SF 3573

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/01/2022 09:31am

A bill for an act
relating to taxation; sales and use; providing a rebate for sales taxes paid; requiring
a report; appropriating money.

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

Section 1. new text begin STATEMENT OF PURPOSE.
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new text begin (a) The state of Minnesota derives revenues from a variety of taxes, fees, and other
sources, including the state sales tax.
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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 years 2020 and
2021.
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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, updated to calendar year 2021, to determine a reasonable amount of a sales tax rebate
due to each eligible taxpayer since no effective or practical mechanism exists for determining
the amount of actual sales tax paid by each eligible individual.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 2. new text begin SALES TAX REBATE.
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new text begin Subdivision 1. new text end

new text begin Eligibility; amount of rebate. new text end

new text begin (a) For rebates based on income tax returns
or Social Security benefits received in 2020, an individual qualifies for a sales tax rebate if
the individual:
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new text begin (1) was a resident of Minnesota for all or part of 2020 and filed a 2020 Minnesota income
tax return on or before October 15, 2021, had a tax liability before refundable credits on
that return of at least $1, and was not allowed to be claimed as a dependent on a 2020 federal
income tax return filed by another person;
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new text begin (2) was a resident of Minnesota for all of 2020, was not eligible for a rebate under clause
(1), attained the age of 18 on or before December 31, 2020, and received in 2020 Social
Security benefits as defined in section 86(d)(1) of the Internal Revenue Code;
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new text begin (3) was allowed to be claimed as a dependent on a 2020 federal income tax return filed
by another person but would have otherwise been eligible for a rebate under clause (1), and
reported earned income as defined in section 32(c)(2)(A)(i) of the Internal Revenue Code;
or
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new text begin (4) filed a 2020 Minnesota income tax return on or before October 15, 2021, in order to
claim:
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new text begin (i) a credit under Minnesota Statutes, section 290.067, 290.0671, or 290.0674;
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new text begin (ii) a refund of withheld taxes; or
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new text begin (iii) a refund of estimated taxes.
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new text begin (b) The sales tax rebate allowed under paragraph (a) equals:
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new text begin (1) $400 for married joint or head of household filers, increased by $25 for each
dependent claimed on the filer's 2020 federal income tax return; and
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new text begin (2) $200 for all other filers, increased by $25 for each dependent claimed on the filer's
2020 federal income tax return.
new text end

new text begin (c) For rebates based on income tax returns or Social Security benefits received in 2021,
an individual qualifies for a sales tax rebate if the individual:
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new text begin (1) was a resident of Minnesota for all or part of 2021 and files a 2021 Minnesota income
tax return on or before October 15, 2022, has a tax liability before refundable credits on
that return of at least $1, and is not allowed to be claimed as a dependent on a 2021 federal
income tax return filed by another person;
new text end

new text begin (2) was a resident of Minnesota for all of 2021, was not eligible for a rebate under clause
(1), attained the age of 18 on or before December 31, 2021, and received in 2021 Social
Security benefits as defined in section 86(d)(1) of the Internal Revenue Code;
new text end

new text begin (3) was allowed to be claimed as a dependent on a 2021 federal income tax return filed
by another person but would have otherwise been eligible for a rebate under clause (1), and
reported earned income as defined in section 32(c)(2)(A)(i) of the Internal Revenue Code;
or
new text end

new text begin (4) files a 2021 Minnesota income tax return on or before October 15, 2022, in order to
claim:
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new text begin (i) a credit under Minnesota Statutes, section 290.067, 290.0671, or 290.0674;
new text end

new text begin (ii) a refund of withheld taxes; or
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new text begin (iii) a refund of estimated taxes.
new text end

new text begin (d) The sales tax rebate allowed under paragraph (c) equals:
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new text begin (1) $200 for married joint or head of household filers, increased by $25 for each
dependent claimed on the filer's 2021 federal income tax return; and
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new text begin (2) $100 for all other filers, increased by $25 for each dependent claimed on the filer's
2021 federal income tax return.
new text end

new text begin (e) 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 paragraph (b) or (d), as applicable,
multiplied by the percentage determined under Minnesota Statutes, section 290.06,
subdivision 2c, paragraph (e), as calculated on the original 2020 or 2021 income tax return,
as applicable, including subsequent adjustments to that return made within the time limits
specified in subdivision 2, paragraph (c).
new text end

new text begin Subd. 2. new text end

new text begin Payment of rebate; other requirements. new text end

new text begin (a) For purposes of this section,
"commissioner" means the commissioner of revenue.
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new text begin (b) The commissioner may issue sales tax rebates under subdivision 1, paragraph (a),
after June 30, 2022, and may issue sales tax rebates under subdivision 1, paragraph (c), after
June 30, 2023. Sales tax rebates under subdivision 1, paragraph (a), not paid by October 1,
2022, and sales tax rebates under subdivision 1, paragraph (c), not paid by October 1, 2023,
bear interest at the rate specified in Minnesota Statutes, section 270C.405.
new text end

new text begin (c) For sales tax rebates due under subdivision 1, paragraph (a), the rebate must not be
adjusted based on changes to a 2020 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 after that date. For sales tax rebates due under subdivision 1, paragraph (c),
the rebate must not be adjusted based on changes to a 2021 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 after that date.
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new text begin (d) Individuals who filed a joint income tax return for 2020 or 2021 must receive a joint
sales tax rebate under the provisions of this paragraph. After the sales tax rebate has been
issued, but before the check has been cashed if the rebate is issued by check, either joint
claimant may request a separate payment for one-half of the joint sales tax rebate. The
amount payable to each person equals one-half of the total joint rebate. Notwithstanding
any provision in this section to the contrary:
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new text begin (1) if, prior to payment of the rebate under subdivision 1, paragraph (a), the commissioner
has been notified that individuals who filed a joint 2020 income tax return are living at
separate addresses, as indicated on their 2021 income tax return or otherwise, the
commissioner may issue separate checks to each individual listed on the joint return; and
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new text begin (2) if, prior to payment of the rebate under subdivision 1, paragraph (c), the commissioner
has been notified that taxpayers who filed a joint 2021 income tax return are living at separate
addresses, as indicated on their 2022 income tax return or otherwise, the commissioner may
issue separate checks to each individual listed on the joint return.
new text end

new text begin (e) The sales tax rebate is a "Minnesota tax law" for purposes of Minnesota Statutes,
section 270B.01, subdivision 8.
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new text begin (f) 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 paragraph, a joint
sales tax rebate is payable to each spouse equally.
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new text begin (g) The right to a sales tax rebate lapses and the rebate check must be deposited in the
general fund if the commissioner:
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new text begin (1) cannot locate an individual entitled to a sales tax rebate under subdivision 1, paragraph
(a), by July 1, 2023, or if an individual to whom a sales tax rebate was issued under
subdivision 1 has not cashed the rebate check by July 1, 2023; or
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new text begin (2) cannot locate an individual entitled to a sales tax rebate under subdivision 1, paragraph
(c), by July 1, 2024, or if an individual to whom a sales tax rebate was issued under
subdivision 2 has not cashed the rebate check by July 1, 2024.
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new text begin (h) Individuals who are entitled to a sales tax rebate but did not receive one and
individuals who receive a sales tax rebate that was not correctly calculated must file a claim
with the commissioner in a form prescribed by the commissioner. A claim made under this
paragraph is a claim for refund under Minnesota Statutes, section 289A.50, subdivisions 4
and 7. Individuals entitled to a sales tax rebate under paragraph (a) must file the claim by
July 1, 2023. Individuals entitled to a sales tax rebate under paragraph (b) must file the
claim by July 1, 2024.
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new text begin (i) 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 (j) The rebate under subdivision 1 is a reduction of fiscal year 2023 sales tax revenues.
The rebate under subdivision 2 is a reduction of fiscal year 2024 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 years 2023 and
2024 and is available until June 30, 2025.
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new text begin (k) If a sales tax rebate issued by check is cashed by someone other than the payee or
payees of the check, and the commissioner determines that the check has been forged or
improperly endorsed, the commissioner may issue an order of assessment for the amount
of the check against the person or persons cashing it. If a sales tax rebate issued by debit
card is stolen or otherwise used by someone other than the payee or payees of the debit
card, and the commissioner determines that the debit card has been improperly used as
tender, the commissioner may issue an order of assessment for the amount of the debit card
against the person or persons using it. The assessment must be made within two years after
the check is cashed or debit card is used, but if cashing the check or using the debit card
constitutes theft under Minnesota Statutes, section 609.52, or forgery under Minnesota
Statutes, section 609.63, 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 289A, for any
other order of the commissioner assessing tax.
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new text begin (l) Notwithstanding Minnesota Statutes, sections 9.031, 16A.40, and 16B.49, and any
other law to the contrary, the commissioner may take whatever actions the commissioner
deems necessary to pay the rebates required by this section, including issuance of debit
cards or checks. The commissioner may, in consultation with the commissioner of
management and budget, contract with a private vendor or vendors to process, print, and
mail debit cards, checks, or warrants required under this section and receive and disburse
state funds to pay debit cards, checks, or warrants.
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new text begin (m) The commissioner may pay rebates required by subdivision 1, paragraph (a), by
electronic funds transfer to individuals who requested that their 2021 individual income tax
refund be paid through electronic funds transfer. The commissioner may pay rebates required
by subdivision 1, paragraph (c), by electronic funds transfer to individuals who requested
that their 2022 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 2021 or 2022 individual income tax refund, as
applicable.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 3. new text begin REPORT REQUIRED.
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new text begin By January .., 2025, the commissioner of revenue shall report to the chairs and ranking
minority members of the legislative committees with jurisdiction over taxes on the payments
issued under this section. The report must comply with sections 3.195 and 3.197.
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Sec. 4. new text begin APPROPRIATIONS.
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new text begin $....... is appropriated in fiscal year 2023 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, 2025, does not cancel but is available for expenditure by the commissioner of
revenue until June 30, 2026. This is a onetime appropriation and is not added to the agency's
base.
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new text begin EFFECTIVE DATE. new text end

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