1.1 	A bill for an act
1.2 	relating to taxation; imposing a tax on the transfer
1.3 	of certain major league sports franchises; proposing
1.4 	coding for new law as Minnesota Statutes, chapter 290D.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. [290D.05] TRANSFER TAX; SALES OF MAJOR SPORTS
1.7 	FRANCHISES.
1.8 		Subdivision 1.Findings. The legislature finds that the
1.9 	state and its political subdivisions have contributed to the
1.10 	value of major league sports franchises through authorizing and
1.11 	issuing bonds and authorizing and imposing taxes to fund sports
1.12 	stadiums and improvements to infrastructure to support them.
1.13 	The legislature further finds that the people of Minnesota have
1.14 	contributed to the value of major league sports franchises by
1.15 	paying food, liquor, lodging, and admissions taxes and by their
1.16 	loyal support of the teams, including attendance at games,
1.17 	television viewing, and purchases of sports memorabilia.
1.18 	Further, the legislature finds that, because of the value
1.19 	contributed by the state and its people, the sale of a major
1.20 	league sports franchise located in the state of Minnesota may be
1.21 	subject to tax by the state.
1.22 		Subd. 2.Tax imposed. A tax is imposed on the sale or
1.23 	other disposition of a major league sports team that plays or
1.24 	has played its home games at a sports stadium constructed with
1.25 	bonds issued under section 473.581.  For purposes of this
2.1 	section, "sale or other disposition of a major league sports
2.2 	team" means the sale or disposition of a major league sports
2.3 	franchise, whether by the sale or other disposition of assets,
2.4 	partnership shares, or corporate stock.  The rate of tax is
2.5 	seven percent of the gain realized on the sale.  For purposes of
2.6 	this section, "gain realized on the sale" means the gain
2.7 	determined for federal income tax purposes under section 1001 of
2.8 	the Internal Revenue Code of 1986, as amended through March 15,
2.9 	2005.
2.10 		Subd. 3.Apportionment. The tax imposed under
2.11 	subdivision 2 is apportioned by multiplying it by the ratio of
2.12 	the period of time the franchise was held by the taxpayer in
2.13 	which the team played its home games in the state to the period
2.14 	of time the franchise was held by the taxpayer.
2.15 		Subd. 4.Credit. A credit against the tax liability
2.16 	imposed under this section is allowed equal to the amount of
2.17 	taxes, if any, imposed on the taxpayer, under chapter 290.  The
2.18 	amount of credit must not exceed the tax liability imposed under
2.19 	this section.
2.20 		Subd. 5.Filing of return; payment of tax. The person
2.21 	who realizes the gain on the sale or other disposition under
2.22 	subdivision 1 is liable for payment of the tax.  For purposes of
2.23 	this section, "person" includes a partnership, corporation,
2.24 	individual, or other entity.  Within 120 days after the close of
2.25 	the taxpayer's taxable year, for federal income tax purposes, in
2.26 	which the sale occurred, the taxpayer shall file a return in the
2.27 	form and manner required by the commissioner of revenue and pay
2.28 	the tax due under this section.  The return must be
2.29 	authenticated by the person filing the return or by the person's
2.30 	agent who is authorized in writing to file the return.  The
2.31 	return must set forth the items and data required to compute the
2.32 	amount of the net tax liability.
2.33 		Subd. 6.Records. A person required to file a return and
2.34 	pay the tax under this section must keep records necessary to
2.35 	determine the tax imposed under this section and is subject to
2.36 	the audit and enforcement provisions of chapters 270 and 289A
3.1 	relating to individual income or corporate franchise taxes, as
3.2 	applicable.
3.3 		Subd. 7.Administration; enforcement. The commissioner
3.4 	of revenue shall administer and enforce the provisions of this
3.5 	section and has all the powers and duties contained in chapters
3.6 	270, 289A, and 290, including payment of refunds, that apply to
3.7 	the individual income or corporate franchise tax, as applicable,
3.8 	to administer, audit, collect, and enforce the tax imposed under
3.9 	this section.
3.10 		Subd. 8.Penalties; interest. (a) Interest is payable to
3.11 	the commissioner under the provisions of section 289A.55, and
3.12 	interest must be paid by the commissioner on overpayments under
3.13 	section 289A.56.
3.14 	(b) The civil penalties provided under section 289A.60 that
3.15 	apply to individual income or corporate franchise taxes under
3.16 	chapter 290, as applicable, apply to the tax imposed under this
3.17 	section.
3.18 		Subd. 9.Administrative review. The administrative
3.19 	review provisions of section 289A.65 apply to the tax imposed
3.20 	under this section.
3.21 		Subd. 10.Deposit of proceeds. The proceeds of the tax
3.22 	imposed under this section must be deposited in the state
3.23 	general fund.
3.24 	
EFFECTIVE DATE. This section is effective for sales and
3.25 	exchanges occurring after March 31, 2005.