Office of the Revisor of Statutes
Minnesota Session Laws - 1999, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 31-H.F.No. 379
An act relating to mortgage registry and deed taxes;
making technical and clarifying changes; defining
terms; amending Minnesota Statutes 1998, sections
287.01; 287.03; 287.04; 287.05; 287.08; 287.10;
287.11; 287.12; 287.13, subdivision 1; 287.21,
subdivision 1; 287.22; 287.23; 287.24; 287.241;
287.29, subdivision 1; 287.30; 287.31; and 287.33;
proposing coding for new law in Minnesota Statutes,
chapter 287; repealing Minnesota Statutes 1998,
sections 287.06; 287.07; 287.09; 287.21, subdivisions
2 and 4; 287.34; 287.35; and 287.36.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 287.01, is
amended to read:
287.01 [DEFINITIONS; MORTGAGE REGISTRY TAX.]
Subdivision 1. [WORDS, TERMS, AND PHRASES.] Unless the
language or context clearly indicates that a different meaning
is intended, the following words, terms, and phrases, for the
purposes of sections 287.01 to 287.12 287.13, shall be
given have the meanings subjoined to given them in this
section.
Subd. 2. [REAL PROPERTY, REAL ESTATE, AND LAND AMENDMENT.]
"Real property," "real estate," and "land," in addition to the
meaning thereof contained in chapter 500, include all property a
conveyance whereof may be recorded or registered by a county
recorder under existing law. "Amendment" means generally a
document that alters an existing mortgage without securing a new
debt, or increasing the amount of an existing debt; and, that
does not, in the case of a multistate mortgage described in
section 287.05, subdivision 1, paragraph (b), result in an
increased percentage of the real property encumbered by the
mortgage being located in this state. Specifically, a document
is considered an amendment to the extent it merely does any one
or any combination of the following:
(i) extends the time for payment of the unpaid portion of
the original debt;
(ii) changes the rate of interest applicable to the unpaid
portion of the original debt;
(iii) adds additional real property as security for the
unpaid portion of the original debt;
(iv) releases some but not all of the real property serving
as security for the unpaid portion of the debt;
(v) replaces all the real property serving as security for
the unpaid portion of the debt with other real property
regardless of value;
(vi) replaces a party previously bound by the mortgage with
a new party who becomes bound by the same amended mortgage; or
(vii) reduces the amount of the debt secured by real
property located in this state, or in the case of a multistate
mortgage described in section 287.05, subdivision 1, paragraph
(b), reduces the percentage of real property encumbered by the
mortgage that is located in this state.
Subd. 3. [MORTGAGE DEBT.] "Mortgage" means any instrument,
including a decree of marriage dissolution or an instrument made
pursuant to it, creating or evidencing a lien of any kind on
property, given or taken as security for a debt, notwithstanding
such debt may also be secured in part by a lien upon
personalty. "Debt" means the principal amount of an obligation
to pay money or to perform or refrain from performing an act
that is secured in whole or in part by a mortgage of an interest
in real property.
Subd. 4. [DECREE OF MARRIAGE DISSOLUTION.] "Decree of
marriage dissolution" includes a summary real estate disposition
judgment or an instrument made pursuant to under it.
Subd. 5. [EXTENSION.] "Extension" means any document that
alters an existing mortgage by extending the time for repayment
without increasing the amount of debt secured by real property
that is located in this state.
Subd. 6. [MORTGAGE.] "Mortgage" means any instrument,
including a decree of marriage dissolution or an instrument made
under it, creating or evidencing a lien of any kind on real
property, given by an owner of real property as security for a
debt, notwithstanding that the debt may also be secured in part
by a lien upon personalty.
Subd. 7. [MULTISTATE MORTGAGE.] "Multistate mortgage"
means a mortgage that encumbers real property located both in
and outside of this state.
Subd. 8. [PERSON.] "Person" includes any individual,
partner, officer, director, firm, partnership, joint venture,
limited liability company, association, cooperative, social
club, fraternal organization, municipal or private corporation,
whether organized for profit or not, estate, trusts, business
trusts, receiver, trustee, syndicate, the United States, a
state, any political subdivision of a state, or any group or
combination acting as a unit, and the plural as well as the
singular. The term includes any agent of any individual or
organization enumerated in this subdivision.
Subd. 9. [REAL PROPERTY, REAL ESTATE, AND LAND.] "Real
property," "real estate," and "land," have the meaning contained
in chapter 500, and include all interests in real property that
can be conveyed by a document which may be recorded.
Subd. 10. [RECORD, RECORDED, AND RECORDING.] "Record,"
"recorded," and "recording" each mean that a document has been
delivered to and filed in the office of the county recorder or
registrar of titles, whichever office maintains the records for
the real property described in the document.
Sec. 2. Minnesota Statutes 1998, section 287.03, is
amended to read:
287.03 [INSTRUMENTS VALID SECURITY FOR DEBT.]
No instrument, other than a decree of marriage dissolution
or an instrument made pursuant to it, relating to real estate
shall be valid as security for any debt, unless the fact that it
is intended and the initial known amount of the debt are
expressed in it.
Sec. 3. [287.035] [IMPOSITION OF TAX.]
A tax of 23 cents is imposed upon each $100, or fraction
thereof, of the debt or portion of a debt that is secured by any
recorded mortgage of real property located in this state. The
person liable for the tax is the mortgagee. The tax is not
imposed on the lawful interest amounts that may accrue with
respect to a debt.
Sec. 4. Minnesota Statutes 1998, section 287.04, is
amended to read:
287.04 [EXEMPTIONS.]
Subdivision 1. [GENERALLY.] The tax imposed by section
287.035 does not apply to:
(a) A decree of marriage dissolution or an instrument made
pursuant to it or a.
(b) A mortgage given to correct a misdescription of the
mortgaged property, or to include.
(c) A mortgage or other instrument that adds additional
security for the same indebtedness on debt for which a mortgage
registration registry tax has been paid, are not subject to the
tax imposed by this chapter except as provided in section
287.05, subdivision 2, paragraph (b).
(d) A contract for the conveyance of any interest in real
property, including a contract for deed.
(e) A mortgage secured by real property subject to the
minerals production tax of sections 298.24 to 298.28.
Subd. 2. [MORTGAGES ON PUBLIC PROPERTY.] No tax is imposed
upon (f) The principal amount of bonds or other obligations
issued by the St. Paul port authority under its common revenue
bond fund if each of the following conditions are met.
(a) (1) The bonds or other obligations are secured by a
mortgage on property, title to which is held by the political
subdivision.
(b) (2) The mortgage is recorded or registered after the
date of enactment May 19, 1993.
(c) (3) The bonds or other obligations are either (i)
outstanding on the date of enactment May 19, 1993, or (ii)
issued in exchange for or to otherwise refund bonds or other
obligations the original series of which were issued before the
date of enactment May 19, 1993.
(g) Mortgages taken in good faith by persons or
corporations whose property is expressly exempted from taxation
by section 272.02, subdivision 1, clauses (1) to (7), or
mortgagees that are fraternal benefit societies subject to
section 64B.24.
(h) A mortgage amendment or extension, as defined in
section 287.01.
Sec. 5. Minnesota Statutes 1998, section 287.05, is
amended to read:
287.05 [DETERMINATION OF TAX ON RECORDATION OR
REGISTRATION; SUPPLEMENTAL MORTGAGES; REVERSE MORTGAGES IN
SPECIAL SITUATIONS.]
Subdivision 1. [TAX IMPOSED REAL PROPERTY OUTSIDE
MINNESOTA.] A tax of 23 cents is 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 situated
within the state executed, delivered, and recorded or
registered; provided, however, that the tax shall be imposed but
once upon any mortgage and extension thereof. If the mortgage
describes real estate situated outside of this state, the tax
shall be imposed upon that proportion of the whole debt secured
thereby as the value of the real estate therein described
situated in this state bears to the value of the whole of the
real estate described therein. The tax imposed by this section
shall not apply to a contract for the conveyance of any interest
in real estate (a) When a multistate mortgage is intended to
secure only a portion of a debt amount recited or referred to in
the mortgage, the mortgage may contain the following statement,
or its equivalent, on the first page: "Notwithstanding anything
to the contrary herein, enforcement of this mortgage in
Minnesota is limited to a debt amount of $....... under chapter
287 of Minnesota Statutes." In such case, the tax shall be
imposed based only on the amount of debt so stated to be secured
by real property located in this state; and, the effect of the
mortgage, or any amendment or extension, as evidence in any
court in this state, or as notice for any purpose in this state,
shall be limited to the amount contained in the statement and
for which the tax has been paid.
(b) All multistate mortgages not taxed under paragraph (a)
shall be taxed under sections 287.01 to 287.13 as if the real
property identified in the mortgage secures payment of that
portion of the maximum debt amount referred to, or incorporated
by reference, in the mortgage that is equal to a fraction the
numerator of which is the value of the real property described
in the mortgage that is located in this state and the
denominator of which is the value of all the real property
described in the mortgage.
Subd. 1a. [REAL PROPERTY IN THIS STATE SECURES PORTION OF
DEBT.] (a) When the real property identified in a mortgage is
located entirely in this state and is intended to secure only a
portion of a debt amount recited or referred to in the mortgage,
the mortgage may contain the following statement, or its
equivalent, on the first page: "Notwithstanding anything to the
contrary herein, enforcement of this mortgage is limited to a
debt amount of $....... under chapter 287 of Minnesota
Statutes." In such case, the tax shall be imposed based only on
the amount of debt so stated to be secured by real property;
and, the effect of the mortgage, or any amendment or extension,
as evidence in any court in this state, or as notice for any
purpose in this state, shall be limited to the amount contained
in the statement and for which the tax has been paid.
(b) All mortgages that are not multistate mortgages and
that are not taxed under paragraph (a) shall be taxed under
sections 287.01 to 287.13 as if the real property identified in
the mortgage secures payment of the maximum debt amount referred
to, or incorporated by reference, in the mortgage.
Subd. 2. [SUPPLEMENTAL MORTGAGES.] Except for an amendment
or a revision to a reverse mortgage as described under
subdivision 6, any supplemental document that alters an existing
mortgage, not including revisions to a reverse mortgage as
described under subdivision 6, securing a portion or all of the
same indebtedness, whether or not additional security is
included, by providing for an increase in the amount of debt
secured by real property located in this state, or, in the case
of a multistate mortgage described in subdivision 1, paragraph
(b), an increase in the percentage of Minnesota real estate as
compared to the total real estate that is encumbered by the
mortgage shall be taxed in the following manner:
(a) Any additional indebtedness shall be taxed on the ratio
that the value of the real estate therein described in this
state bears to the value of the whole of the real estate
described therein. based upon the increase in the amount of the
debt determined to be secured by real property located in this
state under either subdivision 1 or 1a.
(b) If there is no additional indebtedness but the
percentage of the Minnesota real estate as compared to the total
real estate secured by the previous mortgage is increased, the
tax shall be recomputed and paid on the remaining indebtedness
multiplied by the difference between that percentage of
Minnesota real estate included in the supplemental mortgage and
that percentage included in any previous mortgage.
(c) In the event of both an increase in the indebtedness
and a change in the Minnesota percentage of real estate given as
security, the tax shall be recomputed on the portion
representing new indebtedness in the manner provided in (a) and
in the event of an increase in the percentage of Minnesota
property included as security, the tax shall be computed on the
remaining portion of the indebtedness as provided in (b).
Subd. 3. [REVOLVING LINES OF CREDIT.] When a mortgage,
including a reverse mortgage, secures a revolving line of credit
under which advances, payments, and readvances may be made from
time to time, the tax imposed under subdivision 1 shall section
287.035 must be paid on the maximum amount of the line of credit
which that may be secured at any one time, as expressed in the
mortgage, regardless of the time or amount of advances,
payments, or readvances.
Subd. 4. [ADVANCES BY MORTGAGEE.] No tax under subdivision
1 section 287.035 shall be paid on the indeterminate
amount which that may be advanced by the mortgagee in protection
of the mortgaged premises or the mortgage, including taxes,
assessments, charges, claims, fines, impositions, and insurance
premiums,; the amounts due upon prior or superior mortgages and
other prior or superior liens, encumbrances, and interests,; and
legal expenses and attorneys' fees.
Subd. 5. [INDETERMINATE AMOUNTS.] When a mortgage secures
an indeterminate amount other than those described in
subdivision 3, 4, or 6, no tax shall be paid at the time the
mortgage is recorded or registered, but the tax must be paid at
the time of recording or filing an affidavit or other document
stating the amount and time of the actual advance.
Subd. 6. [REVERSE MORTGAGES.] If real property secures a
reverse mortgage, the principal debt or obligation to which
mortgage registry tax applies is the expected total
disbursements or cash equivalent to be made under the terms of
the loan. Interest accruing on the disbursements made is not
subject to mortgage registry tax. In the case of periodic
payments made for an indefinite length of time, the expected
total disbursements must equal the product of the periodic
payment amounts and the number of payments and, if applicable,
the amount of cash distribution or its equivalent. The number
of payments must be based upon the life expectancy assumption
used in determining the payment amount. In the case of reverse
mortgages made as part of the Housing and Community Development
Act of 1987, section 255 of the National Housing Act, and
administered by the Department of Housing and Urban Development
(HUD), mortgage registry tax must not be assessed on Federal
Housing Administration mortgage insurance premiums, monthly
lender service fees, or payments to be distributed to the
borrower by HUD.
Subd. 7. [MORTGAGES TO SECURE OBLIGATIONS TO BE
ISSUED.] If a mortgage is made to a mortgagee in trust to secure
the payment of bonds or other obligations yet to be issued, a
statement may be incorporated in the mortgage stating the amount
of the obligations already issued or yet to be issued, and the
tax to be paid on filing the mortgage for recording must be
computed upon the amount so stated. The statement must be
binding and conclusive upon all persons claiming through or
under the mortgage, and no such obligation issued in excess of
the aggregate so fixed is valid for any purpose unless the
additional tax is paid and receipted by the proper county
treasurer.
Subd. 8. [AMENDMENTS.] An amendment may contain the
following statement, or its equivalent, on its first page:
"This is a mortgage amendment, as defined in Minnesota Statutes,
section 287.01, subdivision 2, and as such it does not secure a
new or an increased amount of debt." In such cases, the
document will be treated as a mortgage amendment, as defined in
section 287.01, subdivision 2, for all purposes and does not
serve to secure a new or an increased amount of debt.
Sec. 6. Minnesota Statutes 1998, section 287.08, is
amended to read:
287.08 [TAX, HOW PAYABLE; RECEIPTS.]
(a) The tax imposed by sections 287.01 to 287.12 shall must
be paid to the treasurer of the any county in this state in
which the mortgaged land real property or some part thereof is
situated located at or before the time of filing the mortgage
for record or registration. The treasurer shall endorse receipt
on the mortgage, countersigned by the county auditor, who shall
charge the amount to the treasurer and such the receipt shall be
recorded with the mortgage, and such receipt of the record
thereof shall be is conclusive proof that the tax has been
paid to in the amount therein stated and authorize authorizes
any county recorder or registrar of titles to record the
mortgage. Its form, in substance, shall be "registration tax
hereon of ..................... dollars paid." If the mortgages
be mortgage is exempt from taxation the endorsement shall, in
substance, be "exempt from registration tax,." to In either
case the receipt must be signed in either case by the treasurer
as such, and in case of payment to be countersigned by the
auditor. In case the treasurer shall be is unable to determine
whether a claim of exemption should be allowed, the tax shall
must be paid as in the case of a taxable mortgage.
(b) Upon written application of the taxpayer, the county
treasurer may refund in whole or in part any tax which that has
been erroneously paid, or a person having paid a mortgage
registry tax amount may seek a refund of such the tax, or other
appropriate relief, by bringing an action in tax court in the
county in which the tax was paid, within 60 days of the
payment. The action is commenced by the serving of a petition
for relief on the county treasurer, and by filing a copy with
the court. The county attorney shall defend the action. The
county treasurer shall notify the treasurer of each county that
has or would receive a portion of the tax as paid.
(c) If the county treasurer determines a refund should be
paid, or if a refund is ordered by the court, the county
treasurer of each county that actually received a portion of the
tax shall immediately pay a proportionate share of three percent
of the refund using any available county funds. The county
treasurer of each county which that received, or would have
received, a portion of the tax shall also pay their county's
proportionate share of the remaining 97 percent of the
court-ordered refund on or before the tenth 20th day of the
following month using solely the mortgage registry tax funds
that would be paid to the commissioner of revenue on that date
under section 287.12. If the funds on hand under this procedure
are insufficient to fully fund 97 percent of the court-ordered
refund, the county treasurer of the county in which the action
was brought shall file a claim with the commissioner of revenue
under section 16A.48 for the remaining portion of 97 percent of
the refund, and shall pay over the remaining portion upon
receipt of a warrant from the state issued pursuant to the claim.
(d) When any such mortgage covers real property situate
located in more than one county in this state the whole of such
total tax shall must be paid to the treasurer of the county
where the mortgage is first presented for record or registration
recording, and the payment shall must be receipted and
countersigned as above provided in paragraph (a). If the
principal debt or obligation secured by such a multiple county
mortgage exceeds $1,000,000, the nonstate portion of the tax
shall must be divided and paid over by the county treasurer
receiving the same it, on or before the tenth 20th day of each
month after receipt thereof, to the county or counties
entitled thereto in the ratio which that the market value of the
real property covered by the mortgage in each county bears to
the market value of all the real property in this state
described in the mortgage. In making such the division and
payment the county treasurer shall send therewith a statement
giving the description of the real property described in the
mortgage and the market value of the part thereof situate
located in each county. For the this purpose aforesaid, the
treasurer of any county may require the treasurer of any other
county to certify to the former the market valuation of any
tract of land real property in any such mortgage.
Sec. 7. Minnesota Statutes 1998, section 287.10, is
amended to read:
287.10 [PREPAYMENT OF TAX; EVIDENCE; NOTICE.]
A mortgage or papers documents relating to its foreclosure,
assignment, or satisfaction, must not be recorded or registered
unless the tax has been paid. A Except as provided in section
582.25, a document or any record of the mortgage may not be
received in evidence in any court, and is not valid notice,
unless the tax has been paid. If the tax is paid, an error in
computation or ascertainment of the amount does not affect the
validity of the mortgage or the record or foreclosure. This
section does not apply to a mortgage that is exempt
from taxation the tax imposed under section 287.04 or 287.05,
subdivision 1 287.035.
Sec. 8. Minnesota Statutes 1998, section 287.11, is
amended to read:
287.11 [MORTGAGES RECORDED OR REGISTERED PRIOR TO PASSAGE
OF SECTIONS 287.01 TO 287.12.]
All mortgages of real estate property recorded or
registered prior to the passage of sections 287.01 to
287.12 shall be are taxable as provided by law under the
provisions of law relating thereto existing prior to the
enactment hereof of sections 287.01 to 287.12; provided, that
the holder of any such mortgage may pay to the treasurer of the
proper county, or the state treasurer, or both, the tax therein
prescribed based upon the amount of the debt secured by such the
mortgage at the time of such the payment as stated by the
affidavit of the owner of such the mortgage, to. The affidavit
may be filed with the county treasurer, and have in which case
the treasurer's receipt, countersigned by the auditor, must be
endorsed thereon on it. The county recorder or secretary of
state, as the case may be, or registrar of titles on
presentation of such the receipt, shall note on the margin of
the mortgage make a record of the date and amount of such the
payment. Thereafter such the mortgage debt lien shall not be
otherwise taxable.
Sec. 9. Minnesota Statutes 1998, section 287.12, is
amended to read:
287.12 [TAXES, HOW APPORTIONED.]
(a) All taxes paid to the county treasurer under the
provisions of sections 287.01 to 287.12 shall must be
apportioned, 97 percent to the general fund of the state, and
three percent to the county revenue fund.
(b) On or before the tenth 20th day of each month the
county treasurer shall determine and pay to the commissioner of
revenue for deposit in the state treasury and credit to the
general fund the state's portion of the receipts from the
mortgage registration registry tax during the preceding month
subject to the electronic funds transfer requirements of section
270.771. The county treasurer shall provide any related reports
requested by the commissioner of revenue.
Sec. 10. Minnesota Statutes 1998, section 287.13,
subdivision 1, is amended to read:
Subdivision 1. [FAILURE TO PAY FULL AMOUNT.] Any person
liable for the tax imposed by section 287.05 287.035 who fails
to pay the full amount of mortgage registry tax imposed under
sections 287.01 to 287.12 this chapter, unless such the failure
is shown to be due to reasonable cause, is liable for a civil
penalty of $250 or 100 percent of the tax for each such failure,
whichever is less.
Sec. 11. [287.20] [DEFINITIONS; DEED TAX.]
Subdivision 1. [WORDS, TERMS, AND PHRASES.] Unless the
language or context clearly indicates that a different meaning
is intended, the following words, terms, and phrases, for the
purposes of sections 287.21 to 287.31, have the meanings given
to them in this section.
Subd. 2. [CONSIDERATION.] (a) "Consideration" means
generally the total monetary value that is given in return for a
conveyance of real property in this state and includes all
lump-sum payments, all prior or future installment payments that
are required under the agreement between the parties, and the
fair market value of any property taken, or to be taken, in
exchange.
(b) Consideration does not include the reasonable and
lawful amounts of interest paid for the privilege of paying the
purchase price in installments and the fair market value of any
items of intangible personal property that are conveyed by the
taxable instrument.
(c) Consideration does not include the amount paid for the
personal property located on the real property being conveyed
and transferred as a part of the total consideration, except
that the amount paid for the personal property located on the
real property being conveyed must be included if the real
property being conveyed is a one-, two-, or three-unit
residential structure.
(d) When a conveyance of real property is made pursuant to
a contract for deed, the consideration is the price for the real
property reflected in the contract; except that, subject to the
limitations under section 287.221, when the conveyance is made
by a person engaged in the business of land sales or
construction of buildings and other improvements, or by an
affiliated person, then the consideration is the amount paid for
the land and the improvements. By January 1, 2001, the
commissioner shall adopt rules that define the phrases "engaged
in the business of land sales or construction of buildings and
other improvements" and "affiliated person" as those phrases are
used in this paragraph.
(e) "Total consideration" has the same meaning as
consideration.
(f) "Consideration, exclusive of the value of any lien or
encumbrance remaining at the time of sale" or "net
consideration" means the amount of consideration as reduced by
the amount outstanding under any lien that attached to the real
property prior to the time of sale and that is not released or
satisfied as a result of the sale.
Subd. 3. [CONSOLIDATION OR MERGER.] "Consolidation" or
"merger" means the combination of all of the assets of two or
more corporations, limited liability companies, or partnerships,
or any combination of these entities, whether or not title to
the assets is taken by a newly created entity or by a
preexisting entity that survives the consolidation or merger in
an altered form.
Subd. 4. [DOCUMENTARY STAMPS.] "Documentary stamps" means
all stamps issued by the county for use in payment of the taxes
imposed by sections 287.21 to 287.37.
Subd. 5. [LIEN.] "Lien" means any legal claim, other than
an easement, created by contract, statute, or law on the real
property of another as security for a debt or obligation. For
purposes of the deed tax, the term "encumbrance" is synonymous
with the term "lien" and an easement is not a lien.
Subd. 6. [PERSON.] "Person" includes any individual,
partner, officer, director, firm, partnership, joint venture,
limited liability company, association, cooperative, social
club, fraternal organization, municipal or private corporation,
whether organized for profit or not, estate, trusts, business
trusts, receiver, trustee, syndicate, the United States, a
state, any political subdivision of a state, or any group or
combination acting as a unit, and the plural as well as the
singular. The term includes directors and officers of
corporations, governors and managers of a limited liability
company, or members of partnerships who, either individually or
jointly with others, have control, supervision, or
responsibility of making or authorizing payment of the tax
imposed by section 287.21. The term includes any agent of any
individual or organization enumerated in this subdivision.
Subd. 7. [REAL PROPERTY, REAL ESTATE, AND LAND.] "Real
property," "real estate," and "land" mean any fee simple estate,
and any estate for life, as defined in chapter 500, and the
purchaser's interest under a contract for the conveyance of such
an estate.
Subd. 8. [RECORD, RECORDED, AND RECORDING.] "Record,"
"recorded," and "recording" each mean that a document has been
delivered to and filed in the office of the county recorder or
registrar of titles, whichever office maintains the records for
the real property described in the document.
Subd. 9. [REORGANIZATION.] "Reorganization" means the
transfer of substantially all of the assets of a corporation, a
limited liability company, or a partnership not in the usual or
regular course of business.
Sec. 12. Minnesota Statutes 1998, section 287.21,
subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION OF TAX.] There (a) A tax is
hereby imposed on each deed, or instrument, or writing by which
any lands, tenements, or other realty real property in this
state shall be is granted, assigned, transferred, or otherwise
conveyed, a tax determined in the following manner. The tax
applies against the net consideration.
(b) The tax is determined in the following manner: (1)
when transfers are made by instruments pursuant to mergers,
consolidations, sales, or transfers of substantially all of the
assets of corporations the entities as defined in section
287.20, subdivision 9, pursuant to plans of reorganization or,
the tax is $1.65; (2) when there is no consideration or when the
consideration, exclusive of the value of any lien or encumbrance
remaining thereon at the time of sale, is $500 or less, the
tax shall be is $1.65.; or (3) when the consideration, exclusive
of the value of any lien or encumbrance remaining thereon at the
time of sale, exceeds $500, the tax shall be is $1.65 plus $1.65
for each additional $500 or fraction of that amount.
The tax applies against the total consideration, including
the fair market value consideration for any personal property
located on the real property conveyed by the deed and
transferred as part of the total consideration, but excluding
the value of any lien or encumbrance remaining on the property
at the time of sale.
(c) The tax is due at the time a taxable deed or instrument
is presented for recording.
Sec. 13. Minnesota Statutes 1998, section 287.22, is
amended to read:
287.22 [EXCEPTIONS EXEMPTIONS.]
The tax imposed by section 287.21 shall does not apply to:
A. Any (1) An executory contract for the sale of land real
property under which the vendee purchaser is entitled to or does
take possession thereof of the real property, or any assignment
or cancellation thereof. of the contract;
B. Any (2) A mortgage or any an amendment, assignment,
extension, partial release, or satisfaction thereof. of a
mortgage;
C. Any (3) A will.;
D. Any (4) A plat.;
E. Any (5) A lease., amendment of lease, assignment of
lease, or memorandum of lease;
F. Any (6) A deed, instrument, or writing in which the
United States or any agency or instrumentality thereof is the
grantor, assignor, transferor, conveyor, grantee, or assignee.;
G. Deeds (7) A deed for a cemetery lot or lots.;
H. Deeds (8) A deed of distribution by a personal
representatives. representative;
I. Deeds (9) A deed to or from coowners a co-owner
partitioning their undivided interests interest in the same
piece of real property.;
J. Any (10) A deed or other instrument of conveyance
issued pursuant to a permanent school fund land exchange under
section 92.121 and related laws.;
K. (11) A referee's or sheriff's certificate of sale in a
mortgage or lien foreclosure sale.;
L. (12) A referee's or, sheriff's, or certificate
holder's certificate of redemption from a mortgage or lien
foreclosure sale issued to the redeeming mortgagor or lienee.;
M. Any (13) A deed, instrument, or writing which grants,
creates, modifies, or cancels terminates an easement.; and
N. (14) A decree of marriage dissolution, as defined in
section 287.01, subdivision 4, or any a deed or other instrument
between the parties to the dissolution made pursuant to the
terms of the decree.
Sec. 14. [287.2205] [TAX-FORFEITED LAND.]
Before a state deed for tax-forfeited land may be issued,
the deed tax must be paid by the purchaser of tax-forfeited land
whether the purchase is the result of a public auction or
private sale or a repurchase of tax-forfeited land. State
agencies and local units of government that acquire
tax-forfeited land by purchase or any other means are subject to
this section.
Sec. 15. Minnesota Statutes 1998, section 287.23, is
amended to read:
287.23 [REAL PROPERTY OUTSIDE COUNTY OR STATE.]
Subdivision 1. [REAL PROPERTY OUTSIDE COUNTY.] If any
taxable deed or instrument describes any real property located
in more than one county in this state, the total tax must be
paid to the treasurer of the county where the document is first
presented for recording, and the payment must be receipted as
provided in section 287.08. If the net consideration exceeds
$700,000, the nonstate portion of the tax must be divided and
paid over by the county treasurer receiving it, on or before the
20th day of each month after receipt, to the county or counties
entitled in the ratio which the market value of the real
property covered by the document in each county bears to the
market value of all the real property in this state described in
the document. In making the division and payment the county
treasurer shall send a statement to the other involved counties
giving the description of the real property described in the
document and the market value of the part located in each
county. The treasurer of any county may require the treasurer
of any other county to certify to the former the market
valuation of any parcel of real property for this purpose.
Subd. 2. [REAL PROPERTY OUTSIDE STATE.] If any deed, or
instrument, or writing shall describe describes any real estate
situate property located outside of this state, the tax imposed
by section 287.21 shall must be measured upon such proportion of
the consideration, (exclusive of the value of any lien or
encumbrance remaining thereon at the time of sale), as the value
of the real estate therein property described situate in this
state bears to the value of the whole of the real estate
property described therein in the deed or instrument.
Sec. 16. Minnesota Statutes 1998, section 287.24, is
amended to read:
287.24 [PERSONS LIABLE.]
Subdivision 1. [GENERAL RULE.] Any person who grants,
assigns, transfers, or conveys any land, tenement, or realty
real property by a deed, writing, or instrument subject to the
tax imposed by section 287.21 shall be liable for such tax but
no public official shall be liable for a tax with respect to any
instrument executed by the official in connection with official
duties.
Subd. 2. [OTHER RESPONSIBLE PERSONS.] If an underpayment
is assessable by the commissioner of revenue against a grantor
pursuant to section 287.37, and the grantor is a business entity
no longer in existence, any person who, either individually or
jointly with others, had control over, supervision of, or
responsibility for making the statement of tax due or exemption
from tax that was submitted to the county treasurer under
section 287.241, subdivision 1, can be assessed and held liable
by the commissioner for the underpayment.
Sec. 17. Minnesota Statutes 1998, section 287.241, is
amended to read:
287.241 [STATEMENT OF TAX DUE OR EXEMPTION; RECORDING OR
REGISTERING OF DOCUMENTS.]
Subdivision 1. [STATEMENT OF TAX DUE OR EXEMPTION.] No
deed, or instrument, or writing, taxable under the provisions of
section 287.21, shall be recorded or registered by the county
recorder or the registrar of titles unless it shall contain
contains the statement of the grantor or grantee, or any
successor in interest, setting forth the amount of tax due under
this chapter or that it is exempt from tax. The county recorder
or registrar of titles shall record or register any such
document deed or instrument when the statement sets forth that
the transfer is tax exempt, and shall refuse to record or
register any such document on which or when documentary stamps
in the amount stated thereon have not been affixed or the
treasurer's receipt appear for the amount of deed tax recited in
the statement. The validity or effectiveness of an a deed or
instrument as between the parties thereto, and as to any person
who would otherwise be bound thereby, shall is not be affected
by the failure to comply herewith; nor with this section. If an
a deed or instrument is accepted for recording or filing
contrary to the provisions hereof this section, shall the
failure to comply herewith does not destroy or impair the record
thereof of the deed or instrument as notice.
Subd. 2. [NOTICE OF CERTIFICATE OF VALUE.] No deed or
instrument providing for the transfer of title to real estate as
property that is subject to the tax as provided in section
287.21, and no executory contract for the sale of land, shall be
recorded in the office of the county recorder or the registrar
of titles unless such deed or instrument shall be is accompanied
by a notice from the county auditor that a certificate of value
was filed in the auditor's office as provided in section 272.115.
Sec. 18. Minnesota Statutes 1998, section 287.29,
subdivision 1, is amended to read:
Subdivision 1. [APPOINTMENT AND PAYMENT OF TAX PROCEEDS.]
(a) The proceeds of the taxes levied and collected under
sections 287.21 to 287.36 must be apportioned, 97 percent to the
general fund of the state, and three percent to the county
revenue fund.
(b) On or before the tenth 20th day of each month, the
county treasurer shall determine and pay to the commissioner of
revenue for deposit in the state treasury and credit to the
general fund the state's portion of the receipts for deed tax
from the sale of documentary stamps during the preceding month
subject to the electronic transfer requirements of section
270.771. The county treasurer shall provide any related reports
requested by the commissioner of revenue.
Sec. 19. Minnesota Statutes 1998, section 287.30, is
amended to read:
287.30 [COUNTY TREASURER; DUTIES.]
The care of documentary stamps entrusted to county
treasurers and the duties imposed upon county treasurers by
sections 287.21 to 287.33 shall be this chapter are within the
duties of such office and shall be are within the coverage of
any official bond delivered to the state, conditioned that any
such officer shall faithfully execute the duties of office. The
county board may by resolution require the county auditor to
perform any duty imposed on the county treasurer under this
chapter.
Sec. 20. Minnesota Statutes 1998, section 287.31, is
amended to read:
287.31 [VIOLATIONS; CIVIL PENALTIES.]
Subdivision 1. [FAILURE TO COMPLY PAY FULL AMOUNT.] Any
person liable for the tax imposed by section 287.21 who fails to
comply with the provisions of section 287.25 pay the full amount
of deed tax imposed under this chapter, unless such the failure
is shown to be due to reasonable cause, shall be is liable to a
civil penalty of $250, or 100 percent of the tax, for each such
failure, whichever is less.
Subd. 2. [WILLFUL EVASION.] Any person who willfully
attempts in any manner to evade or defeat any such tax or the
payment thereof, shall is, in addition to other penalties
provided by law, be liable to a penalty of 50 percent of the
total amount of the underpayment of the tax.
Sec. 21. [287.325] [VIOLATIONS; CRIMINAL PENALTIES.]
Any person who in any manner intentionally attempts to
evade a tax imposed by this chapter, or who intentionally aids
or abets in the evasion or attempted evasion of such tax is
guilty of a gross misdemeanor.
Sec. 22. Minnesota Statutes 1998, section 287.33, is
amended to read:
287.33 [EXPENSES OF ADMINISTRATION.]
Expenses of administration of sections 287.21 to 287.34
this chapter to be paid out of county funds include fees and
expenses incurred by the county attorney in connection
with sections 287.21 to 287.34 this chapter and all other costs
and expenses.
Sec. 23. [287.38] [LIMITATIONS ON TIME FOR ASSESSMENT OF
TAX.]
Subdivision 1. [GENERAL RULE.] Except as otherwise
provided in this section, the amount of taxes assessable under
this chapter must be assessed within 3-1/2 years after the date
the document is recorded.
Subd. 2. [OMISSION IN EXCESS OF 25 PERCENT.] Additional
taxes may be assessed within 6-1/2 years after the document was
recorded, if the taxpayer underpays the tax due on the filing of
that document by more than 25 percent or the document was
erroneously treated as exempt.
Subd. 3. [FRAUD.] Notwithstanding the limitations under
subdivision 1, additional taxes may be assessed at any time if a
document is presented for recording with a fraudulent intent to
underpay the taxes imposed by this chapter.
Sec. 24. [287.385] [INTEREST.]
Subdivision 1. [INTEREST RATE.] If an interest assessment
is required under this section, interest is computed at the rate
specified in section 270.75.
Subd. 2. [LATE PAYMENT.] If a tax is not paid within the
time specified by law for payment, the unpaid tax bears interest
from the date the tax should have been paid until the date the
tax is paid.
Subd. 3. [EXTENSIONS.] If an extension of time for payment
has been granted, interest must be paid from the date the
payment should have been made if no extension had been granted,
until the date the tax is paid.
Subd. 4. [ADDITIONAL ASSESSMENTS.] If a taxpayer is liable
for additional taxes because of a redetermination by the
commissioner of revenue, or for any other reason, the additional
taxes bear interest from the time the tax should have been paid,
without regard to any extension allowed, until the date the tax
is paid.
Subd. 5. [REFUNDS.] (a) Interest must be paid at the rate
specified in section 270.75 on an overpayment that is refunded
or credited to a taxpayer more than 30 days after a refund
request is made. Interest does not apply to the 30-day period.
(b) In the case of an erroneous refund, interest accrues
from the date the refund was paid unless the erroneous refund
results from a mistake of the department of revenue or the
county, then no interest or penalty is imposed unless the
deficiency assessment is not satisfied within 60 days of the
order.
Subd. 6. [INTEREST ON JUDGMENTS.] Notwithstanding section
549.09, if judgment is entered in favor of the commissioner of
revenue or a county with regard to any tax under this chapter,
the judgment bears interest at the rate specified in section
270.75 from the date the judgment is entered until the date of
payment.
Subd. 7. [INTEREST ON PENALTIES.] A penalty imposed under
this chapter bears interest from the date payment was required
to be paid, including any extensions, to the date of payment of
the penalty.
Sec. 25. [287.39] [ADMINISTRATIVE REVIEW.]
Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] Under
this section, a taxpayer may obtain reconsideration by the
commissioner of revenue of:
(1) an order of the commissioner assessing tax;
(2) a denial by the commissioner of a request for abatement
of penalty; or
(3) a denial by the commissioner of a claim for refund of
money paid to the commissioner as a result of an assessment or
order issued by the commissioner under this chapter, by filing
an administrative appeal as provided in subdivision 4.
A taxpayer cannot obtain reconsideration if the action taken by
the commissioner of revenue is the outcome of an administrative
appeal.
Subd. 2. [APPEAL BY TAXPAYER.] A taxpayer who wishes to
seek administrative review shall follow the procedure in
subdivision 4.
Subd. 3. [NOTICE DATE.] For purposes of this section,
"notice date" means the date of the order adjusting the tax or
order denying a request for abatement or, in the case of a
denied refund, the date of the notice of denial.
Subd. 4. [TIME AND CONTENT FOR ADMINISTRATIVE APPEAL.]
Within 60 days after the notice date, the taxpayer shall file a
written appeal with the commissioner of revenue. The appeal
need not be in any particular form, but must contain the
following information:
(1) name and address of the taxpayer;
(2) if a corporation, the state of incorporation of the
taxpayer, and the principal place of business of the
corporation;
(3) the Minnesota identification number or social security
number of the taxpayer;
(4) the type of tax involved;
(5) the date;
(6) the tax periods involved and the amount of tax involved
for each period;
(7) the findings in the notice that the taxpayer disputes;
(8) a summary statement that the taxpayer relies on for
each exception; and
(9) the taxpayer's signature or the signature of the
taxpayer's duly authorized agent.
Subd. 5. [EXTENSIONS.] If requested in writing and within
the time allowed for filing an administrative appeal, the
commissioner may extend the time for filing an appeal for a
period of not more than 30 days from the expiration of the 60
days from the notice date.
Subd. 6. [DETERMINATION OF APPEAL.] On the basis of
applicable law and available information, the commissioner shall
determine the validity, if any, in whole or part of the appeal
and notify the taxpayer of the decision. This notice must be in
writing and contain the basis for the determination.
Subd. 7. [AGREEMENT DETERMINING TAX LIABILITY.] If the
commissioner determines that it is in the best interests of the
state, the commissioner may settle taxes, penalties, or interest
that the commissioner has under consideration by virtue of an
appeal filed under this section. An agreement must be in
writing and signed by the commissioner and the taxpayer or the
taxpayer's representative authorized by the taxpayer to enter
into an agreement. The agreement is final and conclusive and,
except upon a showing of fraud or malfeasance, or
misrepresentation of a material fact, the case shall not be
reopened as to the matters agreed upon.
Subd. 8. [APPEAL OF AN ADMINISTRATIVE DETERMINATION.]
Following the determination of an appeal and notwithstanding any
period of limitations for making assessments or other
determinations to the contrary, the commissioner shall issue an
order reflecting that disposition. If the statute of
limitations for making assessments or other determinations would
have expired before the issuance of this order, except for this
section, the order is limited to issues or matters contained in
the appealed determination. The order is appealable to the
Minnesota tax court under section 271.06.
Subd. 9. [APPEAL WHERE NO DETERMINATION.] If the
commissioner does not make a determination within six months of
the filing of an administrative appeal, the taxpayer may elect
to appeal to tax court.
Subd. 10. [EXEMPTION FROM ADMINISTRATIVE PROCEDURE
ACT.] This section is not subject to chapter 14.
Sec. 26. [REPEALER.]
Minnesota Statutes 1998, sections 287.06; 287.07; 287.09;
287.21, subdivisions 2 and 4; 287.34; 287.35; and 287.36, are
repealed.
Sec. 27. [EFFECTIVE DATE.]
Sections 1 to 26 are effective for documents executed,
recorded, or registered after June 30, 1999.
Presented to the governor March 30, 1999
Signed by the governor April 1, 1999, 1:37 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes