1.1                          A bill for an act 
  1.2             relating to taxation; administration and compliance; 
  1.3             modifying electronic filing requirements; amending 
  1.4             Minnesota Statutes 2000, sections 289A.09, subdivision 
  1.5             1; and 289A.20, subdivision 2. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2000, section 289A.09, 
  1.8   subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [RETURNS.] (a) An employer who is required 
  1.10  to deduct and withhold tax under section 290.92, subdivision 2a 
  1.11  or 3, and a person required to deduct and withhold tax under 
  1.12  section 290.923, subdivision 2, must file a return with the 
  1.13  commissioner for each quarterly period unless otherwise 
  1.14  prescribed by the commissioner.  
  1.15     (b) A person or corporation required to make deposits under 
  1.16  section 290.9201, subdivision 8, must file an entertainer 
  1.17  withholding tax return with the commissioner. 
  1.18     (c) A person required to withhold an amount under section 
  1.19  290.9705, subdivision 1, must file a return. 
  1.20     (d) A partnership required to deduct and withhold tax under 
  1.21  section 290.92, subdivision 4b, must file a return. 
  1.22     (e) An S corporation required to deduct and withhold tax 
  1.23  under section 290.92, subdivision 4c, must also file a return.  
  1.24     (f) Returns must be filed in the form and manner, and 
  1.25  contain the information prescribed by the commissioner, except 
  2.1   that the commissioner may not require returns to be filed by 
  2.2   electronic means.  Every return for taxes withheld must be 
  2.3   signed by the employer, entertainment entity, contract payor, 
  2.4   partnership, or S corporation, or a designee. 
  2.5      <b>[EFFECTIVE DATE.]</b> This section is effective for returns 
  2.6   required to be filed after June 30, 2001. 
  2.7      Sec. 2.  Minnesota Statutes 2000, section 289A.20, 
  2.8   subdivision 2, is amended to read: 
  2.9      Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
  2.10  WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
  2.11  WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 
  2.12  (a) A tax required to be deducted and withheld during the 
  2.13  quarterly period must be paid on or before the last day of the 
  2.14  month following the close of the quarterly period, unless an 
  2.15  earlier time for payment is provided.  A tax required to be 
  2.16  deducted and withheld from compensation of an entertainer and 
  2.17  from a payment to an out-of-state contractor must be paid on or 
  2.18  before the date the return for such tax must be filed under 
  2.19  section 289A.18, subdivision 2.  Taxes required to be deducted 
  2.20  and withheld by partnerships and S corporations must be paid on 
  2.21  or before the date the return must be filed under section 
  2.22  289A.18, subdivision 2. 
  2.23     (b) An employer who, during the previous quarter, withheld 
  2.24  more than $1,500 of tax under section 290.92, subdivision 2a or 
  2.25  3, or 290.923, subdivision 2, must deposit tax withheld under 
  2.26  those sections with the commissioner within the time allowed to 
  2.27  deposit the employer's federal withheld employment taxes under 
  2.28  Treasury Regulation, section 31.6302-1, without regard to the 
  2.29  safe harbor or de minimis rules in subparagraph (f) or the 
  2.30  one-day rule in subsection (c), clause (3).  Taxpayers must 
  2.31  submit a copy of their federal notice of deposit status to the 
  2.32  commissioner upon request by the commissioner. 
  2.33     (c) The commissioner may prescribe by rule other return 
  2.34  periods or deposit requirements.  In prescribing the reporting 
  2.35  period, the commissioner may classify payors according to the 
  2.36  amount of their tax liability and may adopt an appropriate 
  3.1   reporting period for the class that the commissioner judges to 
  3.2   be consistent with efficient tax collection.  In no event will 
  3.3   the duration of the reporting period be more than one year. 
  3.4      (d) If less than the correct amount of tax is paid to the 
  3.5   commissioner, proper adjustments with respect to both the tax 
  3.6   and the amount to be deducted must be made, without interest, in 
  3.7   the manner and at the times the commissioner prescribes.  If the 
  3.8   underpayment cannot be adjusted, the amount of the underpayment 
  3.9   will be assessed and collected in the manner and at the times 
  3.10  the commissioner prescribes. 
  3.11     (e) If the aggregate amount of the tax withheld during a 
  3.12  fiscal year ending June 30 under section 290.92, subdivision 2a 
  3.13  or 3, is equal to or exceeds the amounts established for 
  3.14  remitting federal withheld taxes pursuant to the regulations 
  3.15  promulgated under section 6302(h) of the Internal Revenue Code, 
  3.16  the employer must remit each required deposit for wages paid in 
  3.17  the subsequent calendar year by means of a funds transfer as 
  3.18  defined in section 336.4A-104, paragraph (a).  The funds 
  3.19  transfer payment date, as defined in section 336.4A-401, must be 
  3.20  on or before the date the deposit is due.  If the date the 
  3.21  deposit is due is not a funds transfer business day, as defined 
  3.22  in section 336.4A-105, paragraph (a), clause (4), the payment 
  3.23  date must be on or before the funds transfer business day next 
  3.24  following the date the deposit is due. 
  3.25     (f) A third-party bulk filer as defined in section 290.92, 
  3.26  subdivision 30, paragraph (a), clause (2), who remits 
  3.27  withholding deposits must remit all deposits by means of a funds 
  3.28  transfer as provided in paragraph (e), regardless of the 
  3.29  aggregate amount of tax withheld during a fiscal year for all of 
  3.30  the employers.  
  3.31     <b>[EFFECTIVE DATE.]</b> This section is effective for payments 
  3.32  due after June 30, 2001.