Office of the Revisor of Statutes
Minnesota Session Laws - 1983, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1983
CHAPTER 342--H.F.No. 1259
An act relating to taxation; establishing income tax
definitions; altering, establishing, and eliminating
certain income tax modifications, deductions, and
credits; extending the income tax surtax; allowing
suspension of indexing; modifying income tax
administrative provisions; altering certain property
tax credit, assessment, and administrative provisions;
adjusting computation of property tax refunds;
providing for computation and distribution of state
aids to school districts and other local units of
government; establishing the rate of sales and motor
vehicle excise taxes and modifying exemption
provisions; providing tax incentives for business
development; authorizing the cities of Austin and
Hastings and certain nonprofit entities in the city of
Bemidji and within Independent School District No.
692, Babbitt, to hold property for economic
development purposes; authorizing the imposition of
city lodging taxes; providing for the imposition of a
tax on aggregate materials by the counties of Stearns,
Benton, Sherburne, Wright, Carver, Scott, Dakota,
LeSueur, Kittson, Marshall, Pennington, Red Lake,
Polk, Norman, Mahnomen, Clay, Becker, Wilkin,
Traverse, Big Stone, Stevens, Pope, Anoka, Hennepin,
Washington, and Ramsey; revising provisions governing
property tax deliquencies and sales of tax-forfieted
lands; enacting the multistate tax compact;
authorizing St. Louis County to abate certain taxes;
providing for a budget reserve account and prescribing
certain budget procedures; authorizing the city of
Rochester to impose a local sales tax; authorizing
certain refunds of motor vehicle excise tax; defining
terms; imposing penalties; appropriating money;
amending Minnesota Statutes 1982, sections 16A.15,
subdivision 1, and by adding subdivisions; 116J.42,
subdivision 7; 124.11, subdivisions 2a and 2b;
124.2137, subdivision 1; 270.60; 272.02, subdivision
1; 272.03, subdivision 8; 272.115, subdivision 1;
273.11, subdivision 1 and by adding subdivisions;
273.115, subdivision 1; 273.13, subdivisions 6, 6a, 7,
9, 11, 14a, 17, 17b, 17c, 20; 273.1311; 273.1312,
subdivisions 2, 3, 4, and 5; 273.1313, subdivisions 1,
2, 3, and 5; 273.135, subdivision 1; 273.138,
subdivisions 2, 3, and 6; 273.1391, subdivision 1;
273.1392; 275.50, subdivisions 2, 5, and by adding a
subdivision; 275.51, by adding subdivisions; 276.04;
276.09; 276.10; 276.11; 278.01, subdivisions 1 and 2;
278.03; 278.05, subdivisions 4 and 5; 279.01,
subdivision 1; 279.05; 279.06; 279.14; 279.15; 279.16;
279.20; 280.01; 280.07; 280.10; 280.38; 280.385,
subdivision 1; 281.01; 280.02; 281.03; 281.05; 281.17;
281.18; 281.23; 281.25; 281.34; 281.39; 282.01,
subdivision 5; 282.039; 282.17; 282.171; 282.222,
subdivisions 4 and 5; 282.301; 287.05, subdivision 1;
290.01, subdivisions 19, 20, 20a, as amended, 20b, as
amended, 20f; 290.06, subdivisions 2e, as amended, 11,
13, 14, and by adding a subdivision; 290.067,
subdivisions 1 and 2; 290.068, by adding a
subdivision; 290.07, subdivision 1; 290.09,
subdivisions 1, 2, 3, as amended, 4, 5, and 29;
290.14; 290.17, subdivision 2; 290.18, subdivisions 1
and 2; 290.21, subdivisions 1 and 3; 290.23,
subdivision 5; 290.31, subdivisions 2 and 3; 290.34,
subdivision 2; 290.37, subdivision 1; 290.39,
subdivision 2; 290.431; 290.46; 290.53, subdivision 2,
as amended; 290.92, subdivision 2a, and by adding
subdivisions; 290A.03, subdivisions 3, 6, 8, 11, 13,
as amended, and by adding a subdivision; 290A.04,
subdivisions 1, 2, 2a, 2b, 3, and by adding
subdivisions; 290A.07, subdivision 3; 290A.16;
290A.18; 290A.19; 296.18, subdivision 1; 296.421,
subdivision 5; 297A.02, as amended; 297A.03,
subdivision 2, as amended; 297A.14, as amended;
297A.25, subdivision 1; 297A.35, subdivision 3;
297B.01, subdivision 8; 297B.02, as amended; 298.75;
325D.32, subdivision 9; 471.59, by adding a
subdivision; 473F.08, subdivision 7a; 477A.011,
subdivisions 6, 7, 10, and by adding subdivisions;
477A.012; 477A.013; 477A.014, subdivision 1; 477A.03,
subdivision 2; 515A.1-105; 559.21, by adding a
subdivision; Laws 1981, First Special Session, chapter
1, article II, section 25; Third Special Session
chapter 2, article III, section 22, as amended;
proposing new law coded in Minnesota Statutes,
chapters 124; 168; 273; 276; 279; 280; 282; 290; 297A;
297B; 477A; 507; repealing Minnesota Statutes 1982,
sections 16A.153; 273.13, subdivision 15b; 273.138,
subdivisions 1 and 4; 273.139; 275.09, subdivision 3;
275.50, subdivision 6; 275.51, subdivisions 3e and 5;
279.24; 281.36; 290.01, subdivisions 23, 27, and 28;
290.032, subdivision 5; 290.06, subdivisions 9 and 9a;
290.077, subdivision 2; 290.08, subdivision 25;
290.09, subdivisions 10, 15, 22, and 27; 290.21,
subdivision 32; 290.501; 340.986; 352C.07; 477A.011,
subdivisions 8 and 9; Laws 1961, chapter 605; Laws
1963, chapter 475; Laws 1965, chapter 163; Laws 1977,
chapters 112 and 117; Laws 1979, chapter 273; and Laws
1982, chapter 523, article VII, section 3 and Third
Special Session chapter 1, article 5, section 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
INCOME TAX
Section 1. Minnesota Statutes 1982, section 290.01,
subdivision 19, is amended to read:
Subd. 19. [NET INCOME.] The term "net income" means the
gross income, as defined in subdivision 20, less the following
deductions allowed by section 290.09 (and for individuals,
section 290.21) to the extent allowed by section 290.18,
subdivision 1:
(a) For corporations, the deductions allowed by section
290.09;
(b) For individuals, the deductions allowed in section 15,
without regard to section 290.18, subdivision 1, section 16, and
290.09; and
(c) For estates and trusts, the deduction allowed by
section 15, without regard to section 290.18, subdivision 1.
Sec. 2. Minnesota Statutes 1982, section 290.01,
subdivision 20, is amended to read:
Subd. 20. [GROSS INCOME.] Except as otherwise provided in
this chapter, the term "gross income," as applied to
corporations includes every kind of compensation for labor or
personal services of every kind from any private or public
employment, office, position or services; income derived from
the ownership or use of property; gains or profits derived from
every kind of disposition of, or every kind of dealing in,
property; income derived from the transaction of any trade or
business; and income derived from any source.
The term "gross income" in its application to individuals,
estates, and trusts shall mean the adjusted gross income as
defined in the Internal Revenue Code of 1954, as amended through
the date specified herein for the applicable taxable year, with
the modifications specified in this subdivision and in
subdivisions 20a to 20f. For estates and trusts the adjusted
gross income shall be their federal taxable income as defined in
the Internal Revenue Code of 1954, as amended through the date
specified herein for the applicable taxable year, with the
modifications specified in this subdivision and in subdivisions
20a to 20f, and with the modification that the federal deduction
for personal exemptions for trusts and estates shall not be
allowed.
(i) The Internal Revenue Code of 1954, as amended through
December 31, 1976, including the amendments made to section 280A
(relating to licensed day care centers) in H.R. 3477 as it
passed the Congress on May 16, 1977, shall be in effect for the
taxable years beginning after December 31, 1976. The provisions
of the Tax Reform Act of 1976, P.L. 94-455, which affect
adjusted gross income shall become effective for purposes of
this chapter at the same time they become effective for federal
income tax purposes.
The provisions of section 4 of P.L. 95-458, sections 131,
133, 134, 141, 152, 156, 157, 405, and 543 of P.L. 95-600, and
section 2 of P.L. 96-608 (relating to pensions, individual
retirement accounts, deferred compensation plans, the sale of a
residence and to conservation payments to farmers) including the
amendments made to these sections in P.L. 96-222 shall be
effective at the same time that these provisions became
effective for federal income tax purposes.
(ii) The Internal Revenue Code of 1954, as amended through
December 31, 1979, shall be in effect for taxable years
beginning after December 31, 1979.
(iii) The Internal Revenue Code of 1954, as amended through
December 31, 1980, and as amended by sections 302(b) and 501 to
509 of Public Law Number 97-34, shall be in effect for taxable
years beginning after December 31, 1980 including the provisions
of section 404 (relating to partial exclusions of dividends and
interest received by individuals) of the Crude Oil Windfall
Profit Tax Act of 1980, P.L. 96-223. The provisions of P.L.
96-471 (relating to installment sales) sections 122, 123, 126,
201, 202, 203, 204, 211, 213, 214, 251, 261, 264, 265,
311(g)(3), 313, 314(a)(1), 321(a), 501 to 507, 811, and 812 of
the Economic Recovery Tax Act of 1981, Public Law Number 97-34
and section 113 of Public Law Number 97-119 shall be effective
at the same time that they become effective for federal income
tax purposes.
(iv) The Internal Revenue Code of 1954, as amended through
December 31, 1981, shall be in effect for taxable years
beginning after December 31, 1981. The Payment-in-Kind Tax
Treatment Act of 1983, Public Law Number 98-4, shall be
effective at the same time that it becomes effective for federal
income tax purposes.
References to the Internal Revenue Code of 1954 in
subdivisions 20a, 20b, 20c, and 20e, and 20f shall mean the code
in effect for the purpose of defining gross income for the
applicable taxable year.
Sec. 3. Minnesota Statutes 1982, section 290.01,
subdivision 20a, as amended by Laws 1982, Third Special Session
chapter 1, article 5, section 1, is amended to read:
Subd. 20a. [MODIFICATIONS INCREASING FEDERAL ADJUSTED
GROSS INCOME.] There shall be added to federal adjusted gross
income:
(1) Interest income on obligations of any state other than
Minnesota or a political subdivision of any other state exempt
from federal income taxes under the Internal Revenue Code of
1954;
(2) A business casualty loss if the taxpayer elected to
deduct the loss on the current year's federal income tax return
but had deducted the loss on the previous year's Minnesota
income tax return;
(3) Income taxes imposed by this state or any other taxing
jurisdiction, to the extent deductible in determining federal
adjusted gross income and not credited against federal income
tax;
(4) (3) Interest on indebtedness incurred or continued to
purchase or carry securities the income from which is exempt
from tax under this chapter, to the extent deductible in
determining federal adjusted gross income;
(5) Amounts received as reimbursement for an expense of
sickness or injury which was deducted in a prior taxable year to
the extent that the deduction for the reimbursed expenditure
resulted in a tax benefit;
(6) The amount of any federal income tax overpayment for
any previous taxable year, received as refund or credited to
another taxable year's income tax liability, proportionate to
the percentage of federal income tax that was claimed as a
deduction in determining Minnesota income tax for the previous
taxable year. The amount of the federal income tax overpayment
shall be reported only to the extent that the amount resulted in
a reduction of the tax imposed by this chapter.
The overpayment refund or credit, determined with respect
to a husband and wife on a joint federal income tax return for a
previous taxable year, shall be reported on joint, combined, or
separate Minnesota income tax returns. In the case of combined
or separate Minnesota returns, the overpayment shall be reported
by each spouse proportionately according to the relative amounts
of federal income tax claimed as a deduction on his or her
combined or separate Minnesota income tax return for such
previous taxable year;
(7) (4) In the case of a change of residence from Minnesota
to another state or nation, the amount of moving expenses which
exceed total reimbursements and which were therefore deducted in
arriving at federal adjusted gross income;
(8) (5) The amount of any increase in the taxpayer's
federal tax liability under section 47 of the Internal Revenue
Code of 1954 to the extent of the credit under section 38 of the
Internal Revenue Code of 1954 that was previously allowed as a
deduction under Minnesota Statutes 1982, section 290.01,
subdivision 20b, clause (7);
(9) (6) Expenses and losses arising from a farm which are
not allowable under section 290.09, subdivision 29;
(10) (7) Expenses and depreciation attributable to
substandard buildings disallowed by section 290.101;
(11) (8) The amount by which the gain determined pursuant
to section 41.59, subdivision 2 exceeds the amount of such gain
included in federal adjusted gross income;
(12) (9) To the extent deducted in computing the taxpayer's
federal adjusted gross income for the taxable year, losses
recognized upon a transfer of property to the spouse or former
spouse of the taxpayer in exchange for the release of the
spouse's marital rights;
(13) (10) Interest income from qualified scholarship
funding bonds as defined in section 103(e) of the Internal
Revenue Code of 1954, if the nonprofit corporation is domiciled
outside of Minnesota;
(14) (11) Exempt-interest dividends, as defined in section
852(b)(5)(A) of the Internal Revenue Code of 1954, not included
in federal adjusted gross income pursuant to section
852(b)(5)(B) of the Internal Revenue Code of 1954, except for
that portion of exempt-interest dividends derived from interest
income on obligations of the state of Minnesota, any of its
political or governmental subdivisions, any of its
municipalities, or any of its governmental agencies or
instrumentalities;
(15) (12) The amount of any excluded gain recognized by a
trust on the sale or exchange of property as defined in section
641(c)(1) of the Internal Revenue Code of 1954;
(16) (13) To the extent not included in the taxpayer's
federal adjusted gross income, the amount of any gain, from the
sale or other disposition of property having a lower adjusted
basis for Minnesota income tax purposes than for federal income
tax purposes. This modification shall not exceed the difference
in basis. If the gain is considered a long term capital gain
for federal income tax purposes, the modification shall be
limited to 40 percent of the portion of the gain. This
modification is limited to property that qualified for the
energy equity investment credit contained in section 290.06,
subdivision 14, 290.069, subdivision 4, and to property acquired
in exchange for the release of the taxpayer's marital rights
contained in section 290.14, clause (7);
(17) (14) The amount of any loss from a source outside of
Minnesota which is not allowed under section 290.17 including
any capital loss or net operating loss carryforwards or
carrybacks resulting from the loss;
(18) The amount of a distribution from an individual
housing account which is to be included in gross income as
required under section 290.08, subdivision 25;
(19) (15) To the extent deducted in computing the
taxpayer's federal adjusted gross income, interest, taxes and
other expenses which are not allowed under section 290.10,
clause (9) or (10);
(20) To the extent excluded from federal adjusted gross
income, in the case of a city manager or city administrator who
elects to be excluded from the public employees retirement
association and who makes contributions to a deferred
compensation program pursuant to section 353.028, the amount of
contributions made by the city manager or administrator which is
equal to the amount which would have been the city manager's or
administrator's employee contribution pursuant to section
353.27, subdivision 2, if he were a member of the public
employees retirement association;
(21) (16) The deduction for two-earner married couples
provided in section 221 of the Internal Revenue Code of 1954;
(22) Interest on all-savers certificates which is excluded
under section 128 of the Internal Revenue Code of 1954;
(23) (17) Losses from the business of mining as defined in
section 290.05, subdivision 1, clause (a) which is not subject
to the Minnesota income tax;
(24) (18) Expenses and depreciation attributable to
property subject to Laws 1982, chapter 523, article 7, section 3
which has not been registered;
(25) (19) The amount of contributions to an individual
retirement account, simplified employee pension plan, or
self-employed retirement plan which is allowed under sections
311 and 312 of Public Law Number 97-34 to the extent those
contributions were not an allowable deduction prior to the
enactment of that law;
(26) To the extent deducted in computing federal adjusted
gross income, living expenses of a member of congress in excess
of that allowable under section 290.09, subdivision 2, clause
(a)(3); and
(27) (20) To the extent not included in the taxpayer's
federal adjusted gross income, the amount of any contributions
to a qualified pension plan, designated as employee
contributions but which the employing unit picks up and which
are treated as employer contributions pursuant to section
414(h)(2) of the Internal Revenue Code of 1954.
Sec. 4. Minnesota Statutes 1982, section 290.01,
subdivision 20b, as amended by Laws 1982, Third Special Session
chapter 1, article 5, section 2, is amended to read:
Subd. 20b. [MODIFICATIONS REDUCING FEDERAL ADJUSTED GROSS
INCOME.] There shall be subtracted from federal adjusted gross
income:
(1) Interest income on obligations of any authority,
commission or instrumentality of the United States to the extent
includible in gross income for federal income tax purposes but
exempt from state income tax under the laws of the United States;
(2) The portion of any gain, from the sale or other
disposition of property having a higher adjusted basis for
Minnesota income tax purposes than for federal income tax
purposes, that does not exceed such difference in basis; but if
such gain is considered a long-term capital gain for federal
income tax purposes, the modification shall be limited to 40 per
centum of the portion of the gain. This modification shall not
be applicable if the difference in basis is due to disallowance
of depreciation pursuant to section 290.101.
(3) Income from the performance of personal or professional
services which is subject to the reciprocity exclusion contained
in section 290.081, clause (a);
(4) Losses, not otherwise reducing federal adjusted gross
income assignable to Minnesota, arising from events or
transactions which are assignable to Minnesota under the
provisions of sections 290.17 to 290.20, including any capital
loss or net operating loss carryforwards or carrybacks or out of
state loss carryforwards resulting from the losses, and
including any farm loss carryforwards or carrybacks;
(5) If included in federal adjusted gross income, the
amount of any credit received, whether received as a refund or
credit to another taxable year's income tax liability, pursuant
to chapter 290A, and the amount of any overpayment of income tax
to Minnesota, or any other state, for any previous taxable year,
whether the amount is received as a refund or credited to
another taxable year's income tax liability;
(6) To the extent included in federal adjusted gross
income, or the amount reflected as the ordinary income portion
of a lump sum distribution under section 402(e) of the Internal
Revenue Code of 1954, notwithstanding any other law to the
contrary, the amount received by any person (i) from the United
States, its agencies or instrumentalities, the Federal Reserve
Bank or from the state of Minnesota or any of its political or
governmental subdivisions or from any other state or its
political or governmental subdivisions, or a Minnesota volunteer
firefighter's relief association, by way of payment as a
pension, public employee retirement benefit, or any combination
thereof, or (ii) as a retirement or survivor's benefit made from
a plan qualifying under section 401, 403, 404, 405, 408, 409 or
409A of the Internal Revenue Code of 1954, or (iii) severance
pay distributed to an individual upon discontinuance of the
individual's employment due to termination of business
operations by the individual's employer, provided that the
termination is reasonably likely to be permanent, involves the
discharge of at least 75 percent of the employees at that site
within a one-year period, and the business is not acquired by
another person who continues operations at that site. The
maximum amount of this subtraction shall be $11,000 less the
amount by which the individual's federal adjusted gross income,
plus the ordinary income portion of a lump sum distribution as
defined in section 402(e) of the Internal Revenue Code of 1954,
exceeds $17,000. For purposes of this clause, "severance pay"
means an amount received for cancellation of an employment
contract or a collectively bargained termination payment made as
a substitute for income which would have been earned for
personal services to be rendered in the future. In the case of
a volunteer firefighter who receives an involuntary lump sum
distribution of his pension or retirement benefits, the maximum
amount of this subtraction shall be $11,000; this subtraction
shall not be reduced by the amount of the individual's federal
adjusted gross income in excess of $17,000;
(7) The amount of any credit to the taxpayer's federal tax
liability under section 38 of the Internal Revenue Code of 1954
but only to the extent that the credit is connected with or
allocable against the production or receipt of income included
in the measure of the tax imposed by this chapter;
(8) To the extent included in the taxpayer's federal
adjusted gross income for the taxable year, gain recognized upon
a transfer of property to the spouse or former spouse of the
taxpayer in exchange for the release of the spouse's marital
rights;
(9) (8) The amount of any distribution from a qualified
pension or profit sharing plan included in federal adjusted
gross income in the year of receipt to the extent of any
contribution not previously allowed as a deduction by reason of
a change in federal law which was not adopted by Minnesota law
for a taxable year beginning in 1974 or later;
(10) (9) Interest, including payment adjustment to the
extent that it is applied to interest, earned by the seller of
the property on a family farm security loan executed before
January 1, 1986 that is guaranteed by the commissioner of
agriculture as provided in sections 41.51 to 41.60;
(11) (10) The first $3,000 of compensation for personal
services in the armed forces of the United States or the United
Nations, and the next $2,000 of compensation for personal
services in the armed forces of the United States or the United
Nations wholly performed outside the state of Minnesota. This
modification does not apply to compensation defined in
subdivision 20b, clause (6);
(12) (11) The amount of any income earned for personal
services rendered outside of Minnesota prior to the date when
the taxpayer became a resident of Minnesota. This modification
does not apply to compensation defined in subdivision 20b,
clause (6);
(13) (12) In the case of wages or salaries paid or incurred
on or after January 1, 1977, the amount of any credit for
employment of certain new employees under sections 44B and 51 to
53 of the Internal Revenue Code of 1954 which is claimed as a
credit against the taxpayer's federal tax liability, but only to
the extent that the credit is connected with or allocable
against the production or receipt of income included in the
measure of the tax imposed by this chapter;
(14) (13) In the case of work incentive program expenses
paid or incurred on or after January 1, 1979, the amount of any
credit for expenses of work incentive programs under sections
40, 50A and 50B of the Internal Revenue Code of 1954 which is
claimed as a credit against the taxpayer's federal tax
liability, but only to the extent that the credit is connected
with or allocable against the production or receipt of income
included in the measure of the tax imposed by this chapter;
(15) (14) Unemployment compensation to the extent
includible in gross income for federal income tax purposes under
section 85 of the Internal Revenue Code of 1954;
(16) To the extent included in federal adjusted gross
income, severance pay that may be treated as a lump sum
distribution under the provisions of section 290.032,
subdivision 5;
(17) (15) The amount of any income or gain which is not
assignable to Minnesota under the provisions of section 290.17;
(18) Minnesota exempt-interest dividends as provided by
subdivision 27;
(19) A business casualty loss which the taxpayer elected to
deduct on the current year's Minnesota income tax return but did
not deduct on the current year's federal income tax return;
(20) To the extent included in federal adjusted gross
income, in the case of a city manager or city administrator who
elects to be excluded from the public employees retirement
association and who makes contributions to a deferred
compensation program pursuant to section 353.028, the amount of
payments from the deferred compensation program equivalent to
the amount of contributions taxed under subdivision 20a, clause
(20);
(21) Contributions to and interest earned on an individual
housing account as provided by section 290.08, subdivision 25;
(22) (16) Interest earned on a contract for deed entered
into for the sale of property for agricultural use if the rate
of interest set in the contract is no more than nine percent per
year for the duration of the term of the contract. This
exclusion shall be available only if (1) the purchaser is an
individual who, together with his spouse and dependents, has a
total net worth valued at less than $150,000 and (2) the
property sold under the contract is farm land as defined in
section 41.52, subdivision 6 of no more than 1,000 acres that
the purchaser intends to use for agricultural purposes.
Compliance with these requirements shall be stated in an
affidavit to be filed with the first income tax return on which
the taxpayer claims the exclusion provided in this clause. Upon
request accompanied by the information necessary to make the
determination, the commissioner shall determine whether interest
to be paid on a proposed transaction will qualify for this
exclusion; the determination shall be provided within 30 days of
receipt of the request, unless the commissioner finds it
necessary to obtain additional information, or verification of
the information provided, in which case the determination shall
be provided within 30 days of receipt of the final item of
information or verification. The exclusion provided in this
clause shall apply to interest earned on contracts for deed
entered into after December 31, 1981 and before July 1, 1983;
(23) The penalty on the early withdrawal of an all-savers
certificate as provided in section 128(e) of the Internal
Revenue Code of 1954 to the extent that the interest was
included in income under subdivision 20a, clause (22);
(24) (17) Income from the business of mining as defined in
section 290.05, subdivision 1, clause (a) which is not subject
to the Minnesota income tax; and
(25) (18) To the extent included in federal adjusted gross
income, distributions from a qualified governmental pension plan
which represent a return of designated employee contributions to
the plan and which contributions were included in gross income
pursuant to subdivision 20a, clause (27) (20); and
(19) To the extent included in federal adjusted gross
income, distributions from an individual retirement account
which represent a return of designated employee contributions if
the contributions were included in gross income pursuant to
subdivision 20a, clause (19). The distribution shall be
allocated first to return of contributions included in gross
income until the amount of the contributions has been exhausted.
Sec. 5. Minnesota Statutes 1982, section 290.01,
subdivision 20f, is amended to read:
Subd. 20f. [MODIFICATION FOR ACCELERATED COST RECOVERY
SYSTEM.] A modification shall be made for the allowable
deduction under the accelerated cost recovery system as provided
in subdivision 28. The allowable deduction for the accelerated
cost recovery system as provided in section 168 of the Internal
Revenue Code of 1954 shall be the same amount as provided in
that section for individuals, estates, and trusts with the
following modifications:
(1) For property placed in service after December 31, 1980,
and for taxable years beginning before January 1, 1982, 15
percent of the allowance provided in section 168 of the Internal
Revenue Code of 1954 shall not be allowed.
(2)(a) For taxable years beginning after December 31, 1981,
and before January 1, 1983, for 15-year real property as defined
in section 168 of the Internal Revenue Code of 1954, 40 percent
of the allowance provided in section 168 of the Internal Revenue
Code of 1954 shall not be allowed and for all other property, 17
percent of the allowance shall not be allowed.
(b) For taxable years beginning after December 31, 1982,
and with respect to property placed in service in taxable years
beginning before January 1, 1983, for 15 year real property as
defined in section 168 of the Internal Revenue Code of 1954, 40
percent of the allowance provided in section 168 of the Internal
Revenue Code of 1954 shall not be allowed and for all other
property 20 percent of the allowance shall not be allowed.
(3) For property placed in service in taxable years
beginning after December 31, 1982, the allowable deduction shall
be the amount provided by section 168 of the Internal Revenue
Code of 1954.
(4) For property placed in service after December 31, 1980,
for which the taxpayer elects to use the straight line method
provided in section 168(b)(3) or a method provided in section
168(e)(2) of the Internal Revenue Code of 1954, the
modifications provided in clauses (1) and (2) do not apply.
(5) For property subject to the modifications contained in
clause (1) or (2) above or subject to a reduction in basis
pursuant to section 48(q) of the Internal Revenue Code of 1954,
the following modification shall be made after the entire amount
of the allowable deduction for that property under the provision
of section 168 of the Internal Revenue Code of 1954 has been
obtained. The remaining depreciable basis in those assets for
Minnesota purposes shall be a depreciation allowance computed by
using the straight line method over the following number of
years:
(a) 3 year property - 1 year.
(b) 5 year property - 2 years.
(c) 10 year property - 5 years.
(d) All 15 year property - 7 years.
(6) The basis of property to which section 168 of the
Internal Revenue Code of 1954 applies shall be its basis as
provided in this chapter and including the modifications
provided in this subdivision. The recapture tax provisions
provided in sections 1245 and 1250 of the Internal Revenue Code
of 1954 shall apply but shall be calculated using the basis
provided in the preceding sentence. When an asset is exchanged
for another asset including an involuntary conversion and under
the provision of the Internal Revenue Code of 1954 gain is not
recognized in whole or in part on the exchange of the first
asset, the basis of the second asset shall be the same as its
federal basis provided that the difference in basis due to
clause (1) or (2) can be written off as provided in clause (5).
(7) The modifications provided in this subdivision shall
apply before applying any limitation to out-of-state losses
contained in section 290.17 or farm losses contained in section
290.09, subdivision 29.
(8) After the entire amount of the allowable deduction for
that property under the provisions of section 168 of the
Internal Revenue Code of 1954 has been obtained, the remaining
depreciable basis in those assets for Minnesota purposes that is
allowable under clause (5) shall include the amount of any basis
reduction made for federal purposes under section 48(q) of the
Internal Revenue Code of 1954 to reflect the investment tax
credit. No amount shall be allowed as a deduction under section
196 of the Internal Revenue Code of 1954.
Sec. 6. Minnesota Statutes 1982, section 290.06, is
amended by adding a subdivision to read:
Subd. 2f. [SUSPENSION OF INFLATION ADJUSTMENTS.] (a) The
taxable net income brackets, the personal credit amounts
established pursuant to subdivision 3f and 3g, and the maximum
standard deduction provided under section 16, subdivision 3,
shall not be adjusted for inflation pursuant to subdivision 2d,
for taxable years beginning during a calendar year if the
following conditions occur:
(1) The legislature and the governor have enacted a budget
providing for an appropriation to the budget reserve account of
at least $250,000,000 for the biennium during which the calendar
year began or, in the second half of an odd-numbered year, for
the biennium which began during the calendar year; and
(2) The commissioner of finance estimated at the time the
budget is enacted that the state would receive sufficient
general fund receipts during the biennium to fund the full
appropriation to the budget reserve account; and
(3) On or before September 15 of the calendar year it is
estimated by the commissioner of finance that the probable
general fund receipts from taxes and other sources will be less
than estimated and consequently the amount available for the
remainder of the biennium after transferring any available funds
in the budget reserve account will be less than the amount
estimated or allotted to be expended or incurred from the
general fund; and
(4) The additional receipts resulting from the suspension
of the inflation adjustments, together with all other general
fund revenues, are not estimated to exceed the sum of the
amounts necessary to fund in full all appropriations, including
the appropriation to the budget reserve account, in which case
the commissioner of revenue shall provide for partial inflation
adjustments sufficient to fund in full the appropriations.
(b) The suspension of inflation adjustments shall apply
only during the biennium in which the conditions specified in
paragraph (a) have been satisfied.
(c) For taxable years beginning during a calendar year in
which the inflation adjustments of the brackets, credits, and
maximum standard deduction are not made pursuant to this
subdivision, the taxable net income adjustment factor, as
defined in section 290.18, subdivision 4, shall be the
adjustment factor applicable to taxable years beginning during
the preceding calendar year. For taxable years beginning during
a calendar year in which the inflation adjustments are suspended
for one-half of the taxable year as a result of paragraph (b),
the taxable net income adjustment factor shall be determined by
multiplying the factor for the previous year by an amount equal
to the current year factor divided by two, plus one.
(d) For taxable years beginning during a calendar year in
which the inflation adjustments are suspended pursuant to this
subdivision and for which paragraph (b) will result in the
inflation adjustments being suspended for only one-half of the
taxable year, the commissioner of revenue shall adjust the
withholding tables, notwithstanding section 290.92, subdivision
2a, so that the additional tax imposed is withheld and remitted
by employers during the first six months of the taxable year as
if the suspension were in effect for the entire year.
Sec. 7. Minnesota Statutes 1982, section 290.06,
subdivision 2e, as amended by Laws 1982, Third Special Session
chapter 1, article 5, section 3, is amended to read:
Subd. 2e. [ADDITIONAL INCOME TAX.] In addition to the tax
computed pursuant to subdivisions 2c and 2d or subdivision 3d,
there is hereby imposed an additional income tax on individuals,
estates, and trusts, other than those taxable as corporations.
The additional tax shall be computed by applying the following
rates to the tax computed pursuant to subdivision 3d or, in the
case of an individual who does not qualify for the low income
alternative tax and estates and trusts, the tax computed
pursuant to subdivisions 2c and 2d and sections 290.032 and
290.091 less the credits allowed by sections 290.06,
subdivisions 3e, 3f, 9, 9a, 11 and 14; and 290.081.
(1) For taxable years beginning after December 31, 1981,
but before January 1, 1983, seven percent;
(2) For taxable years beginning after December 31, 1982,
but before January 1, 1984 1985, 5 10 percent;
(3) For taxable years beginning after December 31, 1984,
but before January 1, 1986, 5 percent.
On October 1, 1983 the commissioner of finance shall
determine the amount of the state's unrestricted general fund
balance at the close of the 1982-1983 biennium. If this amount
is more than $150,000,000, the commissioner shall reduce the
rate of the surtax in effect for taxable years beginning after
December 31, 1982 and before January 1, 1984, so that the amount
of revenue raised by the surtax results in a fund balance of no
more than $150,000,000, provided that the rate so determined
shall be rounded upward to the next one-tenth of one percent and
no adjustment shall be required if the change in the rate of the
surtax would be less than one-tenth of one percent.
Sec. 8. [ADJUSTMENT TO WITHHOLDING AND DECLARATIONS.]
For taxable years beginning after December 31, 1984, but
before January 1, 1986, the commissioner of revenue shall adjust
the withholding tables, notwithstanding section 290.92,
subdivision 2a, so that the additional tax imposed by section 7
for the entire year is withheld and remitted by employers as if
the additional tax were imposed at a rate of ten percent during
the first six months of the taxable year.
For the same period, the commissioner shall require that
declarations filed for the first six months of the taxable year
by individuals shall include the additional tax imposed by
section 7.
Sec. 9. Minnesota Statutes 1982, section 290.06,
subdivision 11, is amended to read:
Subd. 11. [CONTRIBUTIONS TO POLITICAL PARTIES AND
CANDIDATES.] In lieu of the deduction provided by section
290.21, subdivision 3, clause (e), A taxpayer may take a credit
against the tax due under this chapter of 50 percent of his
contributions to candidates for elective state or federal public
office and to any political party. The maximum credit for an
individual shall not exceed $50 and, for a married couple filing
jointly or filing a combined return, shall not exceed $100. No
credit shall be allowed under this subdivision for a
contribution to any candidate, other than a candidate for
elective judicial office or federal office, who has not signed
an agreement to limit his campaign expenditures as provided in
section 10A.32, subdivision 3b. For purposes of this
subdivision, a political party means a major political party as
defined in section 200.02, subdivision 7.
This credit shall be allowed only if the contribution is
verified in the manner the commissioner of revenue shall
prescribe.
Sec. 10. Minnesota Statutes 1982, section 290.06,
subdivision 13, is amended to read:
Subd. 13. [GASOLINE AND SPECIAL FUEL TAX REFUND.] Subject
to the provisions of section 296.18, a credit equal to the
amount paid by the taxpayer during the taxable year as excise
tax on gasoline bought and used for any purpose other than use
in motor vehicles or, snowmobiles, or motorboats, or on special
fuel bought and used for any purpose other than use in licensed
motor vehicles may be deducted from any tax due under this
chapter. Any amount by which the credit exceeds the tax due
shall be refunded.
Sec. 11. Minnesota Statutes 1982, section 290.06,
subdivision 14, is amended to read:
Subd. 14. [RESIDENTIAL ENERGY CREDIT.] A credit of 20
percent of the first $10,000 of renewable energy source
expenditures, including the expenditures described in clauses
(a), (b) and (d) if made by an individual taxpayer on a
Minnesota building of six dwelling units or less and
expenditures for biomass conversion equipment described in
clause (c), may be deducted from the tax due under this chapter
for the taxable year in which the expenditures were made. For
purposes of this subdivision, the term "building" shall include
a condominium or townhouse used by the taxpayer as a residence.
In the case of qualifying expenditures incurred in connection
with a building under construction by a contractor, the credit
shall be deducted from the tax liability of the first individual
to purchase the building for use as a principal residence or for
residential rental purposes; the contractor shall not be
eligible for the credit given pursuant to this subdivision for
that expenditure.
A "renewable energy source expenditure" which qualifies
shall include:
(a) Expenditures which qualify for the federal renewable
energy source credit, pursuant to Section 44C of the Internal
Revenue Code of 1954, as amended through December 31, 1981, and
any regulations promulgated pursuant thereto, provided that,
after December 31, 1980, any solar collector included in the
claimed expenditure is certified by the commissioner of energy,
planning and development. A solar collector is a device
designed to absorb incident solar radiation, convert it to
thermal energy, and transfer the thermal energy to a fluid
passing through or in contact with the device. "Solar
collector" shall not include passive solar energy systems as
defined in clause (d);
(b) Expenditures for earth sheltered dwelling units. For
purposes of this credit, an "earth sheltered dwelling unit"
shall mean a structure which complies with applicable building
standards and which is constructed so that:
(1) 80 percent or more of the roof area is covered with a
minimum depth of 12 inches of earth; and
(2) 50 percent or more of the wall area is covered with a
minimum depth of 12 inches of earth; and
(3) Those portions of the structure not insulated with a
minimum of seven feet of earth shall have additional insulation;
(c) Expenditures for biomass conversion equipment located
in Minnesota which produces ethanol, methane or methanol for use
as a gaseous or as a liquid fuel which is not offered for sale;
and
(d) Expenditures for passive solar energy systems. For
purposes of this credit, a "passive solar energy system" is
defined to include systems which utilize elements of the
building and its operable components to heat or cool a building
with the sun's energy by means of conduction, convection,
radiation, or evaporation. A passive system shall include:
(1) Collection aperture, including glazing installed in
south facing walls and roofs; and
(2) Storage element, including thermal mass in the form of
water, masonry, rock, concrete, or other mediums which is
designed to store heat collected from solar radiation.
A passive system may include either or both:
(1) Control and distribution element, including fans,
louvers, and air ducts; or
(2) Retention element, including movable insulation used to
minimize heat loss caused by nocturnal radiation through areas
used for direct solar heat gain during daylight hours.
Eligible passive expenditures shall be for equipment,
materials or devices that are an integral part of the components
listed above and essential to the functioning of a passive
design which qualifies pursuant to rules adopted by the
commissioner of revenue in cooperation with the commissioner of
energy, planning and development. Expenditures for equipment,
materials, or devices which are a part of the normal heating,
cooling, or insulation system of a building are not eligible for
the credit.
If a credit was allowed to a taxpayer under this
subdivision for any prior taxable year, the dollar amount of the
maximum expenditure for which a taxpayer may qualify for a
credit under this subdivision in subsequent years shall be
$10,000 reduced by the amount of expenditures which a credit was
claimed pursuant to this subdivision in prior years. A taxpayer
shall never be allowed to claim more than $10,000 of
expenditures during the duration of the renewable energy credit.
The credit provided in this subdivision shall not be
allowed in a taxable year if the amount of the credit would be
less than $10.
If the credit allowable under this subdivision exceeds the
amount of tax due in a taxable year, the excess credit shall not
be refunded but may be carried forward to the succeeding taxable
year and added to the credit allowable for that year. No amount
may be carried forward to a taxable year beginning after
December 31, 1987.
A shareholder in a family farm corporation and each partner
in a partnership operating a family farm shall be eligible for
the credit provided by this subdivision in the same manner and
to the same extent allowed a joint owner of property under
section 44C (d) of the Internal Revenue Code of 1954, as amended
through December 31, 1981. "Family farm corporation" and
"family farm" have the meanings given in section 500.24.
The credit provided in this subdivision is subject to the
provisions of Section 44C, (c) (7) and (10), and (d) (1) to (3),
and (e), of the Internal Revenue Code of 1954, as amended
through December 31, 1981, and any regulations promulgated
pursuant thereto.
The commissioner of revenue in cooperation with the
commissioner of energy, planning and development shall adopt
rules establishing additional qualifications and definitions for
the credits provided in this subdivision.
Notwithstanding section 290.61, the commissioner of revenue
may request the commissioner of energy, planning and development
to assist in the review and auditing of the information
furnished by the taxpayer for purposes of claiming this credit.
The provisions of section 290.61 shall apply to employees of the
department of energy, planning and development who receive
information furnished by a taxpayer for purposes of claiming
this credit.
The commissioner of energy, planning and development shall
adopt rules establishing the criteria for certification of solar
collectors as required by clause (a). The criteria shall:
(1) Specify the testing procedures to be used in the
evaluation of solar collectors;
(2) Establish minimum levels of collector quality for
safety;
(3) Provide a means to determine the maintainability and
structural integrity of solar collectors;
(4) Establish a system for evaluating and rating the
thermal performance of solar collectors;
(5) Specify the procedures to follow to obtain
certification of a solar collector;
(6) Conform to the maximum extent practicable to the solar
collector certification requirements of other states which have
adopted certification procedures; and
(7) Allow for individual variation so as not to hamper the
development of innovative solar collectors.
The commissioner of energy, planning and development may
adopt temporary rules pursuant to sections 14.29 to 14.36 to
establish this certification procedure.
This subdivision is effective for expenditures made during
taxable years beginning after December 31, 1978 and before
January 1, 1986.
Sec. 12. Minnesota Statutes 1982, section 290.067,
subdivision 1, is amended to read:
Subdivision 1. [AMOUNT OF CREDIT.] A taxpayer may take as
a credit against the tax due from him and his spouse, if any,
under this chapter an amount equal to the dependent care credit
for which he is eligible pursuant to the provisions of section
44A of the Internal Revenue Code of 1954, as amended through
December 31, 1981 1982, except that the applicable percentage of
the employment-related expenses shall be 20 percent and subject
to the other limitations provided in subdivision 2.
Sec. 13. Minnesota Statutes 1982, section 290.067,
subdivision 2, is amended to read:
Subd. 2. [LIMITATIONS.] The credit for expenses incurred
for the care of each dependent shall not exceed $400 $720 in any
taxable year, and the total credit for all dependents of a
claimant shall not exceed $800 $1,440 in a taxable year. The
total credit shall be reduced by five percent of the amount by
which according to the amount of the combined federal adjusted
gross income, plus the ordinary income portion of any lump sum
distribution under section 402(e) of the Internal Revenue Code
of 1954, as amended through December 31, 1981 1982, of the
claimant and his spouse, if any, exceeds $15,000. as follows:
income up to $10,000, $720 maximum for one dependent,
$1,440 for all dependents;
income of $10,001 to $11,000, $670 maximum for one
dependent, $1,340 for all dependents;
income of $11,001 to $12,000, $620 maximum for one
dependent, $1,240 for all dependents;
income of $12,001 to $13,000, $570 maximum for one
dependent, $1,140 for all dependents;
income of $13,001 to $15,000, $520 maximum for one
dependent, $1,040 for all dependents;
income of $15,001 to $22,000, $400 maximum for one
dependent, $800 for all dependents, reduced by five percent of
the amount by which the income exceeds $15,000, plus $70;
income of $22,001 to $23,000, $70 for one dependent, $140
for all dependents;
income of $23,001 to $24,000, $20 for one dependent, $40
for all dependents;
$24,001 and over, no credit.
A married claimant shall file his income tax return for the
year for which he claims the credit either jointly or separately
on one form with his spouse. In the case of a married claimant
only one spouse may claim the credit.
The commissioner shall construct and make available to
taxpayers tables showing the amount of the credit at various
levels of income and expenses. The tables shall follow the
schedule contained in this subdivision, except that the
commissioner may graduate the transitions between expenses and
income brackets.
Sec. 14. Minnesota Statutes 1982, section 290.07,
subdivision 1, is amended to read:
Subdivision 1. [ANNUAL ACCOUNTING PERIOD.] Net income and
taxable net income shall be computed upon the basis of the
taxpayer's annual accounting period. If a taxpayer has no
annual accounting period, or has one other than a fiscal year,
as heretofore defined, the net income and taxable net income
shall be computed on the basis of the calendar year. Taxpayers
shall employ the same accounting period on which they report, or
would be required to report, their net income under the federal
income tax act Internal Revenue Code. The commissioner shall
provide by rule for the determination of the accounting period
for taxpayers who file a combined report under section 290.34,
subdivision 2, when members of the group use different
accounting periods for federal income tax purposes. Unless the
taxpayer changes its accounting period for federal purposes, the
due date of the return is not changed.
A taxpayer may change his accounting period only with the
consent of the commissioner. In case of any such change, he
shall pay a tax for the period not included in either his former
or newly adopted taxable year, computed as provided in section
290.32.
Sec. 15. [290.088] [DEDUCTION FOR FEDERAL INCOME TAXES.]
Adjusted gross income for individuals, estates, and trusts
shall be computed by allowing to individuals, estates, and
trusts a deduction from gross income for federal income taxes.
The amount of the deduction is determined under section 290.18,
subdivision 2.
Sec. 16. [290.089] [DEDUCTIONS FROM GROSS INCOME;
INDIVIDUALS.]
Subdivision 1. [AMOUNT ALLOWED.] In computing the net
income of individuals, an amount determined pursuant to
subdivision 2 or 3 is allowed as a deduction.
Subd. 2. [ITEMIZED DEDUCTIONS.] Subject to the provisions
of section 290.18, subdivision 1, an amount equal to the amount
determined pursuant to section 63(f) of the Internal Revenue
Code is allowed with the following adjustments:
(a) Add the amount paid to others not to exceed $500 for
each dependent in grades K to 6 and $700 for each dependent in
grades 7 to 12, for tuition, textbooks, and transportation of
each dependent in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or
Wisconsin, wherein a resident of this state may legally fulfill
the state's compulsory attendance laws, which is not operated
for profit, and which adheres to the provisions of the Civil
Rights Act of 1964 and chapter 363. As used in this clause,
"textbooks" includes books and other instructional materials and
equipment used in elementary and secondary schools in teaching
only those subjects legally and commonly taught in public
elementary and secondary schools in this state. "Textbooks"
does not include instructional books and materials used in the
teaching of religious tenets, doctrines, or worship, the purpose
of which is to instill such tenets, doctrines, or worship, nor
does it include books or materials for, or transportation to,
extracurricular activities including sporting events, musical or
dramatic events, speech activities, driver's education, or
similar programs;
(b) Add the amount of Minnesota and other states' estate or
inheritance taxes which were allowed as a deduction under
section 290.077, subdivision 4, on income in respect of a
decedent;
(c) Add the amount by which the deduction for the taxable
year allowed pursuant to subdivision 4 exceeds the amount
determined pursuant to section 222 of the Internal Revenue Code;
(d) Subtract income taxes paid or accrued within the
taxable year under this chapter;
(e) Subtract income taxes paid to any other state or to any
province or territory of Canada if a credit is allowed for the
taxes under section 290.081;
(f) If the deduction computed under section 164 of the
Internal Revenue Code is not reduced by the amount of the credit
or refund allowed under chapter 290A, subtract that amount;
(g) Subtract the amount of interest on investment
indebtedness paid or accrued in a taxable year beginning before
January 1, 1981, which has been carried forward and is allowed
as a deduction in the taxable year under section 163(d) of the
Internal Revenue Code;
(h) Subtract the amount of charitable contributions
deducted under section 170 of the Internal Revenue Code that (i)
exceeds the following limitations: (A) an overall limit of 30
percent of the taxpayer's Minnesota gross income which, for
purposes of this paragraph, shall include the ordinary income
portion of a lump sum distribution as defined in section 402(e)
of the Internal Revenue Code; and (B) the aggregate of
contributions to organizations described in section 290.21,
subdivision 3, clause (c) shall not exceed 20 percent of the
taxpayer's Minnesota gross income; or (ii) was deducted as a
carryover under section 170(d) of the Internal Revenue Code.
Subd. 3. [STANDARD DEDUCTION.] In lieu of the deductions
provided in subdivision 2, an individual may claim or be allowed
a standard deduction as follows:
(a) Subject to modification pursuant to clause (b), the
standard deduction shall be an amount equal to ten percent of
the adjusted gross income of the taxpayer, up to a maximum
deduction of $2,250.
In the case of a husband and wife, the standard deduction
shall not be allowed to either if the net income of one of the
spouses is determined without regard to the standard deduction.
(b) The maximum amount of the standard deduction shall be
adjusted for inflation in the same manner as provided in section
290.06, subdivision 2d, for the expansion of the taxable net
income brackets.
(c) The commissioner of revenue may establish a standard
deduction tax table incorporating the rates set forth in section
290.06, subdivision 2c, and the standard deduction. The tax of
any individual taxpayer whose adjusted gross income is less than
$20,000 shall, if an election is made not to itemize nonbusiness
deductions, be computed in accordance with tables prepared and
issued by the commissioner of revenue. The tables shall be
prepared to reflect the allowance of the standard deduction and
the personal and dependent credits.
Subd. 4. [ADOPTION EXPENSES.] An individual taxpayer is
allowed a deduction for the expenses incurred during the taxable
year arising from the adoption of one or more children,
including attorney fees, court costs, social or adoption agency
fees, and other necessary costs in connection with an adoption;
the total expense, however, shall not exceed $1,250 per child
adopted. If under the taxpayer's system of accounting, the
expense is deductible in two different taxable years, the total
deduction for the two years shall not exceed $1,250 per child.
Subd. 5. [COMPUTATION OF MINNESOTA DEDUCTIONS.] An
individual who does not itemize deductions for federal purposes
but does itemize deductions for Minnesota purposes shall compute
that person's deductions for Minnesota as if that person had
itemized their deductions for federal purposes under the
provisions of subdivision 2. The individual shall be allowed as
an itemized deduction for Minnesota the charitable contributions
claimed as a deduction for federal purposes under the provisions
of section 170(i) of the Internal Revenue Code.
Subd. 6. [SEPARATE RETURNS ON SINGLE FORM.] In the case of
a husband and wife who filed a joint federal income tax return
but filed separate Minnesota income tax returns, the amount of
the itemized deductions that shall be allowed shall be the same
amount that was allowed on their joint federal income tax return
and as modified by subdivision 2. The deductions shall be
divided between them based on who incurred and paid the amount
which qualifies as a deduction. Amounts which qualify as a
deduction and which are paid from joint funds may be divided
between the spouses as they elect.
Subd. 7. [INTERNAL REVENUE CODE.] The Internal Revenue
Code referred to in any of the subdivisions of this section
means the Internal Revenue Code of 1954, as amended through
March 12, 1983.
Sec. 17. Minnesota Statutes 1982, section 290.09,
subdivision 1, is amended to read:
Subdivision 1. [LIMITATIONS.] (a) Except as provided in
this subdivision, the following deductions provided in this
section from gross income shall only be allowed to corporations
in computing net income, provided that any item which was
deducted in arriving at gross income under the provisions of
section 290.01, subdivisions 20 to 20f, shall not be again
deducted under this section.
(b) Property taxes may not be deducted under this section
if
(1) The taxes are attributable to a trade or business
carried on by an individual, or
(2) The taxes are expenses for the production of income
which are paid or incurred by an individual; and which are not
allowed as a deduction under section 164 of the Internal Revenue
Code of 1954, as amended through December 31, 1981.
(c) Interest and depreciation attributable to rental
residential property may not be deducted under this section if
the property does not comply with the requirements of Laws 1982,
chapter 523, article 7, section 3. The provisions of
subdivisions 2, clause (c), 28, and 29 shall also apply to
individuals, estates, and trusts to the extent provided in those
subdivisions.
Sec. 18. Minnesota Statutes 1982, section 290.09,
subdivision 2, is amended to read:
Subd. 2. [TRADE OR BUSINESS EXPENSES; EXPENSES FOR
PRODUCTION OF INCOME.] (a) In General. There shall be allowed
as a deduction all the ordinary and necessary expenses paid or
incurred during the taxable year in carrying on any trade or
business, including
(1) A reasonable allowance for salaries or other
compensation for personal services actually rendered;
(2) Traveling expenses (including amounts expended for
meals and lodging other than amounts which are lavish or
extravagant under the circumstances) while away from home in the
pursuit of a trade or business; and
(3) Rentals or other payments required to be made as a
condition to the continued use or possession, for purposes of
the trade or business, of property to which the taxpayer has not
taken or is not taking title or in which he has no equity. For
purposes of the preceding sentence, the place of residence of a
member of congress within the state shall be considered his
home, but amounts expended by such members within each taxable
year for living expenses shall not be deductible for income tax
purposes in excess of $3,000.
(b) Expenses for Production of Income. In the case of an
individual, there shall be allowed as a deduction all the
ordinary and necessary expenses paid or incurred during the
taxable year.
(1) For the production or collection of income;
(2) For the management, conservation, or maintenance of
property held for the production of income; or
(3) In connection with the determination, collection, or
refund of any tax.
(c) Actual campaign expenditures in an amount not to exceed
one-third of the salary of the office sought, for the year the
election is held, by the candidate, but no less than $100, not
reimbursed, which have been personally paid by a candidate for
public office;
(d) No deduction shall be allowed under this subdivision
for any contribution or gift which would be allowable as a
deduction under section 290.21 were it not for the percentage
limitations set forth in such section;
(e) (c) All expense money paid by the legislature to
legislators;
(f) The provisions of section 280A (disallowing certain
expenses in connection with the business use of the home and
rental of vacation homes) of the Internal Revenue Code of 1954,
as amended through December 31, 1981, shall be applicable in
determining the availability of any deduction under this
subdivision.
(g) (d) Entertainment, amusement, or recreation expenses
shall be allowed under this subdivision only to the extent that
they qualify as a deduction under section 274 of the Internal
Revenue Code of 1954, as amended through December 31, 1981.
Sec. 19. Minnesota Statutes 1982, section 290.09,
subdivision 3, as amended by Laws 1982, Third Special Session
chapter 1, article 7, section 1, is amended to read:
Subd. 3. [INTEREST.] (a) All interest paid or accrued
within the taxable year on indebtedness, except as hereinafter
provided.
(b) Interest paid or accrued within the taxable year on
indebtedness incurred or continued to purchase or carry
obligations or securities the income from which is excludable
from gross income under sections 290.01, subdivisions 20 to 20f
or section 290.08, or shares of a regulated investment company
which during the taxable year of the holder thereof distributes
Minnesota exempt-interest dividends as defined in section
290.01, subdivision 27, or on indebtedness described in section
264(a)(2) and (3), (b) and (c) (relating to life insurance) of
the Internal Revenue Code of 1954, as amended through December
1, 1982 shall not be allowed as a deduction.
(c) If personal property or educational services are
purchased under a contract the provisions of section 163(b) of
the Internal Revenue Code of 1954, as amended through December
1, 1982 shall apply.
(d) A cash basis taxpayer may elect to deduct interest as
it accrues on a reverse mortgage loan as defined in section
47.58, subdivision 1, rather than when it is actually paid. This
election must be made, if at all, in the first taxable year in
which it is available to the cash basis taxpayer and, if made,
shall be binding on the taxpayer for each subsequent taxable
year until maturity of the loan.
(e) In the case of a taxpayer other than a corporation, the
amount of interest on investment indebtedness allowable as a
deduction shall be allowed and limited as set forth in section
163(d) of the Internal Revenue Code of 1954, as amended through
December 1, 1982. The limitation prescribed in section
163(d)(1)(A) for married individuals who file separate returns
shall also apply to married individuals who file separately on
one return.
(f) A taxpayer may not deduct interest on indebtedness
incurred or continued to purchase or carry obligations or
shares, or to make deposits or other investments, the interest
on which is described in section 116(c) of the Internal Revenue
Code of 1954, as amended through December 1, 1982 to the extent
such interest is excludable from gross income under section 116
of the Internal Revenue Code of 1954 as amended through December
1, 1982. Interest and carrying costs in the case of straddles
shall be treated as provided in section 263(g) of the Internal
Revenue Code of 1954, as amended through December 1, 1982. The
deduction of original issue discount shall be allowed as
provided in section 163(e) of the Internal Revenue Code of 1954,
as amended through December 1, 1982.
(g) (e) No deduction shall be allowed for interest on any
registration-required obligation unless the obligation is in
registered form as provided in section 163(f) of the Internal
Revenue Code of 1954, as amended through December 1, 1982.
Sec. 20. Minnesota Statutes 1982, section 290.09,
subdivision 4, is amended to read:
Subd. 4. [TAXES.] Taxes paid or accrued within the taxable
year, except (a) income or franchise taxes imposed by this
chapter and income or franchise taxes paid to any other state or
to any province or territory of Canada for which a credit is
allowed under section 290.081; (b) taxes assessed against local
benefits of a kind deemed in law to increase the value of the
property assessed; (c) inheritance, gift and estate taxes except
as provided in section 290.077, subdivision 4; (d) cigarette and
tobacco products excise tax imposed on the consumer; (e) that
part of Minnesota property taxes for which a credit or refund is
claimed and allowed under chapter 290A; (f) federal income taxes
(including the windfall profit tax on domestic crude oil), by
corporations, national and state banks; (g) mortgage registry
tax; (h) real estate transfer tax; (i) federal telephone tax;
(j) federal transportation tax; and (k) (d) tax paid by any
corporation or national or state bank to any foreign country or
possession of the United States to the extent that a credit
against federal income taxes is allowed under the provisions of
the Internal Revenue Code of 1954, as amended through December
31, 1981. If the taxpayer's foreign tax credit consists of both
foreign taxes deemed paid and foreign taxes actually paid or
withheld, it will be conclusively presumed that foreign taxes
deemed paid were first used by the taxpayer in its foreign tax
credit. Minnesota gross income shall include the amount of
foreign tax paid which had been allowed as a deduction in a
previous year, provided such foreign tax is later allowed as a
credit against federal income tax.
Taxes imposed upon a shareholder's interest in a
corporation which are paid by the corporation without
reimbursement from the shareholder shall be deductible only by
such corporation.
Property taxes shall be allowed as a deduction to the same
taxpayer and in the same manner as provided in section 164 of
the Internal Revenue Code of 1954, as amended through December
31, 1981, notwithstanding the provisions of section 272.31.
Sec. 21. Minnesota Statutes 1982, section 290.09,
subdivision 5, is amended to read:
Subd. 5. [LOSSES.] (a) [GENERAL RULE.] There shall be
allowed as a deduction any loss sustained during the taxable
year and not compensated for by insurance or otherwise.
(b) [AMOUNT OF DEDUCTION.] For purposes of paragraph (a),
the basis for determining the amount of the deduction for any
loss shall be the adjusted basis provided in this chapter for
determining the loss from the sale or other disposition of
property.
(c) [LIMITATION OF LOSSES OF INDIVIDUALS.] In the case of
an individual, the deduction under paragraph (a) shall be
limited to
(1) Losses incurred in a trade or business;
(2) Losses incurred in any transaction entered into for
profit, though not connected with a trade or business; and
(3) Losses of property not connected with a trade or
business, if such losses arise from fire, storm, shipwreck, or
other casualty, or from theft to the extent they are deductible
pursuant to the provisions of section 165 (c) (3) of the
Internal Revenue Code of 1954, as amended through December 31,
1981. No loss described in this paragraph shall be allowed if,
at the time of the filing of the return, such loss has been
claimed for inheritance or estate tax purposes.
(d) [WAGERING LOSSES.] Losses from wagering transactions
shall be allowed only to the extent of the gains from such
transactions. No loss from pari-mutuel betting shall be allowed
except to the extent of verified receipts and the sworn
testimony of at least one witness other than the taxpayer or his
spouse.
(e) (d) [THEFT LOSSES.] For purposes of paragraph (a), any
loss arising from theft shall be treated as sustained during the
taxable year in which the taxpayer discovers such loss.
(f) (e) [CAPITAL LOSSES.] Losses from sales or exchanges of
capital assets shall be allowed only to the extent allowed in
section 290.16.
(g) (f) [WORTHLESS SECURITIES.] (1) [GENERAL RULE.] If any
security which is a capital asset becomes worthless during the
taxable year, the loss resulting therefrom shall, for purposes
of this chapter, be treated as a loss from the sale or exchange,
on the last day of the taxable year, of a capital asset.
(2) [SECURITY DEFINED.] For purposes of this paragraph, the
term "security" means:
(A) A share of stock in a corporation;
(B) A right to subscribe for, or to receive, a share of
stock in a corporation; or
(C) A bond, debenture, note, or certificate, or other
evidence of indebtedness, issued by a corporation or by a
government or political subdivision thereof, with interest
coupons or in registered form.
(3) [SECURITIES IN AFFILIATED CORPORATION.] For purposes of
paragraph (1), any security in a corporation affiliated with a
taxpayer which is a domestic corporation shall not be treated as
a capital asset. For purposes of the preceding sentence, a
corporation shall be treated as affiliated with the taxpayer
only if:
(A) At least 80 percent of each class of its stock is owned
directly by the taxpayer, and
(B) More than 90 percent of the aggregate of its gross
receipts for all taxable years has been from sources other than
royalties, rents (except rents derived from rental from
properties to employees of the corporation in the ordinary
course of its operating business), dividends, interest (except
interest received on deferred purchase price of operating assets
sold), annuities, and gains from sales or exchanges of stocks
and securities. In computing gross receipts for purposes of the
preceding sentence, gross receipts from sales or exchanges of
stock and securities shall be taken into account only to the
extent of gains therefrom. The definitions contained in section
165(g) of the Internal Revenue Code of 1954, as amended through
January 15, 1983, shall apply. No deduction shall be allowed
for any loss sustained on any registration-required obligation
as defined in and except as provided in section 165(j) of the
Internal Revenue Code of 1954, as amended through January 15,
1983.
(h) (g) [DISASTER LOSSES.] (1) Notwithstanding the
provisions of (a), any loss
(A) attributable to a disaster which occurs during the
period following the close of the taxable year and on or before
the time prescribed by law for filing the income tax return for
the taxable year (determined without regard to any extension of
time), and
(B) occurring in an area subsequently determined by the
President of the United States to warrant assistance by the
Federal Government under the provisions of the Federal Disaster
Relief Act of 1974, at the election of the taxpayer, may shall
be deducted for the taxable year immediately preceding the
taxable year in which the disaster occurred. Such election may
be made This provision shall apply only if a similar an election
has been made under the provisions of Section 165(h) 165(i) of
the Internal Revenue Code of 1954, as amended through December
31, 1981 January 15, 1983 for federal income tax purposes. Such
deduction allowed in the preceding taxable year shall not be in
excess of so much of the loss as would have been deductible in
the taxable year in which the casualty occurred exceed the
uncompensated amount determined on the basis of the facts
existing at the date the taxpayer claims the loss. If an
election is made under this paragraph, the casualty resulting in
the loss will be deemed to have occurred in the taxable year for
which the deduction is claimed.
(2) The commissioner is authorized to prescribe regulations
providing the time and manner of making an election to claim a
disaster loss under this clause.
(i) [ELECTION.] In lieu of the deduction allowed by (a) or
(h) any loss not compensated for by insurance or otherwise:
(1) Attributable to storm or other natural causes or fire,
may, at the election of the taxpayer, be claimed as a deduction
in the taxable year in which said loss is sustained or in the
preceding taxable year.
(2) In the event that under the provisions of this
paragraph, a taxpayer claims the same disaster loss deduction or
a net operating loss deduction resulting from the inclusion of a
casualty loss in the calculation of such deduction in different
taxable years for state and federal purposes, appropriate
modifications shall be allowed or required for taxable years
affected in order to prevent duplication or omission of such
deduction.
(3) The commissioner is authorized to prescribe regulations
providing the time and manner to make an election to claim a
loss under the provisions of this paragraph and for the filing
of an amended return or claim for refund.
Sec. 22. Minnesota Statutes 1982, section 290.09,
subdivision 29, is amended to read:
Subd. 29. [DEDUCTIONS ATTRIBUTABLE TO FARMING.] (a)
[DEFINITIONS.] For purposes of this subdivision, income and
gains and expenses and losses shall be considered as "arising
from a farm" if such items are received or incurred in
connection with cultivating the soil, or in connection with
raising or harvesting any agricultural or horticultural
commodity, including the raising, shearing, feeding, caring for,
training, and management of livestock, including horses for
horse racing, bees, poultry, and fur-bearing animals and
wildlife, and all operations incident thereto, including but not
limited to the common use of "hedging."
(b) [DEDUCTIONS LIMITED.] Except as provided in this
subdivision, expenses and losses, except for interest and taxes,
arising from a farm shall not be allowed as deductions in excess
of income and gains arising from a farm.
(c) [DEDUCTIONS ALLOWED; CARRYOVER DEDUCTIONS.] Expenses
and losses arising from a farm or farms shall be allowed as
deductions up to the amount of the income and gains arising from
a farm or farms in any taxable year, plus the first $15,000
$30,000 of nonfarm gross income, or nonfarm taxable net income
in the case of a corporation, provided however that in any case
where nonfarm income exceeds $15,000 $30,000, the maximum
allowable amount of $15,000 $30,000 shall be reduced by twice
the an amount by which equal to the nonfarm income exceeds the
amount in excess of $15,000 $30,000 multiplied by three. For
this purpose and for the purpose of applying the limitation in
the following paragraph regarding the application of any
carryback or carryforward, the term gross income shall include
the ordinary income portion of a lump sum distribution as
defined in section 402(e) of the Internal Revenue Code of 1954,
as amended through December 31, 1981, and no deduction shall be
allowed for two-earner married couples as provided in section
221 of the Internal Revenue Code of 1954, as amended through
December 31, 1981. Any remaining balance of the deductions
shall be carried back three years and carried forward five
years, in chronological order, provided, however, that in any
case in which any individual, estate or trust which elects a net
operating loss carryforward under section 172(b)(3)(C) of the
Internal Revenue Code of 1954, as amended through December 31,
1981, such losses shall not be carried back but shall only be
carried forward.
Current expenses and losses shall be utilized as deductions
in any taxable year, to the extent herein allowable, prior to
the application of any carryback or carryover deductions. In
any event, the combined amounts of such current expenses and
losses and carryback or carryover deductions shall be allowed as
deductions up to the amount of the income and gains arising from
a farm or farms in any taxable year, plus the first $15,000
$30,000 of nonfarm gross income, or nonfarm taxable net income
in the case of a corporation, provided however that in any case
where nonfarm income exceeds $15,000 $30,000, the maximum
allowable amount of $15,000 $30,000 shall be reduced by twice
the an amount by which equal to the nonfarm income exceeds the
amount in excess of $15,000 $30,000 multiplied by three.
(d) [SHAREHOLDERS SEPARATE ENTITIES.] For purposes of this
subdivision, individual shareholders of an electing small
business corporation shall be considered separate entities.
(e) [SPECIAL PERIOD OF LIMITATION WITH RESPECT TO FARM LOSS
LIMITATION CARRYBACKS.] For the purposes of sections 290.46 and
290.50, if the claim for refund relates to an overpayment
attributable to a farm loss limitation carryback under this
subdivision, in lieu of the period of limitation prescribed in
sections 290.46 and 290.50, the period of limitation shall be
that period which ends with the expiration of the 15th day of
the 46th month (or the 45th month, in the case of a corporation)
following the end of the taxable year of the farm loss which
results in the carryback.
(f) [INTEREST ON CLAIMS.] In any case in which a taxpayer
is entitled to a refund in a carryback year due to the carryback
of a farm loss, interest shall be computed only from the end of
the taxable year in which the loss occurs.
(g) [ORDER OF APPLICATION.] The application of this
subdivision shall be made after applying any limitation to out
of state losses contained in section 290.17.
Sec. 23. Minnesota Statutes 1982, section 290.14, is
amended to read:
290.14 [GAIN OR LOSS ON DISPOSITION OF PROPERTY, BASIS.]
Except as otherwise provided in this chapter, the basis for
determining the gain or loss from the sale or other disposition
of property acquired on or after January 1, 1933, shall be the
cost to the taxpayer of such property, with the following
exceptions:
(1) If the property should have been included in the last
inventory, it shall be the last inventory value thereof;
(2) If the property was acquired by gift, it shall be the
same as it would be if it were being sold or otherwise disposed
of by the last preceding owner not acquiring it by gift; if the
facts required for this determination cannot be ascertained, it
shall be the fair market value as of the date, or approximate
date, of acquisition by the last preceding owner, as nearly as
the requisite facts can be ascertained by the commissioner;
(3) If the property was acquired by gift through an inter
vivos transfer in trust, it shall be the same as it would be if
it were being sold or otherwise disposed of by the grantor;
(4) Except as otherwise provided in this clause, the basis
of property in the hands of a person acquiring the property from
a decedent or to whom the property passed from a decedent shall,
if not sold, exchanged or otherwise disposed of before the
decedent's death by the person, be the fair market value of the
property at the date of decedent's death or, in the case of an
election under section 2032 (relating to alternate valuation) of
the Internal Revenue Code of 1954, as amended through December
31, 1981, its valuation at the applicable valuation date
prescribed by that section, or in the case of an election under
section 2032A (relating to valuation of farm real property) of
the Internal Revenue Code of 1954, as amended through December
31, 1981, its value determined by that section.
For the purposes of the preceding paragraph, the following
property shall be considered to have been acquired from or to
have passed from the decedent:
(a) Property acquired by bequest, devise, or inheritance,
or by the decedent's estate from the decedent;
(b) Property transferred by the decedent during his
lifetime in trust to pay the income for life to or on the order
or direction of the decedent, with the right reserved to the
decedent at all times before his death to revoke the trust;
(c) Property transferred by the decedent during his
lifetime in trust to pay the income for life to or on the order
or direction of the decedent with the right reserved to the
decedent at all times before his death to make any change in the
enjoyment thereof through the exercise of a power to alter,
amend, or terminate the trust;
(d) Property passing without full and adequate
consideration under a general power of appointment exercised by
the decedent by will;
(e) In the case of a decedent's dying after December 31,
1956, property acquired from the decedent by reason of death,
form of ownership, or other conditions (including property
acquired through the exercise or non-exercise of a power of
appointment), if by reason thereof the property is required to
be included in determining the value of the decedent's gross
estate for Minnesota inheritance or estate tax purposes. In
this case, if the property is acquired before the death of the
decedent, the basis shall be the amount determined under the
first paragraph of this clause reduced by the amount allowed to
the taxpayer as deductions in computing taxable net income under
this chapter or prior Minnesota income tax laws for exhaustion,
wear and tear, obsolescence, amortization, and depletion on the
property before the death of the decedent. The basis shall be
applicable to the property commencing on the death of the
decedent. This paragraph shall not apply to annuities and
property described in paragraphs (a), (b), (c) and (d) of this
clause.
This clause shall not apply to property which constitutes a
right to receive an item of income in respect of a decedent
under section 290.077.
(5) If substantially identical property was acquired in the
place of stocks or securities which were sold or disposed of and
in respect of which loss was not allowed as a deduction under
section 16 or section 290.09, subdivision 5, the basis in the
case of property so acquired shall be the same as that provided
in section 1091 of the Internal Revenue Code of 1954, as amended
through December 31, 1981.
(6) Neither the basis nor the adjusted basis of any portion
of real property shall, in the case of a lessor of the property,
be increased or diminished on account of income derived by the
lessor in respect of the property and excludable from gross
income under section 290.08, subdivision 14.
If an amount representing any part of the value of real
property attributable to buildings erected or other improvements
made by a lessee in respect of the property was included in
gross income of the lessor for any taxable year beginning before
January 1, 1943, the basis of each portion of the property shall
be properly adjusted for the amount included in gross income.
(7) If the property was acquired by the taxpayer as a
transfer of property in exchange for the release of the
taxpayer's marital rights, the basis of the property shall be
the same as it would be if it were being sold or otherwise
disposed of by the person who transferred the property to the
taxpayer.
(8) The basis of property subject to the provisions of
section 1034 of the Internal Revenue Code of 1954, as amended
through December 31, 1981 (relating to the rollover of gain on
sale of principal residence) shall be the same as the basis for
federal income tax purposes. The basis shall be increased by
the amount of gain realized on the sale of a principal residence
outside of Minnesota, while a nonresident of this state, which
gain was not recognized because of the provisions of section
1034.
Sec. 24. Minnesota Statutes 1982, section 290.17,
subdivision 2, is amended to read:
Subd. 2. [OTHER TAXPAYERS.] In the case of taxpayers not
subject to the provisions of subdivision 1, items of gross
income shall be assigned to this state or other states or
countries in accordance with the following principles:
(1) (a) The entire income of all resident or domestic
taxpayers from compensation for labor or personal services, or
from a business consisting principally of the performance of
personal or professional services, shall be assigned to this
state, and the income of nonresident taxpayers from such sources
shall be assigned to this state if, and to the extent that, the
labor or services are performed within it; all other income from
such sources shall be treated as income from sources without
this state.
(b) In the case of an individual who is a nonresident of
Minnesota and who is an athlete or entertainer, income from
compensation for labor or personal services performed within
this state shall be determined in the following manner.
(i) The amount of income to be assigned to Minnesota for an
individual who is a nonresident salaried athletic team employee
shall be determined by using a fraction in which the denominator
contains the total number of days in which the individual is
under a duty to perform for the employer, and the numerator is
the total number of those days spent in Minnesota. In order to
eliminate the need to file state or provincial income tax
returns in several states or provinces, Minnesota will exclude
from income any income assigned to Minnesota under the
provisions of this clause for a nonresident athlete who is
employed by an athletic team whose operations are not based in
this state if the state or province in which the athletic team
is based provides a similar income exclusion. If the state or
province in which the athletic team's operations are based does
not have an income tax on an individual's personal service
income, it will be deemed that that state or province has a
similar income exclusion. As used in the preceding sentence,
the term "province" means a province of Canada.
(ii) The amount of income to be assigned to Minnesota for
an individual who is a nonresident, and who is an athlete not
listed in clause (i), or who is an entertainer, for that
person's athletic or entertainment performance in Minnesota
shall be determined by assigning to this state all income from
performances or athletic contests in this state.
(2) Income from the operation of a farm shall be assigned
to this state if the farm is located within this state and to
other states only if the farm is not located in this state.
Income from winnings on Minnesota pari-mutuel betting tickets
shall be assigned to this state. Income and gains received from
tangible property not employed in the business of the recipient
of such income or gains, and from tangible property employed in
the business of such recipient if such business consists
principally of the holding of such property and the collection
of the income and gains therefrom, shall be assigned to this
state if such property has a situs within it, and to other
states only if it has no situs in this state. Income or gains
from intangible personal property not employed in the business
of the recipient of such income or gains, and from intangible
personal property employed in the business of such recipient if
such business consists principally of the holding of such
property and the collection of the income and gains therefrom,
wherever held, whether in trust, or otherwise, shall be assigned
to this state if the recipient thereof is domiciled within this
state; income or gains from intangible personal property
wherever held, whether in trust or otherwise shall be assigned
to this state if the recipient of such income or gains is
domiciled within this state, or if the grantor of any trust is
domiciled within this state and such income or gains would be
taxable to such grantor under section 290.28 or 290.29;
(3) Income derived from carrying on a trade or business,
including in the case of a business owned by natural persons the
income imputable to the owner for his services and the use of
his property therein, shall be assigned to this state if the
trade or business is conducted wholly within this state, and to
other states if conducted wholly without this state. This
provision shall not apply to business income subject to the
provisions of clause (1);
(4) When a trade or business is carried on partly within
and partly without this state, the entire income derived from
such trade or business, including income from intangible
property employed in such business and including, in the case of
a business owned by natural persons, the income imputable to the
owner for his services and the use of his property therein,
shall be governed, except as otherwise provided in sections
290.35 and 290.36, by the provisions of section 290.19,
notwithstanding any provisions of this section to the contrary.
This shall not apply to business income subject to the
provisions of clause (1), nor shall it apply to income from the
operation of a farm which is subject to the provisions of clause
(2). For the purposes of this clause, a trade or business
located in Minnesota is carried on partly within and partly
without this state if tangible personal property is sold by such
trade or business and delivered or shipped to a purchaser
located outside the state of Minnesota.
If the trade or business carried on wholly or partly in
Minnesota is part of a unitary business, the entire income of
that unitary business shall be subject to apportionment under
section 290.19 except for business income subject to the
provisions of clause (1) and farm income subject to the
provisions of clause (2). The term "unitary business" shall
mean a number of business activities or operations which are of
mutual benefit, dependent upon, or contributory to one another,
individually or as a group. Unity shall be presumed whenever
there is unity of ownership, operation, and use, evidenced by
centralized management or executive force, centralized
purchasing, advertising, accounting, or other controlled
interaction but the absence of these centralized activities will
not necessarily evidence a nonunitary business. Unity of
ownership will not be deemed to exist unless the corporation
owns more than 50 percent of the voting stock of the other
corporation when a corporation is involved unless that
corporation is a member of a group of two or more corporations
more than 50 percent of the voting stock of each member of the
group is directly or indirectly owned by a common owner or by
common owners, either corporate or noncorporate, or by one or
more of the member corporations of the group.
The entire income of a unitary business, including all
income from each activity, operation or division, shall be
subject to apportionment as provided in section 290.19. None of
the income of a unitary business shall be considered as derived
from any particular source and none shall be allocated to any
particular place except as provided by the applicable
apportionment formula.
In determining whether or not intangible property is
employed in a unitary business carried on partly within and
partly without this state so that income derived therefrom is
subject to apportionment under section 290.19 the following
rules and guidelines shall apply.
(a) Intangible property is employed in a business if the
business entity owning intangible property holds it as a means
of furthering the business operation of which a part is located
within the territorial confines of this state.
(b) Where a business operation conducted in Minnesota, is
owned by a business entity which carries on business activity
outside of the state different in kind from that conducted
within this state, and such other business is conducted entirely
outside the state, it will be presumed that the two business
operations are unitary in nature, interrelated, connected and
interdependent unless it can be shown to the contrary.
(5) In the case of a nonresident who is liable for payment
of a penalty for having withdrawn funds from an individual
housing account established pursuant to section 290.08,
subdivision 25, the amount so withdrawn and for which a
deduction was allowed shall be an item of income assignable to
this state, and the penalty tax of ten percent shall remain an
additional liability of that taxpayer.
(6) For purposes of this section, amounts received by a
nonresident from the United States, its agencies or
instrumentalities, the Federal Reserve Bank, the state of
Minnesota or any of its political or governmental subdivisions,
or a Minnesota volunteer fireman's relief association, by way of
payment as a pension, public employee retirement benefit, or any
combination thereof, or as a retirement or survivor's benefit
made from a plan qualifying under section 401, 403, 404, 405,
408, 409 or 409A of the Internal Revenue Code of 1954, as
amended through December 31, 1981, are not considered income
derived from carrying on a trade or business or from performing
personal or professional services in Minnesota, and are not
taxable under this chapter.
(7) (6) All other items of gross income shall be assigned
to the taxpayer's domicile.
Sec. 25. Minnesota Statutes 1982, section 290.18,
subdivision 1, is amended to read:
Subdivision 1. [TAXABLE NET INCOME.] (a) For resident
individuals, taxable net income shall be the same as net income.
(b) For all other taxpayers, the taxable net income shall,
except insofar as section 290.19 is applicable, be computed by
deducting from the gross income assignable to this state under
section 290.17 deductions of the kind permitted by section
sections 16, 290.09, and section 62 of the Internal Revenue Code
of 1954, as amended through March 12, 1983, in accordance with
the following provisions:
(1) Such deductions shall be allowed to the extent that
they are connected with and allocable against the production or
receipt of such gross income assignable to this state;
(2) That proportion of such deductions, so far as not
connected with and allocable against the production or receipt
of such gross income assignable to this state and so far as not
connected with and allocable against the production or receipt
of gross income assignable to other states or countries and so
far as not entering into the computation of the net income
assignable to this state under section 290.19, shall be allowed
which the taxpayer's gross income from sources within this
state, as determined under section 290.17, subdivision 2,
clauses (1), (2), (3), (5), and (7) (6), bears to his gross
income from all sources, including that entering into the
computations provided for by section 290.19; provided that taxes
of the kind deductible under section 290.09, subdivision 4,
shall, so far as within the description of deductions deductible
under this clause, be deductible in their entirety if paid to
the state of Minnesota, or any of its subdivisions authorized to
impose such taxes, and thereupon be excluded in making the
computation of deductions, as in this clause provided.
Sec. 26. Minnesota Statutes 1982, section 290.18,
subdivision 2, is amended to read:
Subd. 2. [FEDERAL INCOME TAX PAYMENTS AND REFUNDS.] The
adjusted gross income shall be computed by deducting from the
gross income assignable to this state under section 290.17, the
deduction for allowable federal income taxes determined under
the provisions of sections 290.09, subdivision 4, 290.10 (8),
(9) or (10), and 290.18.
This deduction shall be allowed to individuals, estates, or
trusts (i) for taxable years beginning after December 31, 1980
in the taxable year to which the liability applies. Such
liability includes the portion of self-employment tax allowed
under section 290.10, clause (8). The self-employment tax must
be deducted by the person who is deriving the income. When the
federal tax liability is joint and several under the computation
of a joint federal return of husband and wife, the federal tax
liability must be split between the spouses in the same ratio
that the federal adjusted gross income of that spouse bears to
the total federal adjusted gross income. For purposes of the
preceding sentence, "federal adjusted gross income" includes the
ordinary income portion of a lump sum distribution as defined in
section 402(e) of the Internal Revenue Code of 1954, as amended
through December 31, 1981.
(ii) taxes paid for a taxable year beginning before January
1, 1981 shall be allowed as follows:
(1) Those taxes paid in a taxable year beginning before
January 1, 1981, shall be claimed in the year in which the
payment was made.
(2) Those paid in a taxable year beginning after December
31, 1980 but before January 1, 1983 shall be divided and
deducted in equal installments reflected by the yearly periods
beginning with the first day of the taxable year in which the
payment was made and ending December 31, 1986. For an amount
which remains to be deducted in a taxable year beginning after
December 31, 1982, where the federal tax liability for the year
in which the payment was made is joint and several under the
computation of a joint federal return of husband and wife, the
remaining amounts to be deducted shall be claimed by the same
spouse and in the same dollar amount as the deduction was
claimed in the first taxable year beginning after December 31,
1981.
(3) Those paid in a taxable year beginning after December
31, 1982 shall be claimed in the year in which the payment was
made. This amount shall be apportioned between spouses as
provided in clause (i) and shall be allocated for exempt income
under the provisions of section 290.10, clause (9) or (10) as
though the payment was part of the federal tax liability for the
year in which the payment was made.
(iii) (4) In the case of a person who was self employed
during all or a portion of the taxable year, the federal income
tax liability for purposes of this section clause shall be
increased by the self-employment tax allowed under section
290.10, clause (8). The self-employment tax shall be deducted
in the year paid as provided in paragraph (1), (2), or (3). The
self-employment tax must be deducted by the person who earned
the income. Self-employment tax paid in a taxable year
beginning after December 31, 1982 shall be allocated for exempt
income as provided in paragraph (3).
(iv) (iii) If a taxpayer's federal tax liability is
eventually not paid by reason of compromise, discharge, or court
order, the deduction allowed pursuant to this subdivision shall
be disallowed for the taxable year in which the liability was
accrued.
(v) (iv) In the event a federal tax liability for a taxable
year commencing after December 31, 1980 is increased, decreased
or modified, and such increase, decrease or modification has
resulted in a change in the amount of Minnesota income tax in
the year to which such increase, decrease or modification is
attributable, the taxpayer's deduction under this section
subdivision shall be modified for such year.
(vi) (v) If the readjustments required in (iv) (iii) or
(v) (iv) are for taxes reflected in the transition rule
described in (ii)(2), the readjustment shall be made equally to
the remaining installments and if a reduction to such
installments is required under this readjustment which exceeds
the total of all remaining installments, the remaining
installments will be reduced to zero and the excess included in
income as a federal income tax refund.
(vii) (vi) Refunds which are not involved with any
readjustments under the transition rule shall be included in
income under Minnesota Statutes 1982, section 290.01,
subdivision 20a, clause (6) if it is from a year beginning
before January 1, 1981.
(viii) (vii) Refunds of taxes for years beginning after
December 31, 1980, shall be used to adjust the deduction in the
taxable year of the liability unless that year is closed by
statute and no other adjustments are to be required or allowable
in which case such refund shall be reportable in the year
received.
Sec. 27. Minnesota Statutes 1982, section 290.21,
subdivision 1, is amended to read:
Subdivision 1. The following deductions shall be allowed
only to corporations and shall be deductions from gross income
in computing net income for individuals, and from a
corporation's taxable net income for corporations.
Sec. 28. Minnesota Statutes 1982, section 290.21,
subdivision 3, is amended to read:
Subd. 3. An amount for contribution or gifts made within
the taxable year:
(a) to or for the use of the state of Minnesota, or any of
its political subdivisions for exclusively public purposes,
(b) to or for the use of any community chest, corporation,
organization, trust, fund, association, or foundation located in
and carrying on substantially all of its activities within this
state, organized and operating exclusively for religious,
charitable, public cemetery, scientific, literary, artistic, or
educational purposes, or for the prevention of cruelty to
children or animals, no part of the net earnings of which inures
to the benefit of any private stockholder or individual,
(c) to a fraternal society, order, or association,
operating under the lodge system located in and carrying on
substantially all of their activities within this state if such
contributions or gifts are to be used exclusively for the
purposes specified in subdivision 3(b), or for or to posts or
organizations of war veterans or auxiliary units or societies of
such posts or organizations, if they are within the state and no
part of their net income inures to the benefit of any private
shareholder or individual,
(d) to or for the use of the United States of America for
exclusively public purposes, and to or for the use of any
community chest, corporation, trust, fund, association, or
foundation, organized and operated exclusively for any of the
purposes specified in subdivision 3(b) and (c) no part of the
net earnings of which inures to the benefit of any private
shareholder or individual, but not carrying on substantially all
of their activities within this state, in an amount equal to the
ratio of Minnesota taxable net income to total net income,
provided, however, that for an individual taxpayer, the
deduction shall be allowed in an amount equal to the ratio of
the taxpayer's gross income assignable to Minnesota to the
taxpayer's gross income from all sources,
(e) to a major political party, as defined in section
200.02, subdivision 7, or a political candidate, as defined in
section 210A.01, or a political cause when sponsored by any
party or association or committee, as defined in section
210A.01, in a maximum amount not to exceed the following:
(1) contributions made by individual natural persons, $100,
(2) contributions made by a national committeeman, national
committeewoman, state chairman, or state chairwoman of a major
political party, as defined in section 200.02, subdivision 7,
$1,000,
(3) contributions made by a congressional district
committeeman or committeewoman of a major political party, as
defined in section 200.02, subdivision 7, $350,
(4) contributions made by a county chairman or a county
chairwoman of a major political party, as defined in section
200.02, subdivision 7, $150;
(f) in the case of an individual, the total deduction
allowable hereunder shall not exceed 30 percent of the
taxpayer's Minnesota gross income as follows:
(i) the aggregate of contributions made to organizations
specified in (a), (b) and (d) shall not exceed ten percent of
the taxpayer's Minnesota gross income,
(ii) the total deduction under this subparagraph for any
taxable year shall not exceed 20 percent of the taxpayer's
Minnesota gross income. For purposes of this subparagraph, the
deduction under this section shall be computed without regard to
any deduction allowed under subparagraph (i) but shall take into
account any contributions described in subparagraph (i) which
are in excess of the amount allowable as a deduction under
subparagraph (i). For purposes of paragraph (f) the term
Minnesota gross income shall also include the ordinary income
portion of a lump sum distribution as defined in section 402(e)
of the Internal Revenue Code of 1954, as amended through
December 31, 1981;
(g) in the case of a corporation, the total deduction
hereunder shall not exceed 15 percent of the taxpayer's taxable
net income less the deductions allowable under this section
other than those for contributions or gifts,
(h) (f) in the case of a corporation reporting its taxable
income on the accrual basis, if: (A) the board of directors
authorizes a charitable contribution during any taxable year,
and (B) payment of such contribution is made after the close of
such taxable year and on or before the fifteenth day of the
third month following the close of such taxable year; then the
taxpayer may elect to treat such contribution as paid during
such taxable year. The election may be made only at the time of
the filing of the return for such taxable year, and shall be
signified in such manner as the commissioner shall by
regulations prescribe;
(i) (g) in the case of a contribution or property placed in
trust as described in section 170(f)(2) of the Internal Revenue
Code of 1954, as amended through December 31, 1981, a deduction
shall be allowed under this subdivision to the extent that a
deduction is allowable for federal income tax purposes.
(j) amounts paid to maintain certain students as members of
the taxpayer's household shall be allowed as a deduction as
provided in section 170(g) of the Internal Revenue Code of 1954,
as amended through December 31, 1981. No other deduction shall
be allowed under this subdivision for these amounts and the
limitations contained in clause (f) shall not apply to these
amounts.
Sec. 29. Minnesota Statutes 1982, section 290.23,
subdivision 5, is amended to read:
Subd. 5. [DISTRIBUTABLE NET INCOME, INCOME, BENEFICIARY;
DEFINED.] (1) For purposes of sections 290.22 through 290.25,
the term "distributable net income" means the same as that term
is defined in section 643(a) of the Internal Revenue Code of
1954, as amended through December 31, 1981 with the following
modification:
There shall be included any tax-exempt interest to which
section 290.01, subdivision 20b, clause (1) applies, reduced by
any amounts which would be deductible in respect of
disbursements allocable to such interest but for the provisions
of sections 290.09, subdivision 3, and section 290.10(9)
(relating to disallowance of certain deductions).
If the estate or trust is allowed a deduction under section
642(c) of the Internal Revenue Code of 1954, as amended through
December 31, 1981, the amount of the modification shall be
reduced to the extent that the amount of income which is paid,
permanently set aside, or to be used for the purposes specified
in that section of the Internal Revenue Code is deemed to
consist of items specified in the modification. For this
purpose, such amount shall (in the absence of specific
provisions in the governing instrument) be deemed to consist of
the same proportion of each class of items of income of the
estate or trust as the total of each class bears to the total of
all classes.
(2) The term "income," and the term "beneficiary" have the
same meaning as those terms are defined in section 643(b) and
(c) of the Internal Revenue Code of 1954, as amended through
December 31, 1981.
Sec. 30. Minnesota Statutes 1982, section 290.31,
subdivision 2, is amended to read:
Subd. 2. [INCOME AND CREDITS OF PARTNER.] (1) In
determining his income tax, each partner shall take into account
separately his distributive share of the partnership's
(a) gains and losses from sales or exchanges of capital
assets held for not more than one year,
(b) gains and losses from sales or exchanges of capital
assets held for more than one year,
(c) gains and losses from sales or exchanges of property
described in section 290.16, subdivision 9(1) and (2) 1231 of
the Internal Revenue Code of 1954, as amended through January
15, 1983 (relating to certain property used in a trade or
business and involuntary conversions),
(d) charitable contributions (as defined in section 290.21,
subdivision 3) as defined in section 170(c) of the Internal
Revenue Code of 1954, as amended through December 31, 1982,
(e) dividends with respect to which there is provided a
deduction under section 290.21, an exclusion under section 116
or a deduction under sections 241 to 247 of the Internal Revenue
Code of 1954, as amended through December 31, 1982,
(f) other items of income, gain, loss, deduction, or
credit, to the extent provided by regulations prescribed by the
commissioner, and
(g) taxable net income or loss, exclusive of items
requiring separate computation under other subparagraphs of this
paragraph (1).
(2) The character of any item of income, gain, loss,
deduction, or credit included in a partner's distributive share
under paragraphs (a) through (f) of paragraph (1) shall be
determined as if such item were realized directly from the
source from which realized by the partnership, or incurred in
the same manner as incurred by the partnership.
(3) In any case where it is necessary to determine the
gross income of a partner for purposes of this chapter, such
amount shall include his distributive share of the gross income
of the partnership.
Sec. 31. Minnesota Statutes 1982, section 290.31,
subdivision 3, is amended to read:
Subd. 3. [PARTNERSHIP COMPUTATIONS.] The taxable net
income of a partnership shall be computed in the same manner as
in the case of an individual except that
(1) the items described in subdivision 2(1) shall be
separately stated, and
(2) the following deductions shall not be allowed to the
partnership:
(a) the deduction for taxes provided in section 290.09,
subdivision 4 164(a) of the Internal Revenue Code of 1954, as
amended through December 31, 1982, with respect to taxes,
described in section 901 of the Internal Revenue Code of 1954,
as amended through December 31, 1981, paid or accrued to foreign
countries and to possessions of the United States,
(b) the deduction for charitable contributions provided in
section 290.21, subdivision 3 or section 170 of the Internal
Revenue Code of 1954, as amended through December 31, 1982,
(c) the net operating loss deduction provided in section
290.095,
(d) the additional itemized deductions for individuals
provided in section 290.09, subdivisions 10 and 17 sections 211
to 223 of the Internal Revenue Code of 1954, as amended through
December 31, 1982, and,
(e) the deduction for depletion under section 290.09,
subdivision 8 with respect to oil and gas wells.
Any election affecting the computation of taxable net
income derived from a partnership shall be made by the
partnership except as provided in section 703(b) of the Internal
Revenue Code of 1954, as amended through December 31, 1981.
Sec. 32. Minnesota Statutes 1982, section 290.34,
subdivision 2, is amended to read:
Subd. 2. [AFFILIATED OR RELATED CORPORATIONS, COMBINED
REPORT.] When a corporation which is required to file an income
tax return is affiliated with or related to any other
corporation through stock ownership by the same interests or as
parent or subsidiary corporations, or has its income regulated
through contract or other arrangement, the commissioner of
revenue may permit or require such combined report as, in his
opinion, is necessary in order to determine the taxable net
income of any one of the affiliated or related corporations.
For purposes of computing either the arithmetic average or
weighted apportionment formulas under section 290.19,
subdivision 1 for each corporation involved, the numerator of
the fraction shall be that corporation's sales, property, and
payroll in Minnesota and the denominator shall be the total
sales, payroll, and property of all the corporations shown on
the combined report. The combined report shall reflect the
income of the entire unitary business as provided in section
290.17, subdivision 2, clause (4). The combined report shall
reflect income only from corporations created or organized in
the United States or under the laws of the United States or of
any state, the District of Columbia, the commonwealth of Puerto
Rico, any possession of the United States, or any political
subdivision of any of the foregoing. All intercompany
transactions between companies which are contained on the
combined report shall be eliminated. This subdivision shall not
apply to insurance companies whose income is determined under
section 290.35 or to investment companies whose income is
determined under section 290.36.
Sec. 33. Minnesota Statutes 290.37, subdivision 1, is
amended to read:
Subdivision 1. [PERSONS MAKING RETURNS.] (a) The
commissioner of revenue shall annually determine the gross
income levels at which individuals and estates shall be required
to file a return for each taxable year.
In the case of a decedent who has gross income in excess of
the minimum amount at which an individual is required to file a
return, the decedent's final income tax return shall be filed by
his or her personal representative, if any. If there is no
personal representative, the return shall be filed by the
successors (as defined in section 524.1-201) who receive any
property of the decedent.
The trustee or other fiduciary of property held in trust
shall file a return with respect to the taxable net income of
such trust if that exceeds an amount on which a tax at the rates
herein provided would exceed the specific credits allowed, or if
the gross income of such trust exceeds $750, if in either case
such trust belongs to the class of taxable persons.
Every corporation shall file a return. The return in this
case shall be signed by an officer of the corporation.
The receivers, trustees in bankruptcy, or assignees
operating the business or property of a taxpayer shall file a
return with respect to the taxable net income of such taxpayer
if that exceeds an amount on which a tax at the rates herein
provided would exceed the specific credits allowed.
(b) Such return shall (1) be verified or contain a written
declaration that it is made under the penalties of criminal
liability for wilfully making a false return, and (2) shall
contain a confession of judgment for the amount of the tax shown
due thereon to the extent not timely paid.
(c) For purposes of this subdivision the term "gross income"
shall mean gross income as defined in section 61 of the Internal
Revenue Code of 1954, as amended through December 31, 1981,
modified and adjusted in accordance with the provisions of
sections 290.01, subdivision 20b, clauses (1), (6) and (11)
(10), 290.08, and 290.17.
Sec. 34. Minnesota Statutes 1982, section 290.39,
subdivision 2, is amended to read:
Subd. 2. [SEPARATE COMPUTATIONS ON A SINGLE RETURN.]
Notwithstanding the provisions of section 290.61, a husband and
wife may elect to compute their Minnesota income tax separately
on a single return, in which event:
(a) if the sum of the payments by either spouse, including
withheld and estimated taxes, exceeds the amount of tax of such
spouse as computed separately, the excess may be applied by the
commissioner to the credit of the other spouse if the sum of the
payments by such other spouse, including withheld and estimated
taxes, is less than the amount of the tax of such other spouse
as computed separately;
(b) if the sum of the payments made by both spouses with
respect to the taxes of both as computed separately, including
withheld and estimated taxes, exceeds the total of the taxes
due, refund of the excess may be made payable to both spouses or
may be credited against any liability in respect of Minnesota
income tax on the part of either spouse;
(c) if the sum of the payments made by both spouses with
respect to the taxes of both as computed separately, including
withheld and estimated taxes, is less than the total of the
taxes due, the liability for the unpaid tax shall be joint and
several; provided that a spouse may be relieved of liability in
those cases contained in section 6013(e) of the Internal Revenue
Code of 1954 as amended through December 31, 1981 (for purposes
of computing the 25 percent test contained in that section, the
amount of gross income stated in the return shall include the
total gross income of both spouses);
(d) if the standard deduction provided for by section
290.09, subdivision 15 16, subdivision 3, is not utilized, then
the total of the Minnesota itemized deductions of a husband and
wife may be taken by either or divided between them as they
elect;
(e) the limitation on the deduction for investment interest
prescribed in section 163(d)(1)(A) of the Internal Revenue Code
of 1954, as amended through March 12, 1983, for married
individuals who file separate returns shall also apply to
married individuals who file separately on one return.
Sec. 35. Minnesota Statutes 1982, section 290.431, is
amended to read:
290.431 [NONGAME WILDLIFE CHECKOFF.]
Every individual who files an income tax return or property
tax refund claim form may designate on their original return
that $1 or more shall be added to the tax or deducted from the
refund that would otherwise be payable by or to that individual
and paid into an account to be established for the management of
nongame wildlife. The commissioner of revenue shall, on the
first page of the income tax return and the property tax refund
claim form, notify filers of their right to designate that a
portion of their tax or refund shall be paid into the nongame
wildlife management account. The sum of the amounts so
designated to be paid shall be credited to the nongame wildlife
management account for use by the nongame section of the
division of wildlife in the department of natural resources.
The commissioner of natural resources shall submit a work
program for each fiscal year and semi-annual progress reports to
the legislative commission on Minnesota resources in the form
determined by the commission. None of the money provided in
this section may be expended unless the commission has approved
the work program.
The state pledges and agrees with all contributors to the
nongame wildlife management account to use the funds contributed
solely for the management of nongame wildlife projects and
further agrees that it will not impose additional conditions or
restrictions that will limit or otherwise restrict the ability
of the commissioner of natural resources to use the available
funds for the most efficient and effective management of nongame
wildlife.
Sec. 36. Minnesota Statutes 1982, section 290.46, is
amended to read:
290.46 [EXAMINATION OF RETURNS; ASSESSMENTS, REFUNDS.]
The commissioner shall, as soon as practicable after the
return is filed, examine the same and make any investigation or
examination of the taxpayer's records and accounts that he may
deem necessary for determining the correctness of the return.
The tax computed by him on the basis of such examination and
investigation shall be the tax to be paid by such taxpayer. If
the tax found due shall be greater than the amount reported as
due on the taxpayer's return, the commissioner shall assess a
tax in the amount of such excess and the whole amount of such
excess shall be paid to the commissioner within 60 days after
notice of the amount and demand for its payment shall have been
mailed to the taxpayer by the commissioner. If the
understatement of the tax on the return was false and fraudulent
with intent to evade the tax, the installments of the tax shown
by the taxpayer on his return which have not yet been paid shall
be paid to the commissioner within 60 days after notice of the
amount thereof and demand for payment shall have been mailed to
the taxpayer by the commissioner. If the amount of the tax found
due by the commissioner shall be less than that reported as due
on the taxpayer's return, the excess shall be refunded to the
taxpayer in the manner provided by section 290.50 (except that
no demand therefor shall be necessary), if he has already paid
the whole of such tax, or credited against any unpaid
installment thereof; provided, that no refundment shall be made
except as provided in section 290.50.
If the commissioner examines returns of a taxpayer for more
than one year, he may issue one order covering the several years
under consideration reflecting the aggregate refund or
additional tax due.
The notices and demands provided for by sections 290.46 to
290.48 shall be in such form as the commissioner may determine
(including a statement) and shall contain a brief explanation of
the computation of the tax and shall be sent by mail to the
taxpayer at the address given in his return, or to his last
known address.
In cases where there has been an overpayment of a
self-assessed liability as shown on the return filed by the
taxpayer, the commissioner may refund such overpayment to the
taxpayer and no demand therefor shall be necessary; further,
written findings by the commissioner, notice by mail to the
taxpayer and certificate for refundment by the commissioner
shall not be necessary and the provisions of section 270.10, in
such case, shall not be applicable.
In the case of an individual, estate or trust, the
commissioner may audit and adjust the taxpayer's computation of
federal adjusted gross income (or federal taxable income for
estates or trusts) to make it properly conform with the
provisions of section 290.01, subdivision 20. In the case of an
individual, the commissioner may audit and adjust the taxpayer's
computation of itemized deductions to make them properly conform
with the provisions of section 16.
Sec. 37. Minnesota Statutes 1982, section 290.92,
subdivision 2a, is amended to read:
Subd. 2a. [COLLECTION AT SOURCE.] (1) [DEDUCTIONS.] Every
employer making payment of wages shall deduct and withhold upon
such wages a tax as provided in this section.
(2) [WITHHOLDING ON PAYROLL PERIOD.] The employer shall
withhold the tax on the basis of each payroll period or as
otherwise provided in this section.
(3) [WITHHOLDING TABLES.] Unless the amount of tax to be
withheld is determined as provided in subdivision 3, the amount
of tax to be withheld for each individual shall be based upon
tables to be prepared and distributed by the commissioner. The
tables shall be computed for the several permissible withholding
periods and shall take account of exemptions allowed under this
section; and the amounts computed for withholding shall be such
that the amount withheld for any individual during his taxable
year shall approximate in the aggregate as closely as possible
the tax which is levied and imposed under this chapter for that
taxable year, upon his salary, wages, or compensation for
personal services of any kind for the employer, and shall take
into consideration the allowable deduction for federal income
tax and the deduction allowable under section 290.09 16,
subdivision 15 3, and the personal credits allowed against the
tax.
(4) [MISCELLANEOUS PAYROLL PERIOD.] If wages are paid with
respect to a period which is not a payroll period, the amount to
be deducted and withheld shall be that applicable in the case of
a miscellaneous payroll period containing a number of days,
including Sundays and holidays, equal to the number of days in
the period with respect to which such wages are paid.
(5) [MISCELLANEOUS PAYROLL PERIOD.] (a) In any case in
which wages are paid by an employer without regard to any
payroll period or other period, the amount to be deducted and
withheld shall be that applicable in the case of a miscellaneous
payroll period containing a number of days equal to the number
of days, including Sundays and holidays, which have elapsed
since the date of the last payment of such wages by such
employer during the calendar year, or the date of commencement
of employment with such employer during such year, or January 1
of such year, whichever is the later.
(b) In any case in which the period, or the time described
in clause (a), in respect of any wages is less than one week,
the commissioner, under regulations prescribed by him, may
authorize an employer to determine the amount to be deducted and
withheld under the tables applicable in the case of a weekly
payroll period, in which case the aggregate of the wages paid to
the employee during the calendar week shall be considered the
weekly wages.
(6) [WAGES COMPUTED TO NEAREST DOLLAR.] If the wages exceed
the highest bracket, in determining the amount to be deducted
and withheld under this subdivision, the wages may, at the
election of the employer, be computed to the nearest dollar.
(7) [REGULATIONS ON WITHHOLDING.] The commissioner may, by
regulations, authorize employers:
(a) To estimate the wages which will be paid to any
employee in any quarter of the calendar year;
(b) To determine the amount to be deducted and withheld
upon each payment of wages to such employee during such quarter
as if the appropriate average of the wages so estimated
constituted the actual wages paid; and
(c) To deduct and withhold upon any payment of wages to
such employee during such quarter such amount as may be
necessary to adjust the amount actually deducted and withheld
upon wages of such employee during such quarter to the amount
required to be deducted and withheld during such quarter without
regard to this paragraph (7).
(8) [ADDITIONAL WITHHOLDING.] The commissioner is
authorized to provide by rule for increases or decreases in the
amount of withholding otherwise required under this section in
cases where the employee requests the changes. Such additional
withholding shall for all purposes be considered tax required to
be deducted and withheld under this section.
(9) [TIPS.] In the case of tips which constitute wages,
this subdivision shall be applicable only to such tips as are
included in a written statement furnished to the employer
pursuant to section 6053 of the Internal Revenue Code of 1954,
as amended through December 31, 1981, and only to the extent
that the tax can be deducted and withheld by the employer, at or
after the time such statement is so furnished and before the
close of the calendar year in which such statement is furnished,
from such wages of the employee (excluding tips, but including
funds turned over by the employee to the employer for the
purpose of such deduction and withholding) as are under the
control of the employer; and an employer who is furnished by an
employee a written statement of tips (received in a calendar
month) pursuant to section 6053 of the Internal Revenue Code of
1954 as amended through December 31, 1981 to which subdivision 1
is applicable may deduct and withhold the tax with respect to
such tips from any wages of the employee (excluding tips) under
his control, even though at the time such statement is furnished
the total amount of the tips included in statements furnished to
the employer as having been received by the employee in such
calendar month in the course of his employment by such employer
is less than $20. Such tax shall not at any time be deducted
and withheld in an amount which exceeds the aggregate of such
wages and funds as are under the control of the employer minus
any tax required by other provisions of state or federal law to
be collected from such wages and funds.
Sec. 38. Minnesota Statutes 1982, section 290.92, is
amended by adding a subdivision to read:
Subd. 27. Any holder of a class A, B, or D license issued
by the Minnesota horse racing commission, who makes a payment or
payments for winnings on a pari-mutuel betting ticket or tickets
in an amount of $200 or more to the same individual, shall
deduct from the payment or payments and withhold 11 percent of
the amount as Minnesota withholding tax. For purposes of this
subdivision, winnings from a pari-mutuel betting ticket must be
determined by reducing the amount received by the amount paid
for the ticket, and payments for winning on a pari-mutuel
betting ticket which are not money must be taken into account at
their fair market value. For purposes of the provisions of this
section, a payment to any person of winnings which are subject
to withholding must be treated as if the payment was a wage paid
by an employer to an employee. Every individual who is to
receive a payment of winnings which are subject to withholding
shall furnish the license holder with a statement, made under
the penalties of perjury, containing the name, address, and
social security account number of the person receiving the
payment and of each person entitled to any portion of such
payment. The license holder is liable for the payment of the
tax required to be withheld under this subdivision and
subdivision 27 but is not liable to any person for the amount of
the payment.
Sec. 39. Minnesota Statutes 1982, section 290.92, is
amended by adding a subdivision to read:
Subd. 28. Any holder of a class A or B license issued by
the Minnesota horse racing commission who makes a payment to a
holder of a class C license issued by the commission, or who
pays an amount as a purse, shall deduct from the payment and
withhold seven percent of the amount as Minnesota withholding
tax when the amount paid to that individual during the calendar
year exceeds $200. For purposes of the provisions of this
section, a payment to any person which is subject to withholding
under this subdivision must be treated as if the payment was a
wage paid by an employer to an employee. Every individual who
is to receive a payment which is subject to withholding under
this subdivision shall furnish the license holder with a
statement, made under the penalties of perjury, containing the
name, address, and social security account number of the person
receiving the payment. No withholding is required if the
individual presents a signed certificate from his employer which
states that the individual is an employee of that employer. A
nonresident individual who holds a class C license must be
treated as an athlete for purposes of applying the provisions of
sections 290.17, subdivision 2(1)(b)(ii) and 290.92, subdivision
4a.
Sec. 40. Minnesota Statutes 1982, section 290A.03,
subdivision 3, is amended to read:
Subd. 3. [INCOME.] (1) "Income" means the sum of the
following:
(a) federal adjusted gross income as defined in the
Internal Revenue Code of 1954 as amended through December 31,
1981 March 12, 1982; and
(b) the sum of the following amounts to the extent not
included in clause (a):
(i) additions to federal adjusted gross income as provided
in Minnesota Statutes, section 290.01, subdivision 20a, clauses
(1), (3), (9), (14), (15), and (21) (2), (6), (11), (12), and
(16);
(ii) all nontaxable income;
(iii) recognized net long term capital gains;
(iv) dividends and interest excluded from federal adjusted
gross income under sections 116 or 128 of the Internal Revenue
Code of 1954;
(v) cash public assistance and relief;
(vi) any pension or annuity (including railroad retirement
benefits, all payments received under the federal social
security act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or
spouse, or which was funded exclusively by the claimant or
spouse and which funding payments were excluded from federal
adjusted gross income in the years when the payments were made;
(vii) nontaxable interest received from the state or
federal government or any instrumentality or political
subdivision thereof;
(viii) workers' compensation;
(ix) unemployment benefits;
(x) nontaxable strike benefits; and
(xi) the gross amounts of payments received in the nature
of disability income or sick pay as a result of accident,
sickness, or other disability, whether funded through insurance
or otherwise. In the case of an individual who files an income
tax return on a fiscal year basis, the term "federal adjusted
gross income" shall mean federal adjusted gross income reflected
in the fiscal year ending in the calendar year. Federal
adjusted gross income shall not be reduced by the amount of a
net operating loss carryback.
(2) "Income" does not include
(a) amounts excluded pursuant to the Internal Revenue Code,
sections 101(a), 102, 117, and 121;
(b) amounts of any pension or annuity which was exclusively
funded by the claimant or spouse and which funding payments were
not excluded from federal adjusted gross income in the years
when the payments were made;
(c) surplus food or other relief in kind supplied by a
governmental agency;
(d) relief granted under sections 290A.01 to 290A.20;
(e) child support payments received under a temporary or
final decree of dissolution or legal separation;
(f) federal adjusted gross income shall be reduced by wage
or salary expense, or expense of work incentive programs which
are not allowed as a deduction under provisions of section 280C
of the Internal Revenue Code of 1954; or
(g) federal adjusted gross income shall be reduced by the
amount of the penalty on the early withdrawal of an all-savers
certificate as provided in section 128(e) of the Internal
Revenue Code of 1954.
Sec. 41. Minnesota Statutes 1982, section 290A.16, is
amended to read:
290A.16 [INCOME TAX DEDUCTION PROHIBITED.]
Notwithstanding section 290.09, subdivision 4, The income
tax deduction for property taxes paid shall not exceed the
amount paid, reduced by the amount of credit allowed with
respect to the tax pursuant to sections 290A.01 to 290A.20.
Sec. 42. Minnesota Statutes 1982, section 290.53,
subdivision 2, as amended by Laws 1983, H.F. No. 381, section
27, is amended to read:
Subd. 2. [FAILURE TO MAKE AND FILE RETURN.] In case of any
failure to make and file a return as required by this chapter
within the time prescribed by law or prescribed by the
commissioner in pursuance of law, there shall be added to the
tax in lieu of the penalty provided in subdivision 1: ten
percent if the failure is for not more than 30 days with an
additional five percent for each additional 30 days or fraction
thereof during which such failure continues, not exceeding 25
percent in the aggregate.
In the case of a failure to file a return of tax imposed by
this chapter within 60 days of the date prescribed for filing of
the return (determined with regard to any extensions of time for
filing), where the return has been demanded by the commissioner
under the provisions of section 290.47, the amount added to the
tax under this subdivision shall not be less than the lesser of
$50 or 100 percent of the amount required to be shown as the
amount of tax on which is due with the return.
The amount so added to any tax shall be collected at the
same time and in the same manner and as a part of the tax, and
the amount of said tax together with the amount so added shall
bear interest at the rate specified in section 270.75 from the
time such tax should have been paid until paid unless the tax
has been paid before the discovery of the neglect, in which case
the amount so added shall be collected in the same manner as the
tax.
For the purposes of this subdivision the amount of any
taxes required to be shown on the return shall be reduced by the
amount of any part of the tax which is paid on or before the
date prescribed for payment of the tax and by the amount of any
credit against the tax which may be claimed upon the return.
Sec. 43. [INSTRUCTIONS TO THE REVISOR.]
In the next edition of Minnesota Statutes, the revisor of
statutes shall substitute the phrase "Internal Revenue Code of
1954, as amended through March 12, 1983" for the words "Internal
Revenue Code of 1954, as amended through December 31, 1981" or
for the words "Internal Revenue Code of 1954, as amended through
December 1, 1982" wherever the phrase occurs in chapter 290,
except sections 290.01, subdivision 20, and 290.09, subdivision
5.
Sec. 44. [REPEALER.]
Minnesota Statutes 1982, sections 290.01, subdivisions 23,
27, and 28; 290.032, subdivision 5; 290.06, subdivisions 9 and
9a; 290.077, subdivision 2; 290.08, subdivision 25; 290.09,
subdivisions 10, 15, 22, and 27; 290.21, subdivision 3a;
290.501; and 352C.07; and Laws 1982, chapter 523, article VII,
section 3, and Third Special Session chapter 1, article 5,
section 4, are repealed.
Sec. 45. [EFFECTIVE DATE.]
Sections 1 to 44 are effective for taxable years beginning
after December 31, 1982, except as otherwise specifically
provided by this section or section 2. For any carryback to a
taxable year beginning before January 1, 1983, "$15,000" shall
be substituted for "$30,000" each place it appears in the second
paragraph of Minnesota Statutes, section 290.09, subdivision 29,
clause (c), the modifications to the rate of phase-out of the
deduction provided by section 22 do not apply to such carryback,
and section 22 is effective for carryover amounts from taxable
years beginning before January 1, 1983. The amendments striking
Minnesota Statutes 1982, section 290.01, subdivision 20a, clause
(22) and subdivision 20b, clause (23) are effective for taxable
years beginning after December 31, 1983. The amendment to
Minnesota Statutes 1982, section 290.01, subdivision 20a,
striking clause (5) is effective for medical expenses deducted
in taxable years after December 31, 1981. The amendments to
Minnesota Statutes 1982, section 290.01, subdivision 20a,
striking clause (6) is effective for federal income tax refunds
received for taxable years beginning after December 31, 1980.
The amendment to Minnesota Statutes 1982, section 290.01,
subdivision 20a, striking clause (20) and subdivision 20b,
striking clause (20) is effective for taxable years beginning
after December 31, 1980. The carryover provisions of sections
290.06, subdivisions 9 and 9a continue to apply to credit
amounts attributable to a taxable year beginning before January
1, 1983. Section 40 is effective for claims based on rent paid
in 1983 and thereafter and for property taxes paid in 1984 and
thereafter.
ARTICLE 2
PROPERTY TAX
Section 1. Minnesota Statutes 1982, section 124.2137,
subdivision 1, is amended to read:
Subdivision 1. [TAX REDUCTIONS.] The county auditor shall
reduce the tax for school purposes on all property receiving the
homestead credit pursuant to section 273.13, subdivision 6, by
an amount equal to 29 percent of the tax levy that would be
produced by applying a rate of 18 mills imposed on up to 320
acres of the property land including the buildings and
structures thereon but excluding the homestead dwelling and
surrounding one acre of land. The county auditor shall reduce
the tax for school purposes on the next 320 acres classified
pursuant to section 273.13, subdivision 6 by an amount equal to
13 percent of the tax levy that would be produced by applying a
rate of ten mills imposed on the property. The tax on all other
agricultural lands classified pursuant to section 273.13,
subdivision 6 shall be reduced by an amount equal to ten percent
of the tax levy that would be produced by applying a rate of
eight mills imposed on the property. The tax on the first 320
acres of agricultural land classified pursuant to section
273.13, subdivision 4 and all real estate devoted to temporary
and seasonal residential occupancy for recreational purposes,
but not devoted to commercial purposes, shall be reduced by an
amount that would be produced by applying a rate of ten mills
equal to 13 percent of the tax imposed on the property. The tax
on timber land classified pursuant to section 273.13,
subdivision 8a and agricultural land in excess of 320 acres
classified pursuant to section 273.13, subdivision 4 shall be
reduced by an amount equal to ten percent of the tax levy that
would be produced by applying a rate of eight mills imposed on
the property. The amounts so computed by the county auditor
shall be submitted to the commissioner of revenue as part of the
abstracts of tax lists required to be filed with the
commissioner under the provisions of section 275.29. Any prior
year adjustments shall also be certified in the abstracts of tax
lists. The commissioner of revenue shall review such the
certifications to determine their accuracy. He may make such
changes in the certification as he may deem necessary or return
a certification to the county auditor for corrections. The
amount of the reduction provided under this subdivision which
any taxpayer can receive on all qualifying property which he
owns shall not exceed $2,000 in the case of agricultural
property and shall not exceed $100 in the case of seasonal
residential recreational property. In the case of property
owned by more than one person, the maximum amount of the
reduction shall apply to the total of all the owners.
Sec. 2. Minnesota Statutes 1982, section 272.02,
subdivision 1, is amended to read:
Subdivision 1. Except as provided in other subdivisions of
this section or in section 272.025 or section 273.13,
subdivisions 17, 17b, 17c or 17d, all property described in this
section to the extent herein limited shall be exempt from
taxation:
(1) All public burying grounds;
(2) All public schoolhouses;
(3) All public hospitals;
(4) All academies, colleges, and universities, and all
seminaries of learning;
(5) All churches, church property, and houses of worship;
(6) Institutions of purely public charity except property
assessed pursuant to section 273.13, subdivisions 17, 17b, 17c
or 17d;
(7) All public property exclusively used for any public
purpose;
(8) (a) Class 2 property of every household of the value of
$100, maintained in the principal place of residence of the
owner thereof. The county auditor shall deduct such the
exemption from the total valuation of such the property as
equalized by the revenue commissioner of revenue assessed to
such the household, and extend the levy of taxes upon the
remainder only. The term "household" as used in this section is
defined to be a domestic establishment maintained either (1) by
two or more persons living together within the same house or
place of abode, subsisting in common and constituting a domestic
or family relationship, or (2) by one person.
(b) During the period of his active service and for six
months after his discharge therefrom, no member of the armed
forces of the United States shall lose status of a householder
under paragraph (a) which he had immediately prior to becoming a
member of the armed forces.
In case there is an assessment against more than one member
of a household the $100 exemption shall be divided among the
members assessed in the proportion that the assessed value of
the Class 2 property of each bears to the total assessed value
of the Class 2 property of all the members assessed. The Class
2 property of each household claimed to be exempt shall be
limited to property in one taxing district, except in those
cases where a single domestic establishment is maintained in two
or more adjoining districts.
Bonds and certificates of indebtedness hereafter issued by
the state of Minnesota, or by any county or city of the state,
or any town, or any common or independent school district of the
state, or any governmental board of the state, or any county or
city thereof, shall hereafter be exempt from taxation; provided,
that nothing herein contained shall be construed as exempting
such the bonds from the payment of a tax thereon, as provided
for by section 291.01, when any of such the bonds constitute, in
whole or in part, any inheritance or bequest, taken or received
by any person or corporation.
(9) Farm machinery manufactured prior to 1930, which is
used only for display purposes as a collectors item;
(10) The taxpayer shall be exempted with respect to, all
agricultural products, inventories, stocks of merchandise of all
sorts, all materials, parts and supplies, furniture and
equipment, manufacturers material, manufactured articles
including the inventories of manufacturers, wholesalers,
retailers and contractors; and the furnishings of a room or
apartment in a hotel, rooming house, tourist court, motel or
trailer camp, tools and machinery which by law are considered as
personal property, and the property described in section 272.03,
subdivision 1, clause (c), except personal property which is
part of an electric generating, transmission, or distribution
system or a pipeline system transporting or distributing water,
gas, or petroleum products or mains and pipes used in the
distribution of steam or hot or chilled water for heating or
cooling buildings and structures. Railroad docks and wharves
which are part of the operating property of a railroad company
as defined in section 270.80 are not exempt.
(11) Containers of a kind customarily in the possession of
the consumer during the consumption of commodities, the sale of
which are subject to tax under the provisions of the excise tax
imposed by Extra Session Laws 1967, chapter 32 297A;
(12) All livestock, poultry, all horses, mules and other
animals used exclusively for agricultural purposes;
(13) All agricultural tools, implements and machinery used
by the owners in any agricultural pursuit.
(14) Real and personal property used primarily for the
abatement and control of air, water, or land pollution to the
extent that it is so used, other than real property used
primarily as a solid waste disposal site.
Any taxpayer requesting exemption of all or a portion of
any equipment or device, or part thereof, operated primarily for
the control or abatement of air or water pollution shall file an
application with the commissioner of revenue. Any such The
equipment or device shall meet standards, regulations or
criteria prescribed by the Minnesota Pollution Control Agency,
and must be installed or operated in accordance with a permit or
order issued by that agency. The Minnesota Pollution Control
Agency shall upon request of the commissioner furnish
information or advice to the commissioner. If the commissioner
determines that property qualifies for exemption, he shall issue
an order exempting such the property from taxation. Any such
The equipment or device shall continue to be exempt from
taxation as long as the permit issued by the Minnesota Pollution
Control Agency remains in effect.
(15) Wetlands. For purposes of this subdivision,
"wetlands" means land which is mostly under water, produces
little if any income, and has no use except for wildlife or
water conservation purposes. "Wetlands" shall be land preserved
in its natural condition, drainage of which would be legal,
feasible, and economically practical and would provide land
suitable for the production of livestock, dairy animals,
poultry, fruit, vegetables, forage and grains, except wild
rice. "Wetlands" shall include adjacent land which is not
suitable for agricultural purposes due to the presence of the
wetlands. "Wetlands" shall not include woody swamps containing
shrubs or trees, wet meadows, meandered water, streams, rivers,
and floodplains or river bottoms. Exemption of wetlands from
taxation pursuant to this section shall not grant the public any
additional or greater right of access to the wetlands or
diminish any right of ownership to the wetlands.
(16) Native prairie. The commissioner of the department of
natural resources shall determine lands in the state which are
native prairie and shall notify the county assessor of each
county in which the lands are located. Pasture land used for
livestock grazing purposes shall not be considered native
prairie for the purposes of this clause and section 273.116.
Upon receipt of an application for the exemption and credit
provided in this clause and section 273.116 for lands for which
the assessor has no determination from the commissioner of
natural resources, the assessor shall refer the application to
the commissioner of natural resources who shall determine within
30 days whether the land is native prairie and notify the county
assessor of his decision. Exemption of native prairie pursuant
to this clause shall not grant the public any additional or
greater right of access to the native prairie or diminish any
right of ownership to it.
(17) Property used in a continuous program to provide
emergency shelter for victims of domestic abuse, provided the
organization that owns and sponsors the shelter is exempt from
federal income taxation pursuant to section 501(c)(3) of the
Internal Revenue Code of 1954, as amended through December 31,
1980 1982, notwithstanding the fact that the sponsoring
organization receives funding under section 8 of the United
States Housing Act of 1937, as amended.
(18) If approved by the governing body of the municipality
in which the property is located, property not exceeding one
acre which is owned and operated by any senior citizen group or
association of groups that in general limits membership to
persons age 55 or older and is organized and operated
exclusively for pleasure, recreation, and other nonprofit
purposes, no part of the net earnings of which inures to the
benefit of any private shareholders; provided the property is
used primarily as a clubhouse, meeting facility or recreational
facility by the group or association and the property is not
used for residential purposes on either a temporary or permanent
basis.
(19) To the extent provided by section 295.44, real and
personal property used or to be used primarily for the
production of hydroelectric or hydromechanical power on a site
owned by the state or a local governmental unit which is
developed and operated pursuant to the provisions of section
105.482, subdivisions 1, 8 and 9.
Sec. 3. Minnesota Statutes 1982, section 272.03,
subdivision 8, is amended to read:
Subd. 8. [MARKET VALUE.] "Market value" means the usual
selling price at the place where the property to which the term
is applied shall be at the time of assessment; being the price
which could be obtained at a private sale and not at forced or
an auction sale, if it is determined by the assessor that the
price from the auction sale represents an arms length
transaction. The price obtained at a forced sale shall not be
considered.
Sec. 4. Minnesota Statutes 1982, section 272.115,
subdivision 1, is amended to read:
272.115 [CERTIFICATE OF VALUE; FILING.]
Subdivision 1. Whenever any real estate is sold on or
after January 1, 1978 for a consideration in excess of $1,000,
whether by warranty deed, quitclaim deed, contract for deed or
any other method of sale, the grantor, grantee or his legal
agent shall file a certificate of value with the county auditor
in the county in which the property is located. Value shall, in
the case of any deed not a gift, be the amount of the full
actual consideration thereof, paid or to be paid, including the
amount of any lien or liens assumed. The certificate of value
shall include the classification to which the property belongs
for the purpose of determining the fair market value of the
property. The certificate shall include financing terms and
conditions of the sale which are necessary to determine the
actual, present value of the sale price for purposes of the
sales ratio study. The commissioner of revenue shall promulgate
administrative rules specifying the financing terms and
conditions which must be included on the certificate.
Sec. 5. Minnesota Statutes 1982, section 273.11,
subdivision 1, is amended to read:
Subdivision 1. [GENERALLY.] Except as provided in
subdivisions 6 and, 7, 8, and 9 or section 273.17, subdivision
1, all property shall be valued at its market value. The market
value as determined pursuant to this section shall be stated
such that any amount under $100 is rounded up to $100 and any
amount exceeding $100 shall be rounded to the nearest $100. In
estimating and determining such value, the assessor shall not
adopt a lower or different standard of value because the same is
to serve as a basis of taxation, nor shall he adopt as a
criterion of value the price for which such property would sell
at auction or at a forced sale, or in the aggregate with all the
property in the town or district; but he shall value each
article or description of property by itself, and at such sum or
price as he believes the same to be fairly worth in money. In
assessing any tract or lot of real property, the value of the
land, exclusive of structures and improvements, shall be
determined, and also the value of all structures and
improvements thereon, and the aggregate value of the property,
including all structures and improvements, excluding the value
of crops growing upon cultivated land. In valuing real property
upon which there is a mine or quarry, it shall be valued at such
price as such property, including the mine or quarry, would sell
for a fair, voluntary sale, for cash. In valuing real property
which is vacant, the fact that such property is platted shall
not be taken into account. An individual lot of such platted
property shall not be assessed in excess of the assessment of
the land as if it were unplatted until the lot is improved with
a permanent improvement all or a portion of which is located
upon the lot, or for a period of three years after final
approval of said plat whichever is shorter. When a lot is sold
or construction begun, the assessed value of that lot or any
single contiguous lot fronting on the same street shall be
eligible for reassessment. All property, or the use thereof,
which is taxable under sections 272.01, subdivision 2, or
273.19, shall be valued at the market value of such property and
not at the value of a leasehold estate in such property, or at
some lesser value than its market value.
Sec. 6. Minnesota Statutes 1982, section 273.11, is
amended by adding a subdivision to read:
Subd. 8. [LIMITED EQUITY COOPERATIVE APARTMENTS.] For the
purposes of this subdivision, the terms defined in this
subdivision have the meanings given them.
A "limited equity cooperative" is a corporation organized
under Minnesota Statutes, chapter 308, which has as its primary
purpose the provision of housing and related services to its
members, who must be persons or families of low and moderate
income as defined in section 462A.03, subdivision 10, at the
time they purchase their membership, and which meets the
following requirements:
(a) The articles of incorporation set the sale price of
occupancy entitling cooperative shares or memberships at no more
than a transfer value determined as provided in the articles.
That value may not exceed the sum of the following:
(1) the consideration paid for the membership or shares by
the first occupant of the unit, as shown in the records of the
corporation;
(2) the fair market value, as shown in the records of the
corporation, of any improvements to the real property that were
installed at the sole expense of the member with the prior
approval of the board of directors;
(3) accumulated interest, or an inflation allowance not to
exceed the greater of a ten percent annual noncompounded
increase on the consideration paid for the membership or share
by the first occupant of the unit, or the amount that would have
been paid on that consideration if interest had been paid on it
at the rate of the percentage increase in the revised consumer
price index for all urban consumers for the Minneapolis-St. Paul
metropolitan area prepared by the United States Department of
Labor, provided that the amount determined pursuant to this
clause may not exceed $500 for each year or fraction of a year
the membership or share was owned; plus
(4) real property capital contributions shown in the
records of the corporation to have been paid by the transferor
member and previous holders of the same membership, or of
separate memberships that had entitled occupancy to the unit of
the member involved. These contributions include contributions
to a corporate reserve account the use of which is restricted to
real property improvements or acquisitions, contributions to the
corporation which are used for real property improvements or
acquisitions, and the amount of principal amortized by the
corporation on its indebtedness due to the financing of real
property acquisition or improvement or the averaging of
principal paid by the corporation over the term of its real
property-related indebtedness.
(b) The articles of incorporation require that the board of
directors limit the purchase price of stock or membership
interests for new member-occupants or resident shareholders to
an amount which does not exceed the transfer value for the
membership or stock as defined in clause (a).
(c) The articles of incorporation require that the total
distribution out of capital to a member shall not exceed that
transfer value.
(d) The articles of incorporation require that upon
liquidation of the corporation any assets remaining after
retirement of corporate debts and distribution to members will
be conveyed to a charitable organization described in section
501(c)(3) of the Internal Revenue Code of 1954, as amended
through December 31, 1982, or a public agency.
A "limited equity cooperative apartment" is a dwelling unit
owned or leased by a limited equity cooperative. If the
dwelling unit is leased by the cooperative the lease agreement
must meet the conditions for a cooperative lease stated in
Minnesota Statutes, section 273.133, subdivision 3.
"Occupancy entitling cooperative share or membership" is
the ownership interest in a cooperative organization which
entitles the holder to an exclusive right to occupy a dwelling
unit owned or leased by the cooperative.
For purposes of taxation, the assessor shall value a unit
owned by a limited equity cooperative at the lesser of its
market value or the value determined by capitalizing the net
operating income of a comparable apartment operated on a rental
basis at the capitalization rate used in valuing comparable
buildings that are not limited equity cooperatives. If a
cooperative fails to operate in accordance with the provisions
of clauses (a) to (d), the property shall be subject to
additional property taxes in the amount of the difference
between the taxes determined in accordance with this subdivision
for the last ten years that the property had been assessed
pursuant to this subdivision and the amount that would have been
paid if the provisions of this subdivision had not applied to
it. The additional taxes, plus interest at the rate specified
in section 549.09, shall be extended against the property on the
tax list for the current year.
Sec. 7. Minnesota Statutes 1982, section 273.11, is
amended by adding a subdivision to read:
Subd. 9. [CONDOMINIUM PROPERTY.] Notwithstanding any other
provision of law to the contrary, for purposes of property
taxation, condominium property shall be valued in accordance
with this subdivision.
(a) A structure or building that is initially constructed
as condominiums shall be identified as separate units after the
filing of a declaration. The market value of the residential
units in that structure or building and included in the
declaration shall be valued as condominiums.
(b) When 60 percent or more of the residential units in a
structure or building being converted to condominiums have been
sold as condominiums including those units that the converters
retain for their own investment, the market value of the
remaining residential units in that structure or building which
are included in the declaration shall be valued as
condominiums. If not all of the residential units in the
structure or building are included in the declaration, the 60
percent factor shall apply to those in the declaration. A
separate description shall be recognized when a declaration is
filed. For purposes of this clause, "retain" shall mean units
that are rented and completed units that are not available for
sale.
(c) For purposes of this subdivision, a "sale" is defined
as the date when the first written document for the purchase or
conveyance of the property is signed, unless that document is
revoked.
Sec. 8. Minnesota Statutes 1982, section 273.115,
subdivision 1, is amended to read:
Subdivision 1. The county auditor shall annually reduce
the tax liability of each owner of wetlands exempt from property
taxation pursuant to section 272.02, subdivision 1, clause (15),
by an amount equal to three-fourths one-half of one percent of
the average level of estimated market value of an acre of
tillable land in the township, city or unorganized territory in
which the qualifying wetland is located, multiplied by the
number of acres of wetlands he owns. Any excess of credit over
tax liability shall not be paid to the property owner but shall
be applied to the tax liability of the owner of the wetlands for
any parcel he owns which is contiguous to the parcel containing
the wetlands.
Sec. 9. Minnesota Statutes 1982, section 273.13,
subdivision 6, is amended to read:
Subd. 6. [CLASS 3B.] Agricultural land, except as provided
by class 1 hereof, and which is used for the purposes of a
homestead shall constitute class 3b and shall be valued and
assessed for taxes payable in 1981 and thereafter as follows:
the first $50,000 $60,000 of market value shall be valued and
assessed at 14 percent; the remaining market value shall be
valued and assessed at 19 percent. Effective for taxes payable
in 1982 and thereafter, The maximum amount of the market value
of the homestead bracket subject to the 14 percent rate shall be
adjusted by the commissioner of revenue as provided in section
273.1311. The property tax to be paid on class 3b property as
otherwise determined by law less any reduction received pursuant
to sections 124.213 and 124.2137, 273.123, 273.135, and 473H.10
shall be reduced by 58 54 percent of the tax for taxes payable
in 1981 and thereafter; provided that the amount of said the
reduction shall not exceed $650. Valuation subject to relief
shall be limited to 240 acres of land, most contiguous
surrounding, bordering, or closest to the house occupied by the
owner as his dwelling place, and such other structures as may be
included thereon utilized by the owner in an agricultural
pursuit, provided that Noncontiguous land shall constitute class
3b only if the homestead is classified as class 3b and the
detached land is located in the same township or city or not
farther than two townships or cities or combination thereof from
the homestead. The first $12,000 market value of each tract of
real estate which is rural in character and devoted or adaptable
to rural but not necessarily agricultural use, used for the
purpose of a homestead shall be exempt from taxation for state
purposes; except as specifically provided otherwise by law.
Agricultural land as used herein, and in section 124.2137,
shall mean contiguous acreage of ten acres or more, primarily
used during the preceding year for agricultural purposes.
Agricultural use may include pasture, timber, waste, unusable
wild land and land included in federal farm programs.
Real estate of less than ten acres used principally for
raising poultry, livestock, fruit, vegetables or other
agricultural products, shall be considered as agricultural land,
if it is not used primarily for residential purposes.
Effective for the 1981 assessment and in subsequent years,
The assessor shall determine and list separately on his records
the market value of the homestead dwelling and the one acre of
land on which that dwelling is located. If any farm buildings
or structures are located on this homesteaded acre of land,
their market value shall not be included in this separate
determination.
Sec. 10. Minnesota Statutes 1982, section 273.13,
subdivision 6a, is amended to read:
Subd. 6a. [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR
PARTNERSHIP.] (a) Each family farm corporation and each
partnership operating a family farm shall be entitled to class
3b assessment and shall be eligible for the credit provided in
subdivision 6 for one homestead occupied by a shareholder or
partner thereof who is residing on the land and actively engaged
in farming of the land owned by the corporation or partnership.
Such a The homestead shall not exceed 240 acres, and shall be
assessed as provided in subdivision 6, notwithstanding the fact
that legal title to the property may be in the name of the
corporation or partnership and not in the name of the person
residing thereon. "Family farm corporation" and "family farm"
shall mean as defined in section 500.24.
(b) In addition to property specified in paragraph (a), any
other residences owned by corporations or partnerships described
in paragraph (a) which are located on agricultural land and
occupied as homesteads by shareholders or partners who are
actively engaged in farming on behalf of the corporation or
partnership shall also be assessed as class 3b property, and be
entitled to the credit provided in subdivision 6, but the
property eligible shall be limited to the residence itself and
as much of the land surrounding the homestead, not exceeding one
acre, as is reasonably necessary for the use of the dwelling as
a home, and shall not include any other structures that may be
located thereon.
Sec. 11. Minnesota Statutes 1982, section 273.13,
subdivision 7, is amended to read:
Subd. 7. [CLASS 3C, 3CC.] All other real estate and class
2a property, except as provided by classes 1 and 3cc, which is
used for the purposes of a homestead, shall constitute class 3c,
and shall be valued and assessed for taxes payable in 1981 and
thereafter as follows: the first $25,000 $30,000 of market
value shall be valued and assessed at 16 17 percent; the next
$25,000 $30,000 of market value shall be valued and assessed at
22 19 percent; and the remaining market value shall be valued
and assessed at 28 30 percent. Effective for taxes payable in
1982 and thereafter, The maximum amounts of the market value of
the homestead brackets subject to the 16 17 percent and 22 19
percent rates shall be adjusted by the commissioner of revenue
as provided in section 273.1311. The property tax to be paid on
class 3c property as otherwise determined by law, less any
reduction received pursuant to section sections 273.123, 273.135
, and 473H.10 shall be reduced by 58 54 percent of the tax for
taxes payable in 1981 and thereafter imposed on the first
$67,000 of market value; provided that the amount of said the
reduction shall not exceed $650. The first $12,000 market value
of each tract of such real estate used for the purposes of a
homestead shall be exempt from taxation for state purposes;
except as specifically provided otherwise by law.
Class 3cc property shall include real estate or
manufactured homes used for the purposes of a homestead by (a)
any blind person, if such the blind person is the owner thereof
or if such the blind person and his or her spouse are the sole
owners thereof; or (b) any person (hereinafter referred to as
veteran) who: (1) served in the active military or naval
service of the United States and (2) is entitled to compensation
under the laws and regulations of the United States for
permanent and total service-connected disability due to the
loss, or loss of use, by reason of amputation, ankylosis,
progressive muscular dystrophies, or paralysis, of both lower
extremities, such as to preclude motion without the aid of
braces, crutches, canes, or a wheelchair, and (3) with
assistance by the administration of veterans affairs has
acquired a special housing unit with special fixtures or movable
facilities made necessary by the nature of the veteran's
disability, or the surviving spouse of such a the deceased
veteran for as long as the surviving spouse retains the special
housing unit as his or her homestead; or (c) any person who:
(1) is permanently and totally disabled and (2) is receiving
receives 90 percent or more of his total income from (i) aid
from any state as a result of that disability, or (ii)
supplemental security income for the disabled, or (iii) workers'
compensation based on a finding of total and permanent
disability, or (iv) social security disability, including the
amount of a disability insurance benefit which is converted to
an old age insurance benefit and any subsequent cost of living
increases, or (v) aid under the Federal Railroad Retirement Act
of 1937, 45 United States Code Annotated, Section 228b(a)5, or
(vi) a pension from any local government retirement fund located
in the state of Minnesota as a result of that disability; which
aid is at least 90 percent of the total income of such disabled
person from all sources. Property shall be classified and
assessed as class 3cc only if the commissioner of revenue
certifies to the assessor that the owner of the property
satisfies the requirements of this subdivision. Class 3cc
property shall be valued and assessed for taxes payable in 1981
and thereafter as follows: in the case of agricultural land,
including a manufactured home, used for a homestead, the first
$33,000 $30,000 of market value shall be valued and assessed at
five percent, the next $17,000 $30,000 of market value shall be
valued and assessed at 14 percent, and the remaining market
value shall be valued and assessed at 19 percent; and in the
case of all other real estate and manufactured homes, the first
$33,000 $30,000 of market value shall be valued and assessed at
five percent, the next $17,000 $30,000 of market value shall be
valued and assessed at 22 19 percent, and the remaining market
value shall be valued and assessed at 28 30 percent. Effective
for taxes payable in 1982 and thereafter, In the case of
agricultural land including a manufactured home used for
purposes of a homestead, the commissioner of revenue shall
adjust, as provided in section 273.1311, the maximum amount of
the market value of the homestead brackets subject to the five
percent and 14 percent rates; and for all other real estate and
manufactured homes, the commissioner of revenue shall adjust, as
provided in section 273.1311, the maximum amount of the market
value of the homestead brackets subject to the five percent and
22 19 percent rates. Permanently and totally disabled for the
purpose of this subdivision means a condition which is permanent
in nature and totally incapacitates the person from working at
an occupation which brings him an income. The property tax to
be paid on class 3cc property as otherwise determined by law,
less any reduction received pursuant to section 273.135 shall be
reduced by 58 54 percent of the tax for taxes payable in 1981
and thereafter imposed on the first $67,000 of market value;
provided that the amount of said the reduction shall not exceed
$650.
For purposes of this subdivision, homestead property which
qualifies for the classification ratios and credits provided in
this subdivision shall include property which is used for
purposes of the homestead but is separated from the homestead by
a road, street, lot, waterway, or other similar intervening
property. The term "used for purposes of the homestead" shall
include but not be limited to uses for gardens, garages, or
other outbuildings commonly associated with a homestead, but
shall not include vacant land held primarily for future
development. In order to receive homestead treatment for the
noncontiguous property, the owner shall apply for it to the
assessor by July 1 of 1983 or the year when the treatment is
initially sought. After initial qualification for the homestead
treatment, additional applications for subsequent years are not
required.
Sec. 12. Minnesota Statutes 1982, section 273.13,
subdivision 9, is amended to read:
Subd. 9. [CLASS 4A, 4B, 4C, AND 4D.] (1) All property not
included in the preceding classes shall constitute class 4a and
shall be valued and assessed at 43 percent of the market value
thereof, except as otherwise provided in this subdivision.
(2) Real property which is not improved with a structure
and which is not utilized as part of a commercial or industrial
activity shall constitute class 4b and shall be valued and
assessed at 40 percent of market value.
(3) Commercial and industrial property, except as provided
in this subdivision, shall constitute class 4c and shall be
valued and assessed at 40 34 percent of the first $50,000 of
market value and 43 percent of the remainder, provided that in
the case of state-assessed commercial or industrial property
owned by one person or entity, only one parcel shall qualify for
the 40 34 percent assessment, and in the case of other
commercial or industrial property owned by one person or entity,
only one parcel in each county shall qualify for the 40 34
percent assessment.
(4) Industrial employment property defined in section
273.1313, during the period provided in section 273.1313, shall
constitute class 4d and shall be valued and assessed at 20
percent of the first $50,000 of market value and 21.5 percent of
the remainder.
Sec. 13. Minnesota Statutes 1982, section 273.13,
subdivision 11, is amended to read:
Subd. 11. [ASSESSOR MAY REQUIRE PROOF.] The assessor may
shall require proof, by affidavit or otherwise of the facts upon
which classification as a homestead may be determined under the
provisions of subdivisions 5a, 6, 7, 7c, 7d, and 10.
Sec. 14. Minnesota Statutes 1982, section 273.13,
subdivision 14a, is amended to read:
Subd. 14a. [BUILDINGS AND APPURTENANCES ON LAND NOT OWNED
BY OCCUPANT.] The property tax to be paid in respect of the
value of all buildings and appurtenances thereto owned and used
by the occupant as a permanent residence, which are located upon
land subject to property taxes and the title to which is vested
in a person or entity other than the occupant, for all purposes
shall be reduced by 58 54 percent of the amount of the tax in
respect of said the value not in excess of $67,000 as otherwise
determined by law for taxes payable in 1981, and thereafter, but
not by more than $650.
Sec. 15. Minnesota Statutes 1982, section 273.13,
subdivision 17, is amended to read:
Subd. 17. [TITLE II OR STATE HOUSING FINANCE AGENCY
PROPERTY USED FOR ELDERLY AND LOW AND MODERATE INCOME FAMILIES.]
(a) Except as provided in clause (b), a structure situated on
real property that is used for housing for the elderly or for
low and moderate income families as defined by Title II of the
National Housing Act or the Minnesota housing finance agency law
of 1971 or regulations promulgated by the agency pursuant
thereto and financed by a direct federal loan or federally
insured loan or a loan made by the Minnesota housing finance
agency pursuant to the provisions of either of said those acts
and acts amendatory thereof shall, for 15 years from the date of
the completion of the original construction or substantial
rehabilitation, or for the original term of the loan, be
assessed at 20 percent of the market value thereof, provided
that the fair market value as determined by the assessor is
based on the normal approach to value using normal unrestricted
rents.
(b) In the case of a structure described in clause (a) with
respect to which construction or substantial rehabilitation had
not been commenced prior to January 1, 1984, the 20 percent
assessment ratio shall apply only to that portion of the
structure that is occupied by elderly persons or low and
moderate income families as defined above.
Sec. 16. Minnesota Statutes 1982, section 273.13,
subdivision 17b, is amended to read:
Subd. 17b. [VALUATION OF FARMERS HOME ADMINISTRATION
PROPERTY IN MUNICIPALITIES OF UNDER 10,000.] (a) Notwithstanding
any other provision of law, except as provided in clause (b),
any structure
(a) (1) situated on real property that is used for housing
for the elderly or for low and moderate income families as
defined by the farmers home administration,
(b) (2) located in a municipality of less than 10,000
population,
(c) (3) financed by a direct loan or insured loan from the
farmers home administration, and
(d) (4) which qualifies under subdivision 17a, shall, for
15 years from the date of the completion of the original
construction or for the original term of the loan, be assessed
at five percent of the market value thereof, provided that the
fair market value as determined by the assessor is based on the
normal approach to value using normal unrestricted rents.
(b) A structure described in clause (a) with respect to
which construction had not been commenced prior to January 1,
1984, shall be assessed at 20 percent of its market value, but
only in proportion to its occupancy by elderly persons or low
and moderate income families as defined above.
Sec. 17. Minnesota Statutes 1982, section 273.13,
subdivision 17c, is amended to read:
Subd. 17c. [VALUATION OF LOWER INCOME HOUSING.] (a) Except
as provided in clause (b), a structure which is
(a) (1) situated upon real property that is used for
housing lower income families or elderly or handicapped persons,
as defined in section 8 of the United States Housing Act of
1937, as amended, and
(b) (2) owned by an entity which has entered into a housing
assistance payments contract under section 8 which provides
assistance for 100 percent of the dwelling units in the
structure, other than dwelling units intended for management or
maintenance personnel, shall, for the term of the housing
assistance payments contract, including all renewals, or for the
term of its permanent financing, whichever is shorter, be
assessed at 20 percent of its market value. The market value
determined by the assessor shall be based on the normal approach
to value using normal unrestricted rents.
(b) In the case of a structure described in clause (a) with
respect to which construction had not been commenced prior to
January 1, 1984, the 20 percent assessment ratio shall apply
only to that portion of the structure that is occupied by lower
income families or elderly or handicapped persons as defined
above.
Sec. 18. Minnesota Statutes 1982, section 273.13,
subdivision 20, is amended to read:
Subd. 20. [TAXATION; APARTMENTS; ASSESSED VALUE; APARTMENT
HOUSING OF TYPE I OR II CONSTRUCTION.] That portion of real
property subject to a general property tax and assessed as a
structure upon the land shall, when such structure is
constructed with materials meeting the requirements for type I
or II construction as defined in the state building code, 90
percent or more is used or is to be used as apartment housing,
and no part of which is subject to the provisions of
subdivisions 7 and, 17, 17b, 17c, and 17d be classified for the
purposes of taxation for a period of 40 years from the date of
completion of original construction, or the date of initial
though partial use, whichever is the earlier date, as follows:
(a) when such the structure is of a height of five or more
stories that part, section, floor or area used or to be used for
apartment housing shall be valued and assessed at 25 percent of
the market value thereof; (b) When such structure is of a height
of four or less stories that part, section, floor or area used
or to be used for apartment housing shall be valued and assessed
at 33 1/3 percent of the market value thereof.
Sec. 19. Minnesota Statutes 1982, section 273.1311, is
amended to read:
273.1311 [FLEXIBLE HOMESTEAD BRACKETS.]
Effective for taxes payable in 1982 and subsequent years,
The maximum amount of the market value of the homestead brackets
shall be adjusted as provided in this section.
For taxes payable in 1982, the homestead brackets shall be
increased by the percentage increase in the statewide average
purchase price of a residential home as indicated by bona fide
sales, for the twelve-month period ending May 31, 1981, as
compared to the twelve-month period ending May 31, 1980. The
revised bracket shall be rounded to the nearest $1,000. The
commissioner of revenue shall determine and announce the revised
brackets as soon as possible.
For taxes payable in 1983 1985 and subsequent years, the
commissioner shall adjust the brackets used in the preceding
assessment by the estimated percentage increase in the statewide
average purchase price assessors' estimated market value of a
residential home for the twelve-month period ending August 31 of
the year preceding the assessment date as compared to the
twelve-month period for the immediate preceding year current
assessment over the previous assessment. The revised bracket
shall be rounded to the nearest $500. The commissioner of
revenue shall determine and announce the revised bracket on
October 1 of each year preceding the assessment date.
Sec. 20. [273.1315] [CERTIFICATION OF 3CC PROPERTY.]
Any property owner seeking classification and assessment of
his homestead as class 3cc property pursuant to section 273.13,
subdivision 7, shall file with the commissioner of revenue for
each assessment year a 3cc homestead declaration, on a form
prescribed by the commissioner. The declaration shall contain
the following information:
(a) the information necessary to verify that the property
owner or his spouse satisfies the requirements of section
273.13, subdivision 7, for 3cc classification;
(b) the property owner's household income, as defined in
section 290A.03, for the previous calendar year; and
(c) any additional information prescribed by the
commissioner.
The declaration shall be filed on or before February 1 of
each year to be effective for property taxes payable during the
succeeding calendar year. The declaration and any supplementary
information received from the property owner pursuant to this
section shall be subject to section 290A.17.
The commissioner shall provide to the assessor on or before
April 1 a listing of the parcels of property qualifying for 3cc
classification.
Sec. 21. Minnesota Statutes 1982, section 273.135,
subdivision 1, is amended to read:
Subdivision 1. The property tax to be paid in respect to
property taxable within a tax relief area on class 3b property
not exceeding 240 acres, on class 3c property, and on class 3cc
property, as otherwise determined by law and regardless of the
market value of the property, for all purposes shall be reduced
in the amount prescribed by subdivision 2, subject to the
limitations contained therein.
Sec. 22. Minnesota Statutes 1982, section 273.1391,
subdivision 1, is amended to read:
Subdivision 1. The property tax to be paid in respect to
property taxable within a tax relief area described in
subdivision 2 on class 3b property not exceeding 240 acres, on
class 3c property, and on class 3cc property, as otherwise
determined by law and regardless of the market value of the
property, for all purposes shall be reduced in the amount
prescribed by subdivision 2, subject to the limitations
contained therein.
Sec. 23. Minnesota Statutes 1982, section 278.05,
subdivision 4, is amended to read:
Subd. 4. [SALES RATIO STUDIES AS EVIDENCE.] The sales
ratio studies published by the department of revenue, or any
part of the studies, or any copy of the studies or records
accumulated to prepare the studies which is prepared by the
commissioner of revenue for the equalization aid review
committee for use in determining school aids shall be admissible
in evidence as a public record without the laying of a
foundation. Additional evidence relevant to the sales ratio
study is also admissible. No sales ratio study received into
evidence shall be conclusive or binding on the court and
evidence of its reliability or unreliability may be introduced
by any party including, but not limited to, evidence of
inadequate adjustment of sale prices for terms of financing.
Sec. 24. Minnesota Statutes 1982, section 287.05,
subdivision 1, is amended to read:
Subdivision 1. A tax of 15 cents is hereby imposed upon
each $100, or fraction thereof, of the principal debt or
obligation which is or may be secured by any mortgage of real
property situate situated within the state executed, delivered,
and recorded or registered; provided, however, that said the tax
shall be imposed but once upon any mortgage and extension
thereof. If any such the mortgage describes any real estate
situate situated outside of this state, such the tax shall be
imposed upon that proportion of the whole debt secured thereby
as the value of the real estate therein described situate
situated in this state bears to the value of the whole of the
real estate described therein, as such the value is determined
by the commissioner of revenue upon application of the
mortgagee. The tax imposed by this section shall not apply to a
contract for the conveyance of real estate or any interest in
real estate recorded or registered on or after January 1, 1984.
Sec. 25. [507.235] [FILING CONTRACTS FOR DEED.]
Subdivision 1. [FILING REQUIRED.] All contracts for deed
executed on or after January 1, 1984, shall be recorded within
six months in the office of the county recorder or registrar of
titles in the county in which the land is situated.
Subd. 2. [PENALTY FOR FAILURE TO FILE.] If a contract for
deed is not filed as required by the county board adopted
pursuant to subdivision 1, a penalty is imposed equal to 0.15
percent of the principal amount of the contract debt. Payments
of the penalty shall be deposited in the general fund of the
county. The penalty shall be a lien against the property and
shall have the same priority and be collected in the same manner
provided for real property taxes.
Sec. 26. Minnesota Statutes 1982, section 515A.1-105, is
amended to read:
515A.1-105 [SEPARATE TITLES AND PROPERTY TAXATION;
HOMESTEAD.]
Subdivision 1. [HOMESTEAD.] (a) Each unit together with
its common element interest constitutes for all purposes a
separate parcel of real estate.
(b) If a declaration is recorded prior to ten days before
any installment of real estate taxes becomes payable, the local
taxing authority shall split the taxes so payable on the
condominium among the units. Interest and penalties which would
otherwise accrue shall not begin to accrue until at least 30
days after the split is accomplished.
(c) A unit used for residential purposes together with not
more than two units used for vehicular parking and their common
element interests shall be treated the same as any other real
estate in determining whether homestead exemptions or
classifications shall apply.
Subd. 2. [MARKET VALUATION.] For purposes of property
taxation, the residential units in a structure or building which
are initially constructed as condominiums or are being converted
into condominiums shall be valued as provided in section 7.
Sec. 27. Laws 1981, First Special Session chapter 1,
article II, section 25, is amended to read:
Sec. 25. [EFFECTIVE DATE.]
Sections 1, 2, 5 to 15, 20, and 22 are effective for taxes
levied in 1981 and thereafter, payable in 1982 and thereafter.
Sections 3 and 4 are Section 3 is effective for taxes levied in
1983 and thereafter, payable in 1984 and thereafter. Section 4
is effective for taxes levied in 1984 and thereafter, payable in
1985 and thereafter. Section 18 is effective the day following
final enactment. Section 19 is effective for taxes levied in
1980, payable in 1981. If a claimant filed a property tax
refund for property taxes payable in 1981 and, if as a result of
section 19 the amount of the eligible refund has changed, the
claimant may file an amended return pursuant to section 290.391
to obtain any additional refund due. Taxpayers who meet the
requirements in section 9 and who notify the assessor prior to
September 1, 1981, shall receive homestead classification on the
qualifying property for the 1981 assessment to the same extent
as other 3c and 3cc property.
Sec. 28. [FARMLAND ASSESSMENT STUDY.]
The committees on taxes shall study the feasibility of
assessing farmland on the basis of productivity and net earning
capacity.
In conducting the study, the committees shall consider the
use of modern soil survey, including surface and subsoil types,
and moisture, temperature, soil conservation practices applied
by land occupiers, and other conditions affecting the soil. In
addition, the committees shall consider data available from the
department of revenue, the Minnesota crop and livestock
reporting service, post-secondary agricultural institutions, and
other appropriate sources. The committees shall also take into
account the experiences of other states which have implemented
farmland assessment programs based on productivity and net
earning capacity.
The committees shall report their findings and
recommendations prior to the third week of the 1984 legislative
session.
Sec. 29. [APPROPRIATION.]
There is appropriated to the department of revenue for the
purpose of administering the provisions of sections 4, 11, and
article 4, section 15, $147,000 for fiscal year 1984 and
$162,000 for fiscal year 1985. The complement of the department
of revenue is increased by six.
Sec. 30. [REPEALER.]
Minnesota Statutes 1982, section 273.13, subdivision 15b,
is repealed.
Sec. 31. [EFFECTIVE DATE.]
Sections 1 to 3, 5, 6, 8 to 12, 14, 18, 19, 21, 22, and 30
are effective for taxes levied in 1983 and thereafter, payable
in 1984 and thereafter. Section 4 is effective for sales
occurring on or after July 1, 1983. Sections 7, 13, 15, 16, 17,
20, and 26 are effective for the 1984 assessment and thereafter.
Sections 23, 27, and 28 are effective the day after final
enactment. Section 29 is effective July 1, 1983.
ARTICLE 3
LEVY LIMITS
Section 1. Minnesota Statutes 1982, section 275.50,
subdivision 2, is amended to read:
Subd. 2. [GOVERNMENTAL SUBDIVISION.] "Governmental
subdivision" means a county, home rule charter city, or
statutory city, town or special taxing district determined by
the department of revenue, except a town home rule charter or
statutory city that has a population of less than 5,000
according to the most recent federal census, provided that the
population of an incorporated municipality located within the
boundaries of a town is not included in the population of the
town. The term does not include school districts or the
metropolitan transit commission created pursuant to section
473.404.
Sec. 2. Minnesota Statutes 1982, section 275.50,
subdivision 5, is amended to read:
Subd. 5. Notwithstanding any other law to the contrary for
taxes levied in 1982 1983 payable in 1983 1984 and subsequent
years, "special levies" means those portions of ad valorem taxes
levied by governmental subdivisions to:
(a) satisfy judgments rendered against the governmental
subdivision by a court of competent jurisdiction in any tort
action, or to pay the costs of settlements out of court against
the governmental subdivision in a tort action when substantiated
by a stipulation for the dismissal of the action filed with the
court of competent jurisdiction and signed by both the plaintiff
and the legal representative of the governmental subdivision,
but only to the extent of the increase in levy for such
judgments and out of court settlements over levy year 1970,
taxes payable in 1971;
(b) pay the costs of complying with any written lawful
order initially issued prior to January 1, 1977 by the state of
Minnesota, or the United States, or any agency or subdivision
thereof, which is authorized by law, statute, special act or
ordinance and is enforceable in a court of competent
jurisdiction, or any stipulation agreement or permit for
treatment works or disposal system for pollution abatement in
lieu of a lawful order signed by the governmental subdivision
and the state of Minnesota, or the United States, or any agency
or subdivision thereof which is enforceable in a court of
competent jurisdiction. The commissioner of revenue shall in
consultation with other state departments and agencies, develop
a suggested form for use by the state of Minnesota, its agencies
and subdivisions in issuing orders pursuant to this subdivision;
(c) pay the costs to a governmental subdivision for their
minimum required share of any program otherwise authorized by
law for which matching funds have been appropriated by the state
of Minnesota or the United States, excluding the administrative
costs of public assistance programs, to the extent of the
increase in levy for the taxes payable year 1983 and subsequent
years over the amount levied for the local share of the program
for the taxes payable year 1971. This clause shall apply only
to those programs or projects for which matching funds have been
designated by the state of Minnesota or the United States on or
before September 1, of the previous year and only when the
receipt of these matching funds is contingent upon the
initiation or implementation of the project or program during
the year in which the taxes are payable or those programs or
projects approved by the commissioner;
(d) pay the costs not reimbursed by the state or federal
government, of payments made to or on behalf of recipients of
aid under any public assistance program authorized by law, and
the costs of purchase or delivery of social services. Except
for the costs of general assistance as defined in section
256D.02, subdivision 4, general assistance medical care under
section 256D.03 and the costs of hospital care pursuant to
section 261.21, the aggregate amounts levied pursuant to this
clause are subject to a maximum increase of 18 percent over the
amount levied for these purposes in the previous year;
(e) pay the costs of principal and interest on bonded
indebtedness, or, effective for taxes levied in 1973 and years
thereafter, to reimburse for the amount of liquor store revenues
used to pay the principal and interest due in the year preceding
the year for which the levy limit is calculated on municipal
liquor store bonds;
(f) pay the costs of principal and interest on certificates
of indebtedness, except tax anticipation or aid anticipation
certificates of indebtedness, issued for any corporate purpose
except current expenses or funding an insufficiency in receipts
from taxes or other sources or funding extraordinary
expenditures resulting from a public emergency;
(g) fund the payments made to the Minnesota state armory
building commission pursuant to section 193.145, subdivision 2,
to retire the principal and interest on armory construction
bonds;
(h) provide for the bonded indebtedness portion of payments
made to another political subdivision of the state of Minnesota;
(i) pay the amounts required to compensate for a decrease
in manufactured homes property tax receipts to the extent that
the governmental subdivision's portion of the total levy in the
current levy year, pursuant to section 273.13, subdivision 3, as
amended, is less than the distribution of the manufactured homes
tax to the governmental subdivision pursuant to section 273.13,
subdivision 3, in calendar year 1971;
(j) pay the amounts required, in accordance with section
275.075, to correct for a county auditor's error of omission in
levy year 1971 or a subsequent levy year, but only to the extent
that when added to the preceding year's levy it is not in excess
of an applicable statutory, special law or charter limitation,
or the limitation imposed on the governmental subdivision by
sections 275.50 to 275.56 in the preceding levy year;
(k) pay amounts required to correct for an error of
omission in the levy certified to the appropriate county auditor
or auditors by the governing body of a city or town with
statutory city powers in a levy year, but only to the extent
that when added to the preceding year's levy it is not in excess
of an applicable statutory, special law or charter limitation,
or the limitation imposed on the governmental subdivision by
sections 275.50 to 275.56 in the preceding levy year;
(l) pay the increased cost of municipal services as the
result of an annexation or consolidation ordered by the
Minnesota municipal board in levy year 1971 or a subsequent levy
year, but only to the extent and for the levy years as provided
by the board in its order pursuant to section 414.01,
subdivision 15. Special levies authorized by the board shall
not exceed 50 percent of the levy limit base of the governmental
subdivision and may not be in effect for more than three years
after the board's order;
(m) pay the increased costs of municipal services provided
to new private industrial and nonresidential commercial
development, to the extent that the extension of such services
are not paid for through bonded indebtedness or special
assessments, and not to exceed the amount determined as
follows. The governmental subdivision may calculate the
aggregate of:
(1) The increased expenditures necessary in preparation for
the delivering of municipal services to new private industrial
and nonresidential commercial development, but limited to one
year's expenditures one time for each such development;
(2) The amount determined by dividing the overall levy
limitation established pursuant to sections 275.50 to 275.56,
and exclusive of special levies and special assessments, by the
total taxable value of the governmental subdivision, and then
multiplying this quotient times the total increase in assessed
value of private industrial and nonresidential commercial
development within the governmental subdivision. For the
purpose of this clause, the increase in the assessed value of
private industrial and nonresidential commercial development is
calculated as the increase in assessed value over the assessed
value of the real estate parcels subject to such private
development as most recently determined before the building
permit was issued. In the fourth levy year subsequent to the
levy year in which the building permit was issued, the increase
in assessed value of the real estate parcels subject to such
private development shall no longer be included in determining
the special levy.
The aggregate of the foregoing amounts, less any costs of
extending municipal services to new private industrial and
nonresidential commercial development which are paid by bonded
indebtedness or special assessments, equals the maximum amount
that may be levied as a "special levy" for the increased costs
of municipal services provided to new private industrial and
nonresidential commercial development. In the levy year
following the levy year in which the special levy made pursuant
to this clause is discontinued, one-half of the amount of that
special levy made in the preceding year shall be added to the
permanent levy base of the governmental subdivision;
(n) recover a loss or refunds in tax receipts incurred in
non-special levy funds resulting from abatements or court action
in the previous year pursuant to section 275.48;
(o) pay amounts required by law to be paid to pay the
interest on and to reduce the unfunded accrued liability of
public pension funds in accordance with the actuarial standards
and guidelines specified in sections 356.215 and 356.216 reduced
for levy year 1977 and subsequent years by 106 percent of the
amount levied for that purpose in 1976, payable in 1977. For
the purpose of this special levy, the estimated receipts
expected from the state of Minnesota pursuant to sections 69.011
to 69.031 or any other state aid expressly intended for the
support of public pension funds shall be considered as a
deduction in determining the required levy for the normal costs
of the public pension funds. No amount of these aids shall be
considered as a deduction in determining the governmental
subdivision's required levy for the reduction of the unfunded
accrued liability of public pension funds;
(p) the amounts allowed under section 174.27 to establish
and administer a commuter van program;
(q) pay the costs of financial assistance to local
governmental units and certain administrative, engineering, and
legal expenses pursuant to Laws 1979, Chapter 253, Section 3;
(r) compensate for revenue lost as a result of abatements
or court action pursuant to sections 270.07, 270.17 or 278.01
due to a reassessment ordered by the commissioner of revenue
pursuant to section 270.16;
(s) pay the costs of implementing section 18.023, including
sanitation and reforestation; and
(t) pay the estimated cost for the following calendar year
of the county's share of funding the Minnesota cooperative soil
survey.
Sec. 3. Minnesota Statutes 1982, section 275.50, is
amended by adding a subdivision to read:
Subd. 8. [IMPLICIT PRICE DEFLATOR.] "Implicit price
deflator" means the implicit price deflator for government
purchases of goods and services for state and local government
prepared by the bureau of economic analysis of the United States
Department of Commerce for the 12-month period ending in June of
the levy year.
Sec. 4. Minnesota Statutes 1982, section 275.51, is
amended by adding a subdivision to read:
Subd. 3f. [LEVY LIMIT BASE.] (a) The property tax levy
limit base for governmental subdivisions for taxes levied in
1983 shall be calculated by adding the following amounts:
(1) the property tax permitted to be levied in 1982 for
taxes payable in 1983 pursuant to Minnesota Statutes 1982,
section 275.51, subdivision 3e; plus
(2) the amount of any payments the governmental subdivision
was certified to receive in 1983 pursuant to Minnesota Statutes
1982, sections 477A.011 to 477A.03; plus
(3) the amount of any payments certified to the
governmental subdivision in 1983 pursuant to Minnesota Statutes
1982, sections 298.28 and 298.282; plus
(4) the difference between the amount certified to the
governmental subdivision in 1983 and the amount certified in
1984 pursuant to section 273.138; plus
(5) any amount levied as a special assessment to cover the
costs of municipal operation and maintenance activities for the
taxes payable year 1983; and
(6) the amount of any base adjustment authorized by the
commissioner of revenue pursuant to subdivision 3g.
(b) For taxes levied in 1984 and subsequent years, a
governmental subdivision's levy limit base is equal to its
adjusted levy limit base for the preceding year provided that,
for taxes levied in 1984, the levy limit base of a county
containing a city of the first class shall be increased by the
amount paid to the county under section 273.138 in 1984 less the
amount that will be paid to it under section 273.138 in 1985.
Sec. 5. Minnesota Statutes 1982, section 275.51, is
amended by adding a subdivision to read:
Subd. 3g. [BASE ADJUSTMENTS.] Any governmental subdivision
which reduced any of its unreserved, undesignated fund balances
because of spending for nonspecial levy purposes in calendar
year 1981 may apply to the commissioner of revenue to have its
levy limit base increased for the taxes payable year 1984 by no
more than the amount of the reduction in the fund balances.
Applications shall be in the form and accompanied by the
data required by the commissioner. If approved by the
commissioner, the subdivision may then pass a resolution stating
the amount by which the levy limit base is proposed to be
increased. Thereafter, the resolution shall be published for
two successive weeks in the official newspaper of the
governmental subdivision or if there is no official newspaper,
in a newspaper of general circulation in the governmental
subdivision, together with a notice fixing a date for a public
hearing on the proposed increase. The hearing shall be held not
less than two weeks nor more than four weeks after the first
publication of the resolution. Following the public hearing,
the governing body may determine to take no further action or,
in the alternative, adopt a resolution authorizing the increase
as originally proposed or approving an increase in the lesser
amount it determines. The resolution authorizing an increase
shall be published in the official newspaper of the governmental
subdivision or if there is no official newspaper, in a newspaper
of general circulation in the governmental subdivision. If
within 30 days thereafter a petition signed by voters equal in
number to five percent of the votes cast in the governmental
subdivision in the last general election or 2,000 voters,
whichever is less, requesting a referendum on the proposed
resolution is filed with the clerk or recorder of the
governmental subdivision if the governmental subdivision is a
city or town, or with the county auditor if the governmental
subdivision is a county, the resolution shall not be effective
until it has been submitted to the voters at a general or
special election and a majority of votes cast on the question of
approving the resolution are in the affirmative. The
commissioner of revenue shall prepare a suggested form of
question to be presented at the referendum. The referendum must
be held at a special or general election prior to October 1,
1983.
Sec. 6. Minnesota Statutes 1982, section 275.51, is
amended by adding a subdivision to read:
Subd. 3h. [ADJUSTED LEVY LIMIT BASE.] For taxes levied in
1983 and thereafter, the adjusted levy limit base is equal to
the levy limit base computed pursuant to subdivision 3f,
increased by:
(a) a percentage equal to the percentage growth in the
implicit price deflator, or five percent, whichever is greater;
(b) a percentage equal to the greater of the percentage
increases in population or in number of households, if any, for
the most recent 12-month period for which data is available,
using figures derived pursuant to section 275.51, subdivision 6;
(c) one-half of the amount levied as a special levy in the
previous year for paying the costs of municipal services
provided to new private industrial and nonresidential commercial
development pursuant to section 275.50, subdivision 5, clause
(m), if the special levy is discontinued; and
(d) the amount of any permanent increase in the levy limit
base approved at a general or special election held during the
12-month period ending September 30 of the levy year, pursuant
to section 275.58, subdivisions 1 and 2.
Sec. 7. Minnesota Statutes 1982, section 275.51, is
amended by adding a subdivision to read:
Subd. 3i. [LEVY LIMITATION.] The levy limitation for a
governmental subdivision shall be equal to the adjusted levy
limit base determined pursuant to subdivision 3h, reduced by (a)
the total amount of local government aid that the governmental
subdivision has been certified to receive pursuant to sections
477A.011 to 477A.014; (b) taconite taxes and aids pursuant to
sections 298.28 and 298.282; (c) state reimbursements for
wetlands and native prairie property tax exemptions pursuant to
sections 273.115, subdivision 3 and 273.116, subdivision 3; and
(d) payments in lieu of taxes to a county pursuant to section
477A.12 which are required to be used to provide property tax
levy reduction certified to be paid in the calendar year in
which property taxes are payable.
As provided in section 298.28, subdivision 1, one cent per
taxable ton of the amount distributed under section 298.28,
subdivision 1, clause (4)(c) shall not be deducted from the levy
limit base of the counties that receive that aid. The resulting
figure is the amount of property taxes which a governmental
subdivision may levy for all purposes other than those for which
special levies and special assessments are made.
Sec. 8. Minnesota Statutes 1982, section 275.51, is
amended by adding a subdivision to read:
Subd. 6. [POPULATION AND HOUSEHOLD ESTIMATES.] For the
purpose of determining the amount of tax that a governmental
subdivision may levy in accordance with limitation established
by this chapter, the population or the number of households of
the governmental subdivision shall be that established by the
last federal census, by a census taken pursuant to section
275.14, or by an estimate made by the metropolitan council, or
by the state demographer made pursuant to section 116J.42,
subdivision 7, whichever is the most recent as to the stated
date of count or estimate, up to and including July 1 of the
current levy year.
Sec. 9. [REPEALER.]
Minnesota Statutes 1982, sections 275.09, subdivision 3;
275.50, subdivision 6; and 275.51, subdivisions 3e and 5, are
repealed.
Sec. 10. [EFFECTIVE DATE.]
Sections 1 to 9 are effective for taxes levied in 1983,
payable in 1984 and thereafter.
ARTICLE 4
PROPERTY TAX REFUND
Section 1. Minnesota Statutes 1982, section 290A.03,
subdivision 6, is amended to read:
Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling
occupied by a claimant as a place of his principal residence and
so much of the land surrounding it, not exceeding ten acres, as
is reasonably necessary for use of the dwelling as a home and
any other property used for purposes of a homestead as defined
in section 273.13, subdivision 7, except that this restriction
shall not be applicable to for agricultural land assessed as
part of a homestead pursuant to section 273.13, subdivision 6,
"homestead" is limited to 320 acres. The homestead may be owned
or rented and may be a part of a multi-dwelling or multi-purpose
building and the land on which it is built. A manufactured home,
as defined in section 168.011, subdivision 8, assessed as
personal property may be a dwelling for purposes of this
subdivision.
Sec. 2. Minnesota Statutes 1982, section 290A.03,
subdivision 8, is amended to read:
Subd. 8. [CLAIMANT.] (a) "Claimant" means a person, other
than a dependent, who filed a claim authorized by sections
290A.01 to 290A.20 and who was domiciled in this state during
the calendar year for which the claim for relief was filed.
(b) In the case of a claim relating to rent constituting
property taxes, the claimant shall have resided in a rented or
leased unit on which ad valorem taxes or payments made in lieu
of ad valorem taxes, including payments of special assessments
imposed in lieu of ad valorem taxes, are payable at some time
during the calendar year covered by the claim.
(c) "Claimant" shall not include a resident of a nursing
home, intermediate care facility, or long term residential
facility whose rent constituting property taxes is paid pursuant
to the supplemental security income program under Title XVI of
the social security act, the Minnesota supplemental aid program
under sections 256D.35 to 256D.41, the medical assistance
program pursuant to Title XIX of the social security act, or the
general assistance medical care program pursuant to section
256D.03, Subdivision 3. If only a portion of the rent
constituting property taxes is paid by these programs, the
resident shall be a claimant for purposes of this chapter, but
the refund calculated pursuant to section 290A.04 shall be
multiplied by a fraction, the numerator of which is income as
defined in subdivision 3 reduced by the total amount of income
from the above sources other than vendor payments under the
medical assistance program or the general assistance medical
care program and the denominator of which is income as defined
in subdivision 3 plus vendor payments under the medical
assistance program or the general assistance medical care
program, to determine the allowable refund pursuant to this
chapter.
(d) Notwithstanding paragraph (c), if the claimant was a
resident of the nursing home, intermediate care facility or long
term residential facility for only a portion of the calendar
year covered by the claim, the claimant may compute rent
constituting property taxes by disregarding the rent
constituting property taxes from the nursing home, intermediate
care facility, or long term residential facility and use only
that amount of rent constituting property taxes or property
taxes payable relating to that portion of the year when the
claimant was not in the facility. The claimant's household
income is his income for the entire calendar year covered by the
claim.
(e) In the case of a claim for rent constituting property
taxes of a part year Minnesota resident, the income and rental
reflected in this computation shall be for the period of
Minnesota residency only. Any rental expenses paid which may be
reflected in arriving at federal adjusted gross income cannot be
utilized for this computation. When two individuals of a
household are able to meet the qualifications for a claimant,
they may determine among them as to who the claimant shall be.
If they are unable to agree, the matter shall be referred to the
commissioner of revenue and his decision shall be final. If a
homestead property owner was a part year Minnesota resident, the
income reflected in the computation made pursuant to section
290A.04 shall be for the entire calendar year, including income
not assignable to Minnesota.
(f) If a homestead is occupied by two or more renters, who
are not husband and wife, the rent shall be deemed to be paid
equally by each, and separate claims shall be filed by each.
The income of each shall be his household income for purposes of
computing the amount of credit to be allowed.
Sec. 3. Minnesota Statutes 1982, section 290A.03,
subdivision 11, is amended to read:
Subd. 11. [RENT CONSTITUTING PROPERTY TAXES.] "Rent
constituting property taxes" means 23 percent of the amount of
gross rent actually paid in cash, or its equivalent, which is
attributable (a) to the property tax paid on the unit or that
portion of gross rent which is (b) to the amount paid in lieu of
property taxes, in any calendar year by a claimant solely for
the right of occupancy of his Minnesota homestead in the
calendar year, and which rent constitutes the basis, in the
succeeding calendar year of a claim for relief under sections
290A.01 to 290A.20 by the claimant. The amount of rent
attributable to property taxes paid or payments in lieu made on
the unit shall be determined by multiplying the net tax on the
property where the unit is located by a fraction, the numerator
of which is the gross rent paid by the claimant for the calendar
year for the unit and the denominator of which is the gross rent
paid for the calendar year for the property in which the unit is
located. In the case of a claimant who resides in a unit for
which a rent subsidy is paid pursuant to section 8 of the United
States Housing Act of 1937, as amended, or under another state
or federal program providing rent supplements or reduced rent
for low and moderate income families, 20 percent of gross rent
actually paid in cash or its equivalent shall be the claimant's
"rent constituting property taxes paid."
Sec. 4. Minnesota Statutes 1982, section 290A.03,
subdivision 13, as amended by Laws 1983, chapter 15, section 28,
is amended to read:
Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes
payable" means the property tax exclusive of special
assessments, penalties, and interest payable on a claimant's
homestead before reductions made pursuant to section 273.13,
subdivisions 6, 7 and 14a, but after deductions made pursuant to
sections 124.2137, 273.115, 273.116, 273.135, 273.139, 273.1391,
273.42, subdivision 2, and any other state paid property tax
credits in any calendar year. In the case of a claimant who
makes ground lease payments, "property taxes payable" includes
the amount of the payments directly attributable to the property
taxes assessed against the parcel on which the house is
located. No apportionment or reduction of the "property taxes
payable" shall be required for the use of a portion of the
claimant's homestead for a business purpose if the claimant does
not deduct any business depreciation expenses for the use of a
portion of the homestead in the determination of federal
adjusted gross income. For homesteads which are manufactured
homes as defined in section 168.011, subdivision 8, "property
taxes payable" shall also include 23 percent the amount of the
gross rent paid in the preceding year for the site on which the
homestead is located, exclusive of charges for utilities or
services which is attributable to the net tax paid on the site.
The amount attributable to property taxes shall be determined by
multiplying the net tax on the parcel by a fraction, the
numerator of which is the gross rent paid for the calendar year
for the site and the denominator of which is the gross rent paid
for the calendar year for the parcel. When a homestead is owned
by two or more persons as joint tenants or tenants in common,
such tenants shall determine between them which tenant may claim
the property taxes payable on the homestead. If they are unable
to agree, the matter shall be referred to the commissioner of
revenue and his decision shall be final. Property taxes are
considered payable in the year prescribed by law for payment of
the taxes.
In the case of a claim relating to "property taxes
payable", the claimant must have owned and occupied the
homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead
property pursuant to section 273.13, subdivisions 6, 7, or 14a
on or before June 1 of the year in which the "property taxes
payable" were levied; or (ii) the claimant must provide
documentation from the local assessor that application for
homestead classification has been made prior to July 1 October 1
of the year in which the "property taxes payable" were payable
and that the assessor has approved the application.
Sec. 5. Minnesota Statutes 1982, section 290A.03, is
amended by adding a subdivision to read:
Subd. 14. [NET TAX.] "Net tax" means
(a) the property tax, exclusive of special assessments,
interest, and penalties, or
(b) the payments made in lieu of ad valorem taxes,
including payments of special assessments imposed in lieu of ad
valorem taxes,
for the calendar year in which the rent was paid. If a
portion of the property is occupied as a homestead or is used
for other than rental purposes, the net tax shall be the amount
of tax after reductions pursuant to section 273.13, subdivisions
6, 7, and 14a, reduced by the percentage that the nonrental use
comprises of the total square footage of the building. If a
portion of the property is used for purposes other than for
residential rental and none of the property is occupied as a
homestead, the net tax shall be the amount of the tax of the
parcel multiplied by a fraction, the numerator of which is the
assessed value of the residential rental portion and the
denominator of which is the total assessed value of the parcel.
If a portion of the property is used for other than rental
residential purposes, the county treasurer shall list on the
property tax statement the amount of net tax pertaining to the
rental residential portion of the property.
The amount of the net tax shall not be reduced by an
abatement or a court ordered reduction in the property tax on
the property made after the certificate of rent constituting
property tax has been provided to the renter.
Sec. 6. Minnesota Statutes 1982, section 290A.04,
subdivision 1, is amended to read:
Subdivision 1. A credit shall be allowed each claimant in
the amount that property taxes payable or rent constituting
property taxes exceed the percentage of the household income of
the claimant specified in subdivision 2 in the year for which
the taxes were levied or in the year in which the rent was
paid. The maximum credit for any claimant who was disabled on
or before June 1 or who attained the age of 65 prior to June 1
of the year following the year for which the taxes were levied
or in which the rent was paid shall be $200 above the maximum
for which that claimant would otherwise be eligible according to
his income. If the amount of property taxes payable or rent
constituting property taxes is equal to or less than the
percentage of the household income of the claimant specified in
subdivision 2 in the year for which the taxes were levied or in
the year in which the rent was paid, the claimant shall not be
eligible for a state refund pursuant to this section.
Sec. 7. Minnesota Statutes 1982, section 290A.04,
subdivision 2, is amended to read:
Subd. 2. The refund shall be paid to claimants whose
property taxes payable exceed the following percentages of their
income, up to the designated maximum credit amounts:
For claimants earning:
$0 to $2,999, 0.5 percent, up to $650;
3,000 to 3,999, 0.6 percent, up to $650;
4,000 to 4,999, 0.7 percent, up to $650;
5,000 to 5,999, 0.8 percent, up to $650;
6,000 to 6,999, 0.9 percent, up to $650;
7,000 to 7,999, 1.0 percent, up to $650;
8,000 to 8,999, 1.1 percent, up to $650;
9,000 to 9,999, 1.2 percent, up to $650;
10,000 to 10,999, 1.3 percent, up to $650;
11,000 to 11,999, 1.4 percent, up to $650;
12,000 to 19,999, 1.5 percent, up to $650;
20,000 to 22,999, 1.6 percent, up to $650;
23,000 to 25,999, 1.8 percent, up to $600;
26,000 to 30,999, 2.0 percent, up to $550;
31,000 to 35,999, 2.2 percent, up to $525;
36,000 to 40,999, 2.4 percent, up to $500;
41,000 to 44,999, 2.6 percent, up to $500;
45,000 to 52,999, 2.8 percent, up to $500;
53,000 to 65,999, 3.0 percent, up to $500;
66,000 to 81,999, 3.2 percent, up to $500;
82,000 to 99,999, 3.5 percent, up to $500;
100,000 and over, 4.0 percent, up to $500;
provided that maximum credits for incomes above $20,000
decline according to the following schedule:
between $20,000 and $26,000 decline $16.67 per $1,000;
between $26,000 and $36,000 decline $5 per $1,000.
A claimant whose property taxes payable or rent
constituting property taxes are in excess of the percentage of
the household income stated below shall pay an amount equal to
the amount shown for the appropriate household income level and
the state refund will be equal to an amount up to the state
refund amount shown below.
Percent Claimant State
Household Income of Income Pays Refund
Net loss and
up to $2,999 0.5 percent $13 $13
3,000 to 3,499 0.6 percent $15 $15
3,500 to 3,999 0.6 percent $18 $18
4,000 to 4,499 0.7 percent $20 $20
4,500 to 4,999 0.7 percent $23 $23
5,000 to 5,999 0.8 percent $40 $40
6,000 to 6,999 0.9 percent $54 $54
7,000 to 7,999 1.0 percent $70 $70
8,000 to 8,999 1.1 percent $88 $88
9,000 to 9,999 1.2 percent $108 $108
10,000 to 10,999 1.3 percent $130 $130
11,000 to 11,999 1.4 percent $154 $154
12,000 to 12,999 1.5 percent $180 $180
13,000 to 13,999 1.5 percent $195 $195
14,000 to 14,999 1.5 percent $210 $210
15,000 to 15,999 1.5 percent $225 $225
16,000 to 16,999 1.5 percent $240 $240
17,000 to 17,999 1.5 percent $255 $255
18,000 to 18,999 1.5 percent $270 $270
19,000 to 19,999 1.5 percent $285 $285
20,000 to 20,999 1.6 percent $320 $320
21,000 to 21,999 1.6 percent $336 $336
22,000 to 22,999 1.6 percent $352 $352
23,000 to 23,999 1.8 percent $414 $414
24,000 to 24,999 1.8 percent $432 $432
25,000 to 25,999 1.8 percent $450 $450
26,000 to 26,999 2.0 percent $520 $520
27,000 to 27,999 2.0 percent $540 $540
28,000 to 28,999 2.0 percent $560 $560
29,000 to 29,999 2.0 percent $580 $580
30,000 to 30,999 2.0 percent $600 $600
31,000 to 31,999 2.2 percent $620 $620
32,000 to 32,999 2.2 percent $640 $640
33,000 to 33,999 2.2 percent $726 $700
34,000 to 34,999 2.2 percent $748 $600
35,000 to 35,999 2.2 percent $770 $500
36,000 to 36,999 2.4 percent $792 $400
37,000 to 37,999 2.4 percent $814 $300
38,000 to 38,999 2.4 percent $912 $200
39,000 to 39,999 2.4 percent $936 $100
The payment made to a claimant shall be the amount of the
state refund calculated pursuant to this subdivision, but not
exceeding $850, less the homestead credit given pursuant to
section 273.13, subdivisions 6, 7 and 14a.
Sec. 8. Minnesota Statutes 1982, section 290A.04,
subdivision 2a, is amended to read:
Subd. 2a. An additional refund shall be allowed each
claimant who was not disabled or who had not attained the age of
65 by June 1 of the year in which the taxes were payable in an
amount equal to 50 percent of the amount by which property taxes
payable or rent constituting property taxes exceed the sum of
(a) the refund calculated pursuant to subdivision 2 and (b) the
percentage of the claimant's household income specified in
subdivision 2. The sum of the refunds provided in subdivision 2
and this subdivision shall not exceed the maximum amounts
provided below.
For claimants earning:
$0 to 25,999, up to $1,000;
26,000 to 35,999, up to $850;
36,000 and over, up to $550;
provided that maximum refunds for incomes above $20,000
decline according to the following schedule:
between $20,000 and $26,000 decline $25 per $1,000; between
$26,000 and $36,000 decline $30 per $1,000. A claimant who owns
his own homestead part of the year and rents part of the year
may add his rent constituting property taxes to the qualifying
tax on his homestead and receive the additional refund provided
in subdivision 2a.
A claimant whose property taxes payable or rent
constituting property taxes are in excess of the sum of the
amounts in subdivision 2 paid by the claimant and the state for
the specified household income level shall be allowed an
additional refund. The amount of the additional refund shall be
equal to the remaining amount of the claimant's property taxes
payable or rent constituting property taxes less the percentage
to be paid by the claimant pursuant to the table below up to the
specified maximum state refund. The refund shall be reduced by
the homestead credit given pursuant to section 273.13,
subdivisions 6, 7, and 14a. The sum of the state refunds
provided in subdivision 2 and this subdivision shall not exceed
a total of $1,125.
Maximum
Percent State
Household Income Paid by Claimant Refund
Net loss and
up to $2,999 5 percent $1,125
3,000 to 3,499 6 percent $1,125
3,500 to 3,999 7 percent $1,125
4,000 to 4,499 8 percent $1,125
4,500 to 4,999 9 percent $1,125
5,000 to 5,999 10 percent $1,125
6,000 to 6,999 11 percent $1,125
7,000 to 7,999 12 percent $1,125
8,000 to 8,999 13 percent $1,125
9,000 to 9,999 14 percent $1,125
10,000 to 10,999 15 percent $1,125
11,000 to 11,999 16 percent $1,125
12,000 to 12,999 17 percent $1,125
13,000 to 13,999 18 percent $1,125
14,000 to 14,999 19 percent $1,125
15,000 to 15,999 20 percent $1,125
16,000 to 16,999 21 percent $1,125
17,000 to 17,999 22 percent $1,125
18,000 to 18,999 23 percent $1,125
19,000 to 19,999 24 percent $1,125
20,000 to 20,999 25 percent $1,125
21,000 to 21,999 27 percent $1,125
22,000 to 22,999 29 percent $1,125
23,000 to 23,999 31 percent $1,125
24,000 to 24,999 33 percent $1,105
25,000 to 25,999 35 percent $1,080
26,000 to 26,999 38 percent $1,050
27,000 to 27,999 41 percent $1,020
28,000 to 28,999 44 percent $990
29,000 to 29,999 47 percent $960
30,000 to 30,999 50 percent $930
31,000 to 31,999 50 percent $900
32,000 to 32,999 50 percent $800
33,000 to 33,999 50 percent $700
34,000 to 34,999 50 percent $600
35,000 to 35,999 50 percent $500
36,000 to 36,999 50 percent $400
37,000 to 37,999 50 percent $300
38,000 to 38,999 50 percent $200
39,000 to 39,999 50 percent $100
40,000 and over -0-
No credit or payment will be allowed pursuant to
subdivision 2 or 2a if the claimant's household income is
$40,000 or more. This subdivision shall not apply to a claimant
who is disabled or has attained the age of 65 by June 1 of the
year in which the taxes are payable.
Sec. 9. Minnesota Statutes 1982, section 290A.04,
subdivision 2b, is amended to read:
Subd. 2b. An additional refund shall be allowed each
claimant who is disabled or has attained the age of 65 by June 1
of the year in which the taxes were payable in an amount equal
to 50 percent of the amount by which property taxes payable or
rent constituting property taxes exceed the sum of (a) the
refund calculated pursuant to subdivision 2 and (b) the
percentage of the claimant's household income specified in
subdivision 2. The sum of the refunds provided in subdivision 2
and this subdivision shall not exceed the maximum amounts
provided below.
For claimants earning:
$0 to 22,999, up to $1,000;
23,000 to 25,999, up to $975;
26,000 to 35,999, up to $950;
36,000 and over, up to $750;
provided that maximum refunds for incomes above $20,000
decline according to the following schedule:
between $20,000 and $26,000 decline $8.33 per $1,000;
between $26,000 and $36,000 decline $20 per $1,000.
In the case of a claimant who was disabled on or before
June 1 or who attained the age of 65 on the date specified in
subdivision 1, the refund shall not be less than the refund
which the claimant's household income as defined in section
290A.03 and property tax or rent constituting property tax would
have entitled him to receive under Minnesota Statutes 1974,
Section 290.0618., if the claimant's property taxes payable or
rent constituting property taxes exceed the total amount in
subdivision 2 to be paid by the claimant and by the state for
the claimant's household income. The amount of the additional
refund shall be equal to the remaining amount of the claimant's
property taxes payable or rent constituting property taxes less
the percentage to be paid by the claimant pursuant to the table
below up to the specified maximum state refund. The refund
shall be reduced by the homestead credit given pursuant to
section 273.13, subdivisions 6, 7, and 14a. The sum of the
state refunds provided in subdivision 2 and this subdivision
shall not exceed a total of $1,125.
Maximum
Percent State
Household Income Paid by Claimant Refund
Net loss and
up to $2,999 5 percent $1,125
3,000 to 3,499 5 percent $1,125
3,500 to 3,999 5 percent $1,125
4,000 to 4,499 5 percent $1,125
4,500 to 4,999 5 percent $1,125
5,000 to 5,999 5 percent $1,125
6,000 to 6,999 5 percent $1,125
7,000 to 7,999 5 percent $1,125
8,000 to 8,999 5 percent $1,125
9,000 to 9,999 5 percent $1,125
10,000 to 10,999 6 percent $1,125
11,000 to 11,999 7 percent $1,125
12,000 to 12,999 8 percent $1,125
13,000 to 13,999 9 percent $1,125
14,000 to 14,999 10 percent $1,125
15,000 to 15,999 10 percent $1,125
16,000 to 16,999 11 percent $1,125
17,000 to 17,999 11 percent $1,125
18,000 to 18,999 12 percent $1,125
19,000 to 19,999 12 percent $1,125
20,000 to 20,999 13 percent $1,125
21,000 to 21,999 15 percent $1,125
22,000 to 22,999 18 percent $1,125
23,000 to 23,999 21 percent $1,125
24,000 to 24,999 24 percent $1,105
25,000 to 25,999 27 percent $1,080
26,000 to 26,999 30 percent $1,050
27,000 to 27,999 35 percent $1,020
28,000 to 28,999 40 percent $ 990
29,000 to 29,999 45 percent $ 960
30,000 to 30,999 50 percent $ 930
31,000 to 31,999 50 percent $900
32,000 to 32,999 50 percent $800
33,000 to 33,999 50 percent $700
34,000 to 34,999 50 percent $600
35,000 to 35,999 50 percent $500
36,000 to 36,999 50 percent $400
37,000 to 37,999 50 percent $300
38,000 to 38,999 50 percent $200
39,000 to 39,999 50 percent $100
40,000 and over -0-
No credit or payment will be allowed pursuant to
subdivision 2 or 2b if the claimant's household income is
$40,000 or more.
Sec. 10. Minnesota Statutes 1982, section 290A.04, is
amended by adding a subdivision to read:
Subd. 2e. If the net property taxes payable on a homestead
increase more than 20 percent over the net property taxes
payable in the previous year on the same property, a claimant
who is a homeowner shall be allowed an additional refund equal
to 50 percent of the amount by which the increase exceeds 20
percent. This subdivision shall not apply to any increase in
the net property taxes payable attributable to improvements made
to the homestead. The refund shall not exceed $200. The
maximum refund shall be reduced by $20 for each $1,000 of the
claimant's household income in excess of $30,000. No refund
shall be allowed if the claimant's household income exceeds
$40,000.
For purposes of this subdivision, "net property taxes
payable" means property taxes payable after reductions made
pursuant to sections 124.2137; 273.13, subdivisions 6, 7, and
14a; 273.115, subdivision 1; 273.116, subdivision 1; 273.135;
273.1391; and 273.42, subdivision 2, and any other state paid
property tax credits and after the deduction of tax refund
amounts for which the claimant qualifies pursuant to
subdivisions 2, 2a and 2b.
In addition to the other proofs required by this chapter,
each claimant under this subdivision shall file with the
property tax refund return a copy of the property tax statement
for taxes payable in the preceding year or other documents
required by the commissioner.
On or before December 1, 1983, the commissioner shall
estimate the cost of making the payments provided by this
section. Notwithstanding the open appropriation provision of
section 290A.23, if the estimated total refund claims exceed
$11,000,000, the commissioner shall adjust accordingly the
percentage increase in net property taxes payable over the
previous year which is required to qualify for the credit
provided in this subdivision.
This subdivision is repealed effective for property taxes
levied in 1984, payable in 1985.
Sec. 11. Minnesota Statutes 1982, section 290A.04, is
amended by adding a subdivision to read:
Subd. 2f. If the net property taxes payable in 1984 on a
homestead increases more than ten percent over the net property
taxes payable in 1983 on the same property, and if the effective
tax rate of property tax paid in 1983 on that homestead as
compared to the January 2, 1982, estimated market value exceeds
2.25 percent, an additional credit shall be paid by the
commissioner to the claimant. The additional credit shall be
equal to 50 percent of the amount by which the increase exceeds
ten percent but in no case shall the additional credit exceed
$200. This subdivision shall not apply to any increase in the
net property taxes payable attributable to improvements made to
the homestead.
For purposes of this subdivision, "effective tax rate"
means the net property tax paid by the claimant in 1983, divided
by the assessor's 1982 estimated market value times 100.
For purposes of this subdivision, "net property taxes"
means the gross tax less the homestead credit and any other
state paid credit and after the deduction of tax refund amounts
for which the claimant qualifies.
The city assessor, or the county assessor if the property
is located in a taxing district which does not have a city
assessor, shall notify all affected property owners of the
availability of this credit and furnish the forms which the
commissioner shall prescribe.
The additional refunds shall be paid at the same time as
the commissioner pays other property tax refund claims.
Sec. 12. Minnesota Statutes 1982, section 290A.04,
subdivision 3, is amended to read:
Subd. 3. The commissioner of revenue shall construct and
make available to taxpayers a comprehensive table showing the
property taxes to be paid and credit allowed at various levels
of income and assessment. The table shall follow the schedule
of income percentages, maximums and other provisions specified
in subdivisions 2, 2a, and 2b, except that the commissioner may
graduate the transition between income brackets.
For homestead property owners who are disabled or are 65 or
older, as provided in subdivision 1, the commissioner shall base
his determination of the credit on the gross qualifying tax
reduced by the average statewide effective homestead credit
percentage for taxes payable in 1975 calculated under section
273.13, subdivisions 6 and 7.
Sec. 13. Minnesota Statutes 1982, section 290A.07,
subdivision 3, is amended to read:
Subd. 3. Any claimant not included in subdivision 2a shall
receive full payment after September 30 August 31 and prior to
October September 15. Interest shall be added at six percent
per annum from October September 15 or 60 days after receipt of
the application if the application is filed after August 31.
Interest will be computed until the date the claim is paid.
Sec. 14. Minnesota Statutes 1982, section 290A.18, is
amended to read:
290A.18 [RIGHT TO FILE CLAIM.]
If a person entitled to relief under sections 290A.01 to
290A.23 dies prior to receiving relief, the surviving spouse, or
dependent or personal representative of the person shall be
entitled to file the claim and receive relief. If there is no
surviving spouse or dependent, the right to the credit shall
lapse.
Sec. 15. Minnesota Statutes 1982, section 290A.19, is
amended to read:
290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT
CERTIFICATE; PENALTY.]
(a) The owner or managing agent of any property for which
rent is paid for occupancy as a homestead shall furnish a
certificate of rent paid constituting property tax to each
person who is a renter on December 31, in the form prescribed by
the commissioner. If the renter moves prior to December 31, the
owner or managing agent shall at his option either provide the
certificate to the renter at the time he moves, or mail the
certificate to the forwarding address if an address has been
provided by the renter. The certificate shall be made available
to the renter not later than January 31 of the year following
the year in which the rent was paid. Any owner or managing
agent who willfully fails to furnish a certificate as provided
herein shall be liable to the commissioner for a penalty of $20
for each act or failure to act. The penalty shall be assessed
and collected in the manner provided in chapter 290 for the
assessment and collection of income tax.
(b) If the owner or managing agent elects to provide the
renter with the certificate at the time he moves, rather than
after December 31, the amount of rent constituting property
taxes shall be computed as follows:
(i) The net tax shall be reduced by 1/12th for each month
remaining in the calendar year.
(ii) In calculating the denominator of the fraction
pursuant to section 290A.03, subdivision 11, the gross rent paid
through the last month of claimant's occupancy shall be
substituted for "the gross rent paid for the calendar year for
the property in which the unit is located."
(c) The certificate of rent constituting property taxes
shall include the address of the property, including the county,
and the property tax parcel identification number and any
additional information which the commissioner determines is
appropriate.
(d) If the owner or managing agent fails to provide the
renter with a certificate of rent constituting property taxes,
the commissioner shall allocate the net tax on the building to
the unit on a square footage basis or other appropriate basis as
the commissioner determines. The renter shall supply the
commissioner with a statement from the county treasurer which
gives the amount of property tax on the parcel, the address and
property tax parcel identification number of the property, and
the number of units in the building.
Sec. 16. [EFFECTIVE DATE.]
This article is effective for claims based on rent paid
during calendar year 1983 and thereafter and property taxes
payable in 1984 and thereafter, except that the date change in
section 4 shall be effective beginning for claims based on rent
paid during calendar year 1982.
ARTICLE 5
LOCAL GOVERNMENT AIDS
Section 1. Minnesota Statutes 1982, section 116J.42,
subdivision 7, is amended to read:
Subd. 7. The commissioner:
(1) Shall continuously gather and develop demographic data
within the state;
(2) Shall design and test methods of research and data
collection;
(3) Shall have the power to call upon any agency of the
state or political subdivision for data as may be available, and
the agencies and political subdivisions shall cooperate to the
fullest extent possible;
(4) Shall periodically prepare population projections for
designated regions and for the state and may periodically
prepare projections for each county, or other political or
geographic division;
(5) Shall review, comment, and prepare analysis of
population estimates and projections made by state agencies,
political subdivisions, other states, federal agencies or
nongovernmental persons, institutions or commissions;
(6) Shall serve as the state liaison with the federal
bureau of census, shall coordinate his activities with federal
demographic activities to the fullest extent possible, and shall
aid the legislature in preparing a census data plan and form for
each decennial census;
(7) Shall compile an annual study of population estimates
on the basis of county, regional or other political or
geographic divisions as necessary to carry out the purposes of
this subdivision and section 116J.43;
(8) Shall, on or before January 1 of each year, issue a
report to the legislature containing an analysis of the
demographic implications of the annual population study and
population projections;
(9) Shall cause to be prepared maps of all counties in the
state, all municipalities with a population of 10,000 or more,
and any other municipalities as deemed necessary for census
purposes, according to scale and detail recommended by the
federal bureau of the census, with the maps of cities showing
boundaries of precincts; and
(10) Shall annually prepare a population an estimate of
population and of the number of households for each governmental
subdivision for which the metropolitan council does not prepare
an annual population estimate, and shall communicate the
estimate estimates to the governing body of each governmental
subdivision by May 1 of each year.
Sec. 2. Minnesota Statutes 1982, section 273.138,
subdivision 2, is amended to read:
Subd. 2. (a) As provided in paragraphs (b) and (c), each
county government, city and township shall receive reimbursement
in 1978 1984 and subsequent years in an amount equal to based on
the product of its total mill rate for taxes payable in the
calendar year prior to the calendar year in which the aid is to
be paid 1983, times the total 1972 assessed value of real
property exempted from taxation by section 272.02, subdivision 1
which was located within the territory of such governmental unit
the county, times 1.25. For the purpose of this subdivision,
the "total mill rate" of a county government, city or township
includes mill rates for taxes levied by such governmental unit
the county which were not levied on the entire taxable value of
such governmental unit the county.
(b) If the county contains a city of the first class, aid
shall be paid in an amount equal to 50 percent of the amount
computed pursuant to paragraph (a) in 1984, and no aid will be
paid in 1985 and subsequent years.
(c) If the county does not contain a city of the first
class, and if the product computed pursuant to paragraph (a) is
$50,000 or more for a county, aid shall be paid to that county
in an amount equal to 90 percent of the amount computed pursuant
to paragraph (a). If the product is less than $50,000, no aid
will be paid.
Sec. 3. Minnesota Statutes 1982, section 273.138,
subdivision 3, is amended to read:
Subd. 3. (a) As provided in paragraph (b), each school
district shall receive reimbursement in 1974 1984 and subsequent
years in an amount equal to based on the product of its 1972
assessed value of real property exempted from taxation by Laws
1973, Chapter 650, Article XXIV, Section 1, times the sum of its
1972 payable 1973 mill rates for the following levies:
(1) A levy to pay the principal and interest on bonded
indebtedness, including the levy to pay the principal and
interest on bonds issued pursuant to Minnesota Statutes 1971,
Section 275.125, Subdivision 3, Clause (6) (c);
(2) A levy to pay the principal and interest on debt
service loans, pursuant to Minnesota Statutes 1971, Section
124.42;
(3) A levy to pay the principal and interest on capital
loans, pursuant to Minnesota Statutes 1971, Section 124.43;
(4) A levy to pay amounts required in support of a teacher
retirement fund, pursuant to Minnesota Statutes 1971, Section
422.13;
(5) A levy for additional maintenance cost in excess of 30
mills times the adjusted assessed valuation of the school
district, pursuant to Minnesota Statutes 1971, Section 275.125,
Subdivision 3, Clause (4).
For the purpose of this subdivision, a school district mill
rate for any of the forementioned levies which was not applied
to the total taxable value of such school district shall be
added to the forementioned sum of mill rates as if it had been
applied to the entire taxable value of the school district.
(b) If the product computed pursuant to paragraph (a) is
more than or equal to an amount equal to $10 per pupil unit of
the district, aid shall be paid to that school district in an
amount equal to 90 percent of the amount computed pursuant to
paragraph (a). If the product is an amount less than $10 per
pupil unit, no aid will be paid.
Sec. 4. Minnesota Statutes 1982, section 273.138,
subdivision 6, is amended to read:
Subd. 6. If a county government, city or township is
subject to the provisions of sections 275.50 to 275.56, the
amount of aid calculated for such taxing district pursuant to
subdivision 2 for 1976 shall be deducted from the taxing
district's levy year 1975, taxes payable 1976 levy limit base
determined pursuant to section 275.51, subdivision 3b and the
amount of aid calculated for such taxing district pursuant to
subdivision 2 for 1977 shall be deducted from the taxing
district's levy year 1976, taxes payable 1977 levy limit base
determined pursuant to section 275.51, subdivision 3c for the
purpose of calculating the taxing district's levy limitation for
taxes payable in 1976 or 1977 as the case may be. The amount of
aid calculated for a school district pursuant to subdivision 3,
clauses (2), (3), (4), (5) and (6) for 1975 or a subsequent year
shall be deducted from the school district's maintenance levy
limitation established pursuant to section 275.125, subdivision
2a, in determining the amount of taxes the school district may
levy for general and special purposes for taxes payable in 1975
or a subsequent year.
Sec. 5. Minnesota Statutes 1982, section 477A.011, is
amended by adding a subdivision to read:
Subd. 3a. [NUMBER OF HOUSEHOLDS.] Number of households
means the number of households established by the most recent
federal census, by a special census conducted under contract
with the United States bureau of the census, by an estimate made
by the metropolitan council, or by an estimate of the state
demographer made pursuant to section 116J.42, subdivision 7,
whichever is the most recent as to the stated date of the count
or estimate.
Sec. 6. Minnesota Statutes 1982, section 477A.011,
subdivision 6, is amended to read:
Subd. 6. [CONSUMER PRICE INDEX IMPLICIT PRICE DEFLATOR
INCREASE.] For any calendar year aid distribution, the consumer
price index implicit price deflator increase means the
percentage increase in the revised consumer price index for all
urban consumers for the Minneapolis - St. Paul metropolitan area
implicit price deflator for government purchases of goods and
services for state and local government prepared by the bureau
of economic analysis of the United States department of labor
commerce for the 12-month period ending in June of the previous
year.
Sec. 7. Minnesota Statutes 1982, section 477A.011,
subdivision 7, is amended to read:
Subd. 7. [LOCAL REVENUE BASE.] For the 1982 1984 aid
distribution, a municipality's local revenue base means its
local revenue base for the sum of:
(a) (1) in the case of a municipality which had a local
revenue base for the 1981 aid distribution, the 1981 aid
distribution base calculated pursuant to Minnesota Statutes
1980, section 477A.01, less any amount added to the local
revenue base for the costs of principal and interest on bonded
debt incurred for the purpose of providing capital replacement
for streets, curbs, gutters, storm sewers, and bridges,
increased in the manner prescribed by clauses (a) and (b).
multiplied by a factor of 1.208, and multiplied by a factor
equal to the estimated 1981 population divided by the 1980
census population, provided that the latter factor is greater
than 1.0; or
For all subsequent calendar year aid distributions, a
municipality's local revenue base means its local revenue base
for the previous year aid distribution calculated pursuant to
sections 477A.011 to 477A.014 increased by:
(a) a percentage equal to the consumer price index increase; and
(b) a percentage equal to the percentage increase in
population over that used to compute the previous year aid
distribution, if any.
The local revenue base for a statutory or home rule charter
city or a town having the powers of a statutory city pursuant to
section 368.01 or special law which has a population of 2,500 or
more according to the most recent federal census and
(2) in the case of a municipality which does did not have a
local revenue base for the previous year 1981 aid distribution
shall be established by adding, the prior year's local
government aid distribution received certified for 1983 pursuant
to Minnesota Statutes 1980, Section 477A.01 or sections 477A.011
to 477A.014, and plus the property tax levy, exclusive of levies
for bonded indebtedness, in the preceding year and multiplying
that sum by a percentage equal to the consumer price index
increase. for taxes payable in 1983;
(b) the total amount certified in calendar year 1983
pursuant to Minnesota Statutes 1982, section 273.138; and
(c) the total amount certified in calendar year 1983
pursuant to Minnesota Statutes 1982, section 273.139, including
any amount received by a district as defined by section 273.73,
subdivision 9, or which qualifies for exemption pursuant to
273.78, which lies totally within the municipality, and
including any amount which would have been received in 1983
pursuant to section 273.139 by a district as defined by section
273.73, subdivision 9, lying totally within the municipality,
for a project approved by the Minnesota housing finance agency
or the United States department of housing and urban development
prior to March 1, 1983, had the project been completed and
subject to taxation based upon full market value for taxes
payable in 1983.
Any municipality whose payable 1983 levy exceeded its
payable 1979 levy by a factor of ten, primarily because of a
loss in state administered aids, may apply to the commissioner
of revenue to have its local revenue base computed as if it did
not have a local revenue base for the 1981 distribution.
Applications shall be in the form and accompanied by the data
required by the commissioner.
For 1985 and all subsequent calendar year aid distributions
the local revenue base means the adjusted local revenue base
used in the previous year aid distribution.
Sec. 8. Minnesota Statutes 1982, section 477A.011, is
amended by adding a subdivision to read:
Subd. 7a. [ADJUSTED LOCAL REVENUE BASE.] Adjusted local
revenue base means the local revenue base increased by:
(a) a percentage equal to the implicit price deflator
increase; and
(b) a percentage equal to the percentage increase in
population over that used to compute the previous year aid
distribution, if any, or a percentage equal to the percentage
increase in number of households over that used to compute the
previous year aid distribution, if any, whichever is higher.
For the purposes of the 1984 aid distribution, the 1981
estimates of population and number of households shall be
considered as the estimates used in the previous year aid
distribution.
For the 1984 and 1985 aid distributions, the adjusted local
revenue base of a city that issued general obligation bonds in
1982 to pay for the construction or reconstruction of water
wells which replaced a municipal water supply found to be an
environmental health hazard by the state department of health
shall be increased by one-fourth of the amount of the bonds
issued. This increase shall be disregarded in computing the
local revenue base for the succeeding year aid distribution.
Sec. 9. Minnesota Statutes 1982, section 477A.011,
subdivision 10, is amended to read:
Subd. 10. [MAXIMUM INCREASE AID AMOUNT.] For any calendar
year the 1984 aid distribution, a municipality's maximum
increase aid amount shall mean the following percentage of its
previous year aid:
(a) 12 percent if its previous year aid is greater than
$100 per capita;
(b) 15 percent if its previous year aid is greater than $75
per capita but not greater than $100 per capita;
(c) 17 percent if its previous year aid is greater than $50
per capita but not greater than $75 per capita;
(d) 20 percent if its previous year aid is not greater than
$50 per capita be 106 percent of the amount it was certified to
receive in 1983 pursuant to sections 477A.011 to 477A.03, plus
any amounts certified in 1983 pursuant to Minnesota Statutes
1982, sections 273.138 and 273.139, including any amount
certified by a district as defined by section 273.73,
subdivision 9, or which qualifies for exemption pursuant to
section 273.78, which lies totally within the municipality, and
including any amount which would have been received in 1983
pursuant to section 273.139 by a district as defined by section
273.73, subdivision 9, lying totally within the municipality,
for a project approved by the Minnesota housing finance agency
or the United States department of housing and urban development
prior to March 1, 1983, had the project been completed and
subject to taxation based upon full market value for taxes
payable in 1983.
For any subsequent calendar year aid distribution, a
municipality's maximum aid amount shall be 106 percent of the
amount received in the previous year pursuant to sections
477A.011 to 477A.03.
Sec. 10. Minnesota Statutes 1982, section 477A.012, is
amended to read:
477A.012 [COUNTY GOVERNMENT DISTRIBUTIONS.]
In each calendar year, every county government except that
of a county containing a city of the first class shall receive a
distribution equal to its previous year aid 60 percent of the
aid amount certified for 1983 pursuant to sections 477A.011 to
477A.03.
Sec. 11. Minnesota Statutes 1982, section 477A.013, is
amended to read:
477A.013 [MUNICIPAL GOVERNMENT DISTRIBUTIONS.]
Subdivision 1. [MUNICIPALITIES UNDER 2,500 POPULATION
TOWNS.] In each calendar year, each municipality which is not
covered by the provisions of subdivision 2 town which has an
average equalized mill rate of at least two mills shall receive
a distribution equal to its previous year aid plus its minimum
increase 50 percent of the amount received in 1983 pursuant to
Minnesota Statutes 1982, sections 273.138, 273.139, and 477A.011
to 477A.03.
Subd. 2. [MUNICIPALITIES OVER 2,500 POPULATION CITIES AND
TOWNS.] In each calendar year, each statutory and home rule
charter city, and each town having the powers of a statutory
city pursuant to section 368.01 or special law, which has a
population of 2,500 or more according to the latest federal
census shall receive a distribution equal to the amount obtained
by subtracting the product of 10 mills and multiplied by the
municipality's equalized assessed value from the adjusted local
revenue base. This amount shall then be adjusted, so that it is
neither less than the sum of its previous year aid and its
minimum increase, nor greater than the sum of its previous year
aid and its maximum increase.
An aid amount shall be computed in the same manner for all
towns which have an average equalized mill rate of at least two
mills. A town's final aid amount shall be determined by either
the subdivision 1 or the subdivision 2 calculation, whichever is
greater.
Subd. 3. [AID LIMITATION.] The aid amount determined
pursuant to subdivision 2 shall be limited so that it is not
greater than the municipality's maximum aid amount.
Sec. 12. [477A.0131] [MAXIMUM AID REDUCTION.]
Subdivision 1. No home rule charter or statutory city
shall receive a distribution in any calendar year pursuant to
sections 477A.011 to 477A.03 that is less than the sum of the
amounts certified in the previous calendar year pursuant to
sections 477A.011 to 477A.03, section 273.139, and section
273.138, by more than an amount equal to three-quarters of one
mill times the unit's equalized assessed value.
Subd. 2. Of the $246,200,000 appropriated for distribution
to cities for calendar year 1984, an amount not to exceed
$6,400,000 may be used for the purposes of this section.
Payments shall be made in the manner prescribed in section
477A.015. In the event that this appropriation is not
sufficient, aid amounts determined pursuant to this section
shall be proportionally reduced.
Sec. 13. Minnesota Statutes 1982, section 477A.014,
subdivision 1, is amended to read:
Subdivision 1. [CALCULATIONS AND PAYMENTS.] The
commissioner of revenue shall make all necessary calculations
and make payments pursuant to sections 477A.012, 477A.013 and
477A.03 directly to the affected taxing authorities annually.
In addition, the commissioner shall notify the authorities of
their aid amounts, as well as the computational factors used in
making the calculations for their authority, and those statewide
total figures that are pertinent, before August 15 of the year
preceding the aid distribution year.
Sec. 14. [477A.017] [UNIFORM FINANCIAL ACCOUNTING AND
REPORTING SYSTEM.]
Subdivision 1. [PURPOSE.] Sections 477A.011 to 477A.03 are
designed to provide property tax relief to local units of
government. In order for the legislature to determine the
amounts of relief necessary each year, the legislature must have
uniform and current financial information from the governmental
units which receive aid distributions. This section is intended
to provide that information.
Subd. 2. [STATE AUDITOR'S DUTIES.] The state auditor shall
prescribe uniform financial accounting and reporting standards
in conformity with national standards to be applicable to cities
of more than 2,500 population and uniform reporting standards to
be applicable to cities of less than 2,500 population.
Subd. 3. [CONFORMITY.] Other law to the contrary
notwithstanding, in order to receive distributions under
sections 477A.011 to 477A.03, counties and cities must conform
to the standards set in subdivision 2 in making all financial
reports required to be made to the state auditor after June 30,
1984.
Sec. 15. Minnesota Statutes 1982, section 477A.03,
subdivision 2, is amended to read:
Subd. 2. [LIMITATION ON APPROPRIATION; PROPORTIONATE
REDUCTION.] The amount appropriated under subdivision 1 for
distributions to towns pursuant to section 477A.013 shall not
exceed $240,725,464 $8,750,000 for calendar year 1982 and the
amount appropriated for distribution to cities pursuant to
section 477A.013 shall not exceed $270,561,978 $246,200,000 for
calendar year 1983 1984. If the limitations contained in this
subdivision result in a reduction in the amounts determined
pursuant to sections 477A.012 and section 477A.013, subdivision
2, each governmental unit city receiving local government aid
shall have its distribution proportionally reduced, but no local
government unit shall receive less aid than its previous year
aid in proportion to the amounts determined pursuant to section
477A.013, subdivision 2, before the limitation of section
477A.013, subdivision 3, is taken into account. If the
limitations contained in this subdivision result in a reduction
in the amounts determined pursuant to section 477A.013,
subdivision 1, each town receiving local government aid shall
have its distribution reduced in proportion to the amounts
determined pursuant to section 477A.013, subdivision 1 or 2,
before the limitation of section 477A.013, subdivision 3, is
taken into account.
Sec. 16. [REPEALER.]
Minnesota Statutes 1982, sections 273.138, subdivisions 1
and 4; 273.139; and 477A.011, subdivisions 8 and 9, are repealed.
Sec. 17. [EFFECTIVE DATE.]
Sections 2 to 12 and 14 to 17 are effective January 1, 1984.
Sections 1 and 13 are effective July 1, 1983.
ARTICLE 6
SALES AND EXCISE TAXES
Section 1. Minnesota Statutes 1982, section 270.60, is
amended to read:
270.60 [TAX REFUND AGREEMENTS WITH INDIANS.]
The commissioner of revenue is authorized to enter into a
tax refund agreement with the governing body of any Sioux or
Chippewa reservation in Minnesota. The agreement may provide
for a mutually agreed upon amount as a refund to the governing
body of any sales or excise tax paid by the Indian residents of
a reservation into the state treasury after June 14, 1976, or
for an amount which measures the economic value of an agreement
by the council to pay the equivalent of the state sales tax on
items included in the sales tax base but exempt on the
reservation, notwithstanding any other law which limits the
refundment of taxes.
There is annually appropriated from the general fund to the
commissioner of revenue the amounts necessary to make the
refunds provided in this section.
Sec. 2. Minnesota Statutes 1982, section 296.18,
subdivision 1, is amended to read:
Subdivision 1. [GASOLINE OR SPECIAL FUEL USED IN OTHER
THAN MOTOR VEHICLES.] Any person who shall buy and use gasoline
for any purpose other than use in motor vehicles or,
snowmobiles, or motorboats, or special fuel for any purpose
other than use in licensed motor vehicles, and who shall have
paid the excise tax directly or indirectly through the amount of
the tax being included in the price of the gasoline or special
fuel, or otherwise, shall be eligible to receive the credit
provided in section 290.06, subdivision 13, in the amount of the
tax paid by him. The taxpayer claiming this credit shall
include with his income tax return information including the
total amount of the gasoline so purchased and used by him other
than in motor vehicles, or special fuel so purchased and used by
him other than in licensed motor vehicles, and shall state when
and for what purpose it was used. The words "gasoline" or
"special fuel" as used in this subdivision do not include
aviation gasoline or special fuel for aircraft.
Sec. 3. Minnesota Statutes 1982, section 296.421,
subdivision 5, is amended to read:
Subd. 5. [COMPUTATION OF UNREFUNDED TAX.] The amount of
unrefunded tax shall be a sum equal to three-fourths of one
percent of all revenues derived from the excise taxes on
gasoline, except on gasoline used for aviation purposes,
together with interest thereon and penalties for delinquency in
payment, paid or collected pursuant to the provisions of
sections 296.02 to 296.17, from which shall be subtracted the
total amount of money refunded for motor boat use pursuant to
section 296.18. The amount of such tax shall be computed for
each six-month period commencing January 1, 1961, and shall be
paid into the state treasury on November 1 and June 1 following
each six-month period.
Sec. 4. Minnesota Statutes 1982, section 297A.02, as
amended by Laws 1982, Third Special Session chapter 1, article
6, section 2, is amended to read:
297A.02 [IMPOSITION OF TAX.]
Subdivision 1. [GENERALLY.] Except as otherwise provided
in this chapter, there is hereby imposed an excise tax of five
six percent of the gross receipts from sales at retail, as
hereinbefore defined, made by any person in this state, except
that for sales at retail made after December 31, 1982 and prior
to July 1, 1983 the rate shall be six percent.
Subd. 2. [FARM MACHINERY.] Notwithstanding the provisions
of subdivision 1, the rate of the excise tax imposed upon sales
of farm machinery shall be four percent.
Subd. 3. [LIQUOR AND BEER SALES.] Notwithstanding the
provisions of subdivision 1, the rate of the excise tax imposed
upon sales of intoxicating liquor, as defined in section 340.07,
subdivision 2, and nonintoxicating malt liquor, as defined in
section 340.001, subdivision 2, shall be 8.5 percent.
Nonintoxicating malt liquor is subject to taxation under this
subdivision only when sold at a on-sale or off-sale municipal
liquor store or other establishment licensed to sell any type of
intoxicating liquor.
Sec. 5. Minnesota Statutes 1982, section 297A.03,
subdivision 2, as amended by Laws 1982, Third Special Session
chapter 1, article VI, section 3, is amended to read:
Subd. 2. It shall be unlawful for any retailer to
advertise or hold out or state to the public or any customer,
directly or indirectly, that the tax or any part thereof will be
assumed or absorbed by the retailer, or that it will not be
added to the sales price or that, if added, it or any part
thereof will be refunded except that in computing the tax to be
collected as the result of any transaction amounts of tax less
than one-half of one cent may be disregarded and amounts of tax
if one-half cent or more may be considered an additional cent.
If the sales price of any sale at retail is nine cents or less,
or if the sales price of any sale at retail made after December
31, 1982 and prior to July 1, 1983, is eight cents or less, no
tax shall be collected. Any person violating this provision
shall be guilty of a misdemeanor.
Sec. 6. Minnesota Statutes 1982, section 297A.14, as
amended by Laws 1982, Third Special Session chapter 1, article
6, section 4, is amended to read:
297A.14 [USING, STORING OR CONSUMING TANGIBLE PERSONAL
PROPERTY; ADMISSIONS; UTILITIES.]
For the privilege of using, storing or consuming in
Minnesota tangible personal property, tickets or admissions to
places of amusement and athletic events, electricity, gas, and
local exchange telephone service purchased for use, storage or
consumption in this state, there is hereby imposed on every
person in this state a use tax at the rate of five six percent
of the sales price of sales at retail of any of the
aforementioned items made to such person unless the tax imposed
by section 297A.02 was paid on the sales price, except that for
sales at retail of any of the aforementioned items made after
December 31, 1982 and prior to July 1, 1983 the rate shall be
six percent. Notwithstanding the provisions of this paragraph,
the rate of the use tax imposed upon the sales price of sales of
farm machinery shall be four percent.
A motor vehicles vehicle subject to tax under this section
shall be taxed at the its fair market value at the time of
transport into Minnesota if such the motor vehicles were vehicle
was acquired more than three months prior to its transport into
this state.
Notwithstanding any other provisions of sections 297A.01 to
297A.44 to the contrary, the cost of paper and ink products
exceeding $100,000 in any calendar year, used or consumed in
producing a publication as defined in section 297A.25,
subdivision 1, clause (i) is subject to the tax imposed by this
section.
Sec. 7. Minnesota Statutes 1982, section 297A.25,
subdivision 1, is amended to read:
Subdivision 1. The following are specifically exempted
from the taxes imposed by sections 297A.01 to 297A.44:
(a) The gross receipts from the sale of food products
including but not limited to cereal and cereal products, butter,
cheese, milk and milk products, oleomargarine, meat and meat
products, fish and fish products, eggs and egg products,
vegetables and vegetable products, fruit and fruit products,
spices and salt, sugar and sugar products, coffee and coffee
substitutes, tea, cocoa and cocoa products, and food products
which are not taxable pursuant to section 297A.01, subdivision
3, clause (c) and which are sold by a retailer, organized as a
nonprofit corporation or association, within a place located on
property owned by the state or an agency or instrumentality of
the state, the entrance to which is subject to an admission
charge. This exemption does not include the following:
(i) candy and candy products;
(ii) carbonated beverages, beverages commonly referred to
as soft drinks containing less than 15 percent fruit juice, or
bottled water other than noncarbonated and noneffervescent
bottled water sold in individual containers of one one-half
gallon or more in size;
(b) The gross receipts from the sale of prescribed drugs
and medicine intended for use, internal or external, in the
cure, mitigation, treatment or prevention of illness or disease
in human beings and products consumed by humans for the
preservation of health, including prescription glasses,
therapeutic and prosthetic devices, but not including cosmetics
or toilet articles notwithstanding the presence of medicinal
ingredients therein;
(c) The gross receipts from the sale of and the storage,
use or other consumption in Minnesota of tangible personal
property, tickets, or admissions, electricity, gas, or local
exchange telephone service, which under the Constitution or laws
of the United States or under the Constitution of Minnesota, the
state of Minnesota is prohibited from taxing;
(d) The gross receipts from the sale of tangible personal
property (i) which, without intermediate use, is shipped or
transported outside Minnesota by the purchaser and thereafter
used in a trade or business or is stored, processed, fabricated
or manufactured into, attached to or incorporated into other
tangible personal property transported or shipped outside
Minnesota and thereafter used in a trade or business outside
Minnesota, and which is not thereafter returned to a point
within Minnesota, except in the course of interstate commerce
(storage shall not constitute intermediate use); provided that
the property is not subject to tax in that state or country to
which it is transported for storage or use, or, if subject to
tax in that other state, that state allows a similar exemption
for property purchased therein and transported to Minnesota for
use in this state; except that sales of tangible personal
property that is shipped or transported for use outside
Minnesota shall be taxed at the rate of the use tax imposed by
the state to which the property is shipped or transported,
unless that state has no use tax, in which case the sale shall
be taxed at the rate generally imposed by this state; and
provided further that sales of tangible personal property to be
used in other states or countries as part of a maintenance
contract shall be specifically exempt; or (ii) which the seller
delivers to a common carrier for delivery outside Minnesota,
places in the United States mail or parcel post directed to the
purchaser outside Minnesota, or delivers to the purchaser
outside Minnesota by means of the seller's own delivery
vehicles, and which is not thereafter returned to a point within
Minnesota, except in the course of interstate commerce;
(e) The gross receipts from the sale of packing materials
used to pack and ship household goods, the ultimate destination
of which is outside the state of Minnesota and which are not
thereafter returned to a point within Minnesota, except in the
course of interstate commerce;
(f) The gross receipts from the sale of and storage, use or
consumption of petroleum products upon which a tax has been
imposed under the provisions of chapter 296, whether or not any
part of said tax may be subsequently refunded;
(g) The gross receipts from the sale of clothing and
wearing apparel except the following:
(i) all articles commonly or commercially known as jewelry,
whether real or imitation; pearls, precious and semi-precious
stones, and imitations thereof; articles made of, or ornamented,
mounted or fitted with precious metals or imitations thereof;
watches; clocks; cases and movements for watches and clocks;
gold, gold-plated, silver, or sterling flatware or hollow ware
and silver-plated hollow ware; opera glasses; lorgnettes; marine
glasses; field glasses and binoculars.
(ii) articles made of fur on the hide or pelt, and articles
of which such fur is the component material or chief value, but
only if such value is more than three times the value of the
next most valuable component material.
(iii) perfume, essences, extracts, toilet waters,
cosmetics, petroleum jellies, hair oils, pomades, hair
dressings, hair restoratives, hair dyes, aromatic cachous and
toilet powders. The tax imposed by this act shall not apply to
lotion, oil, powder, or other article intended to be used or
applied only in the case of babies.
(iv) trunks, valises, traveling bags, suitcases, satchels,
overnight bags, hat boxes for use by travelers, beach bags,
bathing suit bags, brief cases made of leather or imitation
leather, salesmen's sample and display cases, purses, handbags,
pocketbooks, wallets, billfolds, card, pass, and key cases and
toilet cases.
(h) The gross receipts from the sale of and the storage,
use, or consumption of all materials, including chemicals,
fuels, petroleum products, lubricants, packaging materials,
including returnable containers used in packaging food and
beverage products, feeds, seeds, fertilizers, electricity, gas
and steam, used or consumed in agricultural or industrial
production of personal property intended to be sold ultimately
at retail, whether or not the item so used becomes an ingredient
or constituent part of the property produced. Such production
shall include, but is not limited to, research, development,
design or production of any tangible personal property,
manufacturing, processing (other than by restaurants and
consumers) of agricultural products whether vegetable or animal,
commercial fishing, refining, smelting, reducing, brewing,
distilling, printing, mining, quarrying, lumbering, generating
electricity and the production of road building materials. Such
production shall not include painting, cleaning, repairing or
similar processing of property except as part of the original
manufacturing process. Machinery, equipment, implements, tools,
accessories, appliances, contrivances, furniture and fixtures,
used in such production and fuel, electricity, gas or steam used
for space heating or lighting, are not included within this
exemption; however, accessory tools, equipment and other short
lived items, which are separate detachable units used in
producing a direct effect upon the product, where such items
have an ordinary useful life of less than 12 months, are
included within the exemption provided herein;
(i) The gross receipts from the sale of and storage, use or
other consumption in Minnesota of tangible personal property
(except as provided in section 297A.14) which is used or
consumed in producing any publication regularly issued at
average intervals not exceeding three months, and any such
publication. For purposes of this subsection, "publication" as
used herein shall include, without limiting the foregoing, a
legal newspaper as defined by Minnesota Statutes 1965, Section
331.02, and any supplements or enclosures with or part of said
newspaper; and the gross receipts of any advertising contained
therein or therewith shall be exempt. For this purpose,
advertising in any such publication shall be deemed to be a
service and not tangible personal property, and persons or their
agents who publish or sell such newspapers shall be deemed to be
engaging in a service with respect to gross receipts realized
from such newsgathering or publishing activities by them,
including the sale of advertising. The term "publication" shall
not include magazines and periodicals sold over the counter.
Machinery, equipment, implements, tools, accessories,
appliances, contrivances, furniture and fixtures used in such
publication and fuel, electricity, gas or steam used for space
heating or lighting, are not exempt;
(j) The gross receipts from all sales, including sales in
which title is retained by a seller or a vendor or is assigned
to a third party under an installment sale or lease purchase
agreement under section 465.71, of tangible personal property
to, and all storage, use or consumption of such property by, the
United States and its agencies and instrumentalities or a state
and its agencies, instrumentalities and political subdivisions;
(k) The gross receipts from the isolated or occasional sale
of tangible personal property in Minnesota not made in the
normal course of business of selling that kind of property, and
the storage, use, or consumption of property acquired as a
result of such a sale;
(l) The gross receipts from sales of rolling stock and the
storage, use or other consumption of such property by railroads,
freight line companies, sleeping car companies and express
companies taxed on the gross earnings basis in lieu of ad
valorem taxes. For purposes of this clause "rolling stock" is
defined as the portable or moving apparatus and machinery of any
such company which moves on the road, and includes, but is not
limited to, engines, cars, tenders, coaches, sleeping cars and
parts necessary for the repair and maintenance of such rolling
stock.
(m) The gross receipts from sales of airflight equipment
and the storage, use or other consumption of such property by
airline companies taxed under the provisions of sections 270.071
to 270.079. For purposes of this clause, "airflight equipment"
includes airplanes and parts necessary for the repair and
maintenance of such airflight equipment, and flight simulators.
(n) The gross receipts from the sale of telephone central
office telephone equipment used in furnishing intrastate and
interstate telephone service to the public.
(o) The gross receipts from the sale of and the storage,
use or other consumption by persons taxed under the in lieu
provisions of chapter 298, of mill liners, grinding rods and
grinding balls which are substantially consumed in the
production of taconite, the material of which primarily is added
to and becomes a part of the material being processed.
(p) The gross receipts from the sale of tangible personal
property to, and the storage, use or other consumption of such
property by, any corporation, society, association, foundation,
or institution organized and operated exclusively for
charitable, religious or educational purposes if the property
purchased is to be used in the performance of charitable,
religious or educational functions, or any senior citizen group
or association of groups that in general limits membership to
persons age 55 or older and is organized and operated
exclusively for pleasure, recreation and other nonprofit
purposes, no part of the net earnings of which inures to the
benefit of any private shareholders;
(q) The gross receipts from the sale of caskets and burial
vaults;
(r) The gross receipts from the sale of an automobile or
other conveyance if the purchaser is assisted by a grant from
the United States in accordance with 38 United States Code,
Section 1901, as amended.
(s) The gross receipts from the sale to the licensed
aircraft dealer of an aircraft for which a commercial use permit
has been issued pursuant to section 360.654, if the aircraft is
resold while the permit is in effect.
(t) The gross receipts from the sale of building materials
to be used in the construction or remodeling of a residence when
the construction or remodeling is financed in whole or in part
by the United States in accordance with 38 United States Code,
Sections 801 to 805, as amended. This exemption shall not be
effective at time of sale of the materials to contractors,
subcontractors, builders or owners, but shall be applicable only
upon a claim for refund to the commissioner of revenue filed by
recipients of the benefits provided in Title 38 United States
Code, Chapter 21, as amended. The commissioner shall provide by
regulation for the refund of taxes paid on sales exempt in
accordance with this paragraph.
(u) The gross receipts from the sale of textbooks which are
prescribed for use in conjunction with a course of study in a
public or private school, college, university and business or
trade school to students who are regularly enrolled at such
institutions. For purposes of this clause a "public school" is
defined as one that furnishes course of study, enrollment and
staff that meets standards of the state board of education and a
private school is one which under the standards of the state
board of education, provides an education substantially
equivalent to that furnished at a public school. Business and
trade schools shall mean such schools licensed pursuant to
section 141.25.
(v) The gross receipts from the sale of and the storage of
material designed to advertise and promote the sale of
merchandise or services, which material is purchased and stored
for the purpose of subsequently shipping or otherwise
transferring outside the state by the purchaser for use
thereafter solely outside the state of Minnesota.
(w) The gross receipt from the sale of residential heating
fuels in the following manner:
(i) all fuel oil, coal, wood, steam, propane gas, and L.P.
gas sold to residential customers for residential use;
(ii) natural gas sold for residential use to customers who
are metered and billed as residential users and who use natural
gas for their primary source of residential heat, for the
billing months of November, December, January, February, March
and April;
(iii) electricity sold for residential use to customers who
are metered and billed as residential users and who use
electricity for their primary source of residential heat, for
the billing months of November, December, January, February,
March and April.
(x) The gross receipts from the sale or use of tickets or
admissions to the premises of or events sponsored by an
association, corporation or other group of persons which
provides an opportunity for citizens of the state to participate
in the creation, performance or appreciation of the arts and
which qualifies as a tax-exempt organization within the meaning
of section 290.05, subdivision 1, clause (i).
(y) The gross receipts from either the sales to or the
storage, use or consumption of tangible personal property by an
organization of military service veterans or an auxiliary unit
of an organization of military service veterans, provided that:
(i) the organization or auxiliary unit is organized within
the state of Minnesota and is exempt from federal taxation
pursuant to section 501(c), clause (19), of the Internal Revenue
Code as amended through December 31, 1978; and
(ii) the tangible personal property which is sold to or
stored, used or consumed by the organization or auxiliary unit
is for charitable, civic, educational, or nonprofit uses and not
for social, recreational, pleasure or profit uses.
(z) The gross receipts from the sale of sanitary napkins,
tampons, or similar items used for feminine hygiene.
Sec. 8. Minnesota Statutes 1982, section 297A.35,
subdivision 3, is amended to read:
Subd. 3. A person who has paid an amount of tax to a
retailer engaged in providing electricity in respect to the
purchase for agricultural production of electricity which is
exempt from tax under section 297A.25, subdivision 1, clause (h)
may file a claim for refund of such the tax with the
commissioner, notwithstanding any other provision of this
chapter. Such claim for refund shall be made pursuant to
section 290.501.
Sec. 9. Minnesota Statutes 1982, section 297B.01,
subdivision 8, is amended to read:
Subd. 8. "Purchase price" means the total consideration
valued in money for a sale, whether paid in money or otherwise,
provided however, that when a motor vehicle is taken in trade as
a credit or as part payment on a motor vehicle taxable under
Laws 1971, Chapter 853, the credit or trade-in value allowed by
the person selling the motor vehicle shall be deducted from the
total selling price to establish the purchase price of the
vehicle being sold and the trade-in allowance allowed by the
seller shall constitute the purchase price of the motor vehicle
accepted as a trade-in. The purchase price in those instances
where the motor vehicle is acquired by gift or by any other
transfer for a nominal or no monetary consideration shall also
include the average value of similar motor vehicles, established
by standards and guides as determined by the motor vehicle
registrar. The purchase price in those instances where a motor
vehicle is manufactured by a person who registers it under the
laws of this state shall mean the manufactured cost of such
motor vehicle and manufactured cost shall mean the amount
expended for materials, labor and other properly allocable costs
of manufacture, except that in the absence of actual
expenditures for the manufacture of a part or all of the motor
vehicle, manufactured costs shall mean the reasonable value of
the completed motor vehicle. The term "purchase price" shall
not include the transfer of a motor vehicle by way of gift
between a husband and wife or parent and child, nor shall it
include the transfer of a motor vehicle by a guardian to his
ward when there is no monetary consideration and the title to
such vehicle was registered in the name of the guardian, as
guardian, only because the ward was a minor. There shall not be
included in "purchase price" the amount of any tax imposed by
the United States upon or with respect to retail sales whether
imposed upon the retailer or the consumer.
Sec. 10. Minnesota Statutes 1982, section 297B.02, as
amended by Laws 1982, Third Special Session chapter 1, article
6, section 5, is amended to read:
297B.02 [TAX IMPOSED.]
There is hereby imposed an excise tax at the rate of five
percent provided in chapter 297A on the purchase price of any
motor vehicle purchased or acquired, either in or outside of the
state of Minnesota, which is required to be registered under the
laws of this state.
Sec. 11. [297B.031] [REFUND OF TAX; MANDATORY REFUND OR
REPLACEMENT LAWS.]
If a manufacturer of motor vehicles is required by Laws
1983, chapter 108, section 1, subdivision 3, to refund the tax
imposed by this chapter, a portion of the tax paid by the
purchaser shall be refunded to the manufacturer. The amount of
the refund shall be the tax paid by the purchaser less an amount
equal to the tax paid multiplied by a fraction, the denominator
of which is the purchase price of the vehicle and the numerator
of which is the allowance deducted from the refund for the
consumer's use of the vehicle. The refund shall be paid to the
manufacturer only upon filing of a written application, in a
form and providing information as prescribed by the commissioner.
Payment of a refund pursuant to this section shall be made out
of the general and highway user funds in the same proportion
provided for deposit of tax proceeds for the fiscal year
pursuant to section 297B.09, subdivision 1. The amounts
necessary to pay the refunds are appropriated out of the
respective funds.
Sec. 12. [TRANSITION PROVISION.]
The increase in the excise tax on the purchase price of
motor vehicles provided by section 10 for sales made after June
30, 1983 shall not apply to the purchase price of a motor
vehicle, purchased or acquired pursuant to a bona fide written
contract which (a) was executed prior to the day following final
enactment of this law, (b) was enforceable prior to July 1,
1983, and (c) did not provide for the allocation of future taxes.
This section shall not apply if delivery of the motor vehicle is
accepted after December 31, 1983.
Sec. 13. [REPEALER.]
Minnesota Statutes 1982, section 340.986, is repealed.
Sec. 14. [EFFECTIVE DATE.]
Sections 2 and 3 are effective for taxable years beginning
after December 31, 1982. Sections 4 to 10 and 12 are effective
for sales made after June 30, 1983. Sections 1 and 11 are
effective the day following final enactment.
ARTICLE 7
CASH FLOW
Section 1. Minnesota Statutes 1982, section 124.11,
subdivision 2a, is amended to read:
Subd. 2a. (a) Through the 1981-1982 school year, ninety
percent of the estimated post-secondary vocational instructional
aid shall be paid to each district in 12 equal monthly payments
on the 15th of each month. The estimated aid payments shall be
paid on the basis of the department of education's estimates of
the current year's average daily membership adjusted for the
latest available information in November, February and May. The
final payment, adjusted to reflect the actual average daily
membership, shall be made in September of the following fiscal
year.
(b) Beginning in For the 1982-1983 school year, eighty-five
percent of the estimated post-secondary vocational instructional
aid shall be paid to each district in 12 equal monthly payments
on the 15th of each month. The estimated aid payments shall be
paid on the basis of the department of education's estimates of
the current year's average daily membership adjusted for the
latest available information in November, February and May. The
final payment, adjusted to reflect the actual average daily
membership, shall be made in September of the following fiscal
year.
Sec. 2. Minnesota Statutes 1982, section 124.11,
subdivision 2b, is amended to read:
Subd. 2b. (a) Through the 1981-1982 school year,
post-secondary vocational supply aid and support services aid
shall be paid to districts in equal installments on or before
August 1, November 1, February 1, and May 1 of each year. Eighty
percent of post-secondary vocational equipment aid and repair
and betterment aid shall be paid to districts on or before
August 1 of each year. The remaining 20 percent of
post-secondary vocational equipment aid and repair and
betterment aid shall be paid to districts by May 1 of each year.
(b) Beginning in For the 1982-1983 school year, the state
shall pay to districts 25 percent of post-secondary vocational
supply aid and support services aid by August 1, 20 percent by
November 1, 20 percent by February 1, and 20 percent by May 1 of
each school year. Eighty-five percent of post-secondary
vocational equipment aid and repair and betterment aid shall be
paid to districts by August 1 of each year. The final aid
distribution shall be made by October 31 of the following fiscal
year.
Sec. 3. [124.195] [PAYMENT OF AIDS AND CREDITS TO SCHOOL
DISTRICTS.]
Subdivision 1. [APPLICABILITY.] This section applies to
all aids or credits paid by the commissioner of education from
the general fund of the state of Minnesota to school districts
except as provided in section 4. The procedures described in
this section for making disbursements to school districts will
be used starting in fiscal year 1984, except that for districts
that have tax anticipation certificates or aid anticipation
certificates which were sold prior to June 30, 1983, and which
mature prior to June 30, 1984, the payment schedules specified
in Minnesota Statutes 1982 may continue to be used in fiscal
year 1984 if the school district provides evidence to the
commissioner of education that the payment schedules established
in this section would jeopardize repayment of these certificates
or prevent the district from making payments for other services
without additional borrowing.
Subd. 2. [DEFINITIONS.] (a) The term "other district
receipts" means payments by county treasurers pursuant to
section 276.10, apportionments from the school endowment fund
pursuant to section 124.09, apportionments by the county auditor
pursuant to section 124.10, subdivision 2, and payments to
school districts by the commissioner of revenue pursuant to
sections 294.21 to 294.26 and chapter 298.
(b) The term "cumulative amount guaranteed" means the sum
of the following:
(1) one-third of the final adjustment payment according to
subdivision 6; plus
(2) the product of
(i) the cumulative disbursement percentage shown in
subdivision 3; times
(ii) the sum of
85 percent of the estimated aid and credit entitlements
paid according to subdivision 10; plus
100 percent of the entitlements paid according to
subdivisions 8 and 9; plus
the other district receipts; plus
the final adjustment payment according to subdivision 6.
Subd. 3. [PAYMENT DATES AND PERCENTAGES.] Beginning in
fiscal year 1984 and thereafter, the commissioner of education
shall pay to a school district on the dates indicated an amount
computed as follows: the cumulative amount guaranteed minus the
sum of (a) the district's other district receipts through the
current payment, and (b) the aid and credit payments through the
immediately preceding payment. For purposes of this
computation, the payment dates and the cumulative disbursement
percentages are as follows:
Payment date Percentage
Payment 1 First business day prior to July 15: 2.25
Payment 2 First business day prior to July 30: 4.50
Payment 3 First business day prior to August 15: 6.75
Payment 4 First business day prior to August 30: 9.0
Payment 5 First business day prior to September 15: the
greater of (a) one-half of the final adjustment
for the prior fiscal year for the state paid
property tax credits established in section
273.1392, or (b) the amount needed to provide
12.75 percent
Payment 6 First business day prior to September 30: the
greater of (a) one-half of the final adjustment
for the prior fiscal year for the state paid
property tax credits established in section
273.1392, or (b) the amount needed to provide 16.5
percent
Payment 7 First business day prior to October 15: the
greater of (a) one-half of the final adjustment
for the prior fiscal year for all aid entitlements
except state paid property tax credits, or
(b) the amount needed to provide 20.75 percent
Payment 8 First business day prior to October 30: the
greater of (a) one-half of the final adjustment
for the prior fiscal year for all aid
entitlements except state paid property tax
credits, or (b) the amount needed to provide
25.0 percent
Payment 9 First business day prior to November 15: 31.0
Payment 10 First business day prior to November 30: 37.0
Payment 11 First business day prior to December 15: 40.0
Payment 12 First business day prior to December 30: 43.0
Payment 13 First business day prior to January 15: 47.25
Payment 14 First business day prior to January 30: 51.5
Payment 15 First business day prior to February 15: 56.0
Payment 16 First business day prior to February 28: 60.5
Payment 17 First business day prior to March 15: 65.25
Payment 18 First business day prior to March 30: 70.0
Payment 19 First business day prior to April 15: 74.0
Payment 20 First business day prior to April 30: 85.0
Payment 21 First business day prior to May 15: 92.0
Payment 22 First business day prior to May 30: 100.0
Subd. 4. [PAYMENT LIMIT.] Subdivision 3 does not authorize
the commissioner of education to pay to a district's operating
funds an amount of state general fund cash that exceeds the sum
of:
(a) its estimated aid and credit payments for the current
year according to subdivision 10;
(b) its actual aid payments according to subdivisions 8 and
9; and
(c) the final adjustment payment for the prior year.
Subd. 5. [COMMISSIONER'S ASSUMPTIONS.] For purposes of
determining the amount of state general fund cash to be paid to
school districts pursuant to subdivision 3, the commissioner of
education shall:
(a) assume that the payments to school districts by the
county treasurer of revenues accruing to the fiscal year of
receipt pursuant to section 276.10 are made in the following
manner:
(1) 50 percent within seven business days of each due date;
and
(2) 100 percent within 14 business days of each due date;
(b) assume that the payments to school districts by county
auditors pursuant to section 124.10, subdivision 2 are made at
the end of the months indicated in that subdivision.
Subd. 6. [FINAL ADJUSTMENT PAYMENT.] For all aids and
credits paid according to subdivision 10, the final adjustment
payment shall include the amounts necessary to pay the
district's full aid entitlement for the prior year based on
actual data. This payment shall be used to correct all
estimates used for the payment schedule in subdivision 3. The
payment shall be made in two installments, during September or
October, as specified in subdivision 3. In the event actual
data are not available, the final adjustment payment may be
computed based on estimated data. A corrected final adjustment
payment shall be made when actual data are available.
Subd. 7. [PAYMENTS TO SCHOOL NONOPERATING FUNDS.]
Beginning in fiscal year 1984, state general fund payments to
school nonoperating funds shall be made at 85 percent of the
estimated entitlement during the fiscal year of the
entitlement. This amount shall be paid in 12 equal monthly
installments. The amount of the actual entitlement, after
adjustment for actual data, minus the payments made during the
fiscal year of the entitlement shall be paid prior to October 31
of the following school year.
Subd. 8. [PAYMENT PERCENTAGE FOR REIMBURSEMENT AIDS.] The
following aids shall be paid at 100 percent of the entitlement
for the prior fiscal year: special education summer foundation
aid according to section 124.201; abatement aid according to
section 124.214, subdivision 2; special education residential
aid according to section 124.32, subdivision 5; special
education summer school aid, according to section 124.32,
subdivision 10; veterans farm management aid, according to
section 124.625; early retirement aid according to section
125.611; and extended leave and part-time teacher aids according
to chapters 354 and 354A.
Subd. 9. [PAYMENT PERCENTAGE FOR CERTAIN AIDS.] The
following aids shall be paid at 100 percent of the entitlement
for the current fiscal year: school lunch aid, according to
section 124.646; teacher institute aid, campus laboratory school
aid, and high technology aids.
Subd. 10. [AID PAYMENT PERCENTAGE.] Except as provided in
subdivisions 8 and 9, beginning in fiscal year 1984, all
education aids and credits in chapters 121, 123, 124, 125, and
273.1392, except post-secondary vocational shall be paid at 85
percent of the estimated entitlement during the fiscal year of
the entitlement. The amount of the actual entitlement, after
adjustment for actual data, minus the payments made during the
fiscal year of the entitlement shall be paid as the final
adjustment payment according to subdivision 6.
Sec. 4. [124.5629] [PAYMENT OF AVTI INSTRUCTIONAL AID.]
Beginning for the 1983-1984 school year, 85 percent of the
estimated post-secondary vocational instructional aid
entitlement for each district shall be paid during the fiscal
year of entitlement in 24 uniform payments on the first business
day prior to the 15th of each month and on the first business
day prior to the last day of each month.
The amount of entitlement, adjusted for actual data on
tuition and fund balances, minus the payments made during the
fiscal year of entitlement, shall be the final adjustment paid
to each district in two payments on September 15 and September
30 in the fiscal year following entitlement.
Sec. 5. Minnesota Statutes 1982, section 273.1392, is
amended to read:
273.1392 [PAYMENT; AIDS TO SCHOOL DISTRICTS.]
The amounts of homestead credit under section 273.13,
subdivisions 6, 7, and 14a; wetlands credit and reimbursement
under section 273.115; native prairie credit and reimbursement
under section 273.116; disaster or emergency reimbursement under
section 273.123; attached machinery aid under section 273.138;
reimbursement under section 273.139; and metropolitan
agricultural preserve credit reduction under section 473H.10,
shall be certified to the department of education by the
department of revenue. The amounts so certified shall be paid
according to the schedule for payment of foundation aids
pursuant to section 124.11 for fiscal year 1983. The sum
sufficient to make the payments required by this section is
appropriated from the general fund to the commissioner of
education Beginning in fiscal year 1984, the amounts so
certified shall be paid according to section 3, subdivisions 6
and 10.
Sec. 6. Minnesota Statutes 1982, section 276.09, is
amended to read:
276.09 [SETTLEMENT BETWEEN AUDITOR AND TREASURER.]
On the fifth day of March and the 20th day of March, June,
and November May, and October of each year, the county treasurer
shall make full settlement with the county auditor of all
receipts collected by him for all purposes, from the date of the
last settlement up to and including each day mentioned. The
county auditor shall, within 30 days after each settlement, send
an abstract of same to the state auditor in the form prescribed
by the state auditor. At each settlement the treasurer shall
make complete returns of the receipts on the current tax list,
showing the amount collected on account of the several funds
included in the list.
For purposes of this section, "receipts" shall include all
tax payments received by the county treasurer on or before the
settlement date.
Sec. 7. Minnesota Statutes 1982, section 276.10, is
amended to read:
276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.]
On the settlement day in March, June, and November May and
October of each year, the county auditor and county treasurer
shall distribute all undistributed funds in the treasury,
apportioning them, as provided by law, and placing them to the
credit of the state, town, city, school district, special
district and each county fund. Within 20 days after the
distribution is completed, the county auditor shall make a
report of it to the state auditor in the form prescribed by the
state auditor. The county auditor shall issue his warrant for
the payment of moneys in the county treasury to the credit of
the state, town, city, school district, or special districts on
application of the persons entitled to receive them.
Sec. 8. Minnesota Statutes 1982, section 276.11, is
amended to read:
276.11 [WHEN TREASURER SHALL PAY FUNDS.]
As soon as practical after each settlement in March, June,
and November the county treasurer shall pay over to the state
treasurer or the treasurer of any town, city, school district,
or special district, on the warrant of the county auditor, all
receipts arising from taxes levied by and belonging to the
state, or to such municipal corporation, or other body, and
deliver up all orders and other evidences of indebtedness of
such municipal corporation or other body, taking triplicate
receipts therefor. The treasurer shall file one of the receipts
with the county auditor, and shall return one by mail on the day
of its reception to the clerk of the town, city, school
district, or special district to which payment was made. The
clerk shall preserve the receipt in the clerk's office. Upon
written request of the state, a municipal corporation or other
public body, the county treasurer shall, to the extent
practicable, make partial payments of amounts collected
periodically in advance of the next settlement and
distribution. Accompanying each payment shall be a statement
prepared by the county treasurer designating the years for which
taxes included in the payment were collected and, for each year,
the amount of the taxes and any penalties thereon. The county
treasurer shall pay, upon written request of the state, a
municipal corporation or other public body except school
districts, at least 70 percent of the estimated collection
within 30 days after the settlement date. Within 15 seven
business days after the settlement due date, the county
treasurer shall pay to the treasurer of the school districts at
least 70 50 percent of the estimated collections arising from
taxes levied by and belonging to the school district and the
remaining 50 percent of the estimated collections shall be paid
to the treasurer of the school district within the next seven
business days. The treasurer shall pay the balance of the
amounts collected to the state or to a municipal corporation or
other body within 60 days after the settlement date, provided,
however, that after 45 days interest shall accrue at a rate of
eight percent per annum to the credit of and shall be paid to
the state, municipal corporation or other body. Interest shall
be payable upon appropriation from the general revenue fund of
the county and, if not paid, may be recovered by the state,
municipal corporation, or other body, in a civil action.
Sec. 9. Minnesota Statutes 1982, section 278.01,
subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION OF VALIDITY.] Any person
having any estate, right, title, or interest in or lien upon any
parcel of land, who claims that such property has been
partially, unfairly, or unequally assessed in comparison with
other property in the city or county, or that the parcel has
been assessed at a valuation greater than its real or actual
value, or that the tax levied against the same is illegal, in
whole or in part, or has been paid, or that the property is
exempt from the tax so levied, may have the validity of his
claim, defense, or objection determined by the district court of
the county in which the tax is levied or by the tax court by
serving two copies of a petition for such determination upon the
county auditor and one copy each on the county treasurer and the
county attorney and filing the same, with proof of service, in
the office of the clerk of the district court before the first
16th day of June May of the year in which the tax becomes
payable. The county auditor shall immediately forward one copy
of the petition to the appropriate governmental authority in a
home rule charter or statutory city or town in which the
property is located if that city or town employs its own
certified assessor. A copy of the petition shall also be sent
to the school board of the school district in which the property
is located. A petition for determination under this section may
be transferred by the district court to the tax court. An
appeal may also be taken to the tax court under chapter 271 at
any time following receipt of the valuation notice required by
section 273.121 but prior to June 1 May 16 of the year in which
the taxes are payable.
Sec. 10. Minnesota Statutes 1982, section 278.01,
subdivision 2, is amended to read:
Subd. 2. [HOMESTEADS.] Any person having any estate,
right, title or interest in or lien upon any parcel which is
classified as homestead under the provisions of section 273.13,
subdivisions 6, 6a, 7, 7b, 10 or 12, who claims that said parcel
has been assessed at a valuation which exceeds by ten percent or
more the valuation which the parcel would have if it were valued
at the average assessment/sales ratio for real property in the
same class, in that portion of the county in which that parcel
is located, for which the commissioner is able to establish and
publish a sales ratio study as determined by the applicable real
estate assessment/sales ratio study published by the
commissioner of revenue, may have the validity of his claim,
defense, or objection determined by the district court of the
county in which the tax is levied or by the tax court by serving
two copies of a petition for such determination upon the county
auditor and one copy each on the county treasurer and the county
attorney and filing the same, with proof of such service, in the
office of the clerk of the district court before the first 16th
day of June May of the year in which such tax becomes payable.
The county auditor shall immediately forward one copy of the
petition to the appropriate governmental authority in a home
rule charter or statutory city or town in which the property is
located if that city or town employs its own certified
assessor. A copy of the petition shall also be sent to the
school board of the school district in which the property is
located. A petition for determination under this section may be
transferred by the district court to the tax court.
Sec. 11. Minnesota Statutes 1982, section 278.03, is
amended to read:
278.03 [PAYMENT OF TAX.]
If the proceedings instituted by the filing of the petition
have not been completed before the first 16th day of June May
next following the filing, the petitioner shall pay to the
county treasurer 50 percent of the tax levied for such year
against the property involved, unless permission to continue
prosecution of the petition without such payment is obtained as
herein provided. If the proceedings instituted by the filing of
the petition have not been completed by the next November 1
October 16, the petitioner shall pay to the county treasurer 50
percent of the unpaid balance of the taxes levied for the year
against the property involved if the unpaid balance is $2,000 or
less and 80 percent of the unpaid balance if the unpaid balance
is over $2,000, unless permission to continue prosecution of the
petition without payment is obtained as herein provided. The
petitioner, upon ten days notice to the county attorney and to
the county auditor, given at least ten days prior to the first
16th day of June May or the first 16th day of November
October, may apply to the court for permission to continue
prosecution of the petition without payment; and, if it is made
to appear
(1) That the proposed review is to be taken in good faith;
(2) That there is probable cause to believe that the
property may be held exempt from the tax levied or that the tax
may be determined to be less than 50 percent of the amount
levied; and
(3) That it would work a hardship upon petitioner to pay
the taxes due,
the court may permit the petitioner to continue prosecution
of the petition without payment, or may fix a lesser amount to
be paid as a condition of continuing the prosecution of the
petition.
Failure to make payment of the amount required when due
shall operate automatically to dismiss the petition and all
proceedings thereunder unless the payment is waived by an order
of the court permitting the petitioner to continue prosecution
of the petition without payment. The county treasurer shall,
upon request of the petitioner, issue duplicate receipts for the
tax payment, one of which shall be filed by the petitioner in
the proceeding.
Sec. 12. Minnesota Statutes 1982, section 278.05,
subdivision 5, is amended to read:
Subd. 5. Any time after the filing of the petition and
before the trial of the issues raised thereby, when the defense
or claim presented is that the property has been partially,
unfairly, or unequally assessed, or that the parcel has been
assessed at a valuation greater than its real or actual value,
or that a parcel which is classified as homestead under the
provisions of section 273.13, subdivisions 6, 6a, 7, 7b, 10 or
12, has been assessed at a valuation which exceeds by ten
percent or more the valuation which the parcel would have if it
were valued at the average assessment/sales ratio for real
property in the same class in that portion of the county in
which the parcel is located, for which the commissioner is able
to establish and publish a sales ratio study, the attorney
representing the state, county, city or town in the proceedings
may serve on the petitioner, or his attorney, and file with the
clerk of the district court, an offer to reduce the valuation of
any tract or tracts to a valuation set forth in the offer. If,
within ten days thereafter, the petitioner, or his attorney,
gives notice in writing to the county attorney, or the attorney
for the city or town, that the offer is accepted, he may file
the offer with proof of notice, and the clerk shall enter
judgment accordingly. Otherwise, the offer shall be deemed
withdrawn and evidence thereof shall not be given; and, unless a
lower valuation than specified in the offer is found by the
court, no costs or disbursements shall be allowed to the
petitioner, but the costs and disbursements of the state,
county, city or town, including interest at six percent on the
tax based on the amount of the offer from and after the first
16th day of November October of the year the taxes are payable,
shall be taxed in its favor and included in the judgment and
when collected shall be credited to the county revenue fund,
unless the taxes were paid in full before the first 16th day of
November October of the year in which the taxes were payable, in
which event interest shall not be taxable.
Sec. 13. Minnesota Statutes 1982, section 279.01,
subdivision 1, is amended to read:
Subdivision 1. On June first May 16, of each year, with
respect to property actually occupied and used as a homestead by
the owner of the property, a penalty of three percent shall
accrue and thereafter be charged upon all unpaid taxes on real
estate on the current lists in the hands of the county
treasurer, and a penalty of seven percent on non-homestead
property. Thereafter, for both homestead and non-homestead
property, on the first 16th day of each month, up to and
including November first October 16 following, an additional
penalty of one percent for each month shall accrue and be
charged on all such unpaid taxes. When the taxes against any
tract or lot exceed $10, one-half thereof may be paid prior to
June first May 16; and, if so paid, no penalty shall attach; the
remaining one-half shall be paid at any time prior to November
first October 16 following, without penalty; but, if not so
paid, then a penalty of four percent shall accrue thereon for
homestead property and a penalty of four percent on
non-homestead property. Thereafter, for homestead property, on
the first 16th day of each month up to and including January 1
December 16 following, an additional penalty of two percent for
each month shall accrue and be charged on all such unpaid
taxes. Thereafter, for non-homestead property, on the first
16th day of each month up to and including January 1 December 16
following, an additional penalty of four percent for each month
shall accrue and be charged on all such unpaid taxes. If
one-half of such taxes shall not be paid prior to June first May
16, the same may be paid at any time prior to November first
October 16, with accrued penalties to the date of payment added,
and thereupon no penalty shall attach to the remaining one-half
until November first October 16 following; provided, also, that
the same may be paid in installments as follows: One-fourth
prior to April first March 16; one-fourth prior to June first
May 16; one-fourth prior to September first August 16; and the
remaining one-fourth prior to November first October 16, subject
to the aforesaid penalties. Where the taxes delinquent after
November first October 16 against any tract or parcel exceed
$40, they may be paid in installments of not less than 25
percent thereof, together with all accrued penalties and costs,
up to the next tax judgment sale, and after such payment,
penalties, interest, and costs shall accrue only on the sum
remaining unpaid. Any county treasurer who shall make out and
deliver or countersign any receipt for any such taxes without
including all of the foregoing penalties therein, shall be
liable to the county for the amount of such penalties.
Sec. 14. Minnesota Statutes 1982, section 473F.08,
subdivision 7a, is amended to read:
Subd. 7a. The administrative auditor shall determine for
each county the difference between the total levy on
distribution value pursuant to subdivision 3, clause (a), within
the county and the total tax on contribution value pursuant to
subdivision 6, within the county. On or before June 1 May 16 of
each year, he shall certify the differences so determined to
each county auditor. In addition, he shall certify to those
county auditors for whose county the total tax on contribution
value exceeds the total levy on distribution value the
settlement the county is to make to the other counties of the
excess of the total tax on contribution value over the total
levy on distribution value in the county. On or before June 30
15 and November 30 15 of each year, each county treasurer in a
county having a total tax on contribution value in excess of the
total levy on distribution value shall pay one-half of the
excess to the other counties in accordance with the
administrative auditors certification.
Sec. 15. [EFFECTIVE DATE.]
Sections 6, 7, and 9 to 14 are effective for taxes levied
in 1983 and thereafter, payable in 1984 and thereafter. Sections
1 to 5 and 8 are effective July 1, 1983.
ARTICLE 8
ECONOMIC DEVELOPMENT
Section 1. Minnesota Statutes 1982, section 273.13,
subdivision 9, is amended to read:
Subd. 9. [CLASS 4A, 4B, 4C, AND 4D.] (1) All property not
included in the preceding classes shall constitute class 4a and
shall be valued and assessed at 43 percent of the market value
thereof, except as otherwise provided in this subdivision.
(2) Real property which is not improved with a structure
and which is not utilized as part of a commercial or industrial
activity shall constitute class 4b and shall be valued and
assessed at 40 percent of market value.
(3) Commercial and industrial property, except as provided
in this subdivision, shall constitute class 4c and shall be
valued and assessed at 40 percent of the first $50,000 of market
value and 43 percent of the remainder, provided that in the case
of state-assessed commercial or industrial property owned by one
person or entity, only one parcel shall qualify for the 40
percent assessment, and in the case of other commercial or
industrial property owned by one person or entity, only one
parcel in each county shall qualify for the 40 percent
assessment.
(4) Industrial Employment property defined in section
273.1313, during the period provided in section 273.1313, shall
constitute class 4d and shall be valued and assessed at 20
percent of the first $50,000 of market value and 21.5 percent of
the remainder, except that for employment property located in an
enterprise zone designated pursuant to section 273.1312,
subdivision 4, paragraph (c), clause (3), the first $50,000 of
market value shall be valued and assessed at 31.5 percent and
the remainder shall be assessed and valued at 38.5 percent,
unless the governing body of the city designated as an
enterprise zone determines that a specific parcel shall be
assessed pursuant to the first clause of this sentence. The
governing body may provide for assessment under the first clause
of the preceding sentence only for property which is located in
an area which has been designated by the governing body for the
receipt of tax reductions authorized by section 10, subdivision
9, paragraph (a).
Sec. 2. Minnesota Statutes 1982, section 273.1312,
subdivision 2, is amended to read:
Subd. 2. [DESIGNATION.] The commissioner shall designate
an area as an enterprise zone if (i) (a) an application is made
in the form and manner and containing the information as
prescribed by the commissioner's rules commissioner; (ii) (b)
the application is made or approved by the governing body of the
area; and (iii) (c) the area is determined by the commissioner
to be eligible for designation under subdivision 4; and (d) the
zone is selected pursuant to the process provided by section 10.
Sec. 3. Minnesota Statutes 1982, section 273.1312,
subdivision 3, is amended to read:
Subd. 3. [DURATION.] The designation of an area as an
enterprise zone shall be effective from for seven years after
the date of designation to 12 years thereafter.
Sec. 4. Minnesota Statutes 1982, section 273.1312,
subdivision 4, is amended to read:
Subd. 4. [ELIGIBILITY REQUIREMENTS.] An area is eligible
for designation if the following requirements are met:
(1) (a) Its boundary is continuous and includes, if
feasible, proximately located vacant or underutilized lands or
buildings conveniently accessible to residents of the area.
(2) Its population as determined under the most recent
federal decennial census is at least (i) 4,000 if any of the
area is located within an SMSA with a population of 50,000 or
more, or (ii) 2,500 in any other case unless the area is an
Indian reservation, for which no minimum population is required.
(b) The area of the zone is less than 400 acres and the
total market value of the taxable property contained in the zone
at the time of application is less than $100,000 per acre or
$300,000 per acre for an area located wholly within a first
class city, except that these restrictions shall not apply to
areas designated pursuant to paragraph (c), clause (2) or (3).
(3) (a) (c) (1) The proposed zone is located within an
economic hardship area, as established by meeting three two or
more of the following criteria:
(1) (A) the percentage number of total residential
housing units within the zone area which was constructed prior
to 1950 is 70 are substandard is 15 percent or greater under
criteria prescribed by the commissioner using data collected by
the bureau of the census or data submitted by the municipality
and approved by the commissioner;
(2) (B) the percentage of households within the zone area
that fall below the poverty level, as determined by the United
States census bureau, is 20 percent or greater;
(3) (C) (i) the total number of persons residing within the
zone has declined by ten percent or more over the ten years
preceding application market value of commercial and industrial
property in the area has declined over three of the preceding
five years, or (ii) the total market value of all property in
the area, as equalized by the sales ratio study, has declined or
its growth has lagged three percentage points behind the
statewide growth in total equalized market value in the state
over the preceding three year period;
(4) (D) for the last full year for which data is available,
the percentage of the work force of the jurisdiction of the
governing body of the area in which the zone is located engaged
in manufacturing is less than the percentage of the work force
of the state engaged in manufacturing nonfarm per capita income
in the area was 90 percent or less of the median for the state,
excluding standard metropolitan stastistical areas, or for the
standard metropolitan statistical area if the area is located in
a standard metropolitan statistical area;
(5) the jurisdiction of the governing body of the area in
which the zone is located has recently experienced a significant
employment reduction at a federal military installation within
the SMSA in which it is located (E) (i) the current rate of
unemployment in the area is 120 percent of the statewide average
unemployment for the previous year, or (ii) the total number of
employment positions has declined by ten percent during the last
18 months; or
(b) (2) The area is so designated under federal legislation
providing for federal tax benefits to investors, employers or
employees in enterprise zones similar to the state tax benefits
set forth in Laws 1982, Chapter 523; and
(4) The governing body of the area seeking to be designated
as an enterprise zone, by resolution, agrees to follow a course
of action, during the period for which the designation is
effective, designed to promote economic development in the
area. The program may be implemented by governmental action, by
private entities, or both, and may include but is not limited to:
(a) Reduction or abatement of real property taxes of
industrial land and facilities according to section 273.1313;
(b) Issuance of revenue bonds or use of federal funds
available to finance loans for private industrial and housing
facilities;
(c) Issuance of bonds and use of taxes, tax increments, and
available federal funds to finance public facilities in the area;
(d) Increase in the level or efficiency of governmental
services;
(e) Commitments from public or private entities in the area
to provide jobs, job training, and technical, financial, or
other assistance to employees and residents of the area; or
(3) The area consists of a statutory or home rule charter
city with a contiguous border with a city in another state or
with a contiguous border with a city in Minnesota which has a
contiguous border with a city in another state and the area is
determined by the commissioner to be economically or fiscally
distressed.
For purposes of this subdivision, an economic hardship area
must have a population under the most recent federal decennial
census of at least (i) 4,000 if any of the area is located
wholly or partly within a standard metropolitan statistical
area, or (ii) 2,500 for an area located outside of a standard
metropolitan statistical area, or (iii) no minimum in the case
of an area located in an Indian reservation.
Sec. 5. Minnesota Statutes 1982, section 273.1312,
subdivision 5, is amended to read:
Subd. 5. [LIMITATION.] No area shall may be designated as
an enterprise zone after December 31, 1996 1986.
Sec. 6. Minnesota Statutes 1982, section 273.1313,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (1) Terms (a) As used in
this section, the following terms have the meanings given them
in this subdivision.
(2) (b) "Commissioner" means the commissioner of revenue.
(3) "Industrial (c) "Employment property" means taxable
property, excluding land but including buildings, structures,
fixtures, and improvements that satisfy each of the following
conditions:
(a) (1) The property is located within an enterprise zone
designated according to section 273.1312.
(b) (2) The primary purpose and prospective use of the
property is (i) the manufacture or processing of goods or
materials by physical or chemical change, or (ii) the provision
of office, engineering, research and development, warehousing,
parts distribution, or other facilities that are related to a
manufacturing or processing operation conducted by the user
commercial or industrial property which is not used in a trade
or business which either is described in section 103(b)(6)(O) of
the Internal Revenue Code of 1954, as amended through January
15, 1983, or is a public utility.
(c) The user will own the property or occupy it under a
lease requiring the user to pay property taxes on it as if the
user were the owner.
(d) The property is classified as industrial employment
property by the procedure and subject to the conditions provided
in this section, before it is first placed in use.
(4) (d) "Market value", as applied to industrial of a
parcel of employment property on any particular parcel of land,
means the value of all the taxable property situated there
except the land, as annually determined pursuant to section
273.12, less (i) the market value of all property existing at
the time of application for classification, as last assessed
prior to the time of application, and (ii) any increase in the
market value of the property referred to in clause (i) as
assessed in each year after the industrial employment property
is first placed in service. In each year, any change in the
values of the industrial employment property and the other
property on the land shall be deemed to be proportionate unless
caused by a capital improvement or loss.
(5) (e) "Municipality" means any home rule charter or
statutory city or county, but a county may not exercise the
powers granted in this section with reference to property
situated within a city.
(f) Notwithstanding the provisions of clauses (c) and (d)
"employment property" and "market value" includes in the case of
taxable real property located in an enterprise zone designated
under section 273.1312, subdivision 4, paragraph (c), clause
(3), the entire value of the commercial and industrial property
used in a trade or business which is not used in a trade or
business which either is described in section 103(b)(6)(O) of
the Internal Revenue Code of 1954, as amended through January
15, 1983, or is a public utility; provided that the provisions
of this paragraph shall not apply to employment property located
in an enterprise zone designated pursuant to section 273.1312,
subdivision 4, paragraph (c), clause (3), that is assessed
pursuant to the first clause of the first sentence of section
273.13, subdivision 9, paragraph (4).
Sec. 7. Minnesota Statutes 1982, section 273.1313,
subdivision 2, is amended to read:
Subd. 2. [PROGRAM.] (1) (a) The governing body of any
municipality which contains a designated enterprise zone as
provided by section 273.1312 may shall by resolution establish a
program for classification of new industrial property or
improvements to existing property as industrial employment
property pursuant to the provisions of this section, if it finds
that the program is needed to facilitate and encourage the
renewal or addition of industrial facilities to provide or
preserve employment opportunities for its citizens.
Applications for classification under the program shall be filed
with the municipal clerk or auditor in a form prescribed by the
commissioner, with additions as may be prescribed by the
municipal governing body. The application shall contain, where
appropriate, a legal description of the parcel of land on which
the facility is to be situated or improved; a general
description of the facility or improvement and its proposed use,
the equipment proposed to be used in connection with it
(including equipment exempt from taxation under existing law),
the probable time schedule for undertaking the construction or
improvement, and information regarding the matters referred to
in paragraph (4) (d); the market value and the assessed value of
the land and of all other taxable property then situated on it,
according to the most recent assessment; and an estimate of the
probable cost of the new construction or improvement and the
market value of the new or improved facility (excluding land)
when completed.
(2) (b) Upon receipt of an application the municipal clerk
or auditor, subject to any prior approval required by the
resolution establishing the program, shall furnish a copy to the
assessor for the property and to the governing body of each
school district and other public body authorized to levy taxes
on the property, and shall publish a notice in the official
newspaper of the time and place of a hearing to be held by the
governing body on the application, not less than 30 days after
the notice is published, stating that the applicant, the
assessor, representatives of the affected taxing authorities,
and any taxpayer of the municipality may be heard or may present
their views in writing at or before the hearing. The hearing
may be adjourned from time to time, but the governing body shall
take action on the application by resolution within 30 days
after the hearing. If disapproved, the reasons shall be set
forth in the resolution, and the applicant may appeal to the
commissioner within 30 days thereafter, but only on the ground
that the determination is arbitrary, in relation to prior
determinations as to classification under the program, or based
upon a mistake of law. If approved, the resolution shall
include determinations as to the matters set forth in paragraph
(4) (d), and the clerk or auditor shall transmit it to the
commissioner.
(3) (c) Within 60 days after receipt of an approved
application or an appeal from the disapproval of an application,
the commissioner shall take action on it. The commissioner
shall approve each application approved by the governing body if
he finds that it complies with the provisions of this section.
If he disapproves the application, or finds grounds exist for
appeal of a disapproved application, he shall transmit the
finding to the governing body and the applicant. When grounds
for appeal have been determined to exist, the governing body
shall reconsider and take further action on the application
within 30 days after receipt of the commissioner's notice and
serve written notice of the action upon the applicant. The
applicant, within 30 days after receipt of notice of final
disapproval by the commissioner or the governing body, may
appeal from the disapproval to a court of competent jurisdiction.
(4) (d) In the case of enterprise zones qualifying pursuant
to section 273.1312, subdivision 4, paragraph (c), clause (1),
an application shall not be approved unless the governing body
finds and determines that the construction or improvement of the
facility:
(a) (1) Is reasonably likely to create new employment or
prevent a loss of employment in the municipality;
(b) (2) Is not likely to have the effect of transferring
existing employment from one or more other municipalities within
the state;
(c) (3) Is not likely to cause the total market value of
industrial employment property within the municipality to exceed
five percent of the total market value of all taxable property
within the municipality; or if it will, the resulting limitation
upon the increase of the assessed value of all taxable property
within the municipality, considering the amount of additional
municipal services likely to be required for the industrial
employment property, is not likely to substantially impede the
operation or the financial integrity of the municipality or any
other public body levying taxes on property in the municipality;
and
(d) (4) Will not result in the reduction of the assessed
value of existing property within the municipality owned by the
applicant, through abandonment, demolition, or otherwise,
without provision for the restoration of the existing property
within a reasonable time in a manner sufficient to restore the
assessed valuation.
Sec. 8. Minnesota Statutes 1982, section 273.1313,
subdivision 3, is amended to read:
Subd. 3. [CLASSIFICATION.] Property shall be classified as
industrial employment property and assessed as provided for
class 4d property in section 273.13, subdivision 9, clause
paragraph (4), for taxes levied in the year in which the
classification is approved and in each year thereafter to and
including the 12th year after the industrial employment property
is completed for the four succeeding years after the approval.
If the classification is revoked, the revocation is effective
for taxes levied in the next year after revocation.
Sec. 9. Minnesota Statutes 1982, section 273.1313,
subdivision 5, is amended to read:
Subd. 5. [HEARING.] Upon receipt of the request, the
commissioner shall notify the applicant and the governing body
by certified mail of a time and place, not less than 30 days
after receipt, at which the applicant may be heard and. The
hearing must be held within 30 days after receipt of the
request. Within 30 days after the hearing, the commissioner
will shall determine whether the facts and circumstances are
grounds for revocation as recommended by the governing body. If
the commissioner revokes the classification, the applicant may
appeal from the commissioner's order to a court of competent
jurisdiction at any time within 30 days after revocation.
Sec. 10. [273.1314] [SELECTION OF ENTERPRISE ZONES.]
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given.
(a) "City" means a statutory or home rule charter city.
(b) "Commissioner" means the commissioner of energy,
planning, and development or its successor agency.
(c) "Legislative advisory commission" means the legislative
advisory commission established under section 3.30.
(d) "Municipality" means a city or a county for an area
located outside the boundaries of a city. If an area lies in
two or more cities or in both incorporated and unincorporated
areas, municipality shall include an entity formed pursuant to
section 471.59 by the governing bodies of the cities with
jurisdiction over the incorporated area and the counties with
jurisdiction over the unincorporated area.
Subd. 2. [SUBMISSION OF APPLICATIONS.] On or before August
31 of each year, a municipality seeking designation of an area
as an enterprise zone shall submit an application to the
commissioner. The commissioner shall establish procedures and
forms for the submission of applications for enterprise zone
designation.
Subd. 3. [APPLICATIONS; CONTENTS.] The applications for
designation as an enterprise zone shall contain, at a minimum:
(a) verification that the area is eligible for designation
pursuant to section 273.1312;
(b) a development plan, outlining the types of investment
and development within the zone that the municipality expects to
take place if the incentives and tax reductions specified under
paragraphs (d) and (e) are provided, the specific investment or
development reasonably expected to take place, any commitments
obtained from businesses, the projected number of jobs that will
be created, the anticipated wage level of those jobs, and any
proposed targeting of the jobs created, including affirmative
action plans if any;
(c) the municipality's proposed means of assessing the
effectiveness of the development plan or other programs to be
implemented within the zone once they have been implemented;
(d) the specific form of tax reductions, authorized by
subdivision 9, proposed to be granted to businesses, the
duration of the tax reductions, an estimate of the total state
taxes likely to be foregone as a result, and a statement of the
relationship between the proposed tax reductions and the type of
investment or development sought or expected to be attracted to
or maintained in the area if it is designated as a zone;
(e) the municipality's contribution to the zone as required
by subdivision 6;
(f) any additional information required by the
commissioner; and
(g) any additional information which the municipality
considers relevant to the designation of the area as an
enterprise zone.
Paragraph (b) does not apply to an application for
designation under section 273.1312, subdivision 4, paragraph
(c), clause (3).
Subd. 4. [EVALUATION OF APPLICATIONS.] The commissioner
shall review and evaluate the applications submitted pursuant to
subdivision 3 and shall determine whether each area is eligible
for designation as an enterprise zone. If the department of
energy, planning, and development no longer exists as presently
constituted, the commissioner shall consult with the successor
to the responsibilities of the planning division of that
department in making this determination. In determining whether
an area is eligible under section 273.1312, subdivision 4,
paragraph (c), if unemployment, employment, income or other
necessary data are not available for the area from the federal
departments of labor or commerce or the state demographer, the
commissioner may rely upon other data submitted by the
municipality if he determines it is statistically reliable or
accurate. The commissioner, in conjunction with the
commissioner of revenue, shall prepare an estimate of the amount
of state tax revenue which will be foregone for each application
if the area is designated as a zone.
On or before October 1 of each year, the commissioner shall
submit to the legislative advisory commission a list of the
areas eligible for designation as enterprise zones, along with
his recommendations for designation and supporting
documentation. In making recommendations for designation, the
commissioner shall consider and evaluate the applications
pursuant to the following criteria:
(a) the pervasiveness of poverty, unemployment, and general
distress in the area;
(b) the extent of chronic abandonment, deterioration or
reduction in value of commercial, industrial or residential
structures in the area and the extent of property tax arrearages
in the area;
(c) the prospects for new investment and economic
development in the area with the tax reductions proposed in the
application relative to the state and local tax revenue which
would be foregone;
(d) the competing needs of other areas of the state;
(e) the municipality's proposed use of other state and
federal development funds or programs to increase the
probability of new investment and development occurring;
(f) the extent to which the projected development in the
zone will provide employment to residents of the economic
hardship area, and particularly individuals who are unemployed
or who are economically disadvantaged as defined in the federal
Job Training Partnership Act of 1982, 96 Statutes at Large 1322;
(g) the funds available pursuant to subdivision 8; and
(h) other relevant factors which he specifies in his
recommendations.
The commissioner shall submit a separate list of the areas
entitled to designation as enterprise zones under section
273.1312, subdivision 4, paragraph (c), clauses (2) and (3),
along with his recommendations for the amount of funds to be
allocated to each area.
Subd. 5. [LAC RECOMMENDATIONS.] On or before October 15,
the legislative advisory commission shall submit to the
commissioner its advisory recommendations regarding the
designation of enterprise zones. By October 30 of each year the
commissioner shall make the final designation of the areas as
enterprise zones, pursuant to section 273.1312, subdivision 2.
In making the designation, the commissioner may make
modifications in the design of or limitations on the tax
reductions contained in the application necessary because of the
funding limitations under subdivision 8.
Subd. 6. [LOCAL CONTRIBUTION.] No area may be designated
as an enterprise zone unless the municipality agrees to make a
qualifying local contribution in the form of (a) a property tax
reduction for employment property as provided by section
273.1313 for any business qualifying for a state tax reduction
pursuant to this section, or (b) an equivalent local
contribution or investment out of other municipal funds, but
excluding any special federal grants or loans. If the local
contribution is to be used to fund additional reductions in
state taxes, the commissioner and the governing body of the
municipality shall enter an agreement for timely payment to the
state to reimburse the state for the amount of tax revenue
foregone as a result.
Subd. 7. [LIMITATIONS; NUMBER OF DESIGNATIONS.] (a) In
each of the years 1983 and 1984, the commissioner shall
designate at least two but not more than five areas as
enterprise zones. No designations shall be made after December
31, 1984.
(b) No more than one area may be designated as an
enterprise zone in any county, except that two areas may be
designated in a county containing a city of the first class.
(c) No more than one area in a congressional district may
be designated as an enterprise zone in any calendar year.
This subdivision shall not apply to enterprise zones
designated pursuant to section 273.1312, subdivision 4,
paragraph (c), clause (2) or (3).
Subd. 8. [FUNDING LIMITATIONS.] The maximum amount of the
tax reductions which may be authorized pursuant to designations
of enterprise zones under section 273.1312 and this section is
limited to $32,000,000. The maximum amount of this total which
may be authorized by the commissioner for tax reductions
pursuant to subdivision 9 that will reduce tax revenues which
otherwise would have been received during fiscal years 1984 and
1985 is limited to $8,000,000. Of the total limitation and the
1984-1985 biennial limitation the commissioner shall allocate to
enterprise zones designated under section 273.1312, subdivision
4, paragraph (c), clause (3), an amount equal to $10,000,000 and
$4,000,000 respectively. These funds shall be allocated among
such zones on a per capita basis. An amount sufficient to fund
the state funded property tax credits authorized pursuant to
this section is appropriated to the commissioner of revenue.
Upon designation of an enterprise zone the commissioner shall
certify the total amount available for tax reductions in the
zone for its duration. The amount certified shall reduce the
amount available for tax reductions in other enterprise zones.
If subsequent estimates indicate or actual experience shows that
the approved tax reductions will result in amounts of tax
reductions in excess of the amount certified, the commissioner
shall implement a plan to reduce the available tax reductions in
the zone to an amount within the sum certified. If subsequent
estimates indicate or actual experience shows that the approved
tax reductions will result in amounts of tax reductions below
the amount certified, the difference shall be available for
certification in other zones or used in connection with an
amended plan of tax reductions for the zone as the commissioner
determines appropriate. If the tax reductions authorized result
in reduced revenues for a dedicated fund, the commissioner of
finance shall transfer equivalent amounts to the dedicated fund
from the general fund as necessary.
Subd. 9. [AUTHORIZED FORMS OF STATE TAX REDUCTIONS.] (a)
The following types of tax reductions may be approved by the
commissioner for businesses located in an enterprise zone:
(1) An exemption from the general sales tax imposed by
chapter 297A for purchases of construction materials or
equipment for use in the zone;
(2) A credit against the income tax of an employer for
workers employed in the zone, other than workers employed in
construction, up to a maximum of $3,000 per employee;
(3) An income tax credit for a percentage of the cost of
debt financing to construct new facilities in the zone;
(4) A state paid property tax credit for a portion of the
property taxes paid by a new commercial or industrial facility
or the additional property taxes paid by an expansion of an
existing commercial or industrial facility in the zone.
(b) The municipality shall specify in its application for
designation the types of tax reductions it seeks to be made
available in the zone and the percentage rates and other
appropriate limitations on the reductions.
(c) Upon designation of an enterprise zone and approval by
the commissioner of the tax reductions to be made available
therein, the commissioner of revenue shall take the steps
necessary to implement the tax reductions.
(d) The tax reductions provided by this subdivision shall
not apply to any facility described in section 103(b)(6)(O) of
the Internal Revenue Code of 1954, as amended through January
15, 1983, or to any regulated public utility.
(e) The commissioner shall approve tax reductions
authorized by paragraph (a) within an enterprise zone designated
pursuant to section 273.1312, subdivision 4, paragraph (c),
clause (3), only after the governing body of a city designated
as an enterprise zone has designated an area or areas, each
consisting of at least 100 acres, of the city not in excess of
400 acres in which the tax reductions may be provided.
(f) In addition to the tax reductions authorized by
paragraph (a), for an enterprise zone designated under section
273.1312, subdivision 4, paragraph (c), clause (3), the
following types of tax reductions may be approved:
(1) A credit against income tax for workers employed in the
zone up to a maximum of $1,500 per employee;
(2) A state paid property tax credit for a portion of the
property taxes paid by a commercial or industrial facility
located in the zone.
(g) Each tax reduction provided to a business pursuant to
this subdivision shall terminate not longer than five years
after the effective date of the tax reduction for the business.
Subject to the five year limitation, the tax reductions may be
provided after expiration of the zone's designation.
(h) The income tax credits provided pursuant to clauses (a)
and (f) may be refundable.
Subd. 10. [RECAPTURE.] Any business which receives tax
reductions authorized by subdivision 9 and which ceases to
operate its facility located within the enterprise zone within
two years after the expiration of the tax reductions shall repay
the amount of the tax reduction pursuant to the following
schedule:
Termination Repayment
of operations Portion
Less than 6 months 100 percent
6 months or more but less than 12 months 75 percent
12 months or more but less than 18 months 50 percent
18 months or more but less than 24 months 25 percent
Subd. 11. [DEVELOPMENT AND REDEVELOPMENT POWERS.]
Notwithstanding any contrary provision of law or charter, any
city of the first or second class which contains an enterprise
zone or which has been designated as an enterprise zone may, in
addition to its other powers and without limiting them, exercise
the powers granted to a governmental subdivision by chapters
458, 462, and 472. Section 458.192, subdivision 14, shall apply
to the city in the exercise of the powers granted pursuant to
this section. It may exercise the powers assigned to
redevelopment agencies pursuant to chapter 474, without
limitation to further the purposes of sections 458.09 to
458.1991, 462.411 to 462.705, and chapters 472 and 472A. It may
exercise the powers set forth in sections 458.09 to 458.1991,
462.411 to 462.705, and chapters 472 and 472A, without
limitation to further the purposes and policies set forth in
chapter 474. It may exercise the powers granted by this
subdivision and any other development or redevelopment powers
authorized by other laws, including chapters 472A and 474,
independently or in conjunction with each other as though all
the powers had been granted to a single entity. Any project
undertaken to accomplish the purposes of chapter 462 that
qualifies as single-family housing under section 462C.02,
subdivision 4, shall be subject to the provisions of chapter
462C.
The authorization for a city to exercise powers pursuant to
this subdivision shall terminate upon the expiration of the
designation of the enterprise zone provided that the powers
granted by this subdivision may be exercised after that date
with respect to any project, program, or activity commenced or
established prior to that date. The powers granted by this
subdivision may only be exercised within the zone.
Subd. 12. [TECHNICAL ASSISTANCE.] The commissioner shall
establish a mechanism for providing and shall provide technical
assistance to small municipalities seeking designation of an
area as an enterprise zone under this section and section
273.1312. For purposes of this subdivision, a small
municipality means a municipality with a population of 20,000 or
less.
Subd. 13. [ADMINISTRATIVE PROCEDURES ACT.] The provisions
of chapter 14 shall not apply to designation of enterprise zones
pursuant to this section or section 273.1312.
Subd. 14. [FEDERAL DESIGNATIONS.] The commissioner may
accept applications and may at any time grant a contingent
designation of area as an enterprise zone for purposes of
seeking a designation of the area as a federal enterprise zone.
For purposes of the designations, the commissioner may waive any
of the requirements or limitations on designations contained in
this section. If the contingent designation would require
funding in excess of the amount available pursuant to
subdivision 8, the commissioner shall inform the members of the
legislative advisory commission and shall submit a request for
the necessary funding to the tax and appropriations committees
of the legislature.
Subd. 15. [REPORTING.] The commissioner shall require
municipalities receiving enterprise zone designations pursuant
to section 273.1312, subdivision 4, to supply information or
otherwise report to the state regarding the economic activity
which has occurred in the zone following the designation. This
information shall include the number of jobs created in the
zone, the number of economically disadvantaged individuals hired
in the zone, the average wage level of the jobs created, and
descriptions of any affirmative action programs undertaken by
the municipality in connection with the zone.
Subd. 16. [INFORMATION SHARING.] Notwithstanding the
provisions of sections 290.61 and 297A.43, the commissioner of
revenue may share information with the commissioner or with a
municipality receiving an enterprise zone designation, insofar
as necessary to administer the funding limitations provided by
subdivision 8.
Subd. 17. [REPEALER.] This section is repealed effective
December 31, 1996.
Sec. 11. [INSTRUCTION TO REVISOR.]
If the department of energy, planning, and development no
longer exists as presently constituted, "commissioner" as
defined in section 273.1312 and section 10 means the successor
to the responsibilities of the economic development division of
that department. The revisor of statutes shall change the
definition as appropriate in Minnesota Statutes 1984, and
subsequent editions.
Sec. 12. Minnesota Statutes 1982, section 290.068, is
amended by adding a subdivision to read:
Subd. 6. [ADDITIONAL CREDIT.] (a) In addition to the
credit allowed by subdivision 1, a credit shall be allowed
against the tax imposed by this chapter for the taxable year
equal to 12.5 percent of the amount of qualified research
expenses paid or incurred for qualified research performed by a
Minnesota-domiciled corporation for or on behalf of one or more
of its wholly-owned subsidiary corporations which has in effect
during the taxable year a valid election under section 936 of
the Internal Revenue Code, including any expenses paid or
incurred that are attributable to a wholly-owned subsidiary
corporation by reason of paragraph (h) of section 936 for
purposes of determining each corporation's combined taxable
income.
(b) The maximum credit allowed by clause (a) for the
taxable year shall be the excess of
(1) the total amount of tax imposed by this chapter on all
members of the unitary group for the taxable year, over
(2) the sum of (A) the total amount of tax which would be
imposed on the unitary group, if the corporation or corporations
with valid elections under section 936 of the Internal Revenue
Code were excluded from the unitary group, plus (B) the tax, if
any, which would be imposed on the corporation or corporations
with valid elections under section 936 of the Internal Revenue
Code without regard to the other members of the unitary group.
(c)(1) If the amount of the credit determined under clause
(a) for any taxable year exceeds the limitation provided in
clause (b), the excess shall be a research credit carryover to
each of the 15 succeeding taxable years. The entire amount of
the excess unused credit for the taxable year shall be carried
first to the earliest of the taxable years to which the credit
may be carried and then to each successive year to which the
credit may be carried.
(2) The amount of the unused credit which may be added
under subparagraph (1) for any preceding taxable year shall not
exceed the amount by which the limitation provided by clause (b)
for the taxable year exceeds the sum of
(i) the credit allowable under this subdivision for the
taxable year, and
(ii) the amounts, which, by reason of subparagraph (1), are
added to the amount allowable for the taxable year and which are
attributable to taxable years preceding the taxable year in
which an excess credit arises.
Sec. 13. [290.069] [SMALL BUSINESS INVESTMENT CREDITS.]
Subdivision 1. [DEFINITIONS.] (a) "Small business
assistance office" means a nonprofit corporation which is formed
under chapter 317, is an exempt organization under section
501(c)(3) of the Internal Revenue Code, and satisfies the
following conditions:
(1) The primary purpose of the corporation is to aid in the
formation of new businesses which create jobs in the state by
training or providing other direct assistance to entrepreneurs,
managers, inventors, and other individuals in the development,
financing, and operation of qualified small businesses.
(2) The corporation provides audited financial statements
to all contributors and the commissioner of energy, planning,
and development within 90 days following the close of the
corporation's fiscal year.
(3) The corporation employs, at least, two full-time
professional employees or the equivalent.
(4) The corporation is not engaged in providing financing
or primarily engaged in arranging financing for businesses.
(5) The commissioner of energy, planning and development
certifies that the corporation satisfies the requirements of
this paragraph for the calendar year.
(b) "Technology" means a proprietary process, formula,
pattern, device, or compilation of scientific or technical
information unless it
(1) is in the public domain; or
(2) cannot be accurately valued.
(c) "Controlled group of corporations" means the controlled
group of corporations as defined in section 1563 of the Internal
Revenue Code, and if the corporation is part of a unitary
business, includes the corporations or entities constituting the
unitary business which are not in the controlled group of
corporations as defined in section 1563.
(d) An "innovation center public corporation" is a
nonprofit public corporation located at a state university in
Minnesota that has the purpose of assisting, encouraging,
developing, and advancing the high technology small business
prosperity and economic welfare of the state.
(e) The "Internal Revenue Code" means the Internal Revenue
Code of 1954, as amended through January 15, 1983.
(f) "Qualified small business" means a business entity
organized for profit if the entity:
(1) Has 20 or fewer employees and has less than $1,000,000
in gross annual receipts;
(2) Is not a subsidiary or an affiliate of a business which
employs more than 20 employees or has total gross receipts for
the previous year of more than $1,000,000, computed by
aggregating all of the employees and gross receipts of the
business entities affiliated with the business;
(3) Has its commercial domicile in this state;
(4) Does not derive more than 20 percent of its gross
receipts from royalties, rents, dividends, interest, annuities,
and sales or exchanges of stock or securities;
(5) Is not engaged in a trade or business, the primary
purpose of which is described in section 103(b)(6)(O) of the
Internal Revenue Code of 1954, as amended through January 15,
1983; and
(6) Is certified by the commissioner of energy, planning
and development that it satisfies the requirements of clauses
(1) to (5).
Subd. 2. [TECHNOLOGY TRANSFER CREDIT.] A credit may be
claimed against the taxes imposed by this chapter in an amount
equal to 30 percent of the net value of the technology
transferred to a qualified small business if the following
conditions are satisfied:
(a) The commissioner certifies that the technology has the
value claimed by the transferor taxpayer.
(b) The transferor taxpayer is the exclusive and undisputed
owner of the technology at the time the transfer is made.
(c) Except as provided in paragraph (h), the transferor
retains no proprietary or financial interest in the technology
subsequent to its transfer to the qualified small business and
no credit is claimed for the transfer of the technology in a
prior or subsequent taxable year, except pursuant to the
carryover provisions of subdivision 5.
(d) The credit shall apply only to the first $1,000,000 of
the net value of the technology transferred during the taxable
year. The value of the technology shall not exceed the total
qualified research expenses, as defined in section 290.068,
subdivision 2, expended by the transferor to create or develop
the technology. For purposes of this clause, "net value" means
the total value of the technology less any payments received
from the transferee and less the value of any equity interest in
the transferee received by the transferor in exchange for the
technology. For purposes of determining the value of the equity
interest, the total value of the transferee shall be deemed to
be not less than the value of the technology transferred, less
any cash payment made to the transferor.
(e) The taxpayer has not deducted the value of the
transferred property from income under any other provisions of
this chapter, except that the costs of developing the technology
may have been deducted as a business expense or depreciated or
included in the computation of the research and experimental
expenditure credit pursuant to section 290.068.
(f) The transferee business entity may not be a subsidiary
or affiliate of the transferor taxpayer.
(g) The transferee makes a substantial investment in
acquiring or developing the technology. The requirements of
this clause are satisfied if (1) transferee pays the transferor
an amount equal to 20 percent of the value of the technology in
return for acquisition of the rights to the technology, or if
(2) the transferee expends an equivalent amount for equipment,
materials, wages, or other direct costs to develop, produce, or
otherwise use the technology. The requirements of this
paragraph may not be satisfied by granting the transferor an
equity interest as provided by paragraph (h).
(h) The transferor may receive in exchange for the transfer
of the technology an equity interest in the transferee, but this
interest may not exceed 25 percent of the capital interest, if
the transferee is a partnership, or 25 percent in value of the
outstanding stock, if the transferee is a corporation. The
transferor's basis in the equity interest shall be reduced by
the amount of the credits received pursuant to this
subdivision. The transferor may not deduct any loss realized on
the sale or exchange of the equity interest.
The commissioner may require that the taxpayer obtain an
appraisal of the value of the transferred technology by a
reliable, expert third party. The commissioner may promulgate
administrative rules for appraising the value of transferred
technology.
Subd. 3. [CONTRIBUTION CREDIT.] A credit shall be allowed
against the taxes imposed by this chapter in an amount equal to
50 percent of the first $50,000 of contributions made during the
taxable year to a small business assistance office or to an
innovation center public corporation. No credit shall be
allowed for any contributions deducted pursuant to any other
provision of this chapter.
Subd. 4. [EQUITY INVESTMENT CREDIT.] (a) A credit shall be
allowed against the tax imposed by this chapter for the taxable
year in an amount equal to 30 percent of the net investment in
excess of $25,000 in the equity stock of a qualified small
business. The maximum amount of the credit for a taxable year
may not exceed $75,000. For purposes of this credit the
following limitations apply:
(1) Equity stock shall not include any security which
provides for fixed or variable interest payments.
(2) The taxpayer and any related persons may not own more
than 49 percent of the value of any class of stock. For
purposes of this paragraph, a person is a related person to
another person if (i) the relationship between the persons would
result in a disallowance of losses under section 267 or 707(b)
of the Internal Revenue Code of 1954 or (ii) the persons are
members of the same controlled group of corporations. The
restrictions provided by this subdivision shall apply for a
three-year period beginning on the date the stock is purchased.
If the taxpayer or a related person acquires more than 49
percent of the value of any class of stock after the allowance
of a credit under this subdivision and prior to the end of the
three-year period, the taxpayer's tax for the taxable year in
which the credit was allowed shall be increased by the amount of
the credit previously claimed.
(3) The credit shall not exceed 75 percent of the
taxpayer's tax liability computed after the subtraction of all
credits, other than the credit provided in this subdivision.
(b) If the principal place of business of the qualified
small business is located in an enterprise zone designated
pursuant to section 273.1312, $10,000 shall be substituted for
$25,000 and $100,000 for $75,000 in paragraph (a).
(c) The taxpayer's basis in the stock shall be reduced by
the amount of the credit.
Subd. 5. [LIMITATIONS; OTHER CONDITIONS.] The provisions
of section 290.068, subdivisions 3, clause (a); 4; and 5 shall
apply to the sum of the credits which this section allows,
except that no carryback shall be allowed. The carryover
provisions of section 290.068, subdivision 3, clause (b), shall
apply to the sum of the credits allowed by this section except
that the term "research credit" or "research and experimental
expenditure credit" shall include the credits authorized by
subdivisions 2 and 3 of this section. The credits allowed by
subdivisions 2 and 3 shall only be available to corporations and
banks whose tax is computed pursuant to section 290.06,
subdivision 1.
The maximum limitations on the amount of credits pursuant
to subdivisions 2 and 3 shall be determined by aggregating
together the credits of all the corporations in the controlled
group of corporations with the taxpayer. In order to facilitate
compliance with and enforcement of this provision the
commissioner may require the taxpayer to claim the credit on a
combined report of the unitary business or to file a copy of the
consolidated federal return with the state return or both.
Subd. 6. [REPEALER.] This section is repealed effective
for contributions made to a small business office or to an
innovation center public corporation as provided in subdivision
3, for technology transferred as described in subdivision 2, and
for investments made as described in subdivision 4 in taxable
years beginning after December 31, 1985.
Sec. 14. Minnesota Statutes 1982, section 290.09,
subdivision 4, is amended to read:
Subd. 4. [TAXES.] Taxes paid or accrued within the taxable
year, except (a) income or franchise taxes imposed by this
chapter and income or franchise taxes paid to any other state or
to any province or territory of Canada for which a credit is
allowed under section 290.081; (b) taxes assessed against local
benefits of a kind deemed in law to increase the value of the
property assessed; (c) inheritance, gift and estate taxes except
as provided in section 290.077, subdivision 4; (d) cigarette and
tobacco products excise tax imposed on the consumer; (e) that
part of Minnesota property taxes for which a credit or refund is
claimed and allowed under chapter 290A; (f) federal income taxes
(including the windfall profit tax on domestic crude oil), by
corporations, national and state banks; (g) mortgage registry
tax; (h) real estate transfer tax; (i) federal telephone tax;
(j) federal transportation tax; and (k) income or franchise
taxes based on net income paid by a corporation to another
state, to a political subdivision of another state, or to the
District of Columbia; and (l) tax paid by any corporation or
national or state bank to any foreign country or possession of
the United States to the extent that a credit against federal
income taxes is allowed under the provisions of the Internal
Revenue Code of 1954, as amended through December 31, 1981. If
the taxpayer's foreign tax credit consists of both foreign taxes
deemed paid and foreign taxes actually paid or withheld, it will
be conclusively presumed that foreign taxes deemed paid were
first used by the taxpayer in its foreign tax credit. Minnesota
gross income shall include the amount of foreign tax paid which
had been allowed as a deduction in a previous year, provided
such foreign tax is later allowed as a credit against federal
income tax.
Taxes imposed upon a shareholder's interest in a
corporation which are paid by the corporation without
reimbursement from the shareholder shall be deductible only by
such corporation.
Property taxes shall be allowed as a deduction to the same
taxpayer and in the same manner as provided in section 164 of
the Internal Revenue Code of 1954, as amended through December
31, 1981, notwithstanding the provisions of section 272.31.
Sec. 15. Minnesota Statutes 1982, section 471.59, is
amended by adding a subdivision to read:
Subd. 11. [JOINT POWERS BOARD.] Two or more governmental
units, through action of their governing bodies, may establish a
joint board to issue bonds or obligations pursuant to any law by
which any of the governmental units establishing the joint board
may independently issue bonds or obligations and may use the
proceeds of the bonds or obligations to carry out the purposes
of the law under which the bonds or obligations are issued. A
joint board created pursuant to this section may issue
obligations and other forms of indebtedness only pursuant to
authority granted by the action of the governing bodies of the
governmental units which established the joint board. The joint
board established pursuant to this subdivision shall be composed
solely of members of the governing bodies of the governmental
unit which established the joint board, and the joint board may
not pledge the full faith and credit or taxing power of any of
the governmental units which established the joint board. The
obligations or other forms of indebtedness shall be obligations
of the joint board. The obligations or other forms of
indebtedness shall be issued in the same manner and subject to
the same conditions and limitations which would apply if the
obligations were issued or indebtedness incurred by one of the
governmental units which established the joint board provided
that any reference to a governmental unit in the statute, law,
or charter provision authorizing the issuance of the bonds or
the incurring of the indebtedness shall be considered a
reference to the joint board.
Sec. 16. Laws 1981, Third Special Session chapter 2,
article III, section 22, as amended by Laws 1982, chapters 523,
article XXIX, section 5, and 641, article II, section 7, is
amended to read:
Sec. 22. [EFFECTIVE DATE.]
Sections 1 and 19 to 21 are effective February 1, 1982.
The provision of section 2 relating to commodity tax straddles
and section 7 are effective for taxable years beginning after
December 31, 1980. The provisions of section 2 relating to the
exclusion of dividend and interest income are effective for
taxable years beginning after December 31, 1981. Section 2,
clauses (a)(22), (b)(24), the portion of clause (a)(16) relating
to recovery property, (b)(25), and sections 8, 11, and 12 are
effective for property placed in service after December 31, 1980
in taxable years ending after that date. Section 2, clauses
(a)(17), (b)(2), the portion of clause (a)(16) relating to gain
from the sale or disposition of property and section 9 are
effective for taxable years beginning after December 31, 1982.
Section 6 is effective for taxable years beginning after
December 31, 1981. Section 10 is effective for the sale or
other disposition of property taxable years beginning after
December 31, 1982. For taxpayers subject to tax under Minnesota
Statutes, chapter 290, sections 13, 14, and 15 are effective for
taxable years beginning after June 30, 1981. Section 16 is
effective for taxable years beginning after December 31, 1981.
Sections 17 and 18 are effective for petitions filed after
January 31, 1982.
Sec. 17. [EFFECTIVE DATE.]
Sections 1 to 11 and 15 are effective the day following
final enactment. Sections 12 and 14 are effective for taxable
years beginning after December 31, 1982. Section 13 is
effective for taxable years beginning after December 31, 1983.
Section 16 is effective January 1, 1983.
ARTICLE 9
SATELLITE BROADCASTING; DISTILLERIES.
Section 1. Minnesota Statutes 1982, section 272.02,
subdivision 1, is amended to read:
Subdivision 1. Except as provided in other subdivisions of
this section or in section 272.025 or section 273.13,
subdivisions 17, 17b, 17c or 17d, all property described in this
section to the extent herein limited shall be exempt from
taxation:
(1) All public burying grounds;
(2) All public schoolhouses;
(3) All public hospitals;
(4) All academies, colleges, and universities, and all
seminaries of learning;
(5) All churches, church property, and houses of worship;
(6) Institutions of purely public charity except property
assessed pursuant to section 273.13, subdivisions 17, 17b, 17c
or 17d;
(7) All public property exclusively used for any public
purpose;
(8) (a) Class 2 property of every household of the value of
$100, maintained in the principal place of residence of the
owner thereof. The county auditor shall deduct such exemption
from the total valuation of such property as equalized by the
revenue commissioner assessed to such household, and extend the
levy of taxes upon the remainder only. The term "household" as
used in this section is defined to be a domestic establishment
maintained either (1) by two or more persons living together
within the same house or place of abode, subsisting in common
and constituting a domestic or family relationship, or (2) by
one person.
(b) During the period of his active service and for six
months after his discharge therefrom, no member of the armed
forces of the United States shall lose status of a householder
under paragraph (a) which he had immediately prior to becoming a
member of the armed forces.
In case there is an assessment against more than one member
of a household the $100 exemption shall be divided among the
members assessed in the proportion that the assessed value of
the Class 2 property of each bears to the total assessed value
of the Class 2 property of all the members assessed. The Class
2 property of each household claimed to be exempt shall be
limited to property in one taxing district, except in those
cases where a single domestic establishment is maintained in two
or more adjoining districts.
Bonds and certificates of indebtedness hereafter issued by
the state of Minnesota, or by any county or city of the state,
or any town, or any common or independent school district of the
state, or any governmental board of the state, or any county or
city thereof, shall hereafter be exempt from taxation; provided,
that nothing herein contained shall be construed as exempting
such bonds from the payment of a tax thereon, as provided for by
section 291.01, when any of such bonds constitute, in whole or
in part, any inheritance or bequest, taken or received by any
person or corporation.
(9) Farm machinery manufactured prior to 1930, which is
used only for display purposes as a collectors item;
(10) The taxpayer shall be exempted with respect to, all
agricultural products, inventories, stocks of merchandise of all
sorts, all materials, parts and supplies, furniture and
equipment, manufacturers material, manufactured articles
including the inventories of manufacturers, wholesalers,
retailers and contractors; and the furnishings of a room or
apartment in a hotel, rooming house, tourist court, motel or
trailer camp, tools and machinery which by law are considered as
personal property, and the property described in section 272.03,
subdivision 1, clause (c), except personal property which is
part of an electric generating, transmission, or distribution
system or a pipeline system transporting or distributing water,
gas, or petroleum products or mains and pipes used in the
distribution of steam or hot or chilled water for heating or
cooling buildings and structures. Railroad docks and wharves
which are part of the operating property of a railroad company
as defined in section 270.80 are not exempt.
(11) Containers of a kind customarily in the possession of
the consumer during the consumption of commodities, the sale of
which are subject to tax under the provisions of the excise tax
imposed by Extra Session Laws 1967, Chapter 32;
(12) All livestock, poultry, all horses, mules and other
animals used exclusively for agricultural purposes;
(13) All agricultural tools, implements and machinery used
by the owners in any agricultural pursuit.
(14) Real and personal property used primarily for the
abatement and control of air, water, or land pollution to the
extent that it is so used, other than real property used
primarily as a solid waste disposal site.
Any taxpayer requesting exemption of all or a portion of
any equipment or device, or part thereof, operated primarily for
the control or abatement of air or water pollution shall file an
application with the commissioner of revenue. Any such
equipment or device shall meet standards, regulations or
criteria prescribed by the Minnesota Pollution Control Agency,
and must be installed or operated in accordance with a permit or
order issued by that agency. The Minnesota Pollution Control
Agency shall upon request of the commissioner furnish
information or advice to the commissioner. If the commissioner
determines that property qualifies for exemption, he shall issue
an order exempting such property from taxation. Any such
equipment or device shall continue to be exempt from taxation as
long as the permit issued by the Minnesota Pollution Control
Agency remains in effect.
(15) Wetlands. For purposes of this subdivision,
"wetlands" means land which is mostly under water, produces
little if any income, and has no use except for wildlife or
water conservation purposes. "Wetlands" shall be land preserved
in its natural condition, drainage of which would be feasible
and practical and would provide land suitable for the production
of livestock, dairy animals, poultry, fruit, vegetables, forage
and grains, except wild rice. "Wetlands" shall include adjacent
land which is not suitable for agricultural purposes due to the
presence of the wetlands. Exemption of wetlands from taxation
pursuant to this section shall not grant the public any
additional or greater right of access to the wetlands or
diminish any right of ownership to the wetlands.
(16) Native prairie. The commissioner of the department of
natural resources shall determine lands in the state which are
native prairie and shall notify the county assessor of each
county in which the lands are located. Pasture land used for
livestock grazing purposes shall not be considered native
prairie for the purposes of this clause and section 273.116.
Upon receipt of an application for the exemption and credit
provided in this clause and section 273.116 for lands for which
the assessor has no determination from the commissioner of
natural resources, the assessor shall refer the application to
the commissioner of natural resources who shall determine within
30 days whether the land is native prairie and notify the county
assessor of his decision. Exemption of native prairie pursuant
to this clause shall not grant the public any additional or
greater right of access to the native prairie or diminish any
right of ownership to it.
(17) Property used in a continuous program to provide
emergency shelter for victims of domestic abuse, provided the
organization that owns and sponsors the shelter is exempt from
federal income taxation pursuant to section 501(c)(3) of the
Internal Revenue Code of 1954, as amended through December 31,
1980, notwithstanding the fact that the sponsoring organization
receives funding under section 8 of the United States Housing
Act of 1937, as amended.
(18) If approved by the governing body of the municipality
in which the property is located, property not exceeding one
acre which is owned and operated by any senior citizen group or
association of groups that in general limits membership to
persons age 55 or older and is organized and operated
exclusively for pleasure, recreation, and other nonprofit
purposes, no part of the net earnings of which inures to the
benefit of any private shareholders; provided the property is
used primarily as a clubhouse, meeting facility or recreational
facility by the group or association and the property is not
used for residential purposes on either a temporary or permanent
basis.
(19) To the extent provided by section 295.44, real and
personal property used or to be used primarily for the
production of hydroelectric or hydromechanical power on a site
owned by the state or a local governmental unit which is
developed and operated pursuant to the provisions of section
105.482, subdivisions 1, 8 and 9.
(20) If approved by the governing body of the municipality
in which the property is located, a direct satellite
broadcasting facility or fixed satellite regional or national
program service facility, construction of which is commenced
after June 30, 1983, for a period not to exceed five years. When
the facility no longer qualifies for exemption, it shall be
placed on the assessment rolls as provided in subdivision 4. As
used in this clause, a "direct satellite broadcasting facility"
is a facility operated by a corporation licensed by the federal
communications commission to provide direct satellite
broadcasting services using direct broadcast satellites
operating in the 12-ghz. band and a "fixed satellite regional or
national program service facility" is a facility operated by a
corporation licensed by the federal communications commission to
provide fixed satellite-transmitted regularly scheduled
broadcasting services using satellites operating in the 6-ghz.
band. Before approving a tax exemption pursuant to this
paragraph, the governing body of the municipality shall provide
an opportunity to the members of the county board of
commissioners of the county in which the facility is proposed to
be located and the members of the school board of the school
district in which the facility is proposed to be located to meet
with the governing body. The governing body shall present to
the members of those boards its estimate of the fiscal impact of
the proposed property tax exemption. The tax exemption shall
not be approved by the governing body until the county board of
commissioners has presented its written comment on the proposal
to the governing body, or 30 days has passed from the date of
the transmittal by the governing body to the board of the
information on the fiscal impact, whichever occurs first.
(21) If approved by the governing body of the municipality
in which the property is located, a facility construction of
which is commercial after June 30, 1983, at which a licensed
Minnesota manufacturer produces distilled spirituous liquors,
liqueurs, cordials, or liquors designated as specialties
regardless of alcoholic content, but not including ethyl
alcohol, distilled with a majority of the ingredients grown or
produced in Minnesota, for a period not to exceed five years.
When the facility no longer qualifies for exemption, it shall be
placed on the assessment rolls as provided in subdivision 4.
Before approving a tax exemption pursuant to this paragraph, the
governing body of the municipality shall provide an opportunity
to the members of the county board of commissioners of the
county in which the facility is proposed to be located and the
members of the school board of the school district in which the
facility is proposed to be located to meet with the governing
body. The governing body shall present to the members of those
boards its estimate of the fiscal impact of the proposed
property tax exemption. The tax exemption shall not be approved
by the governing body until the county board of commissioners
has presented its written comment on the proposal to the
governing body, or 30 days has passed from the date of the
transmittal by the governing body to the board of the
information on the fiscal impact, whichever occurs first.
Sec. 2. [297A.253] [SATELLITE BROADCASTING FACILITY
MATERIALS; EXEMPTIONS.]
Notwithstanding the provisions of this chapter, there shall
be exempt from the tax imposed therein all materials and
supplies or equipment used or consumed in constructing, or
incorporated into the construction of, a new facility in
Minnesota for providing federal communications commission
licensed direct satellite broadcasting services using direct
broadcast satellites operating in the 12-ghz. band or fixed
satellite regional or national program services, as defined in
section 272.02, subdivision 1, clause (20), construction of
which was commenced after June 30, 1983, and all machinery,
equipment, tools, accessories, appliances, contrivances,
furniture, fixtures, and all technical equipment or tangible
personal property of any other nature or description necessary
to the construction and equipping of that facility in order to
provide those services.
Sec. 3. [297A.254] [DISTILLERY MATERIALS; EXEMPTION.]
Notwithstanding the provisions of this chapter, there shall
be exempt from the tax imposed therein all materials and
supplies or equipment used or consumed in constructing, or
incorporated into the construction of, a new facility in
Minnesota at which a licensed Minnesota manufacturer produces
distilled spirituous liquors, liqueurs, cordials, and liquors
designated as specialties regardless of alcoholic content, but
not including ethyl alcohol, distilled with a majority of
ingredients grown or produced in Minnesota, construction of
which was commenced after June 30, 1983. All machinery,
equipment, tools, accessories, appliances, contrivances,
furniture, fixtures, and all technical equipment or tangible
personal property of any other nature or description necessary
to the construction and equipping of that facility in order to
provide those services is also exempt.
Sec. 4. [EFFECTIVE DATE.]
Section 1 is effective for taxes levied in 1983 and
thereafter, payable in 1984 and thereafter. Sections 2 and 3
are effective for sales made after June 30, 1983, and before
July 1, 1988.
ARTICLE 10
DEVELOPMENT PROPERTY
Section 1. [CITY OF AUSTIN; CITY OF HASTINGS; PROPERTY
HELD FOR DEVELOPMENT.]
Notwithstanding the time limitation provided in Minnesota
Statutes, section 272.02, subdivision 5, the holding of property
by the city of Austin or by the city of Hastings for later
resale for economic development purposes shall be considered a
public purpose in accordance with Minnesota Statutes, section
272.02, subdivision 1, clause (7) for a period not to exceed six
years. This section shall not operate to create an exemption
from sections 272.01, subdivision 2; 272.68; 273.19; or 462.575,
subdivision 3, or other provisions of law providing for the
taxation of or for payments in lieu of taxes for publicly held
property which is leased, loaned, or otherwise made available
and used by a private person.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective for taxes levied in 1983, payable in
1984 and thereafter.
ARTICLE 11
BEMIDJI
Section 1. [CITY OF BEMIDJI; PROPERTY TAX EXEMPTION FOR
PROPERTY HELD FOR FUTURE DEVELOPMENT.]
The governing body of the city of Bemidji may authorize the
exemption from property tax of property entirely located within
the city of Bemidji, held by a qualified nonprofit organization
for later resale for economic development purposes.
For purposes of this section, a "qualified nonprofit
organization" is a corporation organized under the provisions of
chapter 317 which is prohibited by its articles of incorporation
from affording any pecuniary gain to its members or directors
and which has as its primary purpose the civic betterment and
development of the city of Bemidji. The exemption provided
under this subdivision for property held by a qualified
nonprofit organization shall apply only to property held for the
purpose of encouraging development of commerce and industry in
the city in accordance with the provisions of the articles of
incorporation of the organization. This section shall not
operate to create an exemption from sections 272.01, subdivision
2; 272.68; 273.19; or 462.575, subdivision 3; or other provision
of law providing for the taxation of or for payments in lieu of
taxes for publicly held property which is leased, loaned, or
otherwise made available and used by a private person.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day after approval by the city
council of the city of Bemidji at 12:01 a.m. the day after
compliance with Minnesota Statutes, section 645.021, subdivision
3.
ARTICLE 12
I.S.D. No. 692
Section 1. [EXEMPTION FROM PROPERTY TAX FOR LEASED
PROPERTY.]
Property leased from Independent School District No. 692 by
a nonprofit organization established for the purpose of
providing services and rental space to community organizations
and businesses and which donates its revenues that exceed its
operating and maintenance costs and necessary reserves to the
school district or to a community service fund to be used for
educational and recreational purposes within the district, shall
not be subject to taxation pursuant to Minnesota Statutes,
section 272.01, subdivision 2 prior to the leasing or renting of
the property from the nonprofit organization to a tenant.
Sec. 2. [LOCAL APPROVAL.]
Section 1 is effective upon local approval by the governing
bodies of St. Louis county, the city of Babbitt, and Independent
School District No. 692.
ARTICLE 13
CITY LODGING TAX
Section 1. [477A.018] [CITY LODGING TAX.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding section
477A.016 or any other law, a statutory or home rule charter city
may by ordinance impose a tax of up to three percent on the
gross receipts from the furnishing for consideration of lodging
at a hotel, motel, rooming house, tourist court, or other use of
space by a transient, other than the renting or leasing of it
for a continuous period of 30 days or more.
Subd. 2. [EXISTING TAXES.] No statutory or home rule
charter city may impose a tax under this section upon transient
lodging that, when combined with any tax authorized by special
law or enacted prior to 1972, exceeds a rate of three percent.
Subd. 3. [DISPOSITION OF PROCEEDS.] Ninety-five percent of
the gross proceeds from any tax imposed under subdivision 1
shall be used by the statutory or home rule charter city to fund
a local convention or tourism bureau for the purpose of
marketing and promoting the city as a tourist or convention
center. This subdivision shall not apply to any statutory or
home rule charter city that has a lodging tax authorized by
special law or enacted prior to 1972 at the time of enactment of
this section.
Sec. 2. [477A.019] [COLLECTION.]
The statutory or home rule charter city may agree with the
commissioner of revenue that a tax imposed pursuant to section 1
shall be collected by the commissioner together with the tax
imposed by Minnesota Statutes, chapter 297A, and subject to the
same interest, penalties and other rules and that its proceeds,
less the cost of collection, shall be remitted to the city.
Sec. 3. [EFFECTIVE DATE.]
This article is effective July 1, 1983.
ARTICLE 14
GRAVEL TAX
Section 1. Minnesota Statutes 1982, section 298.75, is
amended to read:
Subdivision 1. [DEFINITIONS.] Except as may otherwise be
provided, the following words, when used in this section, shall
have the meanings herein ascribed to them.
(1) "Aggregate material" shall mean non-metallic natural
mineral aggregate including, but not limited to sand, silica
sand, gravel, building stone, crushed rock, limestone, and
granite. Aggregate material shall not include dimension stone
and dimension granite.
(2) "Person" shall mean any individual, firm, partnership,
corporation, organization, trustee, association, or other entity.
(3) "Operator" shall mean any person engaged in the
business of removing aggregate material from the surface or
subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a
marketable product or service.
(4) "Extraction site" shall mean a pit, quarry, or deposit
containing aggregate material and any contiguous property to the
pit, quarry, or deposit which is used by the operator for
stockpiling the aggregate material.
(5) "Importer" shall mean any person who buys aggregate
material produced from a county not listed in paragraph (6) or
another state and causes the aggregate material to be imported
into a county in this state which imposes a tax on aggregate
material.
(6) "County" shall mean the counties of Stearns, Benton,
Sherburne, Wright, Carver, Scott, Dakota, LeSeuer, Kittson,
Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay,
Becker, Wilkin, Traverse, Big Stone, Stevens, Pope, Anoka,
Hennepin, Washington, and Ramsey.
Subd. 2. A county shall impose upon every importer and
operator, engaged in the business of removing aggregate material
for sale from a pit, quarry, or deposit, a production tax equal
to ten cents per cubic yard or seven cents per ton of aggregate
material removed except that the county board may, in its
discretion, decide not to impose this tax if it determines that
in the previous year operators removed less than 20,000 tons or
14,000 cubic yards of aggregate material from that county. The
tax shall be imposed on aggregate material produced in the
county when the aggregate material is transported from the
extraction site or sold, when in the case of storage the
stockpile is within the state of Minnesota and the highways are
not used for transporting the aggregate material. The tax shall
be imposed on an importer when the aggregate material is
imported into the county that imposes the tax.
In the event that If the aggregate material is transported
directly from the extraction site to a waterway, railway, or
another mode of transportation other than a highway, road or
street, the tax imposed by this section shall be apportioned
equally between the county where the aggregate material is
extracted and the county to which the aggregate material is
originally transported. If that destination is not located in
Minnesota, then the county where the aggregate material was
extracted shall receive all of the proceeds of the tax.
Subd. 3. By the 14th day following the last day of each
calendar quarter, every operator or importer shall make and file
with the county auditor of the county in which the aggregate
material is removed or imported, a correct report under oath, in
such form and containing such information as the auditor shall
require relative to the quantity of aggregate material removed
or imported during the preceding calendar quarter. The report
shall be accompanied by a remittance of the amount of tax due.
If any of the proceeds of the tax is to be apportioned as
provided in subdivision 2, the operator or importer shall also
include on the report any relevant information concerning the
amount of aggregate material transported, the tax and the county
of destination. The county auditor shall notify his the county
treasurer of the amount of such tax and the county to which it
is due. The county treasurer shall remit the tax to the
appropriate county within 30 days.
Subd. 4. If any operator or importer fails to make the
report required by subdivision 3 or files an erroneous report,
the county auditor shall, by the fifth working day after the
date the report became due, determine the amount of tax due and
notify the operator or importer by registered mail of the amount
of tax so determined. An operator or importer may, within 30
days from the date of mailing the notice, file in the office of
the county auditor a written statement of objections to the
amount of taxes determined to be due. The statement of
objections shall be deemed to be a petition within the meaning
of chapter 278, and shall be governed by sections 278.02 to
278.13.
Subd. 5. Failure to file the report shall result in a
penalty of $5 for each of the first 30 days, beginning on the
14th day after the date when the county auditor has sent notice
to the operator or importer as provided in subdivision 4, during
which the report is overdue and no statement of objection has
been filed. For each subsequent day during which the report is
overdue and no statement of objection has been filed, a penalty
of $10 shall be assessed against the operator or importer who is
required to file the report. The penalties imposed by this
subdivision shall be collected as part of the tax. If neither
the report nor a statement of objection has been filed after
more than 60 days have elapsed from the date when the notice was
sent, the operator or importer who is required to file the
report is guilty of a misdemeanor.
Subd. 6. It is a misdemeanor for any operator or importer
to remove aggregate material from a pit, quarry, or deposit or
for any importer to import aggregate material unless all taxes
due under this section for the previous reporting period have
been paid or objections thereto have been filed pursuant to
subdivision 4.
Subd. 7. All moneys collected as taxes under this section
shall be deposited in the county treasury and credited as
follows, for expenditure by the county board:
(a) Sixty percent to the county road and bridge fund for
expenditure for the maintenance, construction and reconstruction
of roads, highways and bridges;
(b) Thirty percent to the road and bridge fund of those
towns as determined by the county board and to the general fund
or other designated fund of those cities as determined by the
county board, to be expended for maintenance, construction and
reconstruction of roads, highways and bridges; and
(c) Ten percent to a special reserve fund which is hereby
established, for expenditure for the restoration of abandoned
pits, quarries, or deposits located upon public and tax
forfeited lands within the county.
In the event that If there are no abandoned pits, quarries
or deposits located upon public or tax forfeited lands within
the county, this portion of the tax shall be deposited in the
county road and bridge fund for expenditure for the maintenance,
construction and reconstruction of roads, highways and bridges.
Sec. 2. [REPEALER.]
Laws 1961, chapter 605; Laws 1963, chapter 475; Laws 1965,
chapter 163; Laws 1977, chapters 112 and 117; and Laws 1979,
chapter 273 are repealed.
Sec. 3. [EFFECTIVE DATE.]
Section 1 is effective for aggregate material produced
after June 30, 1983.
Section 2 is effective January 1, 1983.
ARTICLE 15
DELINQUENCY; TAX FORFEITURE
Section 1. [PURPOSES; POLICY.]
Laws pertaining to the processing of delinquent real estate
taxes in this state respecting billing, delinquency, judgment,
sale, forfeiture, and redemption create risks respecting the
validity of the title of the state, or its successors in
interest, arising out of the tax forfeiture process. It is the
policy of the state of Minnesota that the body of law pertaining
to the processing of delinquent real property taxes be liberally
construed in favor of the state, its officers, agents, and its
successors in interest, to accomplish the following:
(a) to promote the policy of unfettered marketability as
expressed in section 284.28;
(b) to provide for uniform and reasonable notices to
taxpayers and other interested parties with regard to:
(1) mailing of billing notices;
(2) notice of delinquency, judgment, and sale;
(3) notice of expiration of the redemption period; and
(c) to eliminate other potential defects or ambiguities as
fetter the marketability of title held by the state, or its
successors in interest.
Sec. 2. Minnesota Statutes 1982, section 276.04, is
amended to read:
276.04 [NOTICE OF RATES; PROPERTY TAX STATEMENTS.]
On receiving the tax lists from the county auditor, the
county treasurer shall, if directed by the county board, give
three weeks' published notice in a newspaper specifying the
rates of taxation for all general purposes and the amounts
raised for each specific purpose. He shall, whether or not
directed by the county board, cause to be printed on all tax
statements, or on an attachment, a tabulated statement of the
dollar amount due to each taxing authority and the amount to be
paid to the state of Minnesota from the parcel of real property
for which a particular tax statement is prepared. The dollar
amounts due the state, county, township or municipality and
school district shall be separately stated but the amounts due
other taxing districts, if any, may be aggregated. The property
tax statements for class 2a property shall contain the same
information that is required on the tax statements for real
property. The county treasurer shall mail to taxpayers
statements of their personal property taxes due, such statements
to be mailed not later than February 15 (except in the case of
Class 2a property), statements of the real property taxes due
shall be mailed not later than January 31; provided, that the
validity of the tax shall not be affected by failure of the
treasurer to mail such statement. The taxpayer is defined as
the owner who is responsible for the payment of the tax. Such
real and personal property tax statements shall contain the
market value, as defined in section 272.03, subdivision 8, used
in determining the tax. The statement shall show the amount
attributable to section 124.2137 as "state paid agricultural
credit" and the amount attributable to section 273.13,
subdivisions 6 and 7 as "state paid homestead credit". The
statement shall show the reduction attributable to the aid given
pursuant to section 273.139 and shall indicate that the
reduction is paid by the state of Minnesota. If so directed by
the county board, the treasurer shall visit places in the county
as he deems expedient for the purpose of receiving taxes and the
county board is authorized to pay the expenses of such visits
and of preparing duplicate tax lists. Failure to mail the tax
statement shall not be deemed a material defect to affect the
validity of any judgment and sale for delinquent taxes.
Sec. 3. [276.041] [FILING TO RECEIVE NOTICE OF DELINQUENT
TAXES.]
Fee owners, vendees, mortgagees, lienholders, and lessees
may file their names and current mailing addresses with the
county auditor in the county in which the land is located for
the purpose of receiving notices affecting such land that are
issued pursuant to sections 276.04, 281.23, and section 6. Each
person filing his name and address shall pay a filing fee of $15
to the county auditor for each parcel. The filing shall expire
after three years. Persons may refile their names and addresses
for additional three-year periods, and a fee of $15 shall be
paid with each refiling. The county auditor shall furnish a
copy of the list of names and addresses to the county
treasurer. Taxpayers of record with the county auditor and
mortgagees who remit taxes on their behalf shall receive tax
statements and other notices as otherwise provided by law and
shall not be required to file and pay fees under this section.
Sec. 4. Minnesota Statutes 1982, section 279.05, is
amended to read:
279.05 [DELINQUENT LIST, FILING, EFFECT.]
On or before February fifteenth, in each year, the county
auditor shall file with the clerk of the district court of the
county a list of the delinquent taxes upon real estate within
his county, which list shall contain a description of each
parcel of land on which such taxes shall be so delinquent,
except such parcels as shall have theretofore been bid in by the
state and not assigned by it or redeemed, with the name of the
owner, if known, and, if unknown, so stated, appearing on the
delinquent list, and the total amount of taxes and penalties,
with the years for which the same are delinquent, set opposite
such description, and shall verify such list by his affidavit.
The list shall contain the following information:
(a) a legal description of the land and tax parcel or
identification number of each parcel of land on which taxes
shall be so delinquent except those parcels as shall have
theretofore been bid in by the state and not redeemed;
(b) names of the taxpayers and fee owners and in addition
those parties who have filed their addresses pursuant to section
3, and, at the election of the county auditor, the current filed
addresses; and
(c) the total amount of taxes and penalties, with the years
for which the same are delinquent, set opposite the description.
The filing of such list shall have the effect of filing a
complaint in an action by the county against each parcel of land
therein described, to enforce payment of the taxes and penalties
therein appearing against it, and shall be deemed the
institution of such action, and the same shall operate as notice
of the pendency thereof. The auditor shall verify the list by
affidavit. The affidavit shall be substantially in the
following form:
State of Minnesota )
) ss.
County of ............... )
................., being by me first duly sworn, deposes,
and says that he is the auditor of the county of
.................; that he has examined the foregoing list, and
knows the contents thereof; and that the same is a correct list
of taxes delinquent for the year (or years) therein appearing
upon real estate in said county true and correct.
Subscribed and sworn to before me this .................
day of ..................., 19.......
Sec. 5. Minnesota Statutes 1982, section 279.06, is
amended to read:
279.06 [COPY OF LIST AND NOTICE.]
Within five days after the filing of such list, the clerk
shall return a copy thereof to the county auditor, with a notice
prepared and signed by him, and attached thereto, which may be
substantially in the following form:
State of Minnesota )
) ss.
County of ............... )
District Court
.......... Judicial District.
The state of Minnesota, to all persons, companies, or
corporations who have or claim any estate, right, title, or
interest in, claim to, or lien upon, any of the several parcels
of land described in the list hereto attached:
The list of taxes and penalties on real property for the
county of ............................... remaining delinquent
on the first Monday in January, 19....., has been filed in the
office of the clerk of the district court of said county, of
which that hereto attached is a copy. Therefore, you, and each
of you, are hereby required to file in the office of said clerk,
on or before the twentieth day after the publication of this
notice and list, your answer, in writing, setting forth any
objection or defense you may have to the taxes, or any part
thereof, upon any parcel of land described in the list, in, to,
or on which you have or claim any estate, right, title,
interest, claim, or lien, and, in default thereof, judgment will
be entered against such parcel of land for the taxes on such
list appearing against it, and for all penalties, interest, and
costs. Based upon said judgment, the land shall be sold to the
state of Minnesota on the second Monday in May, 19... The
period of redemption for all lands sold to the state at a tax
judgment sale shall be three years from the date of sale to the
state of Minnesota if the land is within an incorporated area
unless it is: (a) homesteaded land as defined in section
273.13, subdivision 7; (b) agricultural land as defined in
section 273.13, subdivision 6; or (c) seasonal recreational land
as defined in section 273.13, subdivision 4, in which event the
period of redemption is five years from the date of sale to the
state of Minnesota.
The period of redemption for all other lands sold to the
state at a tax judgment sale shall be five years from the date
of sale.
Inquiries as to the proceedings set forth above can be made
to the county auditor of ..... county whose address is ..... .
(Signed) ...............................,
Clerk of the District Court of the County
of ......................................
(Here insert list.)
The list referred to in the notice shall be substantially
in the following form:
List of real property for the county of
......................., on which taxes remain delinquent on the
first Monday in January, 19...:
Town of (Fairfield),
Township (40), Range (20),
Name of Owner
Names (and
Current Filed
Addresses) for
the Taxpayers
and Fee Owners
and in Addition
Those Parties
Who Have Filed
Their Addresses
Tax
Pursuant to Subdivision of Parcel Total Tax
Section Section Number and Penalty
section 3 $ cts.
John Jones S.E. 1/4 of S.W. 1/4 10 23101 2.20
(825 Fremont
Fairfield, MN
55000)
James Smith Und. half of S.E. 1/4.. 20 4.40
Amos Brown Beg. at .....; thence in
N.E. dirc. 40 rods to
.....; thence in E. dirc.
10 rods to .....; thence
in S.W. dirc. 40 rods to
.....; thence 10 rods N.
to place of beg.........21 3.15
Bruce Smith That part of N.E. 1/4
(2059 Hand of S.W. 1/4 desc. as
Fairfield, follows: Beg. at the
MN 55000) S.E. corner of said
and N.E. 1/4 of S.W. 1/4;
Fairfield thence N. along the E.
State Bank line of said N.E. 1/4
(100 Main of S.W. 1/4 a distance
Street of 600 ft.; thence W.
Fairfield, parallel with the S.
MN 55000) line of said N.E. 1/4
of S.W. 1/4 a distance
of 600 ft.; thence S.
parallel with said E.
line a distance of 600
ft. to S. line of said
N.E. 1/4 of S.W. 1/4;
thence E. along said S.
line a distance of 600
ft. to the point of
beg. ............... 21 33211 3.15
As to platted property, the form of heading shall conform
to circumstances and be substantially in the following form:
City of (Smithtown)
Brown's Addition, or Subdivision
Name of Owner
Names (and
Current Filed
Addresses) for
the Taxpayers
and Fee Owners
and in Addition
Those Parties
Who have Filed
Their Addresses
Tax
Pursuant to Parcel Total Tax
Lot Block Number and Penalty
section 3 $ cts
John Jones 15 9 58243 2.20
(825 Fremont
Fairfield,
MN 55000)
James Smith 12 9 1.20
Amos Brown 4 10 4.40
Bruce Smith 16 9 58244 3.15
(2059 Hand
Fairfield,
MN 55000)
and
Fairfield
State Bank
(100 Main Street
Fairfield,
MN 55000)
The names, descriptions, and figures employed in
parentheses in the above forms are merely for purposes of
illustration.
The name of the town, township, range or city, and addition
or subdivision, as the case may be, shall be repeated at the
head of each column of the printed lists as brought forward from
the preceding column.
Errors in the list shall not be deemed to be a material
defect to affect the validity of the judgment and sale.
Sec. 6. [279.091] [MAILING OF NOTICE AND LIST; FAILURE TO
MAIL.]
On or before March 20 immediately following the filing of
such list with the clerk of district court, the county auditor
shall cause the notice and the pertinent portion of the list of
delinquent real property to be mailed to all real property
taxpayers and in addition those parties who have filed their
addresses pursuant to section 3. Failure to mail the notice and
the pertinent portions of the list shall not be deemed to be a
material defect to affect the validity of the judgment and sale.
Sec. 7. [279.092] [PUBLICATION AND RELATED COSTS.]
The county auditor shall assess a service fee of the
greater of (a) $10.00, or (b) the amount determined by the
county board as reasonably necessary to recover all costs
incurred, against each parcel included in the delinquent tax
list filed pursuant to section 279.05. The unpaid fees shall
constitute a lien against the property in the manner provided in
section 272.31 for unpaid taxes. When the fee is collected, the
general revenue fund of the county shall be credited to defray
costs incurred by the county auditor and the clerk of district
court to prepare and publish the delinquent tax list and to
enter judgment if no answer is filed.
Sec. 8. [279.131] [AFFIDAVIT OF MAILING.]
The county auditor shall forthwith file with the clerk of
the district court an affidavit of mailing of such notice and
list. The affidavit shall be substantially in the following
form:
State of Minnesota )
) ss.
County of ..........)
............................, being the county auditor of
............. County, being duly sworn, on oath, deposes and
says that on the ..... day of .........., 19.., .he mailed the
notice and the pertinent portion of the list of real estate
remaining delinquent in ............. County on the first Monday
of January, 19.., to those parties named in the pertinent
portion of the list by placing a true and correct copy of the
pertinent portion of the list in an envelope addressed to them
as shown in said list and depositing the same with postage
prepaid, in the U.S. Mails at ............................,
Minnesota.
Subscribed and sworn to
before me this ..... day of
...................., 19...
Sec. 9. Minnesota Statutes 1982, section 279.14, is
amended to read:
279.14 [CONCLUSIVENESS OF JUDGMENT, JURISDICTIONAL
DEFECTS.]
When the last publication shall have been made and the
notice and list shall have been mailed by the county auditor,
the notice shall be deemed to have been served and the court to
have acquired full and complete jurisdiction to enforce against
each parcel of land in such published list described in the
taxes, accrued penalties, and costs upon it then delinquent, so
as to bind every estate, right, title, interest, claim, or lien,
in law or equity, in, to, or upon such parcel of land, of every
person, company, or corporation. Such jurisdiction shall not be
affected by any error in making the list filed with the clerk,
nor by any error, irregularity, or omission in the assessment or
levy of the taxes, or in any other proceedings, prior to filing
the list; nor by any mistake in copying the list for
publication, or in publishing the list, or in mailing the list
and notice or in the designation of the newspaper wherein such
list is published; nor by reason of the taxes having been
charged in any other name than that of the rightful owner; nor
by any mistake in the amount of tax in such published list
appearing against any piece or parcel of land therein described;
provided, that any judgment rendered in such proceedings shall
be void upon satisfactory proof made at any time prior to the
expiration of the statute of limitations provided in section
284.28 that such real estate was exempt from taxation or that
such taxes were paid before judgment was rendered.
Sec. 10. Minnesota Statutes 1982, section 279.15, is
amended to read:
279.15 [WHO MAY ANSWER; FORM.]
Any person having any estate, right, title, or interest in,
or lien upon, any parcel of land embraced in such list as
published, within 20 days after the last publication of the
notice, may file with the clerk of the district court an answer,
verified as a pleading in a civil action, setting forth his
defense or objection to the tax or penalty against such parcel
of land. The answer need not be in any particular form, but
shall clearly refer to the parcel of land intended, and set
forth in concise language the facts constituting the defense or
objection to such tax or penalty; and, if the list shall embrace
the taxes for two or more years, the defense or objection may be
to the taxes or penalty for one or more of such years. The
answer may embrace his defense or objection to any number of
parcels of land in or upon which he has any estate, right,
title, interest, or lien. No reply shall be necessary, but at
the trial the allegations of the answer shall be deemed to be
denied.
Sec. 11. Minnesota Statutes 1982, section 279.16, is
amended to read:
279.16 [JUDGMENT WHEN NO ANSWER; FORM; ENTRY.]
Upon the expiration of 20 days from the later of the filing
of the affidavit of publication or the filing of the notice and
list, the affidavit of publication being filed mailing pursuant
to section 8, the clerk shall enter judgment against each and
every such parcel as to which no answer has been filed, which
judgment shall include all such parcels, and shall be
substantially in the following form:
State of Minnesota ) District Court,
) ss.
County of .......... ) ..... Judicial District.
In the matter of the proceedings to enforce payment of the
taxes on real estate remaining delinquent on the first Monday in
January, 19....., for the county of ...................., state
of Minnesota.
A list of taxes on real property, delinquent on the first
Monday in January, 19...., for said county of .................,
having been duly filed in the office of the clerk of this court,
and the notice and list required by law having been duly
published and mailed as required by law, and more than 20 days
having elapsed since the last publication of the notice and
list, and no answer having been filed by any person, company, or
corporation to the taxes upon any of the parcels of land
hereinafter described, it is hereby adjudged that each parcel of
land hereinafter described is liable for taxes, penalties, and
costs to the amount set opposite the same, as follows:
Description. Parcel Number. Amount.
The amount of taxes, penalties, and cost to which, as
hereinbefore stated, each of such parcels of land is liable, is
hereby declared a lien upon such parcel of land as against the
estate, right, title, interest, claim, or lien, of whatever
nature, in law or equity, of every person, company, or
corporation; and it is adjudged that, unless the amount to which
each of such parcels is liable be paid, each of such parcels be
sold, as provided by law, to satisfy the amount to which it is
liable.
Dated this ............. day of ..............., 19.....
............................
Clerk of the District Court,
County of ..................
The judgment shall be entered by the clerk in a book to be
kept by him, to be called the real estate tax judgment book, and
signed by the clerk. The judgment shall be written out on the
left-hand pages of the book, leaving the right-hand pages blank
for the entries in this chapter hereinafter provided; and the
same presumption in favor of the regularity and validity of the
judgment shall be deemed to exist as in respect to judgments in
civil actions in such court, except where taxes have been paid
before the entry of judgment, or where the land is exempt from
taxation, in which cases the judgment shall be prima facie
evidence only of its regularity and validity.
Sec. 12. Minnesota Statutes 1982, section 279.20, is
amended to read:
279.20 [PAPERS FILED BY CLERK.]
The clerk shall attach together and file the list, notice,
affidavit of publication, affidavit of mailing, one copy of the
newspaper and supplement, if any, in which the notice and list
were published, all answers, all orders made in the proceedings,
and all affidavits and other papers filed in the course thereof.
Sec. 13. Minnesota Statutes 1982, section 280.01, is
amended to read:
280.01 [MODE OF STATE BID IN AT SALE.]
On the second Monday in May, in each year, the county
auditor shall sell all parcels of land against which judgment
has been entered and remains unsatisfied for the taxes of the
preceding year or years. The auditor shall bid in for the state
for all such parcels of land the amount of all delinquent taxes,
penalties, costs, and interest to date. No notice of sale shall
be required to be published, posted, or served prior to sale.
Before making such sale he shall give ten days posted notice
thereof, one notice to be posted in the office of the clerk of
the court where the judgment has been entered, one in the office
of the county treasurer, and one at some conspicuous place at
the county-seat; and two weeks' published notice, the first
publication to be at least 15 days before the day of sale. If
answer has been filed, or a republication of the notice and list
of delinquent taxes has been made, and judgment has been
entered, the auditor shall sell the lands charged with taxes in
such judgment within 30 days thereafter, first giving the
required notice by posting and publication. The notice may be
substantially in the following form:
"TAX JUDGMENT SALE
Pursuant to a real estate tax judgment of the district
court of the county of ........................., state of
Minnesota, entered the ..................... day of
......................, 19........, in proceedings for enforcing
payment of taxes and penalties upon real estate in the county of
....................... remaining delinquent on the first Monday
in January, 19........, and of the statutes in such case made
and provided, I shall, on ................. the
......................... day of
.......................19......., at ten o'clock a.m., at
....................., ...................., in the (town or
city) of ...................... and county of
............................., sell the lands which are charged
with taxes, penalties, and costs in said judgment, and on which
taxes shall not have been previously paid.
....................................
Auditor of ............... County."
At the time and place appointed in such notice the auditor
shall commence the sale of such lands, and proceed with the sale
thereof from day to day for six consecutive days, or until the
whole shall be sold. If, for any reason, any parcel against
which a judgment has been entered be omitted from the tax
judgment sale or sales of the year in which the same was
entered, such judgment shall bear interest at one percent per
month from the date thereof, and the auditor may include such
parcel in the next annual tax judgment sale.
Sec. 14. Minnesota Statutes 1982, section 280.07, is
amended to read:
280.07 [ENTRIES IN JUDGMENT BOOKS AFTER SALE.]
Immediately after such sale the county auditor shall set
out in the copy judgment book what disposition was made at such
sale of each parcel of land; if sold to an actual purchaser, to
whom and for what amount, and for what rate of interest; and, if
bid in for the state, then so stating that all parcels were bid
in for the state. He shall thereupon deliver such book to the
clerk of the court, who shall forthwith enter on the right-hand
page of the real estate tax judgment book, opposite the
description of each parcel sold, the words, "satisfied by sale,"
and opposite each parcel bid in for the state the words, "bid in
for the state," and he shall thereupon redeliver the copy
judgment book to the auditor. Upon any assignment or redemption
the auditor shall make a note thereon in the copy judgment book,
opposite the parcel assigned or redeemed.
Sec. 15. Minnesota Statutes 1982, section 280.10, is
amended to read:
280.10 [PAYMENT OF SUBSEQUENT TAXES.]
The taxes for subsequent years shall be levied on property
so sold or bid in for the state in the same manner as if the
sale had not been made. The purchaser or assignee of the state
may pay the amount of such taxes at the annual May sale
following the date they become delinquent. Any such purchaser
or assignee paying such taxes shall, if he be the owner of a
prior certificate of sale, notify the county auditor prior to
the annual May sale that he is the owner of a tax certificate
and such notice shall contain a description of the property for
which such certificate was issued, together with the year of
sale, and thereupon the county auditor shall issue the
certificate or a certificate for such taxes in the same form as
now provided by section 280.03; such certificate shall bear
interest at the rate provided by section 280.02, unless the
prior certificate bears a lower rate of interest, in which case
such lower rate shall apply; provided, that, if there shall have
been any parcel redemption, he shall pay the delinquent taxes on
the unredeemed portion of the land described in his tax
certificate, and such tax certificate, after such parcel
redemption, shall be applicable to such unredeemed portion of
the land therein described only, in all respects as if a portion
of the land unredeemed from had been all of the land described
in the certificate at the time of its issuance, and all
proceedings thereafter had as to notice of expiration of
redemption and otherwise shall be as to the certificate so
modified by the elimination therefrom of the portion of the land
redeemed from as aforesaid.
Sec. 16. Minnesota Statutes 1982, section 280.38, is
amended to read:
280.38 [LANDS BID IN FOR THE STATE; ATTACHMENTS.]
When any parcel of land is bid in for the state, until its
rights be assigned or the land be redeemed, the sale shall not
operate as a payment of the amount for which the same is sold,
but at any time after such sale the county auditor may make and
file with the clerk where the judgment is entered an affidavit
stating the date of the sale, the amount for which such parcel
was bid in for the state, and the amount of all subsequent
delinquent taxes, that its right has not been assigned, that
there has been no redemption, and that the land is rented, in
whole or in part, and produces rent, and giving the names of the
persons paying rent. Upon presentation of such affidavit, the
judge or court commissioner for the county shall endorse thereon
an order directing an attachment to issue to attach the rents of
such lands. The clerk shall thereupon issue a writ directing
the sheriff to attach the rents accruing for such land from any
person, and to collect therefrom the amount for which the same
was bid in for the state, and the amount of all subsequent
delinquent taxes, stating such amount and the date of sale, with
penalties and interest accruing thereon, and his fees, and $1
for the costs of the affidavit and attachment. The sheriff
shall serve such writ by serving a copy thereof on each tenant
or person in possession of such land paying rent therefor, or
for any part thereof, and such service shall operate as an
attachment of all rents accruing from the person served. The
sheriff shall receive such rents as they become due, and may
bring suit in his own name to collect the same, and shall pay
into the county treasury the amount collected. No payment of
rents by any person so served after such service, or prior
thereto for the purpose of defeating such attachment, shall be
valid against such attachment. The clerk shall be allowed for
issuing the writ, including the filing of the affidavit, order
of allowance, writ, and return, 50 cents, to be paid to him by
the county in which the taxes are levied; provided, that in
counties whose population exceeds 150,000 such fees shall be
paid into the county treasury to the use of the county. The
sheriff shall be allowed for serving the writ and collecting the
money the same fees as are allowed by law upon an execution in a
civil action; and, if he brings suit, such additional
compensation as the court may allow, not exceeding one-half of
the fees allowed by law for like services in ordinary cases.
If, at any time while the sheriff is collecting such rent,
the lease upon such property shall expire, or, if the sheriff
has once commenced to collect such rent and the property becomes
vacant, the county auditor may lease the property upon five
days' notice to the owner, subject to the approval of the
district court.
At any time while the sheriff is collecting the rent under
any lease, no modification of the lease between the owner and
the tenant shall be valid unless approved by the district court
upon five days notice to the county auditor.
The collection of such rent under this statute shall not be
a bar to the county auditor assigning such taxes to an actual
purchaser, or selling the land at a forfeited tax sale under the
present laws or any laws hereafter enacted.
In case any unplatted land is bid in for the state and is
cropped upon a share agreement with the owner, or by a
trespasser, the owner's share of such crop; or, in case of a
trespasser, all or any part of such crops, may be attached and
collected in the same manner as rents and applied upon
delinquent taxes. The term "crops" shall include hay and
grass. In case there is no agreement for rent, or in case of an
occupant or trespasser on the unplatted land without any
agreement for rent, then the attachment shall attach to and bind
all of the grass, hay, and crops produced on such lands;
provided, that the district court may, upon application by such
occupant, upon ten days notice to the owner and the county
auditor, and a showing by him to the satisfaction of the court
that his occupancy was not a wilful trespass, release to such
occupant the excess of such crops over and above the owner's or
landlord's share of the grass, hay, and crops of such premises
as determined by the court. Such application must be made not
later than 60 days after the date of the service of the writ of
attachment upon such occupant, and if not made within such time
it shall be considered that such occupant has waived all right
and claim to such crops. The county auditor may give to the
owner or person entitled to the possession of such unplatted
land during the crop season at least ten days notice, in
writing, by mail or otherwise, specifying the time and place at
which application will be made to the district court for an
order permitting the leasing of such land, and the district
court may, if it deems it to be for the best interest of such
person and of the public, make an order fixing the terms upon
which such lease may be made by the county auditor, in the name
of the county. The county auditor may then execute, in the name
of the county, such lease in writing as the court shall order.
No such lease shall be for a longer term than the current crop
season. If the name or address of such person is unknown to the
county auditor, such notice may be given by one publication in a
legal newspaper in the county. If the owner or person entitled
to such possession shall show to the court that he intends to
lease such unplatted land or make a contract for cropping the
same upon shares, the court may make such order as it deems best
to provide for an attachment of all or a part of the rents or
crop share of such person and for applying the same upon the
delinquent taxes. From and after April 24, 1935, In any
proceeding for the collection of rents on unplatted land on
which the taxes have been bid in by the state and not assigned,
the court may, upon motion, order that payment, when made as to
any part or the whole, be paid to the county treasurer to apply
upon taxes. The owner of such unplatted properties may make
application to the district court to release him from applying
all or a portion of such rents upon such taxes upon his showing,
by reason of the condition, cost of upkeep of the property, or
other cause, undue hardship upon such owner or detriment to such
property. The provisions affecting unplatted lands shall not
apply to lands or real estate actually used or occupied by the
owner thereof.
The county board may allow additional clerk hire to the
county auditor for his work in making such leases, which leases
shall be made in the name of the county, and the county shall
have the right to bring suit for unpaid rents under such leases
and to bring the necessary actions to secure evictions of
tenants to whom it has leased.
Attachments, leases, and proceedings issued and made
pursuant to this section shall not be deemed unfinished business
that may be retained by the sheriff at expiration of his term,
as provided by section 387.10.
The right of the county auditor to assign the taxes on any
unplatted lands to an actual purchaser, or to sell the land at
the forfeited tax sale, shall continue until all delinquent
taxes described in the writ of attachment are paid.
Sec. 17. Minnesota Statutes 1982, section 280.385,
subdivision 1, is amended to read:
Subdivision 1. [CONVEYANCE ACCEPTED.] Whenever any lands
have been bid in for the state for delinquent taxes at any tax
judgment sale and have not been sold or assigned, the county
board of the county in which such lands are situated may, in its
discretion, with the consent first obtained of the governing
body of the city or town in which such lands are situated,
accept a conveyance from the owner thereof to the state;
provided that the county attorney finds that such owner has good
title to such lands and that they are free and clear of all
encumbrances except taxes.
Sec. 18. [280.41] [OWNERSHIP BY STATE.]
Title to all parcels of land bid in for the state shall
vest in the state subject only to the rights of redemption set
forth in chapter 281.
Sec. 19. [280.43] [SALE DEFINED.]
No actual public "sale" shall take place under chapter
280. A "sale" shall be conclusively deemed to have been made
and transfer made to the state of Minnesota hereunder.
Sec. 20. Minnesota Statutes 1982, section 281.01, is
amended to read:
281.01 [TAX SALE, RIGHT OF REDEMPTION.]
Any person claiming an interest in any parcel of land sold
for taxes at a tax sale, or bid in by the state at any such a
tax sale, and held or assigned by it subsequent to such sale,
may redeem the same within the time and in the manner in this
chapter provided.
Sec. 21. Minnesota Statutes 1982, section 281.02, is
amended to read:
281.02 [AMOUNT PAYABLE.]
Any person redeeming any parcel of land shall pay into the
county treasury, for the use of the funds or person thereto
entitled:
(1) If such parcel was bid in for the state and its right
has not been assigned, the amount for which the same was bid in,
with interest at 12 percent per annum from the date of sale, and
the amount of all subsequent delinquent taxes, penalties, costs,
and interest thereon at such the rate from and after the time
when such taxes become delinquent;
(2) If the right of the state has been assigned pursuant to
section 280.11, the amount paid by the assignee, with interest
at 12 percent per annum from the day when so paid, and all
unpaid delinquent taxes, interest, costs, and penalties accruing
subsequently to such assignment; and if the assignee has paid
any delinquent taxes, penalties, costs, or interest accruing
subsequently to the assignment, the amount so paid by him, with
interest at 12 percent per annum from the day of such payment;
(3) If such parcel was sold to a purchaser, the amount paid
by such purchaser, with interest at the rate for which such
parcel was sold, and all unpaid delinquent taxes, interest,
costs, and penalties accruing subsequently to such sale; and, if
the purchaser has paid any delinquent taxes, penalties, costs,
or interest accruing subsequently to the sale, the amount so
paid by him, with interest at the rate of 12 percent per annum
from the date of such payment;
(4) If the right of the state has been assigned pursuant to
section 280.11; or, if such parcel was sold to the purchaser and
the certificate of such assignment or purchase shall be
presented to the county auditor by the owner thereof for
cancelation, the auditor shall cancel such certificate and mark
opposite the description of the piece or parcel, described in
such certificate upon the judgment book, and tax list for the
year or years covered by such certificate, the words, "redeemed
by cancelation of certificate provided in section 279.03."
Sec. 22. Minnesota Statutes 1982, section 281.03, is
amended to read:
281.03 [AUDITOR'S CERTIFICATE.]
The county auditor shall certify to the amount due on such
redemption, and, on payment of the same to the county treasurer,
he shall make duplicate receipts for the certified amount,
describing the property redeemed, one of which shall be filed
with the auditor. Such receipts shall be governed by the
provisions of this chapter regulating the payment of current
taxes and such payment shall have the effect to annul the sale.
If the amount certified by the auditor and received in payment
for redemption be less than that required by law, it shall not
invalidate the redemption, but the auditor shall be liable for
the deficiency to the person entitled thereto. On redemption
being made, the auditor shall enter upon the copy of the tax
judgment book, opposite the description of the parcel redeemed,
the word, "redeemed," and shall mail a notice, with postage
prepaid, addressed to the person holding the certificate of sale
or assignment for which the redemption is made, at his last
known post office address, stating that the redemption has been
made, and that the amount thereof is in the county treasury,
subject to his disposal."
Sec. 23. Minnesota Statutes 1982, section 281.05, is
amended to read:
281.05 [REDEMPTION WHEN OWNER DIES.]
When the owner of lands sold for taxes dies after such sale
and before the expiration of the period of redemption, his
executor or administrator, a personal representative or any
person interested in his estate as heir, devisee, legatee, or
creditor, may redeem from such sale at any time within three
years and six months from the date thereof during the period for
redemption. If such redemption be made by an executor or
administrator a personal representative, he shall at the time
thereof produce to the county auditor his letters testamentary
or of administration issued pursuant to chapter 524. If made by
any other person, he shall make and file with the county auditor
an affidavit stating under what right or claim such redemption
is made. The auditor shall make and deliver to the person
making such redemption a certificate containing the name of the
person redeeming, a statement of the claim or right upon which
such redemption was made, the amount paid to redeem, a
description of the lands redeemed, the date of the sale, and the
year in which the taxes for which such sale was made were
levied, which certificate shall have the effect to annul such
sale, and may be recorded as other deeds of real estate, and
with the like effect. If such redemption be made by a creditor,
the amount paid to effect such redemption, with interest thereon
at the rate of seven percent per annum provided in section
279.03, shall constitute a valid claim against the estate of the
deceased.
Sec. 24. Minnesota Statutes 1982, section 281.17, is
amended to read:
281.17 [PERIOD FOR REDEMPTION.]
The stated period of redemption for all lands sold to an
actual purchaser or bid in for the state at a tax judgment sale
held after December 31, 1975, shall be three years from the date
of sale to the state of Minnesota if the land is within an
incorporated area unless it is: (a) homesteaded land as defined
in section 273.13, subdivision 7, (b) agricultural land as
defined in section 273.13, subdivision 6, or (c) seasonal
recreational land as defined in section 273.13, subdivision 4,
in which event the stated period of redemption is five years
from the date of sale to the state of Minnesota.
The stated period of redemption for all other lands sold to
an actual purchaser or bid in for the state at a tax judgment
sale held after December 31, 1975, shall be five years from the
date of sale.
Sec. 25. Minnesota Statutes 1982, section 281.18, is
amended to read:
281.18 [LANDS MAY BE REDEEMED.]
Every parcel of land heretofore sold to an actual purchaser
or bid in for the state at any tax judgment sale and now subject
to redemption, and every parcel of land hereafter sold to an
actual purchaser or bid in for the state at any such sale, shall
continue subject to redemption until the expiration of the time
allowed for redemption after the giving of notice of expiration
as provided by law. Upon the expiration of such time absolute
title to such parcel, if not theretofore redeemed, shall vest in
the state, the purchaser, or its or his assigns, as the case may
be.
Sec. 26. Minnesota Statutes 1982, section 281.23, is
amended to read:
281.23 [NOTICE.]
Subdivision 1. [DUTY OF AUDITOR.] In case any parcel of
land bid in for the state at any tax judgment sale hereafter
held has not been sold or assigned to an actual purchaser
redeemed by 60 days before the expiration of the stated period
of redemption of such parcel, it shall be the duty of the county
auditor thereupon forthwith to give notice of expiration of the
time for redemption of such parcel, as herein provided;
provided, that delay in giving such notice shall not affect the
validity thereof.
Subd. 2. [MAY COVER PARCELS BID IN AT SAME TAX SALE.] All
parcels of land bid in at the same tax judgment sale and having
the same stated period of redemption shall be covered by a
single posted notice, but a separate notice may be posted for
any parcel which may be omitted. Such notice shall be
sufficient if substantially in the following form:
"NOTICE OF EXPIRATION OF REDEMPTION
Office of the County Auditor
County of ......................., State of Minnesota.
To all persons interested in the lands hereinafter
described:
You are hereby notified that the parcels of land
hereinafter described, situated in the county of
................................, state of Minnesota, were bid
in for the state on the ......................... day of
......................., 19....., at the tax judgment sale of
land for delinquent taxes for the year 19........; that the
legal descriptions and tax parcel identification numbers of such
parcels and the names of the persons to whom the same are
assessed, respectively, taxpayers and fee owners and in addition
those parties who have filed their addresses pursuant to section
3, and the amount necessary to redeem as of the date hereof and,
at the election of the county auditor, the current filed
addresses of any such persons, are as follows:
Description Persons to whom assessed
...................... ..............................
...................... ..............................
Names (and
Current Filed
Addresses) for
the Taxpayers
and Fee Owners
and in Addition
Those Parties
Who Have Filed Amount
Their Addresses Tax Necessary to
Pursuant to Legal Parcel Redeem as of
section 3 Description Number Date Hereof
................ ........... ...... ............
................ ........... ...... ............
That the time for redemption of such lands from such sale
will expire 60 days after service of notice and the filing of
proof thereof in my office, as provided by law. The redemption
must be made in my office.
FAILURE TO REDEEM SUCH LANDS PRIOR TO THE EXPIRATION
OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND
FORFEITURE OF SAID LAND TO THE STATE OF MINNESOTA.
Inquiries as to the proceedings set forth above can be made
to the County Auditor for the County of ..............., whose
address is set forth below.
Witness my hand and official seal this
............................ day of ................, 19......
.........................
County Auditor."
(OFFICIAL SEAL)
.........................
(Address)
.........................
(Telephone)."
Such notice shall be posted by the auditor in his office,
subject to public inspection, and shall remain so posted until
at least one week after the date of the last publication of
notice, as hereinafter provided. Proof of such posting shall be
made by the certificate of the auditor, filed in his office.
Subd. 3. [PUBLICATION.] As soon as practicable after the
posting of the notice prescribed in subdivision 2, the county
auditor shall cause to be published for three successive weeks
in the official newspaper of the county, a the notice in
substantially the following form:
"NOTICE OF EXPIRATION OF REDEMPTION
Office of the County Auditor
County of ........................, State of Minnesota.
Notice is hereby given that the time for redemption of
certain lands bid in for the state on the
........................ day of ...............................,
19............, at the tax judgment sale of lands for delinquent
taxes for the year 19............, will expire 60 days after
service of notice and the filing of proof thereof in my office,
as provided by law; that a notice containing a description of
said lands and the names of the persons to whom the same are
assessed has been posted in my office, subject to public
inspection, as required by law.
Dated ............................, 19..........
...............
County Auditor."
prescribed by subdivision 2.
Subd. 4. [PROOF OF PUBLICATION.] Proof of publication of
such notice affidavit, as provided by law, shall be filed in the
office of the county auditor. A single published notice shall
be sufficient for all parcels of land bid in at the same tax
judgment sale, having the same stated period of redemption, and
covered by a notice or notices kept posted during the time of
the publication, as hereinbefore provided. As to either service
upon persons in possession or return as to vacant lands, the
sheriff shall charge mileage only for one trip if the occupants
of more than two tracts are served simultaneously, and in such
case such mileage shall be prorated and charged equitably
against all such owners.
Subd. 5. [MAILING OF NOTICE.] Forthwith after the
commencement of such publication, the county auditor shall cause
the notice of expiration of redemption to be mailed by certified
mail, return receipt requested, to all real property taxpayers
and fee owners and in addition to those parties who have filed
their addresses pursuant to section 3. Proof of such mailing
shall be made by the certificate of the auditor filed in his
office. Failure to receive the notice shall not operate to
postpone or excuse any default.
Subd. 5 6. [SERVICE BY SHERIFF OR CERTIFIED MAIL.]
Forthwith after the commencement of such publication the county
auditor shall deliver to the sheriff of the county a sufficient
number of copies of such published notice of expiration of
redemption for service upon the persons in possession of all
parcels of such land as are actually occupied, together with a
copy of the posted notice or notices referred to in such
published notice. Within 30 days after receipt thereof, the
sheriff shall make such investigation as may be necessary to
ascertain whether the parcels covered by such notice are
actually occupied or not, and shall serve a copy of such
published notice of expiration of redemption upon the person in
possession of each parcel found to be so occupied, in the manner
prescribed for serving summons in a civil action. The sheriff
shall make prompt return to the auditor as to all notices so
served and as to all parcels found vacant and unoccupied. Such
return shall be made upon a copy of such published notice and of
the posted notice or notices covered thereby and shall be prima
facie evidence of the facts therein stated. Unless compensation
for such services is otherwise provided by law, the sheriff
shall receive from the county, in addition to his other
compensation prescribed by law, such fees and mileage for
service on persons in possession as are prescribed by law for
such service in other cases, and shall also receive such
compensation for making investigation and return as to vacant
and unoccupied lands as the county board may fix, subject to
appeal to the district court as in case of other claims against
the county. As to either service upon persons in possession or
return as to vacant lands, the sheriff shall charge mileage only
for one trip if the occupants of more than two tracts are served
simultaneously, and in such case mileage shall be prorated and
charged equitably against all such owners.
Forthwith after the commencement of such publication, the
county auditor shall also give notice by certified mail to the
taxpayer as shown on the last statement without regard to the
county or state of residency, and give notice by certified mail
at the last known address of the person in whose name the
property is assessed on the latest tax statement without regard
to the county or state of residency. Failure to receive the
notice shall not operate to postpone any payment or excuse any
default under this section. Proof of such mailing shall be made
by the certificate of the auditor filed in his office.
Subd. 6 7. [EXPIRATION OF TIME FOR REDEMPTION.] The time
for redemption of any parcel of land as to which notice of
expiration has been given, as provided in subdivisions 2 and, 3,
5, and 6, shall expire 60 days after the giving of such notice
and the filing of proof thereof in the office of the county
auditor, unless such parcel shall theretofore be assigned to an
actual purchaser, as hereinafter provided.
Subd. 7 8. [COST.] The cost of giving notice, as provided
by subdivisions 2 and, 3, 5, and 6, shall be paid by the county.
Subd. 8 9. [CERTIFICATE.] After the time for redemption of
any lands shall have expired after notice given, as provided in
subdivisions 2 and, 3, 5, and 6, the county auditor shall
execute a certificate describing the lands, specifying the tax
judgment sale at which the same were bid in for the state, and
stating that the time for redemption thereof has expired after
notice given as provided by law and that absolute title thereto
has vested in the state of Minnesota. Such certificate shall be
recorded in the office of the county recorder and thereafter
filed in the office of the county auditor, except that in case
of registered land such certificate shall be filed in the office
of the registrar of titles and a duplicate filed in the office
of the county auditor. Such certificate and the record thereof
shall be prima facie evidence of the facts therein stated, but
failure to execute or record or file such certificate shall not
affect the validity of any proceedings hereunder respecting such
lands or the title of the state thereto.
Sec. 27. Minnesota Statutes 1982, section 281.25, is
amended to read:
281.25 [TITLES TO BE HELD IN TRUST BY THE STATE.]
Except as otherwise provided by law, the title to every
parcel of land acquired by the state, as provided by sections
281.16 to 281.27, shall be held by the state in trust for the
respective taxing districts interested in the taxes,
assessments, penalties, interest, and costs accrued against such
parcel at the time of such acquisition in proportion to the
respective interests of such taxing districts therein.
Sec. 28. Minnesota Statutes 1982, section 281.34, is
amended to read:
281.34 [FEES FOR NOTICE.]
For serving such notice the sheriff shall receive the same
fees as for the service of summons in a civil action in the
district court, except that where more than one notice is served
upon one person or corporation at the same time and place the
sheriff shall be entitled to charge but one mileage. Such fees
and the printer's fees for publishing such notice and the costs
of the certified mail shall be paid in the first instance by the
holder of the tax certificate, and repaid by the party offering
to redeem such land before a certificate of redemption shall
issue.
Sec. 29. Minnesota Statutes 1982, section 281.39, is
amended to read:
281.39 [TIME FOR REDEMPTION FROM TAX SALE EXTENDED IN
CERTAIN CASES.]
Whenever at the time fixed by law for absolute forfeiture
of any parcel of land heretofore or hereafter bid in for the
state and not assigned or disposed of by the state pursuant to
Mason's Minnesota Statutes of 1927, Section 2139-2, and acts
amendatory thereof and supplemental thereto, there shall be
pending, in the United States district court, proceedings in
eminent domain affecting such parcel, and such eminent domain
proceedings shall have been pending more than two years prior to
the date of forfeiture, the time of the forfeiture of such
parcel shall be and is postponed and continued until the
expiration of one year after the final determination of such
eminent domain proceedings; and the owner of such parcel,
regardless of whether such parcel is included within the
boundaries of any game preserve, reforestation project, or
conservation area, or any person having an interest therein, may
discharge the delinquent taxes and assessments against such
parcel and redeem such parcel, or portion thereof, from such
sale to the state within such period, as so extended, upon
payment of the portion of such unpaid taxes and assessments
permitted by any law in effect during the pendency of such
condemnation proceedings. Such redemption and discharge of
delinquent taxes and assessments may be so made regardless of
any or no determination of the value or other action by the
county board or the commissioner of revenue.
Sec. 30. Minnesota Statutes 1982, section 282.01,
subdivision 5, is amended to read:
Subd. 5. [SALE ON TERMS, CERTIFICATE.] When sales
hereafter are made on terms the purchaser shall receive a
certificate from the county auditor in such form, consistent
with the provisions of sections 282.01 to 282.13 and setting
forth the terms of sale, as may be prescribed by the attorney
general. Failure of the purchaser or any person claiming under
him, to pay any of the deferred instalments with interest, or
the current taxes, or to comply with any conditions that may
have been stipulated in the notice of sale or in the auditor's
certificate herein provided for, shall constitute default; and
the state may, by order of the county board, during the
continuance of such default, without notice, declare such
certificate canceled and take possession of such lands and may
thereafter resell or lease the same in the same manner and under
the same rules as other lands forfeited to the state for taxes
are sold or leased. When the county board shall have adopted a
resolution ordering the cancelation of such certificate or
certificates the cancelation shall be deemed complete and the
cancelation shall have been completed in accord with section 37,
then a reentry shall be deemed to have been made on the part of
the state without any other act or deed, and without any right
of redemption by the purchaser or any one claiming under him;
and the original purchaser in default or any person claiming
under him, who shall remain in possession or enter thereon shall
be deemed a willful trespasser and shall be punished as such.
When the cancelation of such certificate has been completed
the county auditor shall cancel all taxes and tax liens,
delinquent and current, and special assessments, delinquent or
otherwise, imposed upon the lands described in the certificate
after the issuance thereof by him.
Sec. 31. Minnesota Statutes 1982, section 282.039, is
amended to read:
282.039 [VETERAN'S CREDIT APPLICATION.]
The provisions of Minnesota Statutes 1980, Sections 282.031
to 282.037 shall continue in effect with respect to any veteran
who has applied to purchase land under those sections before
March 23, 1982 or to any veteran who purchases land under those
sections and applies within the required time for a credit under
Minnesota Statutes 1980, Section 282.033. Any contract canceled
or terminated for breach of the conditions thereof pursuant to
Minnesota Statutes 1980, section 282.036, shall be canceled in
the manner set forth in section 37. This section is repealed
April 1, 1988.
Sec. 32. Minnesota Statutes 1982, section 282.17, is
amended to read:
282.17 [CANCELATION OF CONTRACTS.]
Failure of the purchaser to make any payment of any
instalment or of any interest required under a contract within
six months from the date on which such payment becomes due, or
to pay before they become delinquent all taxes that may be
levied upon the lands so purchased shall constitute a default,
and thereupon the contract shall be deemed canceled, and all
right, title, and interest of the purchaser, his heirs,
representatives, or assigns in the premises shall terminate
without the doing by the state of any act or thing whatsoever
upon cancelation in accord with section 37. A record of such
default shall be made in the state land records kept by or under
the direction of the commissioner of natural resources, and a
certificate of such default may be made by or under the
direction of the commissioner and filed with the county
treasurer or recorded in the office of the county recorder of
the county in which the premises are situated. Any such record
or certificate shall be prima facie evidence of the facts
therein stated, but the making of such record or certificate
shall not be essential to the taking effect of such cancelation
and termination, and thereupon the land described in the
contract shall be subject to disposition as provided in sections
282.15 and 282.16, upon first having been reclassified and
reappraised as provided by section 282.14. The county auditor
shall report any such default to the commissioner of natural
resources on or before June 30th of each year.
Sec. 33. Minnesota Statutes 1982, section 282.171, is
amended to read:
282.171 [CONTRACTS, MEMBERS OF ARMED FORCES, CANCELATION.]
No contract entered into by persons in the armed forces of
the United States prior to their induction or enlistment for the
purchase of tax-forfeited or other lands from the state of
Minnesota on the instalment plan shall be terminated or canceled
for non-payment of instalments except as provided herein.
Any person in the armed forces of the United States, who,
as vendee, in any contract with the state of Minnesota for the
purchase of tax-forfeited or other lands, is in default on any
instalment, or is unable to pay any instalment or instalments
thereafter becoming due, and desires to retain his or her rights
under said contract, and such contract has not heretofore been
canceled and the land sold, shall during the period of military
service file, or cause to be filed by an adult, with knowledge
of the facts, with the county auditor or other state agency,
having charge of said contract, an affidavit, giving the legal
description of said lands, and the number, if any, of said
contract, and stating that the vendee in said contract is in the
military service of the United States, the branch of the
service, the date of enlistment or induction, and that said
vendee desires to retain his or her rights under said contract.
If said affidavit is filed within the time herein limited and
provided, said contract shall remain in full force and effect,
notwithstanding any default or non-payment of any instalment or
instalments thereunder, for six months after the vendee's
discharge from the military service. If said vendee fails to
pay all delinquent instalments within six months after his or
her discharge, then in such event said contract may be canceled
and terminated as provided by law in section 37.
Sec. 34. Minnesota Statutes 1982, section 282.222,
subdivision 4, is amended to read:
Subd. 4. [TERMS OF SALE.] All sales under sections 282.221
to 282.226 shall be for cash or on the following terms: at
least 15 percent of the purchase price shall be paid in cash at
the time of the sale, and the balance shall be paid in equal
annual instalments over a period of 20 years, with interest at a
rate equal to the rate in effect at the time under section
549.09, payable annually, on the portion remaining unpaid, with
privilege of prepayment of any instalment on any interest date.
Sales on terms shall be evidenced by a certificate issued by the
county auditor in a form prescribed by the attorney general.
The county auditor shall submit a copy of the certificate to the
commissioner of natural resources within 30 days. The appraised
value of all merchantable timber on such agricultural lands
shall be paid for in cash in full at the time of sale. The
county auditor shall report all sales to the commissioner of
natural resources within 30 days. Failure of the purchaser to
make any payment of any instalment or of any interest required
under any contract within six months from the date on which the
payment is due, or to pay all taxes that may be levied upon the
land purchased before they become delinquent, shall constitute a
default. Upon default the contract shall be deemed canceled and
all right, title, and interest of the purchaser, his heirs,
representatives, or assigns in the premises shall automatically
terminate upon cancelation in accord with section 37. A record
of the default shall be made in the state land records kept by
or under the direction of the commissioner of natural
resources. A certificate of the default may be made by or under
the direction of the commissioner and filed with the county
treasurer or recorded in the office of the county recorder of
the county in which the premises are situated. Any record or
certificate shall be prima facie evidence of the facts stated in
it. The making of the record or certificate is not essential to
the taking effect of the cancelation and termination. Upon
cancelation and termination, the land described in the contract
shall be subject to disposition as provided in this section
after having been reclassified and reappraised as provided by
section 282.221. The county auditor shall report any default to
the commissioner of natural resources on or before June 30th of
each year.
Sec. 35. Minnesota Statutes 1982, section 282.222,
subdivision 5, is amended to read:
Subd. 5. [CANCELATION VALIDATED.] In any case where a
certificate of cancelation of any certificate of sale of lands
sold pursuant to sections 282.221 to 282.226, has heretofore
been made by either the commissioner of finance or the
commissioner of natural resources and filed in the office of the
officer executing the same or in the office of the commissioner
of finance or recorded in the office of the county recorder of
the county in which the land lies, such cancelation is hereby
validated and made effective, and the certificate of sale shall
be deemed canceled as if canceled by the proper officer and in
the manner prescribed by law. All cancelations made after the
effective date of this act shall be in accord with section 37.
Sec. 36. Minnesota Statutes 1982, section 282.301, is
amended to read:
282.301 [RECEIPTS FOR PAYMENTS.]
The purchaser shall receive from the county auditor at the
time of repurchase a receipt, in such form as may be prescribed
by the attorney general. When the purchase price of a parcel of
land shall be paid in full, the following facts shall be
certified by the county auditor to the commissioner of revenue
of the state of Minnesota: the description of land, the date of
sale, the name of the purchaser or his assignee, and the date
when the final instalment of the purchase price was paid. Upon
payment in full of the purchase price, the purchaser or his
assignee shall receive a quitclaim deed from the state, to be
executed by the commissioner of revenue. Failure to make any
payment herein required within 60 days from the date on which
payment was due shall constitute default and upon such default
and cancelation in accord with section 37, the right, title and
interest of the purchaser or his heirs, representatives, or
assigns in such parcel shall terminate without the doing by the
state of any act or thing.
Sec. 37. [282.40] [CANCELATION OF INSTALLMENT SALE
CONTRACTS BY STATE.]
The cancelation of any sale by the state of Minnesota under
an installment contract of any parcel of land shall be completed
pursuant to section 559.21, and all costs, attorney's fees, and
other amounts payable by the purchaser thereunder shall be
payable to the county.
Sec. 38. Minnesota Statutes 1982, section 559.21, is
amended by adding a subdivision to read:
Subd. 7. [CANCELATION OF LAND SALE.] The state of
Minnesota shall cancel any sale of land made by the state under
an installment contract upon default therein only in accord with
the provisions of this section.
Sec. 39. [REPEALER.]
Minnesota Statutes 1982, sections 279.24 and 281.36 are
repealed.
Sec. 40. [EFFECTIVE DATE.]
This article is effective January 1, 1984, except for
section 26, which is effective January 1, 1985.
ARTICLE 16
MULTISTATE TAX COMPACT
Section 1. [290.171] [ENACTMENT OF MULTISTATE TAX
COMPACT.]
The "multistate tax compact" is hereby enacted into law and
entered into with all jurisdictions legally joining therein, in
the form substantially as follows:
Article I. Purposes.
The purposes of this compact are to:
1. Facilitate proper determination of state and local tax
liability of multistate taxpayers, including the equitable
apportionment of tax bases and settlement of apportionment
disputes.
2. Promote uniformity or compatibility in significant
components of tax systems.
3. Facilitate taxpayer convenience and compliance in the
filing of tax returns and in other phases of tax administration.
4. Avoid duplicative taxation.
Article II. Definitions.
As used in this compact:
1. "State" means a state of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, or any
territory or possession of the United States.
2. "Subdivision" means any governmental unit or special
district of a state.
3. "Taxpayer" means any corporation, partnership, firm,
association, governmental unit or agency or person acting as a
business entity in more than one state.
4. "Income tax" means a tax imposed on or measured by net
income including any tax imposed on or measured by an amount
arrived at by deducting expenses from gross income, one or more
forms of which expenses are not specifically and directly
related to particular transactions.
5. "Capital stock tax" means a tax measured in any way by
the capital of a corporation considered in its entirety.
6. "Gross receipts tax" means a tax, other than a sales
tax, which is imposed on or measured by the gross volume of
business, in terms of gross receipts or in other terms, and in
the determination of which no deduction is allowed which would
constitute the tax an income tax.
7. "Sales tax" means a tax imposed with respect to the
transfer for a consideration of ownership, possession or custody
of tangible personal property or the rendering of services
measured by the price of the tangible personal property
transferred or services rendered and which is required by state
or local law to be separately stated from the sales price by the
seller, or which is customarily separately stated from the sales
price, but does not include a tax imposed exclusively on the
sale of a specifically identified commodity or article or class
of commodities or articles.
8. "Use tax" means a nonrecurring tax, other than a sales
tax, which (a) is imposed on or with respect to the exercise or
enjoyment of any right or power over tangible personal property
incident to the ownership, possession or custody of that
property or the leasing of that property from another including
any consumption, keeping, retention, or other use of tangible
personal property and (b) is complementary to a sales tax.
9. "Tax" means an income tax, capital stock tax, gross
receipts tax, sales tax, use tax, and any other tax which has a
multistate impact, except that the provisions of articles III,
IV and V of this compact shall apply only to the taxes
specifically designated therein and the provisions of article IX
of this compact shall apply only in respect to determinations
pursuant to article IV.
Article III. Elements of Income Tax Laws.
Taxpayer Option, State and Local Taxes.
1. Any taxpayer subject to an income tax whose income is
subject to apportionment and allocation for tax purposes
pursuant to the laws of a party state or pursuant to the laws of
subdivisions in two or more party states may elect to apportion
and allocate his income in the manner provided by the laws of
such state or by the laws of such states and subdivisions
without reference to this compact, or may elect to apportion and
allocate in accordance with article IV. This election for any
tax year may be made in all party states or subdivisions thereof
or in any one or more of the party states or subdivisions
thereof without reference to the election made in the others.
For the purposes of this paragraph, taxes imposed by
subdivisions shall be considered separately from state taxes and
the apportionment and allocation also may be applied to the
entire tax base. In no instance wherein article IV is employed
for all subdivisions of a state may the sum of all
apportionments and allocations to subdivisions within a state be
greater than the apportionment and allocation that would be
assignable to that state if the apportionment or allocation were
being made with respect to a state income tax.
Taxpayer Option, Short Form.
2. Each party state or any subdivision thereof which
imposes an income tax shall provide by law that any taxpayer
required to file a return, whose only activities within the
taxing jurisdiction consist of sales and do not include owning
or renting real estate or tangible personal property, and whose
dollar volume of gross sales made during the tax year within the
state or subdivision, as the case may be, is not in excess of
$100,000 may elect to report and pay any tax due on the basis of
a percentage of such volume, and shall adopt rates which shall
produce a tax which reasonably approximates the tax otherwise
due. The commissioner of revenue, after consultation with the
Multistate Tax Commission, not more than once in five years, may
adjust the $100,000 figure in order to reflect such changes as
may occur in the real value of the dollar, and such adjusted
figure, upon adoption by the commissioner, shall replace the
$100,000 figure specifically provided herein. Each party state
and subdivision thereof may make the same election available to
taxpayers additional to those specified in this paragraph.
Coverage.
3. Nothing in this article relates to the reporting or
payment of any tax other than an income tax.
Article IV. Division of Income.
1. As used in this article, unless the context otherwise
requires:
(a) "Business income" means income arising from
transactions and activity in the regular course of the
taxpayer's trade or business, and includes income from tangible
and intangible property if the acquisition, management, and
disposition of the property constitute integral parts of the
taxpayer's regular trade or business operations.
(b) "Commercial domicile" means the principal place from
which the trade or business of the taxpayer is directed or
managed.
(c) "Compensation" means wages, salaries, commissions and
any other form of remuneration paid to employees for personal
services.
(d) "Financial organization" means any bank, trust company,
savings bank, industrial bank, land bank, safe deposit company,
private banker, savings and loan association, credit union,
cooperative bank, small loan company, sales finance company,
investment company, or any type of insurance company.
(e) "Nonbusiness income" means all income other than
business income.
(f) "Public utility" means any business entity (1) which
owns or operates any plant, equipment, property, franchise, or
license for the transmission of communications, transportation
of goods or persons, except by pipeline, or the production,
transmission, sale, delivery, or furnishing of electricity,
water or steam; and (2) whose rates of charges for goods or
services have been established or approved by a federal, state
or local government or governmental agency.
(g) "Sales" means all gross receipts of the taxpayer not
allocated under paragraphs of this article.
(h) "State" means any state of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any
territory or possession of the United States, and any foreign
country or political subdivision thereof.
(i) "This state" means the state in which the relevant tax
return is filed or, in the case of application of this article
to the apportionment and allocation of income for local tax
purposes, the subdivision or local taxing district in which the
relevant tax return is filed.
2. Any taxpayer having income from business activity which
is taxable both within and without this state, other than
activity as a financial organization or public utility or the
rendering of purely personal services by an individual or any
income received by a Minnesota resident individual or income
from the operation of a farm, shall allocate and apportion his
net income as provided in this article. If a taxpayer has
income from business activity as a public utility but derives
the greater percentage of his income from activities subject to
this article, the taxpayer may elect to allocate and apportion
his entire net income as provided in this article.
3. For purposes of allocation and apportionment of income
under this article, a taxpayer is taxable in another state if
(1) in that state he is subject to a net income tax, a franchise
tax measured by net income, a franchise tax for the privilege of
doing business, or a corporate stock tax, or (2) that state has
jurisdiction to subject the taxpayer to a net income tax
regardless of whether, in fact, the state does or does not.
4. All business income shall be apportioned to this state
by multiplying the income by a fraction, the numerator of which
is the property factor plus the payroll factor plus the sales
factor, and the denominator of which is three.
5. The property factor is a fraction, the numerator of
which is the average value of the taxpayer's real and tangible
personal property owned or rented and used in this state during
the tax period and the denominator of which is the average value
of all the taxpayer's real and tangible personal property owned
or rented and used during the tax period.
6. Property owned by the taxpayer is valued at its
original cost. Property rented by the taxpayer is valued at
eight times the net annual rental rate. Net annual rental rate
is the annual rental rate paid by the taxpayer less any annual
rental rate received by the taxpayer from subrentals.
7. The average value of property shall be determined by
averaging the values at the beginning and ending of the tax
period but the tax administrator may require the averaging of
monthly values during the tax period if reasonably required to
reflect properly the average value of the taxpayer's property.
8. The payroll factor is a fraction, the numerator of
which is the total amount paid in this state during the tax
period by the taxpayer for compensation and the denominator of
which is the total compensation paid everywhere during the tax
period.
9. Compensation is paid in this state if:
(a) The individual's service is performed entirely within
the state;
(b) The individual's service is performed both within and
without the state, but the service performed without the state
is incidental to the individual's service within the state; or
(c) Some of the service is performed in the state and (1)
the base of operations or, if there is no base of operations,
the place from which the service is directed or controlled is in
the state, or (2) the base of operations or the place from which
the service is directed or controlled is not in any state in
which some part of the service is performed, but the
individual's residence is in this state.
10. The sales factor is a fraction, the numerator of which
is the total sales of the taxpayer in this state during the tax
period, and the denominator of which is the total sales of the
taxpayer everywhere during the tax period.
11. Sales of tangible personal property are in this state
if:
(a) The property is delivered or shipped to a purchaser,
other than the United States government, within this state
regardless of the f.o.b. point or other conditions of the sale;
or
(b) The property is shipped from an office, store,
warehouse, factory, or other place of storage in this state and
(1) the purchaser is the United States government or (2) the
taxpayer is not taxable in the state of the purchaser.
12. Sales, other than sales of tangible personal property,
are in this state if:
(a) The income-producing activity is performed in this
state; or
(b) The income-producing activity is performed both in and
outside this state and a greater proportion of the
income-producing activity is performed in this state than in any
other state, based on costs of performance.
13. If the allocation and apportionment provisions of this
article do not fairly represent the extent of the taxpayer's
business activity in this state, the taxpayer may petition for
or the tax administrator may require, in respect to all or any
part of the taxpayer's business activity, if reasonable:
(a) Separate accounting;
(b) The exclusion of any one or more of the factors;
(c) The inclusion of one or more additional factors which
will fairly represent the taxpayer's business activity in this
state; or
(d) The employment of any other method to effectuate an
equitable allocation and apportionment of the taxpayer's income.
Article V. Elements of Sales and Use Tax Laws.
Tax Credit.
1. Each purchaser liable for a use tax on tangible
personal property shall be entitled to full credit for the
combined amount or amounts of legally imposed sales or use taxes
paid by him with respect to the same property to another state
and any subdivision thereof. The credit shall be applied first
against the amount of any use tax due the state, and any unused
portion of the credit shall then be applied against the amount
of any use tax due a subdivision.
2. Whenever a vendor receives and accepts in good faith
from a purchaser a resale or other exemption certificate or
other written evidence of exemption authorized by the
appropriate state or subdivision taxing authority, the vendor
shall be relieved of liability for a sales or use tax with
respect to the transaction.
Article VI. The Commission.
Organization and Management.
1. (a) The multistate tax commission is hereby
established. It shall be composed of one "member" from each
party state who shall be the head of the state agency charged
with the administration of the types of taxes to which this
compact applies. If there is more than one such agency the
state shall provide by law for the selection of the commission
member from the heads of the relevant agencies. State law may
provide that a member of the commission be represented by an
alternate but only if there is on file with the commission
written notification of the designation and identity of the
alternate. The attorney general of each party state or his
designee, or other counsel if the laws of the party state
specifically provide, shall be entitled to attend the meetings
of the commission, but shall not vote. Such attorneys general,
designees, or other counsel shall receive all notices of
meetings required under paragraph 1(e) of this article.
(b) Each party state shall provide by law for the selection
of representatives from its subdivisions affected by this
compact to consult with the commission member from that state.
(c) Each member shall be entitled to one vote. The
commission shall not act unless a majority of the members are
present, and no action shall be binding unless approved by a
majority of the total number of members.
(d) The commission shall adopt an official seal to be used
as it may provide.
(e) The commission shall hold an annual meeting and such
other regular meetings as its bylaws may provide and such
special meetings as its executive committee may determine. The
commission bylaws shall specify the dates of the annual and any
other regular meetings, and shall provide for the giving of
notice of annual, regular and special meetings. Notices of
special meetings shall include the reasons therefor and an
agenda of the items to be considered.
(f) The commission shall elect annually, from among its
members, a chairman, a vice chairman and a treasurer. The
commission shall appoint an executive director who shall serve
at its pleasure, and it shall fix his duties and compensation.
The executive director shall be secretary of the commission. The
commission shall make provision for the bonding of such of its
officers and employees as it may deem appropriate.
(g) Irrespective of the civil service, personnel or other
merit system laws of any party state, the executive director
shall appoint or discharge such personnel as may be necessary
for the performance of the functions of the commission and shall
fix their duties and compensation. The commission bylaws shall
provide for personnel policies and programs.
(h) The commission may borrow, accept or contract for the
services of personnel from any state, the United States, or any
other governmental entity.
(i) The commission may accept for any of its purposes and
functions any and all donations and grants of money, equipment,
supplies, materials and services, conditional or otherwise, from
any governmental entity, and may utilize and dispose of the same.
(j) The commission may establish one or more offices for
the transacting of its business.
(k) The commission shall adopt bylaws for the conduct of
its business. The commission shall publish its bylaws in
convenient form, and shall file a copy of the bylaws and any
amendments thereto with the appropriate agency or officer in
each of the party states.
(l) The commission annually shall make to the governor and
legislature of each party state a report covering its activities
for the preceding year. Any donation or grant accepted by the
commission or services borrowed shall be reported in the annual
report of the commission, and shall include the nature, amount
and conditions, if any, of the donation, gift, grant or services
borrowed and the identity of the donor or lender. The
commission may make additional reports as it may deem desirable.
Committees.
2. (a) To assist in the conduct of its business when the
full commission is not meeting, the commission shall have an
executive committee of seven members, including the chairman,
vice chairman, treasurer and four other members elected annually
by the commission. The executive committee, subject to the
provisions of this compact and consistent with the policies of
the commission, shall function as provided in the bylaws of the
commission.
(b) The commission may establish advisory and technical
committees, membership on which may include private persons and
public officials, in furthering any of its activities. Such
committees may consider any matter of concern to the commission,
including problems of special interest to any party state and
problems dealing with particular types of taxes.
(c) The commission may establish such additional committees
as its bylaws may provide.
Powers.
3. In addition to powers conferred elsewhere in this
compact, the commission shall have power to:
(a) Study state and local tax systems and particular types
of state and local taxes.
(b) Develop and recommend proposals for an increase in
uniformity or compatibility of state and local tax laws with a
view toward encouraging the simplification and improvement of
state and local tax law and administration.
(c) Compile and publish information as in its judgment
would assist the party states in implementation of the compact
and taxpayers in complying with state and local tax laws.
(d) Do all things necessary and incidental to the
administration of its functions pursuant to this compact.
Finance.
4. (a) The commission shall submit to the governor or
designated officer or officers of each party state a budget of
its estimated expenditures for such period as may be required by
the laws of that state for presentation to the legislature
thereof.
(b) Each of the commission's budgets of estimated
expenditures shall contain specific recommendations of the
amounts to be appropriated by each of the party states. The
total amount of appropriations requested under any such budget
shall be apportioned among the party states as follows:
one-tenth in equal shares; and the remainder in proportion to
the amount of revenue collected by each party state and its
subdivisions from income taxes, capital stock taxes, gross
receipts taxes, sales and use taxes. In determining such
amounts, the commission shall employ such available public
sources of information as, in its judgment, present the most
equitable and accurate comparisons among the party states. Each
of the commission's budgets of estimated expenditures and
requests for appropriations shall indicate the sources used in
obtaining information employed in applying the formula contained
in this paragraph.
(c) The commission shall not pledge the credit of any party
state. The commission may meet any of its obligations in whole
or in part with funds available to it under paragraph 1(i) of
this article, provided that the commission takes specific action
setting aside such funds prior to incurring any obligation to be
met in whole or in part in such manner. Except where the
commission makes use of funds available to it under paragraph
1(i), the commission shall not incur any obligation prior to the
allotment of funds by the party states adequate to meet the same.
(d) The commission shall keep accurate accounts of all
receipts and disbursements. The receipts and disbursements of
the commission shall be subject to the audit and accounting
procedures established under its bylaws. All receipts and
disbursements of funds handled by the commission shall be
audited yearly by a certified or licensed public accountant and
the report of the audit shall be included in and become part of
the annual report of the commission.
(e) The accounts of the commission shall be open at any
reasonable time for inspection by duly constituted officers of
the party states and by any persons authorized by the commission.
(f) Nothing contained in this article shall be construed to
prevent commission compliance with laws relating to audit or
inspection of accounts by or on behalf of any government
contributing to the support of the commission.
Article VII. Uniform Regulations and Forms.
1. Whenever any two or more party states, or subdivisions
of party states, have uniform or similar provisions of law
relating to an income tax, capital stock tax, gross receipts
tax, sales or use tax, the commission may adopt uniform
regulations for any phase of the administration of such law,
including assertion of jurisdiction to tax, or prescribing
uniform tax forms. The commission may also act with respect to
the provisions of article IV of this compact.
2. Prior to the adoption of any regulation, the commission
shall:
(a) As provided in its bylaws, hold at least one public
hearing on due notice to all affected party states and
subdivisions thereof and to all taxpayers and other persons who
have made timely request of the commission for advance notice of
its regulation-making proceedings.
(b) Afford all affected party states and subdivisions and
interested persons an opportunity to submit relevant written
data and views, which shall be considered fully by the
commission.
3. The commission shall submit any regulations adopted by
it to the appropriate officials of all party states and
subdivisions to which they might apply. Each such state and
subdivision shall consider any such regulation for adoption in
accordance with its own laws and procedures.
Article VIII. Interstate Audits.
1. Any party state or subdivision thereof desiring to make
or participate in an audit of any accounts, books, papers,
records or other documents may request the commission to perform
the audit on its behalf. In responding to the request, the
commission shall have access to and may examine, at any
reasonable time, such accounts, books, papers, records, and
other documents and any relevant property or stock of
merchandise. The commission may enter into agreements with
party states or their subdivisions for assistance in performance
of the audit. The commission shall make charges, to be paid by
the state or local government or governments for which it
performs the service, for any audits performed by it in order to
reimburse itself for the actual costs incurred in making the
audit.
2. The commission may require the attendance of any person
within the state where it is conducting an audit or part thereof
at a time and place fixed by it within such state for the
purpose of giving testimony with respect to any account, book,
paper, document, other record, property or stock of merchandise
being examined in connection with the audit. If the person is
not within the jurisdiction, he may be required to attend for
such purpose at any time and place fixed by the commission
within the state of which he is a resident, provided that such
state has adopted this article.
3. The commission may apply to any court having power to
issue compulsory process for orders in aid of its powers and
responsibilities pursuant to this article and any and all such
courts shall have jurisdiction to issue such orders. Failure of
any person to obey any such order shall be punishable as
contempt of the issuing court. If the party or subject matter
on account of which the commission seeks an order is within the
jurisdiction of the court to which application is made, such
application may be to a court in the state or subdivision on
behalf of which the audit is being made or a court in the state
in which the object of the order being sought is situated. The
provisions of this paragraph apply only to courts in a state
that has adopted this article.
4. The commission may decline to perform any audit
requested if it finds that its available personnel or other
resources are insufficient for the purpose or that, in the terms
requested, the audit is impracticable of satisfactory
performance. If the commission, on the basis of its experience,
has reason to believe that an audit of a particular taxpayer,
either at a particular time or on a particular schedule, would
be of interest to a number of party states or their
subdivisions, it may offer to make the audit or audits, the
offer to be contingent on sufficient participation therein as
determined by the commission.
5. Information obtained by any audit pursuant to this
article shall be confidential and available only for tax
purposes to party states, their subdivisions or the United
States. Availability of information shall be in accordance with
the laws of the states or subdivisions on whose account the
commission performs the audit, and only through the appropriate
agencies or officers of such states or subdivisions. Nothing in
this article shall be construed to require any taxpayer to keep
records for any period not otherwise required by law.
6. Other arrangements made or authorized pursuant to law
for cooperative audit by or on behalf of the party states or any
of their subdivisions are not superseded or invalidated by this
article.
7. In no event shall the commission make any charge
against a taxpayer for an audit.
8. As used in this article, "tax," in addition to the
meaning ascribed to it in article II, means any tax or license
fee imposed in whole or in part for revenue purposes.
Article IX. Arbitration.
1. Whenever the commission finds a need for settling
disputes concerning apportionments and allocations by
arbitration, it may adopt a regulation placing this article in
effect, notwithstanding the provisions of article VII.
2. The commission shall select and maintain an arbitration
panel composed of officers and employees of state and local
governments and private persons who shall be knowledgeable and
experienced in matters of tax law and administration.
3. Whenever a taxpayer who has elected to employ article
IV, or whenever the laws of the party state or subdivision
thereof are substantially identical with the relevant provisions
of article IV, the taxpayer, by written notice to the commission
and to each party state or subdivision thereof that would be
affected, may secure arbitration of an apportionment or
allocation, if he is dissatisfied with the final administrative
determination of the tax agency of the state or subdivision with
respect thereto on the ground that it would subject him to
double or multiple taxation by two or more party states or
subdivisions thereof. Each party state and subdivision thereof
hereby consents to the arbitration as provided herein, and
agrees to be bound thereby.
4. The arbitration board shall be composed of one person
selected by the taxpayer, one by the agency or agencies
involved, and one member of the commission's arbitration panel.
If the agencies involved are unable to agree on the person to be
selected by them, such person shall be selected by lot from the
total membership of the arbitration panel. The two persons
selected for the board in the manner provided by the foregoing
provisions of this paragraph shall jointly select the third
member of the board. If they are unable to agree on the
selection, the third member shall be selected by lot from among
the total membership of the arbitration panel. No member of a
board selected by lot shall be qualified to serve if he is an
officer or employee or is otherwise affiliated with any party to
the arbitration proceeding. Residence within the jurisdiction
of a party to the arbitration proceeding shall not constitute
affiliation within the meaning of this paragraph.
5. The board may sit in any state or subdivision party to
the proceeding, in the state of the taxpayer's incorporation,
residence or domicile, in any state where the taxpayer does
business, or in any place that it finds most appropriate for
gaining access to evidence relevant to the matter before it.
6. The board shall give due notice of the times and places
of its hearings. The parties shall be entitled to be heard, to
present evidence, and to examine and cross-examine witnesses.
The board shall act by majority vote.
7. The board shall have power to administer oaths, take
testimony, subpoena and require the attendance of witnesses and
the production of accounts, books, papers, records, and other
documents, and issue commissions to take testimony. Subpoenas
may be signed by any member of the board. In case of failure to
obey a subpoena, and upon application by the board, any judge of
a court of competent jurisdiction of the state in which the
board is sitting or in which the person to whom the subpoena is
directed may be found may make an order requiring compliance
with the subpoena, and the court may punish failure to obey the
order as a contempt. The provisions of this paragraph apply
only in states that have adopted this article.
8. Unless the parties otherwise agree the expenses and
other costs of the arbitration shall be assessed and allocated
among the parties by the board in such manner as it may
determine. The commission shall fix a schedule of compensation
for members of arbitration boards and of other allowable
expenses and costs. No officer or employee of a state or local
government who serves as a member of a board shall be entitled
to compensation therefor unless he is required on account of his
service to forego the regular compensation attaching to his
public employment, but any such board member shall be entitled
to expenses.
9. The board shall determine the disputed apportionment or
allocation and any matters necessary thereto. The
determinations of the board shall be final for purposes of
making the apportionment or allocation, but for no other purpose.
10. The board shall file with the commission and with each
tax agency represented in the proceeding: the determination of
the board; the board's written statement of its reasons
therefor; the record of the board's proceedings; and any other
documents required by the arbitration rules of the commission to
be filed.
11. The commission shall publish the determinations of
boards together with the statements of the reasons therefor.
12. The commission shall adopt and publish rules of
procedure and practice and shall file a copy of such rules and
of any amendment thereto with the appropriate agency or officer
in each of the party states.
13. Nothing contained herein shall prevent at any time a
written compromise of any matter or matters in dispute, if
otherwise lawful, by the parties to the arbitration proceedings.
Article X. Entry Into Force and Withdrawal.
1. This compact shall become effective as to any other
state upon its enactment. The commission shall arrange for
notification of all party states whenever there is a new
enactment of the compact.
2. Any party state may withdraw from this compact by
enacting a statute repealing the same. No withdrawal shall
affect any liability already incurred by or chargeable to a
party state prior to the time of such withdrawal.
3. No proceeding commenced before an arbitration board
prior to the withdrawal of a state and to which the withdrawing
state or any subdivision thereof is a party shall be
discontinued or terminated by the withdrawal, nor shall the
board thereby lose jurisdiction over any of the parties to the
proceeding necessary to make a binding determination therein.
Article XI. Effect on Other Laws and Jurisdictions.
Nothing in this compact shall be construed to:
(a) Affect the power of any state or subdivision thereof to
fix rates of taxation, except that a party state shall be
obligated to implement article III 2 of this compact.
(b) Apply to any tax or fixed fee imposed for the
registration of a motor vehicle or any tax on motor fuel, other
than a sales tax, provided that the definition of "tax" in
article VIII 9 may apply for the purposes of that article and
the commission's powers of study and recommendation pursuant to
article VI 3 may apply.
(c) Withdraw or limit the jurisdiction of any state or
local court or administrative officer or body with respect to
any person, corporation or other entity or subject matter,
except to the extent that such jurisdiction is expressly
conferred by or pursuant to this compact upon another agency or
body.
(d) Supersede or limit the jurisdiction of any court of the
United States.
Article XII. Construction and Severability.
This compact shall be liberally construed so as to
effectuate the purposes thereof. The provisions of this compact
shall be severable and if any phrase, clause, sentence, or
provision of this compact is declared to be contrary to the
constitution of any state or of the United States or the
applicability thereof to any government, agency, person or
circumstance is held invalid, the validity of the remainder of
this compact and the applicability thereof to any government,
agency, person or circumstance shall not be affected thereby. If
this compact shall be held contrary to the constitution of any
state particpating therein, the compact shall remain in full
force and effect as to the remaining party states and in full
force and effect as to the state affected as to all severable
matters.
Sec. 2. [290.172] [COMMISSIONER OF REVENUE.]
The commissioner of revenue shall represent the state of
Minnesota on the multistate tax commission. The commissioner
may be represented on the commission by an alternate designated
by him. The alternate shall be a deputy or assistant
commissioner in the department of revenue.
Sec. 3. [290.173] [MULTISTATE COMPACT ADVISORY COMMITTEE.]
There is hereby established the multistate tax compact
advisory committee composed of the commissioner of revenue or
the alternate member of the commission designated by him, the
attorney general or his designee, and two members of the senate,
appointed by the committee on committees, and two members of the
house of representatives appointed by the speaker of the house.
The chairman shall be the member of the multistate tax
commission, representing the state of Minnesota. The committee
shall meet at the call of its chairman or at the request of a
majority of its members, but in any event not less than three
times in each year. The committee may consider any and all
matters relating to recommendations of the multistate tax
commission and the activities of the members in representing the
state of Minnesota on the commission.
Sec. 4. [290.174] [INTERSTATE AUDITS.]
Article VIII of the multistate tax compact relating to
interstate audits shall be in force in and with respect to the
state of Minnesota.
Sec. 5. [290.175] [OPTIONAL APPORTIONMENT.]
Notwithstanding the provisions of section 1, the taxpayer
may elect to apportion his income to Minnesota pursuant to this
chapter, without regard to section 1, article IV.
Sec. 6. [APPROPRIATION.]
There is hereby appropriated $175,000 to the multistate tax
commission for fiscal years 1984 and 1985.
Sec. 7. [EFFECTIVE DATE.]
Sections 1 to 5 are effective the day following final
enactment.
ARTICLE 17
ST. LOUIS COUNTY ABATEMENT
Section 1. [ST. LOUIS COUNTY ABATEMENT OF TAXES DUE TO
CERTIFICATION OR PROCESSING ERROR OR DELAY.]
The county board of St. Louis county may abate any property
taxes or order the refund of any property taxes if, due to an
error or delay in processing or certifying the tax, an incorrect
tax is calculated or certified by the county auditor and the
county board finds that the owner of the property has
justifiably relied on the calculation or certification of the
tax by the county auditor and that payment of the tax as
recalculated or recertified would be unjust. The board shall
abate the taxes only upon the written application of the owner.
The application must be approved by the county auditor.
Notwithstanding section 270.07, the order of the
commissioner of revenue shall not be required for abatement of
taxes under this section. Abatement of taxes under this section
shall be in addition to the method provided in section 270.07.
Sec. 2. [APPLICABILITY.]
On its effective date, section 1 applies to St. Louis
county.
Sec. 3. [EFFECTIVE DATE.]
Section 1 is effective after local approval at 12:01 a.m.
on the day after compliance with Minnesota Statutes, section
645.021, subdivision 3, for property taxes payable in 1978 and
1979.
ARTICLE 18
BUDGET RESERVE
Section 1. Minnesota Statutes 1982, section 16A.15,
subdivision 1, is amended to read:
Subdivision 1. [REDUCTION.] In case the commissioner of
finance shall discover at any time that the probable receipts
from taxes or other sources for any appropriation, fund, or item
will be less than was anticipated, and that consequently the
amount available for the remainder of the biennium will be less
than the amount estimated or allotted therefor, he shall, with
the approval of the governor, and after notice to the agency
concerned and after consultation with the legislative advisory
commission created by section 3.30, either:
(a) after consultation with the legislative advisory
commission created by section 3.30, transfer from the budget
reserve account established in section 16A.153, subdivision 6 to
the general fund the amount necessary to balance revenue and
expenditures;
(b) reduce the amount allotted or to be allotted so as to
prevent a deficit; or
(c) make any combination of transfers and reductions as
provided by clauses (a) and (b). Any additional deficit shall,
with the approval of the governor and after consultation with
the legislative advisory commission, be made up by reducing
allotments.
In reducing allotments, the commissioner of finance may
consider other sources of revenue available to recipients of
state appropriations and apply allotment reductions based on all
sources of revenue available.
In like manner he shall request reduction of the amount
allotted or to be allotted to any agency by the amount of any
saving which can be effected upon previous spending plans
through a reduction in prices or other cause.
Sec. 2. Minnesota Statutes 1982, section 16A.15, is
amended by adding a subdivision to read:
Subd. 6. [BUDGET RESERVE ACCOUNT.] The commissioner of
finance on July 1, 1983 shall transfer $250,000,000 to a budget
reserve account in the general fund in the state treasury.
Sec. 3. Minnesota Statutes 1982, section 16A.15, is
amended by adding a subdivision to read:
Subd. 7. [DELAY IN PAYMENT; REDUCTION.] The commissioner
of finance may delay payment of an amount up to 15 percent of an
appropriation due to a special taxing district or a system of
higher education in that entity's fiscal year for up to 60 days
after the start of its next fiscal year. The amount delayed is
subject to allotment reduction under section 1.
Sec. 4. [REPEALER.]
Minnesota Statutes 1982, section 16A.153, is repealed.
Sec. 5. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 19
ROCHESTER SALES TAX
Section 1. [SALES TAX.]
Notwithstanding Minnesota Statutes, section 477A.016, or
any other contrary provision of law, ordinance, or city charter,
the city of Rochester may, by ordinance, impose an additional
sales tax of up to one percent on sales transactions taxable
pursuant to Minnesota Statutes, chapter 297A that occur within
the city.
Sec. 2. [EXCISE TAX.]
Notwithstanding Minnesota Statutes, section 477A.016, or
any other contrary provision of law, ordinance, or city charter,
the city of Rochester may, by ordinance, impose an excise tax of
up to $20 per motor vehicle, as defined by ordinance, purchased
or acquired from any person engaged within the city in the
business of selling motor vehicles at retail.
Sec. 3. [COLLECTION.]
The commissioner of revenue may enter into appropriate
agreements with the city of Rochester to provide for collection
by the state on behalf of the city of a tax imposed by the city
of Rochester pursuant to section 1. The commissioner may charge
the city of Rochester from the proceeds of any tax a reasonable
fee for its collection.
Sec. 4. [ALLOCATION OF REVENUES.]
Revenues received from taxes authorized by sections 1 and 2
shall be used to pay the costs of collecting the taxes, capital
and administrative costs of improvements to the city park and
recreation system and flood control improvements for which the
city voters at a special election held on November 2, 1982,
approved the issuance of general obligation bonds, and to pay
debt service on the bonds. The total capital and administrative
expenditures payable from bond proceeds and revenues received
from the taxes authorized by sections 1 and 2, excluding
investment earnings thereon, shall not exceed $16,000,000 for
improvements to the city park and recreation system and
$16,000,000 for flood control improvements.
Sec. 5. [TERMINATION OF TAXES.]
The taxes imposed pursuant to sections 1 and 2 shall
terminate on the first day of the second month next succeeding a
determination by the city council that sufficient funds have
been received from the taxes and bond proceeds to finance
capital and administrative costs of $16,000,000 for improvements
to the city park and recreation system and $16,000,000 for flood
control improvements and to prepay or retire at maturity the
principal, interest, and premium due on any bonds issued for the
improvements. Any funds remaining after completion of the
improvements and retirement or redemption of the bonds may be
placed in the general fund of the city.
Sec. 6. [BONDS.]
The city of Rochester, pursuant to the approval of the city
voters at a special election held on November 2, 1982, may issue
general obligation bonds of the city in an amount not to exceed
$16,000,000 for improvements to the city park and recreation
system and $16,000,000 for flood control improvements. The debt
represented by the bonds shall not be included in computing any
debt limitation applicable to the city, and the levy of taxes
required by Minnesota Statutes, section 475.61 to pay the
principal of and interest on the bonds shall not be subject to
any levy limitation or be included in computing or applying any
levy limitation applicable to the city. The amount of any
special levy for debt service imposed pursuant to Minnesota
Statutes, section 275.50, subdivision 5, clause (e), for payment
of principal and interest on the bonds shall not include the
amount of estimated collection of revenues from the taxes
imposed pursuant to sections 1 and 2 that are pledged for the
payment of those obligations.
Sec. 7. [EFFECTIVE DATE.]
This article is effective the day after compliance by the
governing body of the city of Rochester with Minnesota Statutes,
section 645.021, subdivision 3.
ARTICLE 20
MISCELLANEOUS
Section 1. [168.022] [REFUNDS; MANDATORY REFUND OR
REPLACEMENT LAWS.]
Subdivision 1. [ENTITLEMENT TO REFUND.] If a manufacturer
of motor vehicles is required by Laws 1983, chapter 108, section
1, subdivision 3, to refund the tax imposed by this chapter, the
tax shall be refunded to the manufacturer as provided in this
section.
Subd. 2. [AMOUNT OF REFUND.] The amount of the refund
shall be the tax paid by the purchaser pursuant to this chapter
less one-twelfth of the annual tax for the vehicle for each
calendar month or fraction of a calendar month between the date
of registration and the date the purchase price is refunded.
Subd. 3. [APPLICATION.] The refund shall be paid to the
manufacturer upon written application to the registrar of motor
vehicles with proof of compliance with this section as the
registrar may require.
Subd. 4. [PAYMENT OUT OF HIGHWAY USER FUND.] Payment of
any refund pursuant to this section shall be made out of the
highway user fund and the amounts necessary to pay the refunds
are appropriated out of the highway user fund.
Sec. 2. Minnesota Statutes 1982, section 325D.32,
subdivision 9, is amended to read:
Subd. 9. "Basic cost of cigarettes" means whichever of the
two following amounts is lower, namely (1) the gross invoice
cost of cigarettes to the wholesaler or retailer, as the case
may be, or (2) the lowest replacement cost of cigarettes to the
wholesaler or retailer in the quantity last purchased, plus the
full face value of any stamps which may be required by any
cigarette tax act of this state, unless included by the
manufacturer in his list price.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective the day following final
enactment.
Approved June 14, 1983
Official Publication of the State of Minnesota
Revisor of Statutes