales tax rebate based on
income under either subdivision 2 or 3.
new text end

new text begin Subd. 2. new text end

new text begin Married joint and head of household filers. new text end

new text begin The sales tax rebate for
taxpayers who qualify under subdivision 1and are married filing joint or head of household
filers is computed according to the following schedule:
new text end

new text begin Income new text end	new text begin Sales Tax Rebate new text end
new text begin less than $2,500 new text end	new text begin $....... new text end
new text begin at least $2,500 but less than $5,000 new text end	new text begin $....... new text end
new text begin at least $5,000 but less than $10,000 new text end	new text begin $....... new text end
new text begin at least $10,000 but less than $15,000 new text end	new text begin $....... new text end
new text begin at least $15,000 but less than $20,000 new text end	new text begin $....... new text end
new text begin at least $20,000 but less than $25,000 new text end	new text begin $....... new text end
new text begin at least $25,000 but less than $30,000 new text end	new text begin $....... new text end
new text begin at least $30,000 but less than $35,000 new text end	new text begin $....... new text end
new text begin at least $35,000 but less than $40,000 new text end	new text begin $....... new text end
new text begin at least $40,000 but less than $45,000 new text end	new text begin $....... new text end
new text begin at least $45,000 but less than $50,000 new text end	new text begin $....... new text end
new text begin at least $50,000 but less than $60,000 new text end	new text begin $....... new text end
new text begin at least $60,000 but less than $70,000 new text end	new text begin $....... new text end
new text begin at least $70,000 but less than $80,000 new text end	new text begin $....... new text end
new text begin at least $80,000 but less than $90,000 new text end	new text begin $....... new text end
new text begin at least $90,000 but less than $100,000 new text end	new text begin $....... new text end
new text begin at least $100,000 but less than $120,000 new text end	new text begin $....... new text end
new text begin at least $120,000 but less than $140,000 new text end	new text begin $....... new text end
new text begin at least $140,000 but less than $160,000 new text end	new text begin $....... new text end
new text begin at least $160,000 but less than $180,000 new text end	new text begin $....... new text end
new text begin at least $180,000 but less than $200,000 new text end	new text begin $....... new text end
new text begin at least $200,000 but less than $400,000 new text end	new text begin $....... new text end
new text begin at least $400,000 but less than $600,000 new text end	new text begin $....... new text end
new text begin at least $600,000 but less than $800,000 new text end	new text begin $....... new text end
new text begin at least $800,000 but less than $1,000,000 new text end	new text begin $....... new text end
new text begin $1,000,000 and over new text end	new text begin $....... new text end

new text begin Subd. 3. new text end

new text begin Single and married separate filers. new text end

new text begin The sales tax rebate for individuals
who qualify under subdivision 1 as single or married filing separately must be computed
according to the following schedule:
new text end

new text begin Income new text end	new text begin Sales Tax Rebate new text end
new text begin less than $2,500 new text end	new text begin $....... new text end
new text begin at least $2,500 but less than $5,000 new text end	new text begin $....... new text end
new text begin at least $5,000 but less than $10,000 new text end	new text begin $....... new text end
new text begin at least $10,000 but less than $15,000 new text end	new text begin $....... new text end
new text begin at least $15,000 but less than $20,000 new text end	new text begin $....... new text end
new text begin at least $20,000 but less than $25,000 new text end	new text begin $....... new text end
new text begin at least $25,000 but less than $30,000 new text end	new text begin $....... new text end
new text begin at least $30,000 but less than $40,000 new text end	new text begin $....... new text end
new text begin at least $40,000 but less than $50,000 new text end	new text begin $....... new text end
new text begin at least $50,000 but less than $70,000 new text end	new text begin $....... new text end
new text begin at least $70,000 but less than $100,000 new text end	new text begin $....... new text end
new text begin at least $100,000 but less than $140,000 new text end	new text begin $....... new text end
new text begin at least $140,000 but less than $200,000 new text end	new text begin $....... new text end
new text begin at least $200,000 but less than $400,000 new text end	new text begin $....... new text end
new text begin at least $400,000 but less than $600,000 new text end	new text begin $....... new text end
new text begin $600,000 and over new text end	new text begin $....... new text end

new text begin Subd. 4. new text end

new text begin Nonresidents. new text end

new text begin Individuals who were not residents of Minnesota for any
part of 2005 and who paid more than $10 in Minnesota sales tax under Minnesota Statutes,
chapter 297A, on nonbusiness consumer purchases in that year qualify for a rebate under
this subdivision only. Qualifying nonresidents must file a claim for rebate on a form
prescribed by the commissioner by November 30, 2007. The claim must include receipts
showing the Minnesota sales tax paid and the date of the sale. Taxes paid on purchases
allowed in the computation of federal taxable income or reimbursed by an employer are
not eligible for the rebate. The commissioner shall determine the qualifying taxes paid
and rebate the lesser of:
new text end

new text begin (1) ... percent of that amount; or
new text end

new text begin (2) the maximum amount for which the claimant would have been eligible as
determined under subdivision 2 if the taxpayer filed the 2005 federal income tax return as
a married taxpayer filing jointly or head of household, or as determined under subdivision
3 for other taxpayers.
new text end

new text begin Subd. 5. new text end

new text begin Definition of income. new text end

new text begin "Income," for purposes of this section other than
subdivision 4, is taxable income as defined in section 63 of the Internal Revenue Code of
1986, as amended through April 15, 2005, plus the sum of any additions to federal taxable
income for the taxpayer under Minnesota Statutes, section 290.01, subdivision 19a, and
reported on the original 2005 income tax return, including subsequent adjustments to
that return made within the time limits specified in subdivision 12. For an individual
who was a resident of Minnesota for less than the entire year, the sales tax rebate equals
the sales tax rebate calculated under subdivision 2 or 3 multiplied by the percentage
determined pursuant to Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e),
as calculated on the original 2005 income tax return, including subsequent adjustments
to that return made within the time limits specified in subdivision 12. For purposes of
subdivision 4, "income" is taxable income as defined in section 63 of the Internal Revenue
Code of 1986, as amended through April 15, 2005, and reported on the taxpayer's original
federal tax return for the first taxable year beginning after December 31, 2004.
new text end

new text begin Subd. 6. new text end

new text begin Social Security and public pension recipients. new text end

new text begin (a) An individual qualifies
for a rebate of $....... under this subdivision if the individual:
new text end

new text begin (1) was a resident of Minnesota for all of calendar year 2005;
new text end

new text begin (2) is not eligible for a rebate under subdivision 9;
new text end

new text begin (3) attained the age of 18 on or before December 31, 2005; and
new text end

new text begin (4)(i) received Social Security benefits as defined in section 86(d)(1) of the Internal
Revenue Code of 1986, as amended through April 15, 2005, in calendar year 2005; or
new text end

new text begin (ii) received federal, state, or local public pension or disability benefits in calendar
year 2005.
new text end

new text begin (b) An individual or married couple who qualifies for a rebate under both this
subdivision and subdivision 1 is eligible for the rebate under whichever subdivision
provides a larger amount.
new text end

new text begin (c) If the Social Security Administration, Railroad Retirement Board, or the
administrator of a public pension is paying benefits to a recipient by electronic funds
transfer in calendar year 2007, the commissioner may pay the rebate under this subdivision
through electronic funds transfer to the same financial institution and into the same
account into which those benefits are transferred in calendar year 2007.
new text end

new text begin (d) For purposes of this subdivision, "public pension plan administrator" means (1)
a state and local public pension administrator, (2) the federal Civil Service Retirement
System, (3) the United States Department of Defense for the military retirement and
survivors benefit programs, and (4) the Federal Employees Retirement System.
new text end

new text begin (e) A state and local public pension administrator is an entity paying benefits under a
pension plan enumerated in Minnesota Statutes, section 356.20, subdivision 2. Each state
and local pension administrator shall provide to the commissioner of revenue, in a form
the commissioner prescribes, a list of individuals to whom it pays benefits that meet the
requirements of paragraph (a), clauses (1) and (3).
new text end

new text begin Subd. 7. new text end

new text begin Dependents. new text end

new text begin An individual who:
new text end

new text begin (1) was allowed to be claimed as a dependent on a 2005 federal income tax return
filed by another person;
new text end

new text begin (2) would have otherwise been eligible for a rebate under subdivision 1; and
new text end

new text begin (3) reported earned income as defined in section 32(c)(2)(A)(i) of the Internal
Revenue Code,
new text end

new text begin is eligible for a rebate under this subdivision only. The rebate under this subdivision
equals ... percent of the amount allowed under the schedule in subdivision 3 based on the
individual's income. For an individual who was a resident of Minnesota for less than
the entire year, the sales tax rebate equals the rebate calculated under this subdivision
multiplied by the percentage determined pursuant to Minnesota Statutes, section 290.06,
subdivision 2c, paragraph (e), as calculated on the original 2005 income tax return.
new text end

new text begin Subd. 8. new text end

new text begin Credit recipients. new text end

new text begin An individual who:
new text end

new text begin (1) was a resident of Minnesota for any part of 2005;
new text end

new text begin (2) was not eligible for a rebate under subdivision 1, 6, or 9;
new text end

new text begin (3) was not allowed to be claimed as a dependent on a 2005 federal income tax
return by another person; and
new text end

new text begin (4)(i) claimed and was eligible for a refund under Minnesota Statutes, chapter
290A, for property taxes paid in 2006 or rent constituting property taxes paid in 2005 on
or before November 30, 2007; or
new text end

new text begin (ii) filed 2005 Minnesota and federal income tax returns before November 30, 2007,
in order to
new text end

new text begin (A) claim a credit under Minnesota Statutes, section 290.067, 290.0671, or 290.0674;
new text end

new text begin (B) claim a refund of withheld taxes; or
new text end

new text begin (C) claim a refund of estimated taxes,
new text end

new text begin is eligible for a rebate under this subdivision only. For married couples filing joint returns
and heads of households, the rebate equals the minimum amount in subdivision 2. For
single filers and married individuals filing separate returns, the rebate equals the minimum
amount in subdivision 3. For individuals who qualify for a rebate under clause (4)(i), the
rebate equals the minimum amount in subdivision 3, unless the property tax refund return
is a joint return and neither of the joint filers qualifies for a rebate under any of the other
rebate criteria, in which case the rebate equals the minimum amount in subdivision 2. For
an individual who was a resident of Minnesota for less than the entire year, the sales tax
rebate equals the rebate calculated under this subdivision multiplied by the percentage
determined under Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e), as
calculated on the original 2005 income tax return. Notwithstanding the provisions of
Minnesota Statutes, section 289A.60, subdivision 12, an individual who files a property
tax refund claim for property taxes paid in 2006 or rent constituting property taxes paid in
2005 after August 15, 2007, and before November 30, 2007, is eligible for a refund under
Minnesota Statutes, chapter 290A, and a rebate under this subdivision.
new text end

new text begin Subd. 9. new text end

new text begin Claims based on federal liabilities. new text end

new text begin An individual who:
new text end

new text begin (1) was a resident of Minnesota for any part of 2005;
new text end

new text begin (2) filed 2005 Minnesota and federal income tax returns on or before November
30, 2007;
new text end

new text begin (3) had federal taxable income on the federal return of at least $5; and
new text end

new text begin (4) does not qualify for a rebate under subdivision 1 or 7, is eligible for a rebate
under this subdivision only.
new text end

new text begin An individual who was allowed to be claimed as a dependent on a 2005 federal income
tax return filed by another person is eligible for a rebate under this subdivision only if the
individual had in 2005 earned income as defined in section 32(c)(2)(A)(i) of the Internal
Revenue Code; the rebate of a dependent eligible for a rebate under this subdivision
equals ... percent of the amount allowed under the schedule in subdivision 3 based on the
individual's income. For all other individuals who qualify under this subdivision, the
rebate equals the amount allowed based on the individual's income under the schedule
in subdivision 2 for married couples filing joint returns and heads of household and the
amount allowed based on the individual's income under the schedule in subdivision 3 for
single filers and married individuals filing separately; provided, however, that any rebate
payable under this subdivision to an individual who was a part-year resident of Minnesota
in 2005 must be prorated according to the formula applicable to part-year residents in
subdivision 5.
new text end

new text begin Subd. 10. new text end

new text begin Fiscal year taxpayers. new text end

new text begin For a fiscal year taxpayer, the dates in
subdivisions 1 through 4 are extended one month for each month in calendar year 2005
that occurred prior to the start of the individual's 2005 fiscal tax year.
new text end

new text begin Subd. 11. new text end

new text begin Payment dates; interest. new text end

new text begin The commissioner of revenue may begin
paying sales tax rebates by July 1, 2007. Sales tax rebates not paid by January 1, 2008,
bear interest at the rate specified in Minnesota Statutes, section 270C.40.
new text end

new text begin Subd. 12. new text end

new text begin No adjustments after processing. new text end

new text begin A sales tax rebate may not be adjusted
based on changes to a 2005 income tax return that are made by order of assessment
after the date the rebate is processed, or made by the taxpayer that are filed with the
commissioner of revenue after that date.
new text end

new text begin Subd. 13. new text end

new text begin Joint rebate rules. new text end

new text begin Individuals who filed a joint income tax return for
2005 must receive a joint sales tax rebate. After the sales tax rebate has been issued, but
before the check has been cashed, either joint claimant may request a separate check for
one-half of the joint sales tax rebate. Notwithstanding anything in this section to the
contrary, if prior to payment, the commissioner has been notified that persons who filed a
joint 2005 income tax return are living at separate addresses, as indicated on their 2006
income tax return or otherwise, the commissioner may issue separate checks to each
person. The amount payable to each person is one-half of the total joint rebate.
new text end

new text begin Subd. 14. new text end

new text begin Deceased individuals. new text end

new text begin If a rebate is received by the estate of a deceased
individual after the probate estate has been closed, and if the original rebate check is
returned to the commissioner with a copy of the decree of descent or final account of the
estate, Social Security numbers, and addresses of the beneficiaries, the commissioner may
issue separate checks in proportion to their share in the residuary estate in the names of
the residuary beneficiaries of the estate.
new text end

new text begin Subd. 15. new text end

new text begin Application of other law. new text end

new text begin (a) The sales tax rebate is a "Minnesota tax
law" for purposes of Minnesota Statutes, section 270B.01, subdivision 8.
new text end

new text begin (b) The sales tax rebate is "an overpayment of any tax collected by the commissioner"
for purposes of Minnesota Statutes, section 270C.64. For purposes of this subdivision,
a joint sales tax rebate is payable to each spouse equally.
new text end

new text begin (c) The sales tax rebate is a refund subject to revenue recapture under Minnesota
Statutes, chapter 270A. The commissioner of revenue shall remit the entire refund to the
claimant agency, which shall, upon the request of the spouse who does not owe the debt,
refund one-half of the joint sales tax rebate to the spouse who does not owe the debt.
new text end

new text begin Subd. 16. new text end

new text begin Lapse of entitlement. new text end

new text begin If the commissioner of revenue cannot locate an
individual entitled to a sales tax rebate by July 1, 2009, or if an individual to whom a sales
tax rebate was issued has not cashed the check by July 1, 2009, the right to the sales tax
rebate lapses and the check must be deposited in the general fund.
new text end

new text begin Subd. 17. new text end

new text begin Claims for unpaid rebates. new text end

new text begin Individuals entitled to a sales tax rebate
pursuant to subdivision 1, 6, 7, 8, or 9 but who did not receive one, and individuals who
receive a sales tax rebate that was not correctly computed, must file a claim with the
commissioner before July 1, 2008, in a form prescribed by the commissioner. These
claims must be treated as if they are a claim for refund under Minnesota Statutes, section
289A.50, subdivisions 4 and 7.
new text end

new text begin Subd. 18. new text end

new text begin Appropriation. new text end

new text begin The rebate is a reduction of fiscal year 2007 sales tax
revenues. The amount necessary to make the sales tax rebates and interest provided in this
section is appropriated from the general fund to the commissioner of revenue in fiscal year
2007 and is available until June 30, 2009.
new text end

new text begin Subd. 19. new text end

new text begin Illegally cashed checks. new text end

new text begin If a sales tax rebate check is cashed by someone
other than the payee or payees of the check, and the commissioner of revenue determines
that the check has been forged or improperly endorsed or the commissioner determines
that a rebate was overstated or erroneously issued, the commissioner may issue an order
of assessment for the amount of the check or the amount the check is overstated against
the person or persons cashing it. The assessment must be made within two years after
the check is cashed, but if cashing the check constitutes theft under Minnesota Statutes,
section 609.52, or forgery under Minnesota Statutes, section 609.631, the assessment can
be made at any time. The assessment may be appealed administratively and judicially. The
commissioner may take action to collect the assessment in the same manner as provided by
Minnesota Statutes, chapter 270C, for any other order of the commissioner assessing tax.
new text end

new text begin Subd. 20. new text end

new text begin Authority to contract with vendor. new text end

new text begin Notwithstanding Minnesota Statutes,
sections 9.031, 16A.40, 16B.49, and any other law to the contrary, the commissioner
of revenue may take whatever actions the commissioner deems necessary to pay the
rebates required by this section, and may, in consultation with the commissioner of
finance, contract with a private vendor or vendors to process, print, and mail the rebate
checks or warrants required under this section and receive and disburse state funds to pay
those checks or warrants.
new text end

new text begin Subd. 21. new text end

new text begin Electronic payment. new text end

new text begin The commissioner may pay rebates required by this
section by electronic funds transfer to individuals who requested that their 2006 individual
income tax refund be paid through electronic funds transfer. The commissioner may make
the electronic funds transfer payments to the same financial institution and into the same
account as the 2006 individual income tax refund.
new text end

new text begin Subd. 22. new text end

new text begin Adjustments. new text end

new text begin A sales tax rebate of $1,013,000,000 is authorized for fiscal
year 2007. Before payment, the commissioner of revenue shall adjust the rebate as follows:
new text end

new text begin (1) the rebates calculated in subdivisions 2, 3, 4, 6, 7, 8, and 9 must be
proportionately reduced to account for 2005 income tax returns that are filed on or after
January 1, 2007, but before June 1, 2007, so that the estimated amount of sales tax rebates
payable under subdivisions 2, 3, 4, 6, 7, 8, and 9 on the date the rebate is processed does
not exceed the total amount available for the rebate; and
new text end

new text begin (2) the commissioner of finance shall certify by July 15, 2007, the preliminary fiscal
2007 general fund net nondedicated revenues. If certified net nondedicated revenues
are less than the amount forecast in February 2007, the commissioner of revenue shall
proportionally decrease all rebates under this section to rebate the entire amount of the
certified net nondedicated revenues. The adjustments under this subdivision are not a rule
subject to Minnesota Statutes, chapter 14.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after final enactment.
new text end

Sec. 3. new text begin APPROPRIATIONS.
new text end

new text begin (a) $....... is appropriated in fiscal year 2007 from the general fund to the
commissioner of revenue to administer the sales tax rebates in section 2. Any
unencumbered balance remaining on June 30, 2007, does not cancel but is available
for expenditure by the commissioner of revenue until June 30, 2008. Notwithstanding
Minnesota Statutes, section 16A.285, the commissioner of revenue may not use this
appropriation for any purpose other than administering the sales tax rebates. This is a
onetime appropriation and may not be added to the agency's budget base.
new text end

new text begin (b) $....... is appropriated in fiscal year 2007 from the general fund to the
commissioner of finance to pay the cost of clearing sales tax rebate checks through
commercial banks. Any unencumbered balance remaining on June 30, 2007, does not
cancel but is available for expenditure by the commissioner of finance until June 30,
2008. Notwithstanding Minnesota Statutes, section 16A.285, the commissioner of finance
may not use this appropriation for any purpose other than paying the cost of clearing
rebate checks.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after final enactment.
new text end