SF 2729

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/09/2023 08:40am

A bill for an act
relating to taxation; income; modifying the definition of resident trust; amending
Minnesota Statutes 2022, section 290.01, subdivision 7b.

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

Section 1.

Minnesota Statutes 2022, section 290.01, subdivision 7b, is amended to read:

Subd. 7b.

Resident trust.

(a) deleted text begin Resident trust means deleted text end A trust, except a grantor type trust,
deleted text begin which either deleted text end new text begin that became irrevocable on or before December 31, 1995, or was first
administered in Minnesota on or before December 31, 1995, is a resident trust only if two
or more of the following conditions are satisfied:
new text end

new text begin (1) a majority of the discretionary decisions of the trustees relative to the investment of
trust assets are made in Minnesota;
new text end

new text begin (2) a majority of the discretionary decisions of the trustees relative to the distributions
of trust income and principal are made in Minnesota; or
new text end

new text begin (3) the official books and records of the trust, consisting of the original minutes of trustee
meetings and the original trust instruments, are located in Minnesota.
new text end

new text begin (b) A trust, except a grantor type trust, that became irrevocable after December 31, 1995,
or was first administered in Minnesota after December 31, 1995, is a resident trust only if:
new text end

(1) new text begin either it:
new text end

new text begin (i) new text end was created by a will of a decedent who at death was domiciled in this state new text begin ; new text end or

deleted text begin (2) deleted text end new text begin (ii) new text end is an irrevocable trust, the grantor of which was domiciled in this state at the time
the trust became irrevocable deleted text begin . deleted text end new text begin ; and
new text end

new text begin (2) two or more of the following conditions are satisfied:
new text end

new text begin (i) a majority of the discretionary decisions of the trustees relative to the investment of
trust assets are made in Minnesota;
new text end

new text begin (ii) a majority of the discretionary decisions of the trustees relative to the distributions
of trust income and principal are made in Minnesota; or
new text end

new text begin (iii) the official books and records of the trust, consisting of the original minutes of
trustee meetings and the original trust instruments, are located in Minnesota.
new text end

new text begin (c) new text end For the purpose of this subdivision, a trust is considered irrevocable to the extent the
grantor is not treated as the owner thereof under sections 671 to 678 of the Internal Revenue
Code. The term "grantor type trust" means a trust where the income or gains of the trust are
taxable to the grantor or others treated as substantial owners under sections 671 to 678 of
the Internal Revenue Code. deleted text begin This paragraph applies to trusts, except grantor type trusts, that
became irrevocable after December 31, 1995, or are first administered in Minnesota after
December 31, 1995.
deleted text end

deleted text begin (b) This paragraph applies to trusts, except grantor type trusts, that are not governed
under paragraph (a). A trust, except a grantor type trust, is a resident trust only if two or
more of the following conditions are satisfied:
deleted text end

deleted text begin (1) a majority of the discretionary decisions of the trustees relative to the investment of
trust assets are made in Minnesota;
deleted text end

deleted text begin (2) a majority of the discretionary decisions of the trustees relative to the distributions
of trust income and principal are made in Minnesota;
deleted text end

deleted text begin (3) the official books and records of the trust, consisting of the original minutes of trustee
meetings and the original trust instruments, are located in Minnesota.
deleted text end

deleted text begin (c) deleted text end new text begin (d) new text end For purposes of deleted text begin paragraph deleted text end new text begin paragraphs (a) and new text end (b), if the trustees delegate decisions
and actions to an agent or custodian, the actions and decisions of the agent or custodian
must not be taken into account in determining whether the trust is administered in Minnesota,
if:

(1) the delegation was permitted under the trust agreement;

(2) the trustees retain the power to revoke the delegation on reasonable notice; and

(3) the trustees monitor and evaluate the performance of the agent or custodian on a
regular basis as is reasonably determined by the trustees.

new text begin EFFECTIVE DATE. new text end

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