Minnesota Session Laws - 1985, Regular Session

  

                         Laws of Minnesota 1985 

                        CHAPTER 101-S.F.No. 450 
           An act relating to taxation; providing for collection 
          of outstate liabilities; changing certain time 
          limitations; changing tax lien provisions; changing 
          entry for confessions of judgment; amending Minnesota 
          Statutes 1984, sections 270.063; 270.66, subdivision 1;
          270.68, subdivisions 1 and 4; 270.69, subdivisions 1, 
          2, 3, and 4; 270.70, subdivisions 1 and 13; 290.49, 
          subdivision 7; 290.92, subdivisions 6 and 23; 296.15, 
          subdivision 6; 297A.34, subdivision 5; proposing 
          coding for new law in Minnesota Statutes, chapter 270; 
          repealing Minnesota Statutes 1984, section 270.69, 
          subdivision 5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 270.063, is 
amended to read: 
    270.063 [COLLECTION OF DELINQUENT TAXES.] 
    For the purpose of collecting delinquent state tax 
liabilities from taxpayers who do not reside or are not located 
in Minnesota, there is appropriated to the commissioner of 
revenue an amount representing the cost of collection, not to 
exceed one-third of the amount collected by contract with 
collection agencies, revenue departments of other states, or 
attorneys to enable the commissioner to reimburse these agencies 
for this service.  The commissioner shall report quarterly on 
the status of this program to the chairmen of the house tax and 
appropriation committees and senate tax and finance committees.  
    Notwithstanding section 16A.15, subdivision 3, the 
commissioner of revenue may authorize the prepayment of 
sheriff's fees, attorney fees, fees charged by revenue 
departments of other states, or court costs to be incurred in 
connection with the collection out of state of delinquent tax 
liabilities owed to the commissioner of revenue.  
    Sec. 2.  [270.65] [DATE OF ASSESSMENT; DEFINITION.] 
    For purposes of chapters 270, 290, 296, and 297A, the term 
"date of assessment" means the date a return was filed or the 
date a return should have been filed, whichever is later; or, in 
the case of taxes determined by the commissioner, "date of 
assessment" means the date of the order assessing taxes; or, in 
the case of an amended return filed by the taxpayer, the 
assessment date is the date the return was filed with the 
commissioner. 
    Sec. 3.  Minnesota Statutes 1984, section 270.66, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CERTIFICATION BY COMMISSIONER.] Upon 
certification by the commissioner of revenue to the commissioner 
of finance, or to any state agency described in subdivision 3 
which disburses its own funds, within five ten years after the 
tax should have been paid or the return is filed, whichever is 
later date of assessment of the tax, that a taxpayer has an 
uncontested delinquent tax liability owed to the commissioner of 
revenue, the commissioner of finance or the state agency shall 
apply to such delinquent tax liability funds sufficient to 
satisfy such unpaid tax liability from funds appropriated for 
payment of an obligation of the state or any of its agencies 
that are due and owing the taxpayer, provided however, that such 
credit shall not be made against any funds exempt under section 
550.37 or those funds owed an individual taxpayer who receives 
assistance under the provisions of chapter 256. 
    Sec. 4.  Minnesota Statutes 1984, section 270.68, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LEGAL ACTION.] In addition to all other 
methods authorized by law for the collection of tax, if any tax 
payable to the commissioner of revenue or to the department of 
revenue, including penalties and interest thereon, is not paid 
within 60 days after it is required by law to be paid, the 
commissioner of revenue may, within five years after the 
date the tax should have been paid or the return is filed, 
whichever is later of assessment of the tax, bring an action at 
law against the person liable for the payment or collection of 
the tax, in the name of the state, for the recovery of the tax 
and interest and penalties due in respect thereof.  The action 
shall be brought in the district court of the judicial district 
in which lies the county of the residence or principal place of 
business within this state of the taxpayer, or, in the case of 
an estate or trust, of the place of its principal 
administration, and for this purpose the place named as such in 
the return, if any, made by the taxpayer shall be conclusive 
against the taxpayer in this matter.  If no place is named in 
the return, the action may be commenced in Ramsey county.  The 
action shall be commenced by filing with the clerk of the court 
a statement showing the name and address of the taxpayer, if 
known, an itemized summary of the taxable periods and the type 
of tax, the tax due and unpaid and the interest and penalties 
due with respect thereto under the provisions of law applicable 
to the tax, and shall contain a prayer that the court adjudge 
the taxpayer to be indebted on account of the taxes, interest, 
and penalties in the amount specified in the statement; a copy 
of the statement shall be furnished to the clerk therewith.  The 
clerk shall mail a copy of the statement by certified mail to 
the taxpayer at the address given in the return, if any; and, if 
no address is given, then at his last known address, within five 
days after the same is filed, except that, if the taxpayer's 
address is not known, notice to him shall be made by posting a 
copy of the statement for ten days in the place in the 
courthouse where public notices are regularly posted.  The 
taxpayer shall, if he desires to litigate the claim, or any part 
thereof, file a verified answer with the clerk setting forth his 
objections to the claim, or any part thereof; the answer shall 
be filed on or before the 20th day after the date of mailing the 
statement; or, if notice has been given by posting, on or before 
the 20th day after the expiration of the period during which the 
notice was required to be posted.  If no answer is filed within 
the specified time, the clerk, upon the filing of an affidavit 
of default, shall enter judgment for the state in the amount 
prayed for, plus costs of $10.  If an answer is filed, the 
issues raised shall stand for trial as soon as possible after 
the filing of the answer, and the court shall determine the 
issues and direct judgment accordingly; and, if the taxes, 
interest, or penalties are sustained to any extent over the 
amount rendered by the taxpayer, shall assess $10 costs against 
the taxpayer. The court shall disregard all technicalities and 
matters of form not affecting the substantial merits.  The 
commissioner may call upon the county attorney or the attorney 
general to conduct the proceedings on behalf of the state.  
Execution shall be issued upon the judgment at the request of 
the commissioner, and the execution shall, in all other 
respects, be governed by the laws applicable to executions 
issued on judgments.  Only the homestead and household goods of 
the judgment debtor shall be exempt from seizure and sale upon 
the execution.  
    Sec. 5.  Minnesota Statutes 1984, section 270.68, 
subdivision 4, is amended to read: 
    Subd. 4.  [CONFESSION OF JUDGMENT.] (a) The commissioner 
may, within 3-1/2 years after any return or report is filed, 
notwithstanding section 541.09, enter judgment on any confession 
of judgment contained in the return or report after ten days 
notice served upon the taxpayer by mail at the address shown in 
his return or report.  The judgment shall be entered by the 
clerk of district court of any county upon the filing of a 
photocopy or similar reproduction of that part of the return or 
report containing the confession of judgment along with a 
statement of the commissioner or his agent that the tax has not 
been paid.  
    (b) Notwithstanding any other provision of the law to the 
contrary, the commissioner may, within five years after a 
written agreement is signed by the taxpayer and the commissioner 
under the provisions of section 270.67, subdivision 2, enter 
judgment on the confession of judgment contained within the 
agreement after ten days notice served upon the taxpayer at the 
address shown in the agreement.  Such judgment shall be entered 
by the clerk of district court of any county upon the filing of 
the agreement or a certified copy thereof along with a statement 
of the commissioner or his agent that the tax has not been paid. 
    Sec. 6.  Minnesota Statutes 1984, section 270.69, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CREATION OF LIEN.] The tax imposed by any 
chapter administered by the commissioner of revenue, and 
interest and penalties imposed with respect thereto, including 
any recording fees, sheriff fees, or court costs that may 
accrue, shall become a lien upon all the property within this 
state, both real and personal, of the person liable for the 
payment or collection of the tax, except his homestead property 
exempt under subdivision 3, from and after the filing by the 
commissioner of a notice of lien in the office of the county 
recorder of the county in which the property is situated, or in 
the case of personal property belonging to an individual who is 
not a resident of this state, or which is a corporation, 
partnership, or other organization, in the office of the 
secretary of state date of assessment of the tax.  
    Sec. 7.  Minnesota Statutes 1984, section 270.69, 
subdivision 2, is amended to read: 
    Subd. 2.  [INDEXING FILING OF LIENS NECESSARY FOR 
ENFORCEABILITY AGAINST CERTAIN PERSONS.] The lien imposed by 
subdivision 1 is not enforceable against any purchaser, 
mortgagee, pledgee, holder of a uniform commercial code security 
interest, mechanic's lienor, or judgment lien creditor, until a 
notice of lien has been filed by the commissioner of revenue in 
the office of the county recorder of the county in which the 
property is situated, or in the case of personal property 
belonging to an individual who is not a resident of this state, 
or which is a corporation, partnership, or other organization, 
in the office of the secretary of state.  The indexing of liens 
filed pursuant to this section subdivision and, notwithstanding 
section 386.77, the fees charged for such filing and indexing, 
shall be as prescribed in sections 272.483 and 272.484.  
    Sec. 8.  Minnesota Statutes 1984, section 270.69, 
subdivision 3, is amended to read: 
    Subd. 3.  [EXEMPT PROPERTY.] The lien imposed on personal 
property by this section, even though properly filed, shall not 
be valid as is not enforceable against a purchaser with respect 
to tangible personal property purchased at retail, or as against 
the personal property listed as exempt in sections 550.37, 
550.38, and 550.39, or against the homestead of the taxpayer as 
defined in chapter 510. 
    Sec. 9.  Minnesota Statutes 1984, section 270.69, 
subdivision 4, is amended to read: 
    Subd. 4.  [PERIOD OF LIMITATIONS.] The lien imposed by this 
section shall, notwithstanding any other provision of law to the 
contrary, be valid and enforceable from the time the lien arises 
and for ten years from the date of filing the notice of lien, 
which must be filed by the commissioner within five years after 
the tax should have been paid or the return is filed, whichever 
is later date of assessment of the tax.  A notice of lien filed 
in one county may be transcribed to any other county within ten 
years after the date of its filing, but the transcription shall 
not extend the period during which the lien is enforceable. 
    Sec. 10.  Minnesota Statutes 1984, section 270.70, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AUTHORITY OF COMMISSIONER.] If any tax 
payable to the commissioner of revenue or to the department of 
revenue is not paid when due, such tax may be collected by the 
commissioner of revenue within five years after the tax should 
have been paid or the return is filed, whichever is later date 
of assessment of the tax, or if the tax judgment has been filed, 
within the statutory period of enforcement of a valid tax 
judgment, by a levy upon all property and rights to property of 
the person liable for the payment or collection of such tax 
(except that which is exempt from execution pursuant to section 
550.37) or property on which there is a lien provided in section 
270.69.  For this purpose, the term "tax" shall include any 
penalty, interest and costs properly payable.  The term "levy" 
includes the power of distraint and seizure by any means. 
    Sec. 11.  Minnesota Statutes 1984, section 270.70, 
subdivision 13, is amended to read: 
    Subd. 13.  [LEVY AND SALE BY SHERIFF.] If any tax payable 
to the commissioner of revenue or to the department of revenue 
is not paid as provided in subdivision 2, the commissioner may, 
within five years after the tax should have been paid or the 
return is filed, whichever is later date of assessment of the 
tax, delegate the authority granted to him by subdivision 1, by 
means of issuing his warrant to the sheriff of any county of the 
state commanding him, as agent for the commissioner, to levy 
upon and sell the real and personal property of the person 
liable for the payment or collection of the tax and to levy upon 
the rights to property of that person within the county, or to 
levy upon and seize any property within the county on which 
there is a lien provided in section 270.69, and to return the 
warrant to the commissioner and pay to the commissioner the 
money collected by virtue thereof by a time to be therein 
specified not less than 60 days from the date of the warrant.  
The sheriff shall proceed thereunder to levy upon and seize any 
property of the person and to levy upon the rights to property 
of the person within the county (except his homestead or that 
property which is exempt from execution pursuant to section 
550.37), or to levy upon and seize any property within the 
county on which there is a lien provided in section 270.69.  For 
purposes of the preceding sentence, the term "tax" shall include 
any penalty, interest and costs properly payable.  The sheriff 
shall then sell so much of the property levied upon as is 
required to satisfy the taxes, interest, and penalties, together 
with his costs; but the sales, and the time and manner of 
redemption therefrom, shall, to the extent not provided in 
sections 270.701 to 270.709, be governed by chapter 550.  The 
proceeds of the sales, less the sheriff's costs, shall be turned 
over to the commissioner, who shall then apply the proceeds as 
provided in section 270.708.  
    Sec. 12.  Minnesota Statutes 1984, section 290.49, 
subdivision 7, is amended to read: 
    Subd. 7.  [COURT PROCEEDINGS.] Where the assessment of any 
tax is hereafter made within the period of limitation properly 
applicable thereto, including an assessment made under section 
290.56, such tax may be collected by a proceeding in court, but 
only if begun 
    (1) within eighteen months after the expiration of the 
period for the assessment of the tax, or 
    (2) within eighteen months after the expiration of the 
period agreed upon by the commissioner and the taxpayer, 
pursuant to the provisions of subdivision 8, or 
    (3) within eighteen months after final disposition of any 
appeal from the order of assessment within five years after the 
date of assessment. 
    Sec. 13.  Minnesota Statutes 1984, section 290.92, 
subdivision 6, is amended to read: 
    Subd. 6.  [RETURNS, DEPOSITS.] (1) (a) [RETURNS.] Every 
employer who is required to deduct and withhold tax under 
subdivision 2a or 3 shall file a return with the commissioner 
for each quarterly period, on or before the last day of the 
month following the close of each quarterly period, unless 
otherwise prescribed by the commissioner.  Any tax required to 
be deducted and withheld during the quarterly period shall be 
paid with the return unless an earlier time for payment is 
provided.  However, any return may be filed on or before the 
tenth day of the second calendar month following the period if 
the return shows timely deposits in full payment of the taxes 
due for that period.  For the purpose of the preceding sentence, 
a deposit which is not required to be made within the return 
period, may be made on or before the last day of the first 
calendar month following the close of the period.  Every 
employer, in preparing a quarterly return, shall take credit for 
monthly deposits previously made in accordance with this 
subdivision. 
    The return shall be in the form and contain the information 
prescribed by the commissioner.  The commissioner may grant a 
reasonable extension of time for filing the return and paying 
the tax, but no extension shall be granted for more than six 
months.  
     (b) [ADVANCE DEPOSITS REQUIRED IN CERTAIN CASES.] (i) 
Unless clause (ii) is applicable, if during any calendar month, 
other than the last month of the calendar quarter, the aggregate 
amount of the tax withheld during that quarter under subdivision 
2a or 3 exceeds $500, the employer shall deposit the aggregate 
amount with the commissioner within 15 days after the close of 
the calendar month.  (ii) If at the close of any eighth-monthly 
period the aggregate amount of undeposited taxes is $3,000 or 
more, the employer shall deposit the undeposited taxes with the 
commissioner within three banking days after the close of the 
eighth-monthly period.  For purposes of this subparagraph, the 
term "eighth-monthly period" means the first three days of a 
calendar month, the fourth day through the seventh day of a 
calendar month, the eighth day through the 11th day of a 
calendar month, the 12th day through the 15th day of a calendar 
month, the 16th day through the 19th day of a calendar month, 
the 20th day through the 22nd day of a calendar month, the 23rd 
day through the 25th day of a calendar month, or the portion of 
a calendar month following the 25th day of the month.  
     (c) [OTHER METHODS.] The commissioner may by rule prescribe 
other return periods or deposit requirements.  In prescribing 
the reporting period, the commissioner may classify employers 
according to the amount of their tax liability and may adopt an 
appropriate reporting period for each class which he deems to be 
consistent with efficient tax collection.  In no event shall the 
duration of the reporting period be more than one year, provided 
that for employers with annual withholding tax liabilities of 
less than $1,200 the reporting period shall be no more frequent 
than quarterly. 
     (2) If less than the correct amount of tax is paid to the 
commissioner, proper adjustments, with respect to both the tax 
and the amount to be deducted, shall be made, without interest, 
in the manner and at the times as the commissioner prescribes.  
If the underpayment cannot be adjusted, the amount of the 
underpayment shall be assessed and collected in the manner and 
at the times as the commissioner prescribes. 
     (3) If any employer fails to make and file any return 
required by paragraph (1) at the time prescribed, or makes and 
files a false or fraudulent return, the commissioner shall make 
for him a return from his own knowledge and from information he 
obtains through testimony, or otherwise, and assess a tax on the 
basis of it.  The amount of tax shown on it shall be paid to the 
commissioner at the times as the commissioner prescribes.  Any 
return or assessment made by the commissioner shall be prima 
facie correct and valid, and the employer shall have the burden 
of establishing its incorrectness or invalidity in any action or 
proceeding in respect to it. 
     (4) If the commissioner, in any case, has reason to believe 
that the collection of the tax provided for in paragraph (1) of 
this subdivision, and any added penalties and interest, if any, 
will be jeopardized by delay, he may immediately assess the tax, 
whether or not the time otherwise prescribed by law for making 
and filing the return and paying the tax has expired. 
     (5) Any assessment under this subdivision shall be made by 
recording the liability of the employer in the office of the 
commissioner in accordance with rules prescribed by the 
commissioner.  Upon request of the employer, the commissioner 
shall furnish the employer a copy of the record of assessment. 
     (6) Any assessment of tax under this subdivision shall be 
made within 3-1/2 years after the due date of the return 
required by paragraph (1), or the date the return was filed, 
whichever is later.  In the case of a false or fraudulent return 
or failure to file a return, the tax may be assessed at any time.
     (7) (a) Except as provided in (b) of this paragraph, every 
employer who fails to pay to or deposit with the commissioner 
any sum or sums required by this section to be deducted, 
withheld and paid, shall be personally and individually liable 
to the state for the sum or sums (and any added penalties and 
interest).  Any sum or sums deducted and withheld in accordance 
with the provisions of subdivision 2a or subdivision 3 shall be 
held to be a special fund in trust for the state of Minnesota. 
     (b) If the employer, in violation of this section, fails to 
deduct and withhold the tax under this section, and thereafter 
the taxes against which the tax may be credited are paid, the 
tax required to be deducted and withheld shall not be collected 
from the employer; but this does not relieve the employer from 
liability for any penalties and interest otherwise applicable 
for failure to deduct and withhold. 
    (8) Upon the failure of any employer to pay to or deposit 
with the commissioner, within the time provided by paragraphs 
(1), (2), or (3) of this subdivision, any tax required to be 
withheld in accordance with the provisions of subdivision 2a or 
subdivision 3, or if the commissioner has assessed a tax 
pursuant to paragraph (4), the tax shall become immediately due 
and payable, and the commissioner may deliver to the attorney 
general a certified statement of the tax, penalties and interest 
due from the employer.  The statement shall also give the 
address of the employer owing the tax, the period for which the 
tax is due, the date of the delinquency, and any other 
information required by the attorney general.  The attorney 
general shall institute legal action in the name of the state to 
recover the amount of the tax, penalties, interest and costs.  
The commissioner's certified statement to the attorney general 
shall for all purposes and in all courts be prima facie evidence 
of the facts stated in it and that the amount shown in it is due 
from the employer named in the statement.  If an action is 
instituted, the court shall, upon application of the attorney 
general, appoint a receiver of the property and business of the 
delinquent employer for the purpose of impounding it as security 
for any judgment which has been or may be recovered.  Any action 
shall must be brought within five years after the due date of 
the return or deposit required by paragraph (1), or the date the 
return was filed, or deposit made whichever is later.  In the 
case of failure to make and file the return or if the return is 
false or fraudulent, or the deposit is not made, the action may 
be brought at any time assessment of any tax under this 
subdivision. 
    (8a) The period of time during which a tax must be assessed 
or collection proceedings commenced under this subdivision shall 
be suspended during the period from the date of filing of a 
petition in bankruptcy until 30 days after the commissioner of 
revenue receives notice that the bankruptcy proceedings have 
been closed or dismissed or the automatic stay has been 
terminated or has expired.  
    The suspension of the statute of limitations under this 
subdivision shall apply to the person against whom the petition 
in bankruptcy is filed and all other persons who may also be 
wholly or partially liable for the tax under this chapter.  
    (9) Either party to an action for the recovery of any tax, 
interest or penalties under this subdivision may appeal the 
judgment as in other civil cases. 
    (10) No suit shall lie to enjoin the assessment or 
collection of any tax imposed by this section, or the interest 
and penalties added to it. 
    Sec. 14.  Minnesota Statutes 1984, section 290.92, 
subdivision 23, is amended to read: 
    Subd. 23.  [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 
(1) The commissioner may, within five years after the taxes 
should have been paid or the return is filed, whichever is later 
date of assessment of the tax, give notice to any employer 
deriving income which has a taxable situs in this state 
regardless of whether the income is exempt from taxation, that 
an employee of that employer is delinquent in a certain amount 
with respect to any state taxes, including penalties, interest 
and costs.  The commissioner can proceed under this subdivision 
only if the tax is uncontested or if the time for appeal of the 
tax has expired.  The commissioner shall not proceed under this 
subdivision until the expiration of 30 days after mailing to the 
taxpayer, at his last known address, a written notice of (a) the 
amount of taxes, interest, and penalties due from the taxpayer 
and demand for their payment, and (b) the commissioner's 
intention to require additional withholding by the taxpayer's 
employer pursuant to this subdivision.  The effect of the notice 
shall expire 180 days after it has been mailed to the taxpayer 
provided that the notice may be renewed by mailing a new notice 
which is in accordance with this subdivision.  The renewed 
notice shall have the effect of reinstating the priority of the 
original claim.  The notice to the taxpayer shall be in 
substantially the same form as that provided in section 571.41.  
The notice shall further inform the taxpayer of the wage 
exemptions contained in section 550.37, subdivision 14.  If no 
statement of exemption is received by the commissioner within 30 
days from the mailing of the notice, he may proceed under this 
subdivision.  The notice to the taxpayer's employer may be 
served by mail or by delivery by an employee of the department 
of revenue and shall be in substantially the same form as 
provided in section 571.495.  Upon receipt of notice, the 
employer shall withhold from compensation due or to become due 
to the employee, the total amount shown by the notice, subject 
to the provisions of section 571.55.  The employer shall 
continue to withhold each pay period until the total amount 
shown by the notice is paid in full.  Upon receipt of notice by 
the employer, the claim of the state of Minnesota shall have 
priority over any subsequent garnishments or wage assignments.  
The commissioner may arrange between the employer and the 
employee for withholding a portion of the total amount due the 
employee each pay period, until the total amount shown by the 
notice plus accrued interest has been withheld. 
     The "compensation due" any employee is defined in 
accordance with the provisions of section 571.55.  The maximum 
withholding allowed under this subdivision for any one pay 
period shall be decreased by any amounts payable pursuant to a 
garnishment action with respect to which the employer was served 
prior to being served with the notice of delinquency and any 
amounts covered by any irrevocable and previously effective 
assignment of wages; the employer shall give notice to the 
department of the amounts and the facts relating to such 
assignments within ten days after the service of the notice of 
delinquency on the form provided by the department of revenue as 
noted in this subdivision.  In crediting amounts withheld 
against delinquent taxes of an employee, the department shall 
apply amounts withheld in the following order:  penalties, 
interest, tax and costs. 
     (2) If the employee ceases to be employed by the employer 
before the full amount set forth in a notice of delinquency plus 
accrued interest has been withheld, the employer shall 
immediately notify the commissioner in writing of the 
termination date of the employee and the total amount withheld.  
No employer may discharge any employee by reason of the fact 
that the commissioner has proceeded under this subdivision.  If 
an employer discharges an employee in violation of this 
provision, the employee shall have the same remedy as provided 
in section 571.61, subdivision 2. 
    (3) The employer shall, by the date prescribed in 
subdivision 6, remit to the commissioner, on a form and in the 
manner prescribed by the commissioner, the amount withheld 
during the calendar quarter under this subdivision.  Should any 
employer, after notice, willfully fail to withhold in accordance 
with the notice and this subdivision, or willfully fail to remit 
any amount withheld as required by this subdivision, the 
employer shall be liable for the total amount set forth in the 
notice together with accrued interest which may be collected by 
any means provided by law relating to taxation.  No amount 
required to be paid by an employer by reason of his failure to 
remit under this subdivision, may be deducted from the gross 
income of the employer, under sections 290.09, subdivision 4 or 
290.01, subdivisions 20 to 20f.  Any amount collected from the 
employer for failure to withhold or for failure to remit under 
this subdivision shall be credited to the employee's account in 
the following manner:  penalties, interest, tax and costs. 
    (4) Clauses (1), (2) and (3), except provisions imposing a 
liability on the employer for failure to withhold or remit, 
shall apply to cases in which the employer is the United States 
or any instrumentality thereof or this state or any municipality 
or other subordinate unit thereof. 
    (5) The commissioner shall refund to the employee excess 
amounts withheld from him under this subdivision.  If any excess 
results from payments by the employer because of willful failure 
to withhold or remit as prescribed in clause (3) above, the 
excess attributable to the employer's payment shall be refunded 
to the employer. 
    (6) Employers required to withhold delinquent taxes, 
penalties, interest and costs under this subdivision shall not 
be required to compute any additional interest, costs or other 
charges to be withheld. 
    (7) The collection remedy provided to the commissioner by 
this subdivision shall have the same legal effect as if it were 
a levy made pursuant to section 270.70.  
    Sec. 15.  Minnesota Statutes 1984, section 296.15, 
subdivision 6, is amended to read: 
    Subd. 6.  [LIMITATION OF ACTIONS.] No action shall be 
brought for the collection of delinquent excise taxes and 
inspection fees under the provisions of this chapter unless 
commenced within six five years after the date of the filing of 
the required reports in the office of the commissioner, provided 
that in assessment of the taxes and fees.  In the case of a 
false or fraudulent report with intent to evade tax or 
inspection fee or of a failure to file a report, action may be 
commenced at any time the taxes or fees may be assessed at any 
time, and a proceeding in court for their collection must be 
begun within five years after the assessment.  
    The period of time during which a tax or fee must be 
assessed under this chapter or collection proceedings commenced 
under this subdivision is suspended during the period from the 
date of filing of a petition in bankruptcy until 30 days after 
the commissioner of revenue receives notice that the bankruptcy 
proceedings have been closed or dismissed or the automatic stay 
has been terminated or has expired. 
    The suspension of the statute of limitations under this 
subdivision applies to the person against whom the petition in 
bankruptcy is filed and all other persons who may also be wholly 
or partially liable for the tax under this chapter. 
    Sec. 16.  Minnesota Statutes 1984, section 297A.34, 
subdivision 5, is amended to read: 
    Subd. 5.  Where the assessment of any tax is hereafter made 
within the period of limitation properly applicable thereto, 
such tax may be collected by a proceeding in court, but only if 
begun: 
    (a) Not later than 24 months after the expiration of the 
period for the assessment of the tax; 
    (b) Not later than 24 months after final disposition of any 
appeal from the order of assessment within five years after the 
date of assessment.  
    Sec. 17.  [REPEALER.] 
    Minnesota Statutes 1984, section 270.69, subdivision 5, is 
repealed. 
    Sec. 18.  [EFFECTIVE DATE.] 
    This act is effective the day after enactment, except that 
the provisions in section 15 relating to changing the period of 
collection from six years to five years does not apply to any 
tax assessed more than five years but less than six years prior 
to the day after final enactment.  This act does not apply to 
any tax, the collection of which is barred by statute of 
limitations on the day after enactment. 
    Approved May 10, 1985