SF 3039

as introduced - 93rd Legislature (2023 - 2024) Posted on 09/21/2023 09:28am

A bill for an act
relating to taxation; imposing a gross receipts tax on certain digital products;
appropriating money for payments to local governments; proposing coding for
new law in Minnesota Statutes, chapter 295.

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

Section 1.

new text begin [295.85] LOCAL DIGITAL MEDIA GROSS RECEIPTS TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of revenue.
new text end

new text begin (c) "Gross receipts" means the total amount received, in money or by barter or exchange,
for all sales of digital products at retail as measured by the sales price, but does not include
any taxes imposed directly on the consumer that are separately stated on the invoice, bill
of sale, or similar document given to the purchaser.
new text end

new text begin (d) "Digital products" means digital products and services, as defined in section 297A.61,
subdivisions 50 to 56.
new text end

new text begin (e) "Digital products provider" means a retailer that sells digital products.
new text end

new text begin (f) "Retail sale" has the meaning given in section 297A.61, subdivision 4.
new text end

new text begin Subd. 2. new text end

new text begin Gross receipts tax imposed. new text end

new text begin A tax is imposed on each digital products provider
equal to one percent of gross receipts from retail sales of digital products in Minnesota. The
digital products provider may, but is not required to, collect the tax from the purchaser. If
separately stated on the invoice, bill of sale, or similar document given to the purchaser,
the tax is excluded from the sales price for purposes of the tax imposed under chapter 297A.
new text end

new text begin Subd. 3. new text end

new text begin Use tax imposed; credit for taxes paid. new text end

new text begin (a) A person that receives digital
products for use in Minnesota, other than from a digital products provider that paid the tax
under subdivision 2, is subject to tax at the rate imposed under subdivision 2. Liability for
the tax is incurred when the person is given access to the digital products.
new text end

new text begin (b) A person that has paid taxes to another jurisdiction on the same transaction and is
subject to tax under this section is entitled to a credit for the tax legally due and paid to
another jurisdiction to the extent of the lesser of (1) the tax actually paid to the other
jurisdiction, or (2) the amount of tax imposed by Minnesota on the transaction subject to
tax in the other jurisdiction.
new text end

new text begin Subd. 4. new text end

new text begin Tax collection required. new text end

new text begin A digital products provider with nexus in Minnesota,
who is not subject to tax under subdivision 2, is required to collect the tax imposed under
subdivision 3 from the purchaser of the digital products and give the purchaser a receipt for
the tax paid.
new text end

new text begin Subd. 5. new text end

new text begin Exemptions. new text end

new text begin All of the exemptions applicable to the taxes imposed under
chapter 297A are applicable to the taxes imposed under this section.
new text end

new text begin Subd. 6. new text end

new text begin Sourcing of sales; determining location of sale. new text end

new text begin (a) All of the provisions of
section 297A.668 apply to the taxes imposed by this section.
new text end

new text begin (b) For every sale taxable under this section, the digital products provider must record
the nine-digit zip code of the purchaser. If a nine-digit zip code designation is not available
for a street address or if a seller is unable to determine the nine-digit zip code designation
of a purchaser after exercising due diligence to determine the designation, the seller may
use the five-digit zip code area. The digital products provider must provide the total amount
of sales in each zip code on the return required under this section.
new text end

new text begin Subd. 7. new text end

new text begin Payment; reporting. new text end

new text begin A person subject to tax under this section must report
the tax on a return prescribed by the commissioner of revenue, and must remit the tax with
the return. The return and the tax must be filed and paid using the filing cycle and due dates
provided for taxes imposed under chapter 297A.
new text end

new text begin Subd. 8. new text end

new text begin Administration. new text end

new text begin Unless specifically provided otherwise by this section, the
audit, assessment, refund, penalty, interest, enforcement, collection remedies, appeal, and
administrative provisions of chapters 270C and 289A that are applicable to taxes imposed
under chapter 297A apply to taxes imposed under this section.
new text end

new text begin Subd. 9. new text end

new text begin Interest on overpayments. new text end

new text begin Interest must be paid on an overpayment refunded
or credited to the taxpayer from the date of payment of the tax until the date the refund is
paid or credited. For purposes of this subdivision, the date of payment is the due date of the
return or the date of actual payment of the tax, whichever is later.
new text end

new text begin Subd. 11. new text end

new text begin Deposit of revenues; appropriation; payment to local governments. new text end

new text begin (a)
The commissioner shall deposit all revenues, including penalties and interest, derived from
the tax imposed by this section in the general fund.
new text end

new text begin (b) Each year, an amount equal to the deposit of revenues under this section for the
previous calendar year is appropriated from the general fund to the commissioner of revenue
for payments to county auditors. The commissioner of revenue must pay to each county
auditor an amount equal to the tax remitted under this section attributable to the sales of
digital products in that county as determined under subdivision 6 and reported on returns
required under this section. The commissioner must also provide the county auditor the
total amount of sales in each zip code as provided on returns required under this section.
The county auditor must issue payment to the municipality in which the sales occurred.
Money appropriated under this section may only be spent on the support of local digital
media by the operator of the municipality's local access channels.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2023.
new text end