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HF 3481

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/28/2022 04:39pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/15/2022

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; decreasing income tax rates; amending
Minnesota Statutes 2020, section 290.06, subdivision 2d; Minnesota Statutes 2021
Supplement, section 290.06, subdivision 2c.

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

Section 1.

Minnesota Statutes 2021 Supplement, section 290.06, subdivision 2c, is amended
to read:


Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:

(1) On the first deleted text begin$38,770deleted text endnew text begin $41,050new text end, deleted text begin5.35deleted text endnew text begin 4.85new text end percent;

(2) On all over deleted text begin$38,770deleted text endnew text begin $41,050new text end, but not over deleted text begin$154,020deleted text endnew text begin $163,060new text end, deleted text begin6.8deleted text endnew text begin 6.3new text end percent;

(3) On all over deleted text begin$154,020deleted text endnew text begin $163,060new text end, but not over deleted text begin$269,010deleted text endnew text begin $284,810new text end, deleted text begin7.85deleted text endnew text begin 7.35new text end percent;

(4) On all over deleted text begin$269,010deleted text endnew text begin $284,810new text end, deleted text begin9.85deleted text endnew text begin 9.35new text end percent.

Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts after the adjustment required in subdivision 2d.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin$26,520deleted text endnew text begin $28,080new text end, deleted text begin5.35deleted text endnew text begin 4.85new text end percent;

(2) On all over deleted text begin$26,520deleted text endnew text begin $28,080new text end, but not over deleted text begin$87,110deleted text endnew text begin $92,230new text end, deleted text begin6.8deleted text endnew text begin 6.3new text end percent;

(3) On all over deleted text begin$87,110deleted text endnew text begin $92,230new text end, but not over deleted text begin$161,720deleted text endnew text begin $171,220new text end, deleted text begin7.85deleted text endnew text begin 7.35new text end percent;

(4) On all over deleted text begin$161,720deleted text endnew text begin $171,220new text end, deleted text begin9.85deleted text endnew text begin 9.35new text end percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin$32,650deleted text endnew text begin $34,570new text end, deleted text begin5.35deleted text endnew text begin 4.85new text end percent;

(2) On all over deleted text begin$32,650deleted text endnew text begin $34,570new text end, but not over deleted text begin$131,190deleted text endnew text begin $138,890new text end, deleted text begin6.8deleted text endnew text begin 6.3new text end percent;

(3) On all over deleted text begin$131,190deleted text endnew text begin $138,890new text end, but not over deleted text begin$214,980deleted text endnew text begin $227,600new text end, deleted text begin7.85deleted text endnew text begin 7.35new text end percent;

(4) On all over deleted text begin$214,980deleted text endnew text begin $227,600new text end, deleted text begin9.85deleted text endnew text begin 9.35new text end percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
17, and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9
, 10, 14, 15, 17, 18, and 27, and 290.0137, paragraph (c), after applying the
allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
17, and 290.0137, paragraph (a); and reduced by

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and
27, and 290.0137, paragraph (c).

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying
owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
7a, paragraph (b), the individual must compute the individual's Minnesota income tax as
provided in paragraph (e), and also must include, to the extent attributed to the electing
qualifying entity:

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
addition under section 290.0131, subdivision 5; and

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
subtraction under section 290.0132, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 2.

Minnesota Statutes 2020, section 290.06, subdivision 2d, is amended to read:


Subd. 2d.

Inflation adjustment of brackets.

The commissioner shall annually adjust
the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
in subdivision 2c as provided in section 270C.22. The statutory year is taxable year deleted text begin2019deleted text endnew text begin
2022
new text end. The rate applicable to any rate bracket must not be changed. The dollar amounts
setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the
rate bracket for married filing separate returns after this adjustment is done. The rate bracket
for married filing separate must be one-half of the rate bracket for married filing joint.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end