Journal of the House - 96th
Day - Tuesday, May 4, 2010 - Top of Page 11028
Delete everything after the
enacting clause and insert:
"ARTICLE 1
PROPERTY TAXES
Section 1. Minnesota Statutes 2008, section 82B.035,
subdivision 2, is amended to read:
Subd. 2. Assessors. Nothing in this chapter shall be
construed as requiring the licensing of persons employed and acting in their
capacity as assessors for political subdivisions of the state and performing
duties enumerated in section 273.061, subdivision 7 or 8.
EFFECTIVE DATE. This section is effective the day following final
enactment for testimony offered and opinions or reports prepared in cases or
proceedings that have not been finally resolved.
Sec. 2. Minnesota Statutes 2008, section 270.075,
subdivision 1, is amended to read:
Subdivision 1. Rate
of tax. The commissioner shall
determine the rate of tax to be levied and collected against the net tax
capacity as determined pursuant to section 270.074, subdivision 2 3,
to generate revenues sufficient to fund the airflight property tax portion of
each year's state airport fund appropriation, as certified to the commissioner
by the commissioner of transportation. The
certification shall be presented to the commissioner prior to December 31 of
each year. The property tax portion
of the state airport fund appropriation is the difference between the total
fund appropriation and the estimated total fund revenues from other sources for
the state fiscal year in which the tax is payable and may include a portion
of the balance in the state airports fund as determined to be available by the
commissioner of transportation. If
a levy amount has not been certified by September 1 of a levy year, the
commissioner shall use the last previous certified amount to determine the rate
of tax. The certification by the
commissioner of transportation to the commissioner shall state the total fund
appropriation and shall list individually the estimated fund revenues including
the account carryover balance in the airport fund. The difference of these amounts shall be
shown as the property tax portion of the state airport fund appropriation.
If a levy amount has not
been certified by December 31 of a levy year, the commissioner shall use the
last previous certified amount to determine the rate of tax, and shall notify
the chairs and the ranking minority members of the committees of the house of
representatives and senate having jurisdiction over the Department of
Transportation that a certification was not made under this subdivision.
EFFECTIVE DATE. This section is effective for taxes payable in 2011
and thereafter.
Sec. 3. Minnesota Statutes 2008, section 270.075,
subdivision 2, is amended to read:
Subd. 2. Notice
of taxes; payment. As soon as
practicable and not later than December March 1 next following
the levy of the tax, the commissioner shall give actual notice to the airline
company of the net tax capacity and of the tax.
The taxes imposed under sections 270.071 to 270.079 shall become due and
payable on January April 1 following the levy thereof. If any tax is not paid on the due date or, if
an appeal is made pursuant to section 270.076, within 60 days after notice of
an increased tax, a late payment penalty of five percent of the unpaid tax
shall be assessed. If the tax remains
unpaid for more than 30 days, an additional penalty of five percent of the
unpaid tax is imposed for each additional 30 days or fraction of 30 days that
the tax remains unpaid. The penalty
imposed under this section must not exceed the lesser of $25,000 or 25 percent
of the unpaid tax. The unpaid tax and
penalty shall bear interest at the rate specified in section 270C.40 from the
time such tax should have been paid until paid.
All interest and penalties shall be added to the tax and collected as a part
thereof.
EFFECTIVE DATE. This section is effective for taxes payable in 2011
and thereafter.
Journal of the House - 96th Day - Tuesday, May 4, 2010 - Top
of Page 11029
Sec. 4. Minnesota
Statutes 2008, section 270.41, subdivision 5, is amended to read:
Subd. 5. Prohibited activity. A licensed assessor or other person
employed by an assessment jurisdiction or contracting with an assessment
jurisdiction for the purpose of valuing or classifying property for property
tax purposes is prohibited from making appraisals or analyses, accepting an
appraisal assignment, or preparing an appraisal report as defined in section
82B.02, subdivisions 2 to 5, on any property within the assessment jurisdiction
where the individual is employed or performing the duties of the assessor under
contract. Violation of this prohibition
shall result in immediate revocation of the individual's license to assess
property for property tax purposes. This
prohibition must not be construed to prohibit an individual from carrying out
any duties required for the proper assessment of property for property tax
purposes or performing duties enumerated in section 273.061, subdivision 7
or 8. If a formal resolution has
been adopted by the governing body of a governmental unit, which specifies the
purposes for which such work will be done, this prohibition does not apply to
appraisal activities undertaken on behalf of and at the request of the
governmental unit that has employed or contracted with the individual. The resolution may only allow appraisal
activities which are related to condemnations, right-of-way acquisitions, or
special assessments.
EFFECTIVE
DATE. This section is effective the day
following final enactment for testimony offered and opinions or reports
prepared in cases or proceedings that have not been finally resolved.
Sec. 5. Minnesota
Statutes 2008, section 272.0213, is amended to read:
272.0213 LEASED
SEASONAL-RECREATIONAL LAND.
(a) A county board may elect, by resolution, to exempt
from taxation, including the tax under section 273.19, qualified lands. "Qualified lands" for purposes of
this section means property that:
(1) is owned by a county, city, town, or the state,
or the federal governments;
(2) is rented by the entity for noncommercial
seasonal-recreational or noncommercial seasonal-recreational residential use;
and
(3) was rented for the purposes specified in clause (2) and
was exempt from taxation for property taxes payable in 2008.
(b) Lands owned by the federal government and rented for
noncommercial seasonal-recreational or noncommercial seasonal-recreational
residential use is exempt from taxation, including the tax under section
273.19.
EFFECTIVE
DATE. This section is effective beginning
with taxes payable in 2011.
Sec. 6. Minnesota
Statutes 2008, section 273.061, subdivision 7, is amended to read:
Subd. 7. Division of duties between local and county
assessor. The duty of the duly
appointed local assessor shall be to view and appraise the value of all
property as provided by law, but all the book work shall be done by the county
assessor, or the assessor's assistants, and the value of all property subject
to assessment and taxation shall be determined by the county assessor, except
as otherwise hereinafter provided. If
directed by the county assessor, the local assessor shall perform the duties
enumerated in subdivision 8, paragraph (16).
Sec. 7. Minnesota
Statutes 2008, section 273.061, subdivision 8, is amended to read:
Subd. 8. Powers and duties. The county assessor shall have the
following powers and duties:
Journal of the House - 96th Day - Tuesday, May 4, 2010 - Top
of Page 11030
(1) To call upon and confer with the township and city
assessors in the county, and advise and give them the necessary instructions
and directions as to their duties under the laws of this state, to the end that
a uniform assessment of all real property in the county will be attained.
(2) To assist and instruct the local assessors in the
preparation and proper use of land maps and record cards, in the property
classification of real and personal property, and in the determination of
proper standards of value.
(3) To keep the local assessors in the county advised of all
changes in assessment laws and all instructions which the assessor receives
from the commissioner of revenue relating to their duties.
(4) To have authority to require the attendance of groups of
local assessors at sectional meetings called by the assessor for the purpose of
giving them further assistance and instruction as to their duties.
(5) To immediately commence the preparation of a large scale
topographical land map of the county, in such form as may be prescribed by the
commissioner of revenue, showing thereon the location of all railroads,
highways and roads, bridges, rivers and lakes, swamp areas, wooded tracts,
stony ridges and other features which might affect the value of the land. Appropriate symbols shall be used to indicate
the best, the fair, and the poor land of the county. For use in connection with the topographical
land map, the assessor shall prepare and keep available in the assessor's
office tables showing fair average minimum and maximum market values per acre
of cultivated, meadow, pasture, cutover, timber and waste lands of each
township. The assessor shall keep the
map and tables available in the office for the guidance of town assessors,
boards of review, and the county board of equalization.
(6) To also prepare and keep available in the office for the
guidance of town assessors, boards of review and the county board of
equalization, a land valuation map of the county, in such form as may be
prescribed by the commissioner of revenue.
This map, which shall include the bordering tier of townships of each
county adjoining, shall show the average market value per acre, both with and
without improvements, as finally equalized in the last assessment of real
estate, of all land in each town or unorganized township which lies outside the
corporate limits of cities.
(7) To regularly examine all conveyances of land outside the
corporate limits of cities of the first and second class, filed with the county
recorder of the county, and keep a file, by descriptions, of the considerations
shown thereon. From the information
obtained by comparing the considerations shown with the market values assessed,
the assessor shall make recommendations to the county board of equalization of
necessary changes in individual assessments or aggregate valuations.
(8) To become familiar with the values of the different items
of personal property so as to be in a position when called upon to advise the
boards of review and the county board of equalization concerning property,
market values thereof.
(9) While the county board of equalization is in session, to
give it every possible assistance to enable it to perform its duties. The assessor shall furnish the board with all
necessary charts, tables, comparisons, and data which it requires in its
deliberations, and shall make whatever investigations the board may desire.
(10) At the request of either the board of county commissioners
or the commissioner of revenue, to investigate applications for reductions of
valuation and abatements and settlements of taxes, examine the real or personal
property involved, and submit written reports and recommendations with respect
to the applications, in such form as may be prescribed by the board of county
commissioners and commissioner of revenue.
(11) To make diligent search each year for real and personal
property which has been omitted from assessment in the county, and report all such
omissions to the county auditor.
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of Page 11031
(12) To regularly confer with county assessors in all adjacent
counties about the assessment of property in order to uniformly assess and
equalize the value of similar properties and classes of property located in
adjacent counties. The conference shall
emphasize the assessment of agricultural and commercial and industrial property
or other properties that may have an inadequate number of sales in a single
county.
(13) To render such other services pertaining to the
assessment of real and personal property in the county as are not inconsistent
with the duties set forth in this section, and as may be required by the board
of county commissioners or by the commissioner of revenue.
(14) To maintain a record, in conjunction with other county
offices, of all transfers of property to assist in determining the proper
classification of property, including but not limited to, transferring
homestead property and name changes on homestead property.
(15) To determine if a homestead application is required due
to the transfer of homestead property or an owner's name change on homestead
property.
(16) To perform appraisals of property, review the original
assessment and determine the accuracy of the original assessment, prepare an
appraisal or appraisal report, and testify before any court or other body as an
expert or otherwise on behalf of the assessor's jurisdiction with respect to
properties in that jurisdiction.
EFFECTIVE
DATE. This section is effective the day
following final enactment for testimony offered and opinions or reports
prepared in cases or proceedings that have not been finally resolved.
Sec. 8. Minnesota
Statutes 2008, section 273.1231, subdivision 1, is amended to read:
Subdivision 1. Applicability. For purposes of sections 273.1231 to 273.1235
273.1236, the following words, terms, and phrases have the meanings given
them in this section unless the language or context clearly indicates that a
different meaning is intended.
EFFECTIVE
DATE. This section is effective for
assessment year 2010 and thereafter.
Sec. 9. Minnesota Statutes
2008, section 273.1232, subdivision 1, is amended to read:
Subdivision 1. Reassessments required. For the purposes of sections 273.1231 to 273.1235
273.1236, the county assessor must reassess all damaged property in a
disaster or emergency area, except that the commissioner of revenue shall
reassess all property for which an application is submitted to the commissioner
under section 273.1233 or 273.1235. As
soon as practical, the assessor or commissioner of revenue must report the
reassessed value to the county auditor.
EFFECTIVE
DATE. This section is effective for
assessment year 2010 and thereafter.
Sec. 10. [273.1236] DISASTER-DAMAGED HOMES;
PARTIAL VALUATION EXCLUSION.
(a) A homestead property that (1) sustained physical damage
from a disaster or emergency resulting in a reassessed market value that is at
least $15,000 less than the market value of the property established for the
January 2 assessment in the year in which the damage occurred, (2) has been
substantially restored or rebuilt by the end of the year following the year in
which the damage occurred, (3) has a gross living area after reconstruction
that does not exceed 130 percent of the gross living area prior to the disaster
or emergency, and (4) has an estimated market value for the assessment year
following the year in which the restoration or reconstruction was substantially
completed that exceeds its estimated market value established for the January 2
assessment in the year in which the damage occurred by at least $25,000 due to
the restoration or reconstruction, is eligible for a valuation exclusion under
this section for the two assessment years immediately following the year in
which the restoration or reconstruction was completed.
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of Page 11032
(b) The assessor shall determine the difference between the
estimated market value established for the January 2 assessment in the year in
which the damage occurred and the estimated market value established for the
January 2 assessment in the year following the completion of the restoration or
reconstruction.
(c) In the first assessment year following the restoration or
reconstruction, all of the difference identified under paragraph (b) shall be
excluded in determining taxable market value.
In the second assessment year following the restoration or
reconstruction, half of the difference identified under paragraph (b) shall be
excluded in determining taxable market value.
(d) For the purposes of this section, "gross living
area" includes only above-grade living area, and does not include any
finished basement living area.
(e) Application for the valuation exclusion under this section
must be filed by January 2 of the year following the year in which the
restoration or reconstruction was substantially completed. The application must be filed with the
assessor of the county in which the property is located on the form prescribed
by the commissioner of revenue.
EFFECTIVE
DATE. This section is effective for
assessment year 2010 and thereafter. The
application deadline in paragraph (e) is extended to June 30, 2010, for
restoration or reconstruction substantially completed in 2009.
Sec. 11. Minnesota
Statutes 2008, section 273.124, subdivision 1, is amended to read:
Subdivision 1. General rule. (a) Residential real estate that is
occupied and used for the purposes of a homestead by its owner, who must be a Minnesota
resident, is a residential homestead.
Agricultural land, as defined in section 273.13, subdivision
23, that is occupied and used as a homestead by its owner, who must be a
Minnesota resident, is an agricultural homestead.
Dates for establishment of a homestead and homestead treatment
provided to particular types of property are as provided in this section.
Property held by a trustee under a trust is eligible for
homestead classification if the requirements under this chapter are satisfied.
The assessor shall require proof, as provided in subdivision
13, of the facts upon which classification as a homestead may be
determined. Notwithstanding any other
law, the assessor may at any time require a homestead application to be filed
in order to verify that any property classified as a homestead continues to be
eligible for homestead status.
Notwithstanding any other law to the contrary, the Department of Revenue
may, upon request from an assessor, verify whether an individual who is
requesting or receiving homestead classification has filed a Minnesota income
tax return as a resident for the most recent taxable year for which the
information is available.
When there is a name change or a transfer of homestead
property, the assessor may reclassify the property in the next assessment
unless a homestead application is filed to verify that the property continues
to qualify for homestead classification.
(b) For purposes of this section, homestead property shall
include property which is used for purposes of the homestead but is separated
from the homestead by a road, street, lot, waterway, or other similar
intervening property. The term
"used for purposes of the homestead" shall include but not be limited
to uses for gardens, garages, or other outbuildings commonly associated with a
homestead, but shall not include vacant land held primarily for future
development. In order to receive
homestead treatment for the noncontiguous property, the owner must use the
property for the purposes of the homestead, and must apply to the assessor,
both by the deadlines given in subdivision 9.
After initial qualification for the homestead treatment, additional
applications for subsequent years are not required.
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of Page 11033
(c) Residential real estate that is occupied and used for
purposes of a homestead by a relative of the owner is a homestead but only to
the extent of the homestead treatment that would be provided if the related
owner occupied the property. For
purposes of this paragraph and paragraph (g), "relative" means a
parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister,
uncle, aunt, nephew, or niece. This
relationship may be by blood or marriage.
Property that has been classified as seasonal residential recreational
property at any time during which it has been owned by the current owner or
spouse of the current owner will not be reclassified as a homestead unless it
is occupied as a homestead by the owner; this prohibition also applies to
property that, in the absence of this paragraph, would have been classified as
seasonal residential recreational property at the time when the residence was
constructed. Neither the related
occupant nor the owner of the property may claim a property tax refund under
chapter 290A for a homestead occupied by a relative. In the case of a residence located on
agricultural land, only the house, garage, and immediately surrounding one acre
of land shall be classified as a homestead under this paragraph, except as
provided in paragraph (d). In the
case of nonagricultural property, this paragraph only applies to applications
approved before December 16, 2010.
(d) Agricultural property that is occupied and used for
purposes of a homestead by a relative of the owner, is a homestead, only to the
extent of the homestead treatment that would be provided if the related owner
occupied the property, and only if all of the following criteria are met:
(1) the relative who is occupying the agricultural property
is a son, daughter, brother, sister, grandson, granddaughter, father, or mother
of the owner of the agricultural property or a son, daughter, brother, sister,
grandson, or granddaughter of the spouse of the owner of the agricultural
property;
(2) the owner of the agricultural property must be a
Minnesota resident;
(3) the owner of the agricultural property must not receive homestead
treatment on any other agricultural property in Minnesota; and
(4) the owner of the agricultural property is limited to only
one agricultural homestead per family under this paragraph.
Neither the related occupant nor the owner of the property may
claim a property tax refund under chapter 290A for a homestead occupied by a
relative qualifying under this paragraph.
For purposes of this paragraph, "agricultural property" means
the house, garage, other farm buildings and structures, and agricultural land.
Application must be made to the assessor by the owner of the
agricultural property to receive homestead benefits under this paragraph. The assessor may require the necessary proof
that the requirements under this paragraph have been met.
(e) In the case of property owned by a property owner who is
married, the assessor must not deny homestead treatment in whole or in part if
only one of the spouses occupies the property and the other spouse is absent
due to: (1) marriage dissolution
proceedings, (2) legal separation, (3) employment or self-employment in another
location, or (4) other personal circumstances causing the spouses to live
separately, not including an intent to obtain two homestead classifications for
property tax purposes. To qualify under
clause (3), the spouse's place of employment or self-employment must be at
least 50 miles distant from the other spouse's place of employment, and the
homesteads must be at least 50 miles distant from each other. Homestead treatment, in whole or in part,
shall not be denied to the owner's spouse who previously occupied the residence
with the owner if the absence of the owner is due to one of the exceptions
provided in this paragraph.
(f) The assessor must not deny homestead treatment in whole
or in part if:
Journal of the House - 96th
Day - Tuesday, May 4, 2010 - Top of Page 11034
(1) in the case of a
property owner who is not married, the owner is absent due to residence in a
nursing home, boarding care facility, or an elderly assisted living facility
property as defined in section 273.13, subdivision 25a, and the property is not
otherwise occupied; or
(2) in the case of a
property owner who is married, the owner or the owner's spouse or both are
absent due to residence in a nursing home, boarding care facility, or an
elderly assisted living facility property as defined in section 273.13,
subdivision 25a, and the property is not occupied or is occupied only by the
owner's spouse.
(g) If an individual is
purchasing property with the intent of claiming it as a homestead and is
required by the terms of the financing agreement to have a relative shown on
the deed as a co-owner, the assessor shall allow a full homestead classification. This provision only applies to first-time
purchasers, whether married or single, or to a person who had previously been
married and is purchasing as a single individual for the first time. The application for homestead benefits must
be on a form prescribed by the commissioner and must contain the data necessary
for the assessor to determine if full homestead benefits are warranted.
(h) If residential or
agricultural real estate is occupied and used for purposes of a homestead by a
child of a deceased owner and the property is subject to jurisdiction of
probate court, the child shall receive relative homestead classification under
paragraph (c) or (d) to the same extent they would be entitled to it if the
owner was still living, until the probate is completed. For purposes of this paragraph,
"child" includes a relationship by blood or by marriage.
(i) If a single-family home,
duplex, or triplex classified as either residential homestead or agricultural
homestead is also used to provide licensed child care, the portion of the
property used for licensed child care must be classified as a part of the
homestead property.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 12. Minnesota Statutes 2009 Supplement, section
273.124, subdivision 3a, is amended to read:
Subd. 3a. Manufactured
home park cooperative. (a) When
a manufactured home park is owned by a corporation or association organized
under chapter 308A or 308B, and each person who owns a share or shares in the
corporation or association is entitled to occupy a lot within the park, the
corporation or association may claim homestead treatment for each lot
occupied by a shareholder the park.
Each lot must be designated by legal description or number, and each lot
is limited to not more than one-half acre of land for each homestead.
(b) The manufactured home park
shall be valued and assessed as if it were homestead property within class 1
entitled to homestead treatment if all of the following criteria are met:
(1) the occupant is using
the property as a permanent residence;
(2) the occupant or the
cooperative corporation or association is paying the ad valorem property
taxes and any special assessments levied against the land and structure either
directly, or indirectly through dues to the corporation or association;
and
(3) (2) the corporation or
association organized under chapter 308A or 308B is wholly owned by persons
having a right to occupy a lot owned by the corporation or association.
(c) A charitable corporation,
organized under the laws of Minnesota with no outstanding stock, and granted a
ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status,
qualifies for homestead treatment with respect to member residents of the
a manufactured home park who if its members hold residential
participation warrants entitling them to occupy a lot in the manufactured home
park.
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of Page 11035
(d) "Homestead treatment" under this subdivision
means the class rate provided for class 4c property classified under section
273.13, subdivision 25, paragraph (d), clause (5), item (ii). The homestead market value credit under
section 273.1384 does not apply and the property taxes assessed against the
park shall not be included in the determination of taxes payable for rent paid
under section 290A.03.
EFFECTIVE
DATE. This section is effective for taxes
payable in 2011 and thereafter.
Sec. 13.
Minnesota Statutes 2008, section 273.124, subdivision 8, is amended to
read:
Subd. 8. Homestead owned by or leased to family farm
corporation, joint farm venture, limited liability company, or
partnership. (a) Each family farm
corporation; each joint family farm venture; and each limited liability company
or partnership which operates a family farm; is entitled to class 1b under
section 273.13, subdivision 22, paragraph (b), or class 2a assessment for one homestead
occupied by a shareholder, member, or partner thereof who is residing on the
land, and actively engaged in farming of the land owned by the family farm
corporation, joint family farm venture, limited liability company, or
partnership. Homestead treatment applies
even if legal title to the property is in the name of the family farm
corporation, joint family farm venture, limited liability company, or
partnership, and not in the name of the person residing on it.
"Family farm corporation," "family farm,"
and "partnership operating a family farm" have the meanings given in
section 500.24, except that the number of allowable shareholders, members, or
partners under this subdivision shall not exceed 12. "Limited liability company" has the
meaning contained in sections 322B.03, subdivision 28, and 500.24, subdivision
2, paragraphs (l) and (m). "Joint
family farm venture" means a cooperative agreement among two or more farm
enterprises authorized to operate a family farm under section 500.24.
(b) In addition to property specified in paragraph (a), any
other residences owned by family farm corporations, joint family farm ventures,
limited liability companies, or partnerships described in paragraph (a) which
are located on agricultural land and occupied as homesteads by its
shareholders, members, or partners who are actively engaged in farming on
behalf of that corporation, joint farm venture, limited liability company, or
partnership must also be assessed as class 2a property or as class 1b property
under section 273.13.
(c) Agricultural property that is owned by a member, partner,
or shareholder of a family farm corporation or joint family farm venture,
limited liability company operating a family farm, or by a partnership
operating a family farm and leased to the family farm corporation, limited
liability company, partnership, or joint farm venture, as defined in paragraph
(a), is eligible for classification as class 1b or class 2a under section
273.13, if the owner is actually residing on the property, and is actually
engaged in farming the land on behalf of that corporation, joint farm venture,
limited liability company, or partnership.
This paragraph applies without regard to any legal possession rights of
the family farm corporation, joint family farm venture, limited liability
company, or partnership under the lease.
(d) Agricultural property that (1) is owned by a family farm
corporation, joint farm venture, limited liability company, or partnership and
(2) is contiguous to a class 2a homestead under section 273.13, subdivision 23,
or if noncontiguous, is located in the same township or city, or not farther
than four townships or cities, or combination thereof from a class 2a
homestead, and the class 2a homestead is owned by one of the shareholders, members,
or partners; is entitled to receive the first tier homestead class rate up to
the first tier maximum market value on any remaining market value not received
on the shareholder's, member's, or partner's homestead class 2a property. The owner must notify the county assessor by
July 1 that a portion of the market value under this subdivision may be
eligible for homestead classification for the current assessment year, for
taxes payable in the following year.
EFFECTIVE
DATE. This section is effective for
assessment year 2010 and thereafter, for taxes payable in 2011 and thereafter.
Journal of the House - 96th Day - Tuesday, May 4, 2010 - Top
of Page 11036
Sec. 14.
Minnesota Statutes 2008, section 273.124, subdivision 14, is amended to
read:
Subd. 14. Agricultural homesteads; special
provisions. (a) Real estate of less
than ten acres that is the homestead of its owner must be classified as class
2a under section 273.13, subdivision 23, paragraph (a), if:
(1) the parcel on which the house is located is contiguous on
at least two sides to (i) agricultural land, (ii) land owned or administered by
the United States Fish and Wildlife Service, or (iii) land administered by the
Department of Natural Resources on which in lieu taxes are paid under sections
477A.11 to 477A.14;
(2) its owner also owns a noncontiguous parcel of
agricultural land that is at least 20 acres;
(3) the noncontiguous land is located not farther than four
townships or cities, or a combination of townships or cities from the
homestead; and
(4) the agricultural use value of the noncontiguous land and
farm buildings is equal to at least 50 percent of the market value of the
house, garage, and one acre of land.
Homesteads initially classified as class 2a under the
provisions of this paragraph shall remain classified as class 2a, irrespective
of subsequent changes in the use of adjoining properties, as long as the
homestead remains under the same ownership, the owner owns a noncontiguous
parcel of agricultural land that is at least 20 acres, and the agricultural use
value qualifies under clause (4).
Homestead classification under this paragraph is limited to property that
qualified under this paragraph for the 1998 assessment.
(b)(i) Agricultural property shall be classified as the
owner's homestead, to the same extent as other agricultural homestead property,
if all of the following criteria are met:
(1) the property consists of at least 40 acres including
undivided government lots and correctional 40's;
(2) the owner, the owner's spouse, the son or daughter of the
owner or owner's spouse, the brother or sister of the owner or owner's spouse,
or the grandson or granddaughter of the owner or the owner's spouse, is
actively farming the agricultural property, either on the person's own behalf
as an individual or on behalf of a partnership operating a family farm, family
farm corporation, joint family farm venture, or limited liability company of
which the person is a partner, shareholder, or member;
(3) both the owner of the agricultural property and the
person who is actively farming the agricultural property under clause (2), are
Minnesota residents;
(4) neither the owner nor the spouse of the owner claims
another agricultural homestead in Minnesota; and
(5) neither the owner nor the person actively farming the
property lives farther than four townships or cities, or a combination of four
townships or cities, from the agricultural property, except that if the owner
or the owner's spouse is required to live in employer-provided housing, the
owner or owner's spouse, whichever is actively farming the agricultural
property, may live more than four townships or cities, or combination of four
townships or cities from the agricultural property.
The relationship under this paragraph may be either by blood
or marriage.
(ii) Real property held by a trustee under a trust is
eligible for agricultural homestead classification under this paragraph if the
qualifications in clause (i) are met, except that "owner" means the
grantor of the trust.
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(iii) Property containing the residence of an owner who owns
qualified property under clause (i) shall be classified as part of the owner's
agricultural homestead, if that property is also used for noncommercial storage
or drying of agricultural crops.
(c) Noncontiguous land shall be included as part of a
homestead under section 273.13, subdivision 23, paragraph (a), only if the
homestead is classified as class 2a and the detached land is located in the
same township or city, or not farther than four townships or cities or
combination thereof from the homestead.
Any taxpayer of these noncontiguous lands must notify the county
assessor that the noncontiguous land is part of the taxpayer's homestead, and,
if the homestead is located in another county, the taxpayer must also notify
the assessor of the other county.
(d) Agricultural land used for purposes of a homestead and
actively farmed by a person holding a vested remainder interest in it must be
classified as a homestead under section 273.13, subdivision 23, paragraph
(a). If agricultural land is classified
class 2a, any other dwellings on the land used for purposes of a homestead by
persons holding vested remainder interests who are actively engaged in farming the
property, and up to one acre of the land surrounding each homestead and
reasonably necessary for the use of the dwelling as a home, must also be
assessed class 2a.
(e) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23, paragraph (a), for the
1997 assessment shall remain classified as agricultural homesteads for
subsequent assessments if:
(1) the property owner abandoned the homestead dwelling
located on the agricultural homestead as a result of the April 1997 floods;
(2) the property is located in the county of Polk, Clay,
Kittson, Marshall, Norman, or Wilkin;
(3) the agricultural land and buildings remain under the same
ownership for the current assessment year as existed for the 1997 assessment
year and continue to be used for agricultural purposes;
(4) the dwelling occupied by the owner is located in
Minnesota and is within 30 miles of one of the parcels of agricultural land
that is owned by the taxpayer; and
(5) the owner notifies the county assessor that the
relocation was due to the 1997 floods, and the owner furnishes the assessor any
information deemed necessary by the assessor in verifying the change in
dwelling. Further notifications to the
assessor are not required if the property continues to meet all the requirements
in this paragraph and any dwellings on the agricultural land remain
uninhabited.
(f) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23, paragraph (a), for the
1998 assessment shall remain classified agricultural homesteads for subsequent
assessments if:
(1) the property owner abandoned the homestead dwelling
located on the agricultural homestead as a result of damage caused by a March
29, 1998, tornado;
(2) the property is located in the county of Blue Earth,
Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice;
(3) the agricultural land and buildings remain under the same
ownership for the current assessment year as existed for the 1998 assessment
year;
(4) the dwelling occupied by the owner is located in this
state and is within 50 miles of one of the parcels of agricultural land that is
owned by the taxpayer; and
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(5) the owner notifies the county assessor that the
relocation was due to a March 29, 1998, tornado, and the owner furnishes the
assessor any information deemed necessary by the assessor in verifying the
change in homestead dwelling. For taxes
payable in 1999, the owner must notify the assessor by December 1, 1998. Further notifications to the assessor are not
required if the property continues to meet all the requirements in this
paragraph and any dwellings on the agricultural land remain uninhabited.
(g) Agricultural property of a family farm corporation, joint
family farm venture, family farm limited liability company, or partnership
operating a family farm as described under subdivision 8 shall be classified
homestead, to the same extent as other agricultural homestead property, if all
of the following criteria are met:
(1) the property consists of at least 40 acres including
undivided government lots and correctional 40's;
(2) a shareholder, member, or partner of that entity is
actively farming the agricultural property;
(3) that shareholder, member, or partner who is actively
farming the agricultural property is a Minnesota resident;
(4) neither that shareholder, member, or partner, nor the
spouse of that shareholder, member, or partner claims another agricultural
homestead in Minnesota; and
(5) that shareholder, member, or partner does not live
farther than four townships or cities, or a combination of four townships or
cities, from the agricultural property.
Homestead treatment applies under this paragraph for property
leased to a family farm corporation, joint farm venture, limited liability
company, or partnership operating a family farm if legal title to the property
is in the name of an individual who is a member, shareholder, or partner in the
entity.
(h) To be eligible for the special agricultural homestead
under this subdivision, an initial full application must be submitted to the
county assessor where the property is located.
Owners and the persons who are actively farming the property shall be
required to complete only a one-page abbreviated version of the application in
each subsequent year provided that none of the following items have changed
since the initial application:
(1) the day-to-day operation, administration, and financial
risks remain the same;
(2) the owners and the persons actively farming the property
continue to live within the four townships or city criteria and are Minnesota
residents;
(3) the same operator of the agricultural property is listed
with the Farm Service Agency;
(4) a Schedule F or equivalent income tax form was filed for
the most recent year;
(5) the property's acreage is unchanged; and
(6) none of the property's acres have been enrolled in a
federal or state farm program since the initial application.
The owners and any persons who are actively farming the
property must include the appropriate Social Security numbers, and sign and
date the application. If any of the
specified information has changed since the full application was filed, the
owner must notify the assessor, and must complete a new application to
determine if the property continues to qualify for the special agricultural
homestead. The commissioner of revenue
shall prepare a standard reapplication form for use by the assessors.
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(i) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23, paragraph (a), for the
2007 assessment shall remain classified agricultural homesteads for subsequent
assessments if:
(1) the property owner abandoned the homestead dwelling
located on the agricultural homestead as a result of damage caused by the
August 2007 floods;
(2) the property is located in the county of Dodge, Fillmore,
Houston, Olmsted, Steele, Wabasha, or Winona;
(3) the agricultural land and buildings remain under the same
ownership for the current assessment year as existed for the 2007 assessment
year;
(4) the dwelling occupied by the owner is located in this
state and is within 50 miles of one of the parcels of agricultural land that is
owned by the taxpayer; and
(5) the owner notifies the county assessor that the relocation
was due to the August 2007 floods, and the owner furnishes the assessor any
information deemed necessary by the assessor in verifying the change in
homestead dwelling. For taxes payable in
2009, the owner must notify the assessor by December 1, 2008. Further notifications to the assessor are not
required if the property continues to meet all the requirements in this
paragraph and any dwellings on the agricultural land remain uninhabited.
(j) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23, paragraph (a), for the
2008 assessment shall remain classified as agricultural homesteads for
subsequent assessments if:
(1) the property owner abandoned the homestead dwelling
located on the agricultural homestead as a result of the March 2009 floods;
(2) the property is located in the county of Marshall;
(3) the agricultural land and buildings remain under the same
ownership for the current assessment year as existed for the 2008 assessment
year and continue to be used for agricultural purposes;
(4) the dwelling occupied by the owner is located in Minnesota
and is within 50 miles of one of the parcels of agricultural land that is owned
by the taxpayer; and
(5) the owner notifies the county assessor that the relocation
was due to the 2009 floods, and the owner furnishes the assessor any
information deemed necessary by the assessor in verifying the change in
dwelling. Further notifications to the
assessor are not required if the property continues to meet all the
requirements in this paragraph and any dwellings on the agricultural land
remain uninhabited.
EFFECTIVE
DATE. This section is effective for
assessment years 2010 and 2011, for taxes payable in 2011 and 2012.
Sec. 15. Minnesota
Statutes 2009 Supplement, section 273.13, subdivision 23, is amended to read:
Subd. 23. Class 2.
(a) An agricultural homestead consists of class 2a agricultural land
that is homesteaded, along with any class 2b rural vacant land that is
contiguous to the class 2a land under the same ownership. The market value of the house and garage and
immediately surrounding one acre of land has the same class rates as class 1a
or 1b property under subdivision 22. The
value of the remaining land including improvements up to the first tier
valuation limit of agricultural homestead property has a net class rate of 0.5
percent of market value. The remaining
property over the first tier has a class rate of one percent of market
value. For purposes of this subdivision,
the "first tier valuation limit of agricultural homestead property"
and "first tier" means the limit certified under section 273.11,
subdivision 23.
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(b) Class 2a agricultural
land consists of parcels of property, or portions thereof, that are
agricultural land and buildings. Class
2a property has a net class rate of one percent of market value, unless it is
part of an agricultural homestead under paragraph (a). Class 2a property must also include any
property that would otherwise be classified as 2b, but is interspersed with class
2a property, including but not limited to sloughs, wooded wind shelters,
acreage abutting ditches, ravines, rock piles, land subject to a setback
requirement, and other similar land that is impractical for the assessor to
value separately from the rest of the property or that is unlikely to be able
to be sold separately from the rest of the property.
An assessor may classify the
part of a parcel described in this subdivision that is used for agricultural
purposes as class 2a and the remainder in the class appropriate to its use.
(c) Class 2b rural vacant
land consists of parcels of property, or portions thereof, that are unplatted
real estate, rural in character and not used for agricultural purposes,
including land used for growing trees for timber, lumber, and wood and wood
products, that is not improved with a structure. The presence of a minor, ancillary
nonresidential structure as defined by the commissioner of revenue does not
disqualify the property from classification under this paragraph. Any parcel of 20 acres or more improved with
a structure that is not a minor, ancillary nonresidential structure must be
split-classified, and ten acres must be assigned to the split parcel containing
the structure. Class 2b property has a
net class rate of one percent of market value unless it is part of an
agricultural homestead under paragraph (a), or qualifies as class 2c under
paragraph (d).
(d) Class 2c managed forest
land consists of no less than 20 and no more than 1,920 acres statewide per
taxpayer that is being managed under a forest management plan that meets the
requirements of chapter 290C, but is not enrolled in the sustainable forest
resource management incentive program.
It has a class rate of .65 percent, provided that the owner of the
property must apply to the assessor in order for the property to initially
qualify for the reduced rate and provide the information required by the
assessor to verify that the property qualifies for the reduced rate. If the assessor receives the application and
information before May 1 in an assessment year, the property qualifies
beginning with that assessment year. If
the assessor receives the application and information after April 30 in an
assessment year, the property may not qualify until the next assessment
year. The commissioner of natural
resources must concur that the land is qualified. The commissioner of natural resources shall
annually provide county assessors verification information on a timely
basis. The presence of a minor,
ancillary nonresidential structure as defined by the commissioner of revenue
does not disqualify the property from classification under this paragraph.
(e) Agricultural land as
used in this section means contiguous acreage of ten acres or more, used during
the preceding year for agricultural purposes.
"Agricultural purposes" as used in this section means the
raising, cultivation, drying, or storage of agricultural products for sale, or
the storage of machinery or equipment used in support of agricultural
production by the same farm entity. For
a property to be classified as agricultural based only on the drying or storage
of agricultural products, the products being dried or stored must have been
produced by the same farm entity as the entity operating the drying or storage
facility. "Agricultural
purposes" also includes enrollment in the Reinvest in Minnesota program
under sections 103F.501 to 103F.535 or the federal Conservation Reserve Program
as contained in Public Law 99-198 or a similar state or federal conservation
program if the property was classified as agricultural (i) under this
subdivision for the assessment year 2002 or (ii) in the year prior to its
enrollment. Agricultural classification
shall not be based upon the market value of any residential structures on the
parcel or contiguous parcels under the same ownership.
(f) Real estate of less than
ten acres, which is exclusively or intensively used for raising or cultivating
agricultural products, shall be considered as agricultural land. To qualify under this paragraph, property that
includes a residential structure must be used intensively for one of the
following purposes:
(i) for drying or storage of
grain or storage of machinery or equipment used to support agricultural
activities on other parcels of property operated by the same farming entity;
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(ii) as a nursery, provided that only those acres used to
produce nursery stock are considered agricultural land;
(iii) for livestock or poultry confinement, provided that
land that is used only for pasturing and grazing does not qualify; or
(iv) for market farming; for purposes of this paragraph,
"market farming" means the cultivation of one or more fruits or
vegetables or production of animal or other agricultural products for sale to
local markets by the farmer or an organization with which the farmer is
affiliated.; or
(v) the commercial processing of milk into cheese products
from milk produced on the property.
(g) Land shall be classified as agricultural even if all or a
portion of the agricultural use of that property is the leasing to, or use by
another person for agricultural purposes.
Classification under this subdivision is not determinative
for qualifying under section 273.111.
(h) The property classification under this section
supersedes, for property tax purposes only, any locally administered
agricultural policies or land use restrictions that define minimum or maximum
farm acreage.
(i) The term "agricultural products" as used in
this subdivision includes production for sale of:
(1) livestock, dairy animals, dairy products, poultry and
poultry products, fur-bearing animals, horticultural and nursery stock, fruit
of all kinds, vegetables, forage, grains, bees, and apiary products by the
owner;
(2) fish bred for sale and consumption if the fish breeding
occurs on land zoned for agricultural use;
(3) the commercial boarding of horses, which may include
related horse training and riding instruction, if the boarding is done in
conjunction with on property that is also used for raising pasture to
graze horses or raising or cultivating other agricultural products
as defined in clause (1);
(4) property which is owned and operated by nonprofit
organizations used for equestrian activities, excluding racing;
(5) game birds and waterfowl bred and raised for use on a
shooting preserve licensed under section 97A.115;
(6) insects primarily bred to be used as food for animals;
(7) trees, grown for sale as a crop, including short rotation
woody crops, and not sold for timber, lumber, wood, or wood products; and
(8) maple syrup taken from trees grown by a person licensed
by the Minnesota Department of Agriculture under chapter 28A as a food
processor.; and
(9) the commercial processing of milk into cheese products
from milk produced on the property, provided the property is also the homestead
of the property owner.
(j) If a parcel used for agricultural purposes is also used
for commercial or industrial purposes, including but not limited to:
(1) wholesale and retail sales;
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(2) processing of raw agricultural products or other goods;
(3) warehousing or storage of processed goods; and
(4) office facilities for the support of the activities
enumerated in clauses (1), (2), and (3),
the
assessor shall classify the part of the parcel used for agricultural purposes
as class 1b, 2a, or 2b, whichever is appropriate, and the remainder in the
class appropriate to its use. The
grading, sorting, and packaging of raw agricultural products for first sale is
considered an agricultural purpose. A
greenhouse or other building where horticultural or nursery products are grown
that is also used for the conduct of retail sales must be classified as
agricultural if it is primarily used for the growing of horticultural or
nursery products from seed, cuttings, or roots and occasionally as a showroom
for the retail sale of those products.
Use of a greenhouse or building only for the display of already grown
horticultural or nursery products does not qualify as an agricultural purpose.
(k) The assessor shall determine and list separately on the
records the market value of the homestead dwelling and the one acre of land on
which that dwelling is located. If any
farm buildings or structures are located on this homesteaded acre of land,
their market value shall not be included in this separate determination.
(l) Class 2d airport landing area consists of a landing area
or public access area of a privately owned public use airport. It has a class rate of one percent of market
value. To qualify for classification
under this paragraph, a privately owned public use airport must be licensed as
a public airport under section 360.018.
For purposes of this paragraph, "landing area" means that part
of a privately owned public use airport properly cleared, regularly maintained,
and made available to the public for use by aircraft and includes runways,
taxiways, aprons, and sites upon which are situated landing or navigational
aids. A landing area also includes land
underlying both the primary surface and the approach surfaces that comply with
all of the following:
(i) the land is properly cleared and regularly maintained for
the primary purposes of the landing, taking off, and taxiing of aircraft; but
that portion of the land that contains facilities for servicing, repair, or
maintenance of aircraft is not included as a landing area;
(ii) the land is part of the airport property; and
(iii) the land is not used for commercial or residential
purposes.
The land
contained in a landing area under this paragraph must be described and
certified by the commissioner of transportation. The certification is effective until it is
modified, or until the airport or landing area no longer meets the requirements
of this paragraph. For purposes of this
paragraph, "public access area" means property used as an aircraft
parking ramp, apron, or storage hangar, or an arrival and departure building in
connection with the airport.
(m) Class 2e consists of land with a commercial aggregate
deposit that is not actively being mined and is not otherwise classified as class
2a or 2b, provided that the land is not located in a county that has elected to
opt-out of the aggregate preservation program as provided in section 273.1115,
subdivision 6. It has a class rate of
one percent of market value. To qualify
for classification under this paragraph, the property must be at least ten
contiguous acres in size and the owner of the property must record with the
county recorder of the county in which the property is located an affidavit
containing:
(1) a legal description of the property;
(2) a disclosure that the property contains a commercial
aggregate deposit that is not actively being mined but is present on the entire
parcel enrolled;
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(3) documentation that the
conditional use under the county or local zoning ordinance of this property is
for mining; and
(4) documentation that a
permit has been issued by the local unit of government or the mining activity
is allowed under local ordinance. The
disclosure must include a statement from a registered professional geologist,
engineer, or soil scientist delineating the deposit and certifying that it is a
commercial aggregate deposit.
For purposes of this section
and section 273.1115, "commercial aggregate deposit" means a deposit
that will yield crushed stone or sand and gravel that is suitable for use as a
construction aggregate; and "actively mined" means the removal of top
soil and overburden in preparation for excavation or excavation of a commercial
deposit.
(n) When any portion of the
property under this subdivision or subdivision 22 begins to be actively mined,
the owner must file a supplemental affidavit within 60 days from the day any
aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively
being mined must be (1) valued and classified under subdivision 24 in the next
subsequent assessment year, and (2) removed from the aggregate resource
preservation property tax program under section 273.1115, if the land was
enrolled in that program. Copies of the
original affidavit and all supplemental affidavits must be filed with the county
assessor, the local zoning administrator, and the Department of Natural
Resources, Division of Land and Minerals.
A supplemental affidavit must be filed each time a subsequent portion of
the property is actively mined, provided that the minimum acreage change is
five acres, even if the actual mining activity constitutes less than five
acres.
(o) The definitions
prescribed by the commissioner under paragraphs (c) and (d) are not rules and
are exempt from the rulemaking provisions of chapter 14, and the provisions in
section 14.386 concerning exempt rules do not apply.
EFFECTIVE DATE. This section is effective for taxes payable in 2011
and thereafter.
Sec. 16. Minnesota Statutes 2009 Supplement, section
273.13, subdivision 25, is amended to read:
Subd. 25. Class
4. (a) Class 4a is residential real
estate containing four or more units and used or held for use by the owner or
by the tenants or lessees of the owner as a residence for rental periods of 30
days or more, excluding property qualifying for class 4d. Class 4a also includes hospitals licensed
under sections 144.50 to 144.56, other than hospitals exempt under section
272.02, and contiguous property used for hospital purposes, without regard to
whether the property has been platted or subdivided. The market value of class 4a property has a
class rate of 1.25 percent.
(b) Class 4b includes:
(1) residential real estate
containing less than four units that does not qualify as class 4bb, other than
seasonal residential recreational property;
(2) manufactured homes not
classified under any other provision;
(3) a dwelling, garage, and
surrounding one acre of property on a nonhomestead farm classified under
subdivision 23, paragraph (b) containing two or three units; and
(4) unimproved property that
is classified residential as determined under subdivision 33.
The market value of class 4b
property has a class rate of 1.25 percent.
(c) Class 4bb includes:
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(1) nonhomestead residential real estate containing one unit,
other than seasonal residential recreational property; and
(2) a single family dwelling, garage, and surrounding one acre
of property on a nonhomestead farm classified under subdivision 23, paragraph
(b).
Class 4bb property has the same class rates as class 1a
property under subdivision 22.
Property that has been classified as seasonal residential recreational
property at any time during which it has been owned by the current owner or
spouse of the current owner does not qualify for class 4bb.
(d) Class 4c property includes:
(1) except as provided in subdivision 22, paragraph (c), real
and personal property devoted to temporary and seasonal residential occupancy
for recreation purposes, including real and personal property devoted to
temporary and seasonal residential occupancy for recreation purposes and not
devoted to commercial purposes for more than 250 days in the year preceding the
year of assessment. For purposes of this
clause, property is devoted to a commercial purpose on a specific day if any
portion of the property is used for residential occupancy, and a fee is charged
for residential occupancy. Class 4c
property under this clause must contain three or more rental units. A "rental unit" is defined as a
cabin, condominium, townhouse, sleeping room, or individual camping site
equipped with water and electrical hookups for recreational vehicles. Class 4c property under this clause must
provide recreational activities such as renting ice fishing houses, boats and
motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing
tackle. A camping pad offered for rent
by a property that otherwise qualifies for class 4c under this clause is also
class 4c under this clause regardless of the term of the rental agreement, as
long as the use of the camping pad does not exceed 250 days. In order for a property to be classified as
class 4c, seasonal residential recreational for commercial purposes under this
clause, (i) at least 40 percent of the annual gross lodging receipts
related to the property must be from business conducted during 90 consecutive
days and either (i) (A) at least 60 percent of all paid bookings
by lodging guests during the year must be for periods of at least two
consecutive nights; or (ii) (B) at least 20 percent of the annual
gross receipts must be from charges for rental of fish houses, boats and
motors, snowmobiles, downhill or cross-country ski equipment, or charges for
marina services, launch services, and guide services, or the sale of bait and
fishing tackle.; or (ii) the property contains 20 or fewer rental
units, is devoted to temporary residential occupancy for no more than 250 days
in the year, is located in a township or a city with a population of 2,500 or
less, that is located outside the metropolitan area as defined under section
473.121, subdivision 2, and that contains a portion of a state trail
administered by the Department of Natural Resources. For purposes of this determination, a
paid booking of five or more nights shall be counted as two bookings. Class 4c property classified under this
clause also includes commercial use real property used exclusively for
recreational purposes in conjunction with other class 4c property classified
under this clause and devoted to temporary and seasonal residential occupancy
for recreational purposes, up to a total of two acres, provided the property is
not devoted to commercial recreational use for more than 250 days in the year
preceding the year of assessment and is located within two miles of the class
4c property with which it is used.
Owners of real and personal property devoted to temporary and seasonal
residential occupancy for recreation purposes and all or a portion of which was
devoted to commercial purposes for not more than 250 days in the year preceding
the year of assessment desiring classification as class 4c, must submit a
declaration to the assessor designating the cabins or units occupied for 250
days or less in the year preceding the year of assessment by January 15 of the
assessment year. Those cabins or units
and a proportionate share of the land on which they are located must be
designated class 4c under this clause as otherwise provided. The remainder of the cabins or units and a
proportionate share of the land on which they are located will be designated as
class 3a. The owner of property desiring
designation as class 4c property under this clause must provide guest registers
or other records demonstrating that the units for which class 4c designation is
sought were not occupied for more than 250 days in the year preceding the
assessment if so requested. The portion
of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4)
conference center or meeting room, and (5) other nonresidential facility operated
on a commercial basis not directly related to temporary and seasonal
residential occupancy for recreation purposes does not qualify for class 4c;
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(2) qualified property used as a golf course if:
(i) it is open to the public on a daily fee basis. It may charge membership fees or dues, but a
membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically
charged by municipal courses; and
(ii) it meets the requirements of section 273.112,
subdivision 3, paragraph (d).
A structure used as a clubhouse, restaurant, or place of
refreshment in conjunction with the golf course is classified as class 3a
property;
(3) real property up to a maximum of three acres of land
owned and used by a nonprofit community service oriented organization and not
used for residential purposes on either a temporary or permanent basis,
provided that:
(i) the property is not used for a revenue-producing activity
for more than six days in the calendar year preceding the year of assessment;
or
(ii) the organization makes annual charitable contributions
and donations at least equal to the property's previous year's property taxes
and the property is allowed to be used for public and community meetings or
events for no charge, as appropriate to the size of the facility.
For purposes of this clause,
(A) "charitable contributions and donations" has
the same meaning as lawful gambling purposes under section 349.12, subdivision
25, excluding those purposes relating to the payment of taxes, assessments,
fees, auditing costs, and utility payments;
(B) "property taxes" excludes the state general
tax;
(C) a "nonprofit community service oriented
organization" means any corporation, society, association, foundation, or
institution organized and operated exclusively for charitable, religious,
fraternal, civic, or educational purposes, and which is exempt from federal
income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the
Internal Revenue Code; and
(D) "revenue-producing activities" shall include
but not be limited to property or that portion of the property that is used as
an on-sale intoxicating liquor or 3.2 percent malt liquor establishment
licensed under chapter 340A, a restaurant open to the public, bowling alley, a
retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who
conducts a for-profit enterprise on the premises.
Any portion
of the property not qualifying under either item (i) or (ii) is class 3a. The use of the property for social events
open exclusively to members and their guests for periods of less than 24 hours,
when an admission is not charged nor any revenues are received by the
organization shall not be considered a revenue-producing activity.
The organization shall maintain records of its charitable
contributions and donations and of public meetings and events held on the
property and make them available upon request any time to the assessor to
ensure eligibility. An organization
meeting the requirement under item (ii) must file an application by May 1 with
the assessor for eligibility for the current year's assessment. The commissioner shall prescribe a uniform
application form and instructions;
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(4) postsecondary student
housing of not more than one acre of land that is owned by a nonprofit
corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located
within two miles of the border of a college campus;
(5)(i) manufactured
home parks as defined in section 327.14, subdivision 3, excluding
manufactured home parks described in section 273.124, subdivision 3a, and (ii)
manufactured home parks as defined in section 327.14, subdivision 3, that are
described in section 273.124, subdivision 3a;
(6) real property that is
actively and exclusively devoted to indoor fitness, health, social, recreational,
and related uses, is owned and operated by a not-for-profit corporation, and is
located within the metropolitan area as defined in section 473.121, subdivision
2;
(7) a leased or privately
owned noncommercial aircraft storage hangar not exempt under section 272.01,
subdivision 2, and the land on which it is located, provided that:
(i) the land is on an
airport owned or operated by a city, town, county, Metropolitan Airports
Commission, or group thereof; and
(ii) the land lease, or any
ordinance or signed agreement restricting the use of the leased premise,
prohibits commercial activity performed at the hangar.
If a hangar classified under
this clause is sold after June 30, 2000, a bill of sale must be filed by the
new owner with the assessor of the county where the property is located within
60 days of the sale;
(8) a privately owned
noncommercial aircraft storage hangar not exempt under section 272.01,
subdivision 2, and the land on which it is located, provided that:
(i) the land abuts a public
airport; and
(ii) the owner of the
aircraft storage hangar provides the assessor with a signed agreement
restricting the use of the premises, prohibiting commercial use or activity
performed at the hangar; and
(9) residential real estate,
a portion of which is used by the owner for homestead purposes, and that is
also a place of lodging, if all of the following criteria are met:
(i) rooms are provided for
rent to transient guests that generally stay for periods of 14 or fewer days;
(ii) meals are provided to
persons who rent rooms, the cost of which is incorporated in the basic room
rate;
(iii) meals are not provided
to the general public except for special events on fewer than seven days in the
calendar year preceding the year of the assessment; and
(iv) the owner is the
operator of the property.
The market value subject to
the 4c classification under this clause is limited to five rental units. Any rental units on the property in excess of
five, must be valued and assessed as class 3a.
The portion of the property used for purposes of a homestead by the
owner must be classified as class 1a property under subdivision 22;
(10) real property up to a
maximum of three acres and operated as a restaurant as defined under section
157.15, subdivision 12, provided it: (A)
is located on a lake as defined under section 103G.005, subdivision 15,
paragraph (a), clause (3); and (B) is either devoted to commercial purposes for
not more than 250 consecutive days, or receives
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at least 60 percent of its
annual gross receipts from business conducted during four consecutive
months. Gross receipts from the sale of
alcoholic beverages must be included in determining the property's
qualification under subitem (B). The
property's primary business must be as a restaurant and not as a bar. Gross receipts from gift shop sales located
on the premises must be excluded. Owners
of real property desiring 4c classification under this clause must submit an
annual declaration to the assessor by February 1 of the current assessment
year, based on the property's relevant information for the preceding assessment
year; and
(11) lakeshore and riparian property and adjacent land, not
to exceed six acres, used as a marina, as defined in section 86A.20,
subdivision 5, which is made accessible to the public and devoted to
recreational use for marina services.
The marina owner must annually provide evidence to the assessor that it
provides services, including lake or river access to the public. No more than 800 feet of lakeshore may be
included in this classification. Buildings used in conjunction with a marina
for marina services, including but not limited to buildings used to provide
food and beverage services, fuel, boat repairs, or the sale of bait or fishing
tackle, are classified as class 3a property.
Class 4c property has a class rate of 1.5 percent of market
value, except that (i) each parcel of seasonal residential recreational
property not used for commercial purposes has the same class rates as class 4bb
property, (ii) manufactured home parks assessed under clause (5), item (i),
have the same class rate as class 4b property, and the market value of
manufactured home parks assessed under clause (5), item (ii), has the same
class rate as class 4d property, (iii) commercial-use seasonal residential
recreational property and marina recreational land as described in clause (11),
has a class rate of one percent for the first $500,000 of market value, and
1.25 percent for the remaining market value, (iv) the market value of property
described in clause (4) has a class rate of one percent, (v) the market value
of property described in clauses (2), (6), and (10) has a class rate of 1.25
percent, and (vi) that portion of the market value of property in clause (9)
qualifying for class 4c property has a class rate of 1.25 percent.
(e) Class 4d property is qualifying low-income rental housing
certified to the assessor by the Housing Finance Agency under section 273.128,
subdivision 3. If only a portion of the
units in the building qualify as low-income rental housing units as certified
under section 273.128, subdivision 3, only the proportion of qualifying units
to the total number of units in the building qualify for class 4d. The remaining portion of the building shall
be classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units
in the building. For all properties
qualifying as class 4d, the market value determined by the assessor must be
based on the normal approach to value using normal unrestricted rents.
Class 4d property has a class rate of 0.75 percent.
EFFECTIVE
DATE. This section is effective for
assessment year 2010, for taxes payable in 2011 and thereafter.
Sec. 17.
Minnesota Statutes 2008, section 273.13, subdivision 34, is amended to
read:
Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value
of property owned by a veteran or by the veteran and the veteran's spouse
qualifying for homestead classification under subdivision 22 or 23 is excluded
in determining the property's taxable market value if it serves as the
homestead of a military veteran, as defined in section 197.447, who has a
service-connected disability of 70 percent or more. To qualify for the exclusion under this
subdivision paragraphs (a) and (b), the veteran must have been
honorably discharged from the United States armed forces, as indicated by
United States Government Form DD214 or other official military discharge
papers, and must be certified by the United States Veterans Administration as
having a service-connected disability.
(b)(1) For a disability rating of 70 percent or more,
$150,000 of market value is excluded, except as provided in clause (2); and
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(2) for a total (100
percent) and permanent disability, $300,000 of market value is excluded.
(c) If a disabled veteran
qualifying for a valuation exclusion under paragraph (b), clause (2),
predeceases the veteran's spouse, and if upon the death of the veteran the
spouse holds the legal or beneficial title to the homestead and permanently
resides there, the exclusion shall carry over to the benefit of the veteran's
spouse for one four additional assessment year years
or until such time as the spouse sells, transfers, or otherwise disposes of the
property, whichever comes first.
(d) If the spouse of a
military service person who dies due to a service-connected cause while in
active service, as defined in section 190.05, subdivision 5, holds the legal or
beneficial title to a homestead and permanently resides there at the time of
the service person's death, the spouse shall be eligible for a market value
exclusion of $300,000 for five years following the death of the service person,
or until such time as the spouse sells, transfers, or otherwise disposes of the
property, whichever comes first. To
qualify for exclusion under this paragraph, the surviving spouse must apply to
the assessor and show proof of the service member's death while in active
service in any branch or unit of the United States armed forces, as indicated
on United States Government Form DD1300 or DD2064. If the application is received prior to July
1 of a given year, the exclusion first applies for taxes payable in the
following year. If the application is
received after June 30 of a given year, the exclusion first applies for taxes
payable in the second year following receipt of the application.
(d) (e) In the case of an
agricultural homestead, only the portion of the property consisting of the
house and garage and immediately surrounding one acre of land qualifies for the
valuation exclusion under this subdivision.
(e) (f) A property qualifying for a
valuation exclusion under this subdivision is not eligible for the credit under
section 273.1384, subdivision 1, or classification under subdivision 22,
paragraph (b).
(f) (g) To qualify for a valuation
exclusion under this subdivision a property owner must apply to the assessor by
July 1 of each assessment year, except that an annual reapplication is not
required once a property has been accepted for a valuation exclusion under
paragraph (b), clause (2), or paragraph (d), and the property continues
to qualify until there is a change in ownership.
EFFECTIVE DATE. The change made to paragraph (c) is effective for
taxes payable in 2011 and thereafter, and applies to the surviving spouse of
any disabled veteran who had previously been assessed under paragraph (c). Paragraph (d) is effective for deaths occurring
the day following final enactment and thereafter.
Sec. 18. Minnesota Statutes 2009 Supplement, section
275.065, subdivision 3, is amended to read:
Subd. 3. Notice
of proposed property taxes. (a) The
county auditor shall prepare and the county treasurer shall deliver after
November 10 and on or before November 24 each year, by first class mail to each
taxpayer at the address listed on the county's current year's assessment roll,
a notice of proposed property taxes.
Upon written request by the taxpayer, the treasurer may send the notice
in electronic form or by electronic mail instead of on paper or by ordinary
mail.
(b) The commissioner of
revenue shall prescribe the form of the notice.
(c) The notice must inform
taxpayers that it contains the amount of property taxes each taxing authority
proposes to collect for taxes payable the following year. In the case of a town, or in the case of the
state general tax, the final tax amount will be its proposed tax. The notice must clearly state for each city,
county, school district, regional library authority established under section
134.201, and metropolitan taxing districts as defined in paragraph (i), the
time and place of the taxing authorities' regularly scheduled meetings in which
the budget and levy will be discussed and the final budget and levy determined,
which must occur after November 24. The
taxing authorities must provide the county auditor with the information to be
included in the notice on or before the time it certifies its
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proposed levy under
subdivision 1. The public must be
allowed to speak at the meetings and the meetings shall not be held before 6:00
p.m. It must provide a telephone number for the taxing authority that taxpayers
may call if they have questions related to the notice and an address where
comments will be received by mail, except that no notice required under this
section shall be interpreted as requiring the printing of a personal telephone
number or address as the contact information for a taxing authority. If a taxing authority does not maintain
public offices where telephone calls can be received by the authority, the
authority may inform the county of the lack of a public telephone number and
the county shall not list a telephone number for that taxing authority.
(d) The notice must state
for each parcel:
(1) the market value of the
property as determined under section 273.11, and used for computing property
taxes payable in the following year and for taxes payable in the current year
as each appears in the records of the county assessor on November 1 of the
current year; and, in the case of residential property, whether the property is
classified as homestead or nonhomestead.
The notice must clearly inform taxpayers of the years to which the
market values apply and that the values are final values;
(2) the items listed below, shown
separately by county, city or town, and state general tax, net of the
residential and agricultural homestead credit under section 273.1384, voter
approved school levy, other local school levy, and the sum of the special
taxing districts, and as a total of all taxing authorities:
(i) the actual tax for taxes
payable in the current year; and
(ii) the proposed tax
amount.
If the county levy under
clause (2) includes an amount for a lake improvement district as defined under
sections 103B.501 to 103B.581, the amount attributable for that purpose must be
separately stated from the remaining county levy amount.
In the case of a town or the
state general tax, the final tax shall also be its proposed tax unless the town
changes its levy at a special town meeting under section 365.52. If a school district has certified under
section 126C.17, subdivision 9, that a referendum will be held in the school
district at the November general election, the county auditor must note next to
the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the
notice. In the case of the city of
Minneapolis, the levy for Minneapolis Park and Recreation shall be listed
separately from the remaining amount of the city's levy. In the case of the city of St. Paul, the
levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In
the case of Ramsey County, any amount levied under section 134.07 may be listed
separately from the remaining amount of the county's levy. In the case of a parcel where tax increment
or the fiscal disparities areawide tax under chapter 276A or 473F applies, the
proposed tax levy on the captured value or the proposed tax levy on the tax
capacity subject to the areawide tax must each be stated separately and not
included in the sum of the special taxing districts; and
(3) the increase or decrease
between the total taxes payable in the current year and the total proposed taxes,
expressed as a percentage.
For purposes of this
section, the amount of the tax on homesteads qualifying under the senior
citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.
(e) The notice must clearly
state that the proposed or final taxes do not include the following:
(1) special assessments;
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(2) levies approved by the voters after the date the proposed
taxes are certified, including bond referenda and school district levy
referenda;
(3) a levy limit increase approved by the voters by the first
Tuesday after the first Monday in November of the levy year as provided under
section 275.73;
(4) amounts necessary to pay cleanup or other costs due to a
natural disaster occurring after the date the proposed taxes are certified;
(5) amounts necessary to pay tort judgments against the
taxing authority that become final after the date the proposed taxes are
certified; and
(6) the contamination tax imposed on properties which
received market value reductions for contamination.
(f) Except as provided in subdivision 7, failure of the
county auditor to prepare or the county treasurer to deliver the notice as
required in this section does not invalidate the proposed or final tax levy or
the taxes payable pursuant to the tax levy.
(g) If the notice the taxpayer receives under this section
lists the property as nonhomestead, and satisfactory documentation is provided
to the county assessor by the applicable deadline, and the property qualifies
for the homestead classification in that assessment year, the assessor shall
reclassify the property to homestead for taxes payable in the following year.
(h) In the case of class 4 residential property used as a
residence for lease or rental periods of 30 days or more, the taxpayer must
either:
(1) mail or deliver a copy of the notice of proposed property
taxes to each tenant, renter, or lessee; or
(2) post a copy of the notice in a conspicuous place on the
premises of the property.
The notice must be mailed or posted by the taxpayer by
November 27 or within three days of receipt of the notice, whichever is
later. A taxpayer may notify the county
treasurer of the address of the taxpayer, agent, caretaker, or manager of the
premises to which the notice must be mailed in order to fulfill the
requirements of this paragraph.
(i) For purposes of this subdivision and subdivision 6,
"metropolitan special taxing districts" means the following taxing
districts in the seven-county metropolitan area that levy a property tax for
any of the specified purposes listed below:
(1) Metropolitan Council under section 473.132, 473.167,
473.249, 473.325, 473.446, 473.521, 473.547, or 473.834;
(2) Metropolitan Airports Commission under section 473.667,
473.671, or 473.672; and
(3) Metropolitan Mosquito Control Commission under section 473.711.
For purposes of this section, any levies made by the regional
rail authorities in the county of Anoka, Carver, Dakota, Hennepin, Ramsey,
Scott, or Washington under chapter 398A shall be included with the appropriate
county's levy.
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(j) The governing body of a county, city, or school district
may, with the consent of the county board, include supplemental information
with the statement of proposed property taxes about the impact of state aid
increases or decreases on property tax increases or decreases and on the level
of services provided in the affected jurisdiction. This supplemental information may include
information for the following year, the current year, and for as many
consecutive preceding years as deemed appropriate by the governing body of the
county, city, or school district. It may
include only information regarding:
(1) the impact of inflation as measured by the implicit price
deflator for state and local government purchases;
(2) population growth and decline;
(3) state or federal government action; and
(4) other financial factors that affect the level of property
taxation and local services that the governing body of the county, city, or
school district may deem appropriate to include.
The information may be presented using tables, written
narrative, and graphic representations and may contain instruction toward
further sources of information or opportunity for comment.
EFFECTIVE
DATE. This section is effective for
notices prepared in 2010, for taxes payable in 2011 and thereafter.
Sec. 19.
Minnesota Statutes 2009 Supplement, section 275.70, subdivision 5, as
amended by Laws 2010, chapter 215, article 13, section 3, is amended to
read:
Subd. 5. Special levies. "Special levies" means those
portions of ad valorem taxes levied by a local governmental unit for the
following purposes or in the following manner:
(1) to pay the costs of the principal and interest on bonded
indebtedness or to reimburse for the amount of liquor store revenues used to
pay the principal and interest due on municipal liquor store bonds in the year
preceding the year for which the levy limit is calculated;
(2) to pay the costs of principal and interest on
certificates of indebtedness issued for any corporate purpose except for the
following:
(i) tax anticipation or aid anticipation certificates of
indebtedness;
(ii) certificates of indebtedness issued under sections
298.28 and 298.282;
(iii) certificates of indebtedness used to fund current
expenses or to pay the costs of extraordinary expenditures that result from a
public emergency; or
(iv) certificates of indebtedness used to fund an
insufficiency in tax receipts or an insufficiency in other revenue sources;
(3) to provide for the bonded indebtedness portion of
payments made to another political subdivision of the state of Minnesota;
(4) to fund payments made to the Minnesota State Armory
Building Commission under section 193.145, subdivision 2, to retire the
principal and interest on armory construction bonds;
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(5) property taxes approved
by voters which are levied against the referendum market value as provided
under section 275.61;
(6) to fund matching
requirements needed to qualify for federal or state grants or programs to the
extent that either (i) the matching requirement exceeds the matching
requirement in calendar year 2001, or (ii) it is a new matching requirement
that did not exist prior to 2002;
(7) to pay the expenses
reasonably and necessarily incurred in preparing for or repairing the effects
of natural disaster including the occurrence or threat of widespread or severe
damage, injury, or loss of life or property resulting from natural causes, in
accordance with standards formulated by the Emergency Services Division of the
state Department of Public Safety, as allowed by the commissioner of revenue
under section 275.74, subdivision 2;
(8) pay amounts required to
correct an error in the levy certified to the county auditor by a city or
county in a levy year, but only to the extent that when added to the preceding
year's levy it is not in excess of an applicable statutory, special law or
charter limitation, or the limitation imposed on the governmental subdivision
by sections 275.70 to 275.74 in the preceding levy year;
(9) to pay an abatement
under section 469.1815;
(10) to pay any costs
attributable to increases in the employer contribution rates under chapter 353,
or locally administered pension plans, that are effective after June 30, 2001;
(11) to pay the operating or
maintenance costs of a county jail as authorized in section 641.01 or 641.262,
or of a correctional facility as defined in section 241.021, subdivision 1,
paragraph (f), to the extent that the county can demonstrate to the commissioner
of revenue that the amount has been included in the county budget as a direct
result of a rule, minimum requirement, minimum standard, or directive of the
Department of Corrections, or to pay the operating or maintenance costs of a
regional jail as authorized in section 641.262.
For purposes of this clause, a district court order is not a rule,
minimum requirement, minimum standard, or directive of the Department of
Corrections. If the county utilizes this
special levy, except to pay operating or maintenance costs of a new regional
jail facility under sections 641.262 to 641.264 which will not replace an
existing jail facility, any amount levied by the county in the previous levy
year for the purposes specified under this clause and included in the county's
previous year's levy limitation computed under section 275.71, shall be
deducted from the levy limit base under section 275.71, subdivision 2, when
determining the county's current year levy limitation. The county shall provide the necessary
information to the commissioner of revenue for making this determination;
(12) to pay for operation of
a lake improvement district, as authorized under section 103B.555. If the county utilizes this special levy, any
amount levied by the county in the previous levy year for the purposes
specified under this clause and included in the county's previous year's levy
limitation computed under section 275.71 shall be deducted from the levy limit
base under section 275.71, subdivision 2, when determining the county's current
year levy limitation. The county shall
provide the necessary information to the commissioner of revenue for making
this determination;
(13) to repay a state or
federal loan used to fund the direct or indirect required spending by the local
government due to a state or federal transportation project or other state or
federal capital project. This authority
may only be used if the project is not a local government initiative;
(14) to pay for court
administration costs as required under section 273.1398, subdivision 4b, less
the (i) county's share of transferred fines and fees collected by the district
courts in the county for calendar year 2001 and (ii) the aid amount certified
to be paid to the county in 2004 under section 273.1398, subdivision 4c; however,
for taxes levied to pay for these costs in the year in which the court
financing is transferred to the state, the amount under this clause is limited
to the amount of aid the county is certified to receive under section 273.1398,
subdivision 4a;
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(15) to fund a police or firefighters relief association as
required under section 69.77 to the extent that the required amount exceeds the
amount levied for this purpose in 2001;
(16) for purposes of a storm sewer improvement district under
section 444.20;
(17) to pay for the maintenance and support of a city or
county society for the prevention of cruelty to animals under section 343.11,
but not to exceed in any year $4,800 or the sum of $1 per capita based on the county's
or city's population as of the most recent federal census, whichever is
greater. If the city or county uses this
special levy, any amount levied by the city or county in the previous levy year
for the purposes specified in this clause and included in the city's or
county's previous year's levy limit computed under section 275.71, must be
deducted from the levy limit base under section 275.71, subdivision 2, in
determining the city's or county's current year levy limit;
(18) for counties, to pay for the increase in their share of
health and human service costs caused by reductions in federal health and human
services grants effective after September 30, 2007;
(19) for a city, for the costs reasonably and necessarily
incurred for securing, maintaining, or demolishing foreclosed or abandoned
residential properties, as allowed by the commissioner of revenue under section
275.74, subdivision 2. A city must have
either (i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a
foreclosure rate in 2007 in the city or in a zip code area of the city that is
at least 50 percent higher than the average foreclosure rate in the
metropolitan area, as defined in section 473.121, subdivision 2, to use this
special levy. For purposes of this
paragraph, "foreclosure rate" means the number of foreclosures, as
indicated by sheriff sales records, divided by the number of households in the
city in 2007;
(20) for a city, for the unreimbursed costs of redeployed
traffic-control agents and lost traffic citation revenue due to the collapse of
the Interstate 35W bridge, as certified to the Federal Highway Administration;
(21) to pay costs attributable to wages and benefits for
sheriff, police, and fire personnel. If
a local governmental unit did not use this special levy in the previous year
its levy limit base under section 275.71 shall be reduced by the amount equal
to the amount it levied for the purposes specified in this clause in the
previous year;
(22) an amount equal to any reductions in the certified aids or
credits payable under sections 477A.011 to 477A.014, and section 273.1384, due
to unallotment under section 16A.152 or reductions under another provision of
law. The amount of the levy allowed
under this clause is equal to the amount unallotted or reduced in the calendar
year in which the tax is levied unless the unallotment or reduction amount is
not known by September 1 of the levy year, and the local government has not
adjusted its levy under section 275.065, subdivision 6, or 275.07, subdivision
6, in which case the unallotment or reduction amount may be levied in the
following year;
(23) to pay for the difference between one-half of the costs
of confining sex offenders undergoing the civil commitment process and any
state payments for this purpose pursuant to section 253B.185, subdivision 5;
(24) for a county to pay the costs of the first year of
maintaining and operating a new facility or new expansion, either of which
contains courts, corrections, dispatch, criminal investigation labs, or other public
safety facilities and for which all or a portion of the funding for the site
acquisition, building design, site preparation, construction, and related
equipment was issued or authorized prior to the imposition of levy limits in
2008. The levy limit base shall then be
increased by an amount equal to the new facility's first full year's operating
costs as described in this clause; and
(25) for the estimated amount of reduction to market value
credit reimbursements under section 273.1384 for credits payable in the year in
which the levy is payable.; and
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(26) to pay the estimated
costs of all salaries and expenses of county veteran service officers, as
provided under section 197.60, subdivision 4.
EFFECTIVE DATE. This section is effective for taxes payable in 2011
and thereafter.
Sec. 20. Minnesota Statutes 2008, section 275.71,
subdivision 4, is amended to read:
Subd. 4. Adjusted
levy limit base. For taxes levied in
2008 through 2010, the adjusted levy limit base is equal to the levy limit base
computed under subdivision 2 or section 275.72, multiplied by:
(1) one plus the lesser
of 3.9 percent or the percentage growth in the implicit price deflator,
but the percentage shall not be less than zero or exceed 3.9 percent;
(2) one plus a percentage
equal to 50 percent of the percentage increase in the number of households, if
any, for the most recent 12-month period for which data is available; and
(3) one plus a percentage
equal to 50 percent of the percentage increase in the taxable market value of
the jurisdiction due to new construction of class 3 property, as defined in
section 273.13, subdivision 4, except for state-assessed utility and railroad
property, for the most recent year for which data is available.
EFFECTIVE DATE. This section is effective for taxes levied in 2010
and thereafter.
Sec. 21. Minnesota Statutes 2008, section 276.02, is
amended to read:
276.02 TREASURER TO BE COLLECTOR.
The county treasurer shall
collect all taxes extended on the tax lists of the county and the fines,
forfeitures, or penalties received by any person or officer for the use of the
county. The treasurer shall collect the
taxes according to law and credit them to the proper funds. This section does not apply to fines and penalties
accruing to municipal corporations for the violation of their ordinances that
are recoverable before a city justice.
Taxes, fines, interest, and penalties must be paid with United States
currency or by check or, money order, or electronic payments,
including, but not limited to, automated clearing house transactions and federal
wires drawn on a bank or other financial institution in the United
States. The county board may by
resolution authorize the treasurer to impose a charge for any dishonored checks
or electronic payments. The charges for
dishonored payment of property taxes may be added to the tax, shall constitute
a lien on the property, and when collected shall be distributed to the county.
The county board may, by
resolution, authorize the treasurer and/or other designees to accept payments
of real property taxes by credit card provided that a fee is charged for its
use. The fee charged must be
commensurate with the costs assessed by the card issuer. If a credit card transaction under this
section is subsequently voided or otherwise reversed, the lien of real property
taxes under section 272.31 is revived and attaches in the manner and time
provided in that section as though the credit card transaction had never
occurred, and the voided or reversed credit card transaction shall not impair
the right of a lienholder under section 272.31 to enforce the lien in its
favor.
EFFECTIVE DATE. This section is effective for property taxes payable
in 2011 and thereafter.
Sec. 22. Minnesota Statutes 2009 Supplement, section
276.04, subdivision 2, is amended to read:
Subd. 2. Contents
of tax statements. (a) The treasurer
shall provide for the printing of the tax statements. The commissioner of revenue shall prescribe
the form of the property tax statement and its contents. The tax statement must not state or imply
that property tax credits are paid by the state of Minnesota. The statement must contain a tabulated
statement of the dollar amount due to each taxing authority and the amount of
the state tax from the parcel
Journal of the House - 96th
Day - Tuesday, May 4, 2010 - Top of Page 11055
of real property for which a
particular tax statement is prepared.
The dollar amounts attributable to the county, the state tax, the voter
approved school tax, the other local school tax, the township or municipality, and
the total of the metropolitan each special taxing districts
district as defined in section 275.065, subdivision 3, paragraph (i)
275.066, must be separately stated. The
amounts due all other special taxing districts, if any, may be aggregated
except that any levies made by the regional rail authorities in the county of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be listed on a separate line directly under the appropriate county's
levy. If the county levy under this
paragraph includes an amount for a lake improvement district as defined under
sections 103B.501 to 103B.581, the amount attributable for that purpose must be
separately stated from the remaining county levy amount. In the case of Ramsey County, if the county
levy under this paragraph includes an amount for public library service under
section 134.07, the amount attributable for that purpose may be separated from
the remaining county levy amount. The
amount of the tax on homesteads qualifying under the senior citizens' property
tax deferral program under chapter 290B is the total amount of property tax
before subtraction of the deferred property tax amount. The amount of the tax on contamination value
imposed under sections 270.91 to 270.98, if any, must also be separately
stated. The dollar amounts, including
the dollar amount of any special assessments, may be rounded to the nearest
even whole dollar. For purposes of this
section whole odd-numbered dollars may be adjusted to the next higher even-numbered
dollar. The amount of market value
excluded under section 273.11, subdivision 16, if any, must also be listed on
the tax statement.
(b) The property tax statements for manufactured homes and
sectional structures taxed as personal property shall contain the same
information that is required on the tax statements for real property.
(c) Real and personal property tax statements must contain
the following information in the order given in this paragraph. The information must contain the current year
tax information in the right column with the corresponding information for the
previous year in a column on the left:
(1) the property's estimated market value under section
273.11, subdivision 1;
(2) the property's taxable market value after reductions
under section 273.11, subdivisions 1a and 16;
(3) the property's gross tax, before credits;
(4) for homestead residential and agricultural properties,
the credits under section 273.1384;
(5) any credits received under sections 273.119; 273.1234 or
273.1235; 273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 473H.10,
except that the amount of credit received under section 273.135 must be
separately stated and identified as "taconite tax relief"; and
(6) the net tax payable in the manner required in paragraph
(a).
(d) If the county uses envelopes for mailing property tax
statements and if the county agrees, a taxing district may include a notice
with the property tax statement notifying taxpayers when the taxing district
will begin its budget deliberations for the current year, and encouraging
taxpayers to attend the hearings. If the
county allows notices to be included in the envelope containing the property
tax statement, and if more than one taxing district relative to a given
property decides to include a notice with the tax statement, the county
treasurer or auditor must coordinate the process and may combine the
information on a single announcement.
EFFECTIVE
DATE. This section is effective for tax
statements relating to taxes payable in 2012 and thereafter.
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of Page 11056
Sec. 23.
Minnesota Statutes 2009 Supplement, section 279.01, subdivision 1, is
amended to read:
Subdivision 1. Due dates; penalties. Except as provided in subdivision 3 or 4,
on May 16 or 21 days after the postmark date on the envelope containing the
property tax statement, whichever is later, a penalty accrues and thereafter is
charged upon all unpaid taxes on real estate on the current lists in the hands
of the county treasurer. The penalty is
at a rate of two percent on homestead property until May 31 and four percent on
June 1. The penalty on nonhomestead
property is at a rate of four percent until May 31 and eight percent on June
1. This penalty does not accrue until
June 1 of each year, or 21 days after the postmark date on the envelope
containing the property tax statements, whichever is later, on commercial use
real property used for seasonal residential recreational purposes and
classified as class 1c or 4c, and on other commercial use real property classified
as class 3a, provided that over 60 percent of the gross income earned by the
enterprise on the class 3a property is earned during the months of May, June,
July, and August. In order for the first
half of the tax due on class 3a property to be paid after May 15 and before
June 1, or 21 days after the postmark date on the envelope containing the
property tax statement, whichever is later, without penalty, the owner of the
property must attach an affidavit to the payment attesting to compliance with
the income provision of this subdivision.
Thereafter, for both homestead and nonhomestead property, on the first
day of each month beginning July 1, up to and including October 1 following, an
additional penalty of one percent for each month accrues and is charged on all
such unpaid taxes provided that if the due date was extended beyond May 15 as
the result of any delay in mailing property tax statements no additional
penalty shall accrue if the tax is paid by the extended due date. If the tax is not paid by the extended due
date, then all penalties that would have accrued if the due date had been May
15 shall be charged. When the taxes
against any tract or lot exceed $250 $100, one-half thereof may
be paid prior to May 16 or 21 days after the postmark date on the envelope
containing the property tax statement, whichever is later; and, if so paid, no
penalty attaches; the remaining one-half may be paid at any time prior to
October 16 following, without penalty; but, if not so paid, then a penalty of
two percent accrues thereon for homestead property and a penalty of four
percent on nonhomestead property.
Thereafter, for homestead property, on the first day of November an
additional penalty of four percent accrues and on the first day of December
following, an additional penalty of two percent accrues and is charged on all
such unpaid taxes. Thereafter, for
nonhomestead property, on the first day of November and December following, an
additional penalty of four percent for each month accrues and is charged on all
such unpaid taxes. If one-half of such
taxes are not paid prior to May 16 or 21 days after the postmark date on the
envelope containing the property tax statement, whichever is later, the same
may be paid at any time prior to October 16, with accrued penalties to the date
of payment added, and thereupon no penalty attaches to the remaining one-half
until October 16 following.
This section applies to payment of personal property taxes
assessed against improvements to leased property, except as provided by section
277.01, subdivision 3.
A county may provide by resolution that in the case of a
property owner that has multiple tracts or parcels with aggregate taxes
exceeding $250 $100, payments may be made in installments as
provided in this subdivision.
The county treasurer may accept payments of more or less than
the exact amount of a tax installment due.
Payments must be applied first to the oldest installment that is due but
which has not been fully paid. If the
accepted payment is less than the amount due, payments must be applied first to
the penalty accrued for the year or the installment being paid. Acceptance of partial payment of tax does not
constitute a waiver of the minimum payment required as a condition for filing
an appeal under section 278.03 or any other law, nor does it affect the order
of payment of delinquent taxes under section 280.39.
EFFECTIVE
DATE. This section is effective for taxes
payable in 2011 and thereafter.
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of Page 11057
Sec. 24. Minnesota
Statutes 2008, section 279.025, is amended to read:
279.025 PAYMENT OF DELINQUENT
PROPERTY TAXES, SPECIAL ASSESSMENTS.
Payment of delinquent property tax and related interest and
penalties and special assessments shall be paid with United States currency or
by check or, money order, or electronic means, including, but
not limited to, automated clearing house transactions and federal wires
drawn on a bank or other financial institution in the United States.
EFFECTIVE
DATE. This section is effective for
property taxes payable in 2011 and thereafter.
Sec. 25. Minnesota
Statutes 2009 Supplement, section 290B.03, subdivision 1, is amended to read:
Subdivision 1. Program qualifications. The qualifications for the senior
citizens' property tax deferral program are as follows:
(1) the property must be owned and occupied as a homestead by
a person 65 years of age or older. In
the case of a married couple, at least one of the spouses must be at least 65
years old at the time the first property tax deferral is granted, regardless of
whether the property is titled in the name of one spouse or both spouses, or
titled in another way that permits the property to have homestead status, and
the other spouse must be at least 62 years of age;
(2) the total household income of the qualifying homeowners,
as defined in section 290A.03, subdivision 5, for the calendar year preceding
the year of the initial application may not exceed $60,000 $75,000;
(3) the homestead must have been owned and occupied as the
homestead of at least one of the qualifying homeowners for at least 15 years
prior to the year the initial application is filed;
(4) there are no state or federal tax liens or judgment liens
on the homesteaded property;
(5) there are no mortgages or other liens on the property that
secure future advances, except for those subject to credit limits that result
in compliance with clause (6); and
(6) the total unpaid balances of debts secured by mortgages
and other liens on the property, including unpaid and delinquent special
assessments and interest and any delinquent property taxes, penalties, and
interest, but not including property taxes payable during the year, does not
exceed 75 percent of the assessor's estimated market value for the year.
EFFECTIVE
DATE. This section is effective July 1,
2010, and thereafter.
Sec. 26. Minnesota
Statutes 2008, section 290B.03, is amended by adding a subdivision to read:
Subd. 1a.
Special program
qualifications; spouse of service member who died while in active service or
deceased disabled veteran. (a)
Notwithstanding the requirements of subdivision 1, clauses (1) and (3), but
subject to all the other requirements of subdivision 1, homestead property
owned and occupied by the spouse of either a service member who died while in
active service, or a deceased disabled veteran, is eligible to participate in
the program established under this chapter.
For purposes of this subdivision, "service member who died while in
active service" means a person serving in any branch or unit of the United
States armed forces who has died from a service-connected cause while serving
in active service, as defined in section 190.05, subdivision 5, as indicated on
United States Government Form DD1300 or DD2064.
For purposes of this subdivision, "deceased disabled veteran"
means a deceased disabled veteran who was honorably discharged from the United
States armed forces, as indicated by United States Government Form DD214 or
other official military discharge papers, and certified by the United States
Veterans Administration as having a total (100 percent) and permanent
service-connected disability prior to the veteran's death.
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of Page 11058
(b) Applications under this subdivision are exempt from the
age requirements under the application process in section 290B.04, subdivision
1. The commissioner may require
certifications as are necessary to ensure eligibility under this subdivision.
EFFECTIVE
DATE. This section is effective for taxes
payable in 2011 and thereafter.
Sec. 27.
Minnesota Statutes 2008, section 290B.04, subdivision 3, is amended to
read:
Subd. 3. Excess-income certification by taxpayer. A taxpayer whose initial application has
been approved under subdivision 2 shall notify the commissioner of revenue in
writing by July 1 if the taxpayer's household income for the preceding calendar
year exceeded $60,000 $75,000.
The certification must state the homeowner's total household income for
the previous calendar year. No property
taxes may be deferred under this chapter in any year following the year in
which a program participant filed or should have filed an excess-income
certification under this subdivision, unless the participant has filed a
resumption of eligibility certification as described in subdivision 4.
EFFECTIVE
DATE. This section is effective July 1,
2010, and thereafter.
Sec. 28.
Minnesota Statutes 2008, section 290B.04, subdivision 4, is amended to
read:
Subd. 4. Resumption of eligibility certification by
taxpayer. A taxpayer who has
previously filed an excess-income certification under subdivision 3 may resume
program participation if the taxpayer's household income for a subsequent year
is $60,000 $75,000 or less.
If the taxpayer chooses to resume program participation, the taxpayer
must notify the commissioner of revenue in writing by July 1 of the year
following a calendar year in which the taxpayer's household income is $60,000
$75,000 or less. The certification
must state the taxpayer's total household income for the previous calendar
year. Once a taxpayer resumes
participation in the program under this subdivision, participation will
continue until the taxpayer files a subsequent excess-income certification
under subdivision 3 or until participation is terminated under section 290B.08,
subdivision 1.
EFFECTIVE
DATE. This section is effective July 1,
2010, and thereafter.
Sec. 29.
Minnesota Statutes 2008, section 290B.05, subdivision 1, is amended to
read:
Subdivision 1. Determination by commissioner. The commissioner shall determine each
qualifying homeowner's "annual maximum property tax amount" following
approval of the homeowner's initial application and following the receipt of a
resumption of eligibility certification.
The "annual maximum property tax amount" equals three percent
of the homeowner's total household income for the year preceding either the
initial application or the resumption of eligibility certification, whichever
is applicable. Following approval of the
initial application, the commissioner shall determine the qualifying
homeowner's "maximum allowable deferral." No tax may be deferred
relative to the appropriate assessment year for any homeowner whose total
household income for the previous year exceeds $60,000 $75,000. No tax shall be deferred in any year in which
the homeowner does not meet the program qualifications in section 290B.03. The maximum allowable total deferral is equal
to 75 percent of the assessor's estimated market value for the year, less the
balance of any mortgage loans and other amounts secured by liens against the
property at the time of application, including any unpaid and delinquent special
assessments and interest and any delinquent property taxes, penalties, and
interest, but not including property taxes payable during the year.
EFFECTIVE
DATE. This section is effective July 1,
2010, and thereafter.
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Sec. 30. Minnesota Statutes 2008, section 428A.12, is
amended to read:
428A.12 PETITION REQUIRED.
No action may be taken under
sections 428A.13 and 428A.14 unless owners of 25 50 percent or
more of the housing units that would be subject to fees in the proposed housing
improvement area file a petition requesting a public hearing on the proposed
action with the city clerk. No action
may be taken under section 428A.14 to impose a fee unless owners of 25
50 percent or more of the housing units subject to the proposed fee file a
petition requesting a public hearing on the proposed fee with the city clerk or
other appropriate official.
EFFECTIVE DATE. This section is effective for petitions filed
beginning July 1, 2010.
Sec. 31. Minnesota Statutes 2008, section 428A.18,
subdivision 2, is amended to read:
Subd. 2. Requirements
for veto. If residents of 35
45 percent or more of the housing units in the area subject to the fee file
an objection to the ordinance adopted by the city under section 428A.13 with
the city clerk before the effective date of the ordinance, the ordinance does
not become effective. If owners of 35
45 percent or more of the housing units' tax capacity subject to the fee
under section 428A.14 file an objection with the city clerk before the
effective date of the resolution, the resolution does not become
effective.
EFFECTIVE DATE. This section is effective beginning July 1, 2010.
Sec. 32. Minnesota Statutes 2008, section 473H.05,
subdivision 1, is amended to read:
Subdivision 1. Before
March June 1 for next year's taxes. An owner or owners of certified long-term
agricultural land may apply to the authority with jurisdiction over the land on
forms provided by the commissioner of agriculture for the creation of an
agricultural preserve at any time. Land
for which application is received prior to March June 1 of any
year shall be assessed pursuant to section 473H.10 for taxes payable in the
following year. Land for which
application is received on or after March June 1 of any year
shall be assessed pursuant to section 473H.10 in the following year. The application shall be executed and
acknowledged in the manner required by law to execute and acknowledge a deed
and shall contain at least the following information and such other information
as the commissioner deems necessary:
(a) Legal description of the
area proposed to be designated and parcel identification numbers if so
designated by the county auditor and the certificate of title number if the
land is registered;
(b) Name and address of
owner;
(c) An affidavit by the
authority evidencing that the land is certified long-term agricultural land at
the date of application;
(d) A statement by the owner
covenanting that the land shall be kept in agricultural use, and shall be used
in accordance with the provisions of sections 473H.02 to 473H.17 which exist on
the date of application and providing that the restrictive covenant shall be
binding on the owner or the owner's successor or assignee, and shall run with
the land.
EFFECTIVE DATE. This section is effective the day following final
enactment, except that in 2010 the application date in this section shall be
extended to August 1.
Sec. 33. Minnesota Statutes 2009 Supplement, section
477A.011, subdivision 36, as amended by Laws 2010, chapter 215, article 13,
section 4, is amended to read:
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Day - Tuesday, May 4, 2010 - Top of Page 11060
Subd. 36. City
aid base. (a) Except as otherwise
provided in this subdivision, "city aid base" is zero.
(b) The city aid base for
any city with a population less than 500 is increased by $40,000 for aids
payable in calendar year 1995 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $40,000 for aids payable in calendar year 1995 only, provided
that:
(i) the average total tax capacity
rate for taxes payable in 1995 exceeds 200 percent;
(ii) the city portion of the
tax capacity rate exceeds 100 percent; and
(iii) its city aid base is
less than $60 per capita.
(c) The city aid base for a
city is increased by $20,000 in 1998 and thereafter and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c),
is also increased by $20,000 in calendar year 1998 only, provided that:
(i) the city has a
population in 1994 of 2,500 or more;
(ii) the city is located in
a county, outside of the metropolitan area, which contains a city of the first
class;
(iii) the city's net tax
capacity used in calculating its 1996 aid under section 477A.013 is less than
$400 per capita; and
(iv) at least four percent
of the total net tax capacity, for taxes payable in 1996, of property located
in the city is classified as railroad property.
(d) The city aid base for a
city is increased by $200,000 in 1999 and thereafter and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c),
is also increased by $200,000 in calendar year 1999 only, provided that:
(i) the city was
incorporated as a statutory city after December 1, 1993;
(ii) its city aid base does
not exceed $5,600; and
(iii) the city had a
population in 1996 of 5,000 or more.
(e) The city aid base for a
city is increased by $150,000 for aids payable in 2000 and thereafter, and the
maximum amount of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $150,000 in calendar year 2000 only,
provided that:
(1) the city has a
population that is greater than 1,000 and less than 2,500;
(2) its commercial and industrial
percentage for aids payable in 1999 is greater than 45 percent; and
(3) the total market value
of all commercial and industrial property in the city for assessment year 1999
is at least 15 percent less than the total market value of all commercial and
industrial property in the city for assessment year 1998.
(f) The city aid base for a
city is increased by $200,000 in 2000 and thereafter, and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c),
is also increased by $200,000 in calendar year 2000 only, provided that:
Journal of the House - 96th Day - Tuesday, May 4, 2010 - Top
of Page 11061
(1) the city had a population in 1997 of 2,500 or more;
(2) the net tax capacity of the city used in calculating its
1999 aid under section 477A.013 is less than $650 per capita;
(3) the pre-1940 housing percentage of the city used in calculating
1999 aid under section 477A.013 is greater than 12 percent;
(4) the 1999 local government aid of the city under section
477A.013 is less than 20 percent of the amount that the formula aid of the city
would have been if the need increase percentage was 100 percent; and
(5) the city aid base of the city used in calculating aid
under section 477A.013 is less than $7 per capita.
(g) The city aid base for a city is increased by $102,000 in
2000 and thereafter, and the maximum amount of total aid it may receive under
section 477A.013, subdivision 9, paragraph (c), is also increased by $102,000
in calendar year 2000 only, provided that:
(1) the city has a population in 1997 of 2,000 or more;
(2) the net tax capacity of the city used in calculating its
1999 aid under section 477A.013 is less than $455 per capita;
(3) the net levy of the city used in calculating 1999 aid
under section 477A.013 is greater than $195 per capita; and
(4) the 1999 local government aid of the city under section
477A.013 is less than 38 percent of the amount that the formula aid of the city
would have been if the need increase percentage was 100 percent.
(h) The city aid base for a city is increased by $32,000 in
2001 and thereafter, and the maximum amount of total aid it may receive under
section 477A.013, subdivision 9, paragraph (c), is also increased by $32,000 in
calendar year 2001 only, provided that:
(1) the city has a population in 1998 that is greater than
200 but less than 500;
(2) the city's revenue need used in calculating aids payable
in 2000 was greater than $200 per capita;
(3) the city net tax capacity for the city used in
calculating aids available in 2000 was equal to or less than $200 per capita;
(4) the city aid base of the city used in calculating aid
under section 477A.013 is less than $65 per capita; and
(5) the city's formula aid for aids payable in 2000 was
greater than zero.
(i) The city aid base for a city is increased by $7,200 in 2001
and thereafter, and the maximum amount of total aid it may receive under
section 477A.013, subdivision 9, paragraph (c), is also increased by $7,200 in
calendar year 2001 only, provided that:
(1) the city had a population in 1998 that is greater than
200 but less than 500;
(2) the city's commercial industrial percentage used in
calculating aids payable in 2000 was less than ten percent;
Journal of the House - 96th Day - Tuesday, May 4, 2010 - Top
of Page 11062
(3) more than 25 percent of the city's population was 60
years old or older according to the 1990 census;
(4) the city aid base of the city used in calculating aid
under section 477A.013 is less than $15 per capita; and
(5) the city's formula aid for aids payable in 2000 was
greater than zero.
(j) The city aid base for a city is increased by $45,000 in
2001 and thereafter and by an additional $50,000 in calendar years 2002 to
2011, and the maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (c), is also increased by $45,000 in
calendar year 2001 only, and by $50,000 in calendar year 2002 only, provided
that:
(1) the net tax capacity of the city used in calculating its
2000 aid under section 477A.013 is less than $810 per capita;
(2) the population of the city declined more than two percent
between 1988 and 1998;
(3) the net levy of the city used in calculating 2000 aid
under section 477A.013 is greater than $240 per capita; and
(4) the city received less than $36 per capita in aid under
section 477A.013, subdivision 9, for aids payable in 2000.
(k) The city aid base for a city with a population of 10,000
or more which is located outside of the seven-county metropolitan area is increased
in 2002 and thereafter, and the maximum amount of total aid it may receive
under section 477A.013, subdivision 9, paragraph (b) or (c), is also increased
in calendar year 2002 only, by an amount equal to the lesser of:
(1)(i) the total population of the city, as determined by the
United States Bureau of the Census, in the 2000 census, (ii) minus 5,000, (iii)
times 60; or
(2) $2,500,000.
(l) The city aid base is increased by $50,000 in 2002 and
thereafter, and the maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (c), is also increased by $50,000 in
calendar year 2002 only, provided that:
(1) the city is located in the seven-county metropolitan
area;
(2) its population in 2000 is between 10,000 and 20,000; and
(3) its commercial industrial percentage, as calculated for
city aid payable in 2001, was greater than 25 percent.
(m) The city aid base for a city is increased by $150,000 in
calendar years 2002 to 2011 and by an additional $75,000 in calendar years 2009
to 2014 and the maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (c), is also increased by $150,000 in
calendar year 2002 only and by $75,000 in calendar year 2009 only, provided
that:
(1) the city had a population of at least 3,000 but no more
than 4,000 in 1999;
(2) its home county is located within the seven-county
metropolitan area;
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(3) its pre-1940 housing
percentage is less than 15 percent; and
(4) its city net tax
capacity per capita for taxes payable in 2000 is less than $900 per capita.
(n) The city aid base for a
city is increased by $200,000 beginning in calendar year 2003 and the maximum
amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year 2003 only,
provided that the city qualified for an increase in homestead and agricultural
credit aid under Laws 1995, chapter 264, article 8, section 18.
(o) The city aid base for a
city is increased by $200,000 in 2004 only and the maximum amount of total aid
it may receive under section 477A.013, subdivision 9, is also increased by
$200,000 in calendar year 2004 only, if the city is the site of a nuclear dry
cask storage facility.
(p) The city aid base for a
city is increased by $10,000 in 2004 and thereafter and the maximum total aid
it may receive under section 477A.013, subdivision 9, is also increased by
$10,000 in calendar year 2004 only, if the city was included in a federal major
disaster designation issued on April 1, 1998, and its pre-1940 housing stock
was decreased by more than 40 percent between 1990 and 2000.
(q) The city aid base for a
city is increased by $30,000 in 2009 and thereafter and the maximum total aid
it may receive under section 477A.013, subdivision 9, is also increased by
$25,000 in calendar year 2006 only if the city had a population in 2003 of at
least 1,000 and has a state park for which the city provides rescue services
and which comprised at least 14 percent of the total geographic area included
within the city boundaries in 2000.
(r) The city aid base for a
city is increased by $80,000 in 2009 and thereafter and the minimum and maximum
amount of total aid it may receive under section 477A.013, subdivision 9, is
also increased by $80,000 in calendar year 2009 only, if:
(1) as of May 1, 2006, at
least 25 percent of the tax capacity of the city is proposed to be placed in
trust status as tax-exempt Indian land;
(2) the placement of the
land is being challenged administratively or in court; and
(3) due to the challenge,
the land proposed to be placed in trust is still on the tax rolls as of May 1,
2006.
(s) The city aid base for a
city is increased by $100,000 in 2007 and thereafter and the minimum and
maximum total amount of aid it may receive under this section is also increased
in calendar year 2007 only, provided that:
(1) the city has a 2004
estimated population greater than 200 but less than 2,000;
(2) its city net tax
capacity for aids payable in 2006 was less than $300 per capita;
(3) the ratio of its pay
2005 tax levy compared to its city net tax capacity for aids payable in 2006
was greater than 110 percent; and
(4) it is located in a
county where at least 15,000 acres of land are classified as tax-exempt Indian
reservations according to the 2004 abstract of tax-exempt property.
(t) The city aid base for a
city is increased by $30,000 in 2009 only, and the maximum total aid it may
receive under section 477A.013, subdivision 9, is also increased by $30,000 in
calendar year 2009, only if the city had a population in 2005 of less than
3,000 and the city's boundaries as of 2007 were formed by the consolidation of
two cities and one township in 2002.
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of Page 11064
(u) The city aid base for a city is increased by $100,000 in
2009 and thereafter, and the maximum total aid it may receive under section
477A.013, subdivision 9, is also increased by $100,000 in calendar year 2009
only, if the city had a city net tax capacity for aids payable in 2007 of less
than $150 per capita and the city experienced flooding on March 14, 2007, that
resulted in evacuation of at least 40 homes.
(v) The city aid base for a city is increased by $100,000 in
2009 to 2013, and the maximum total aid it may receive under section 477A.013,
subdivision 9, is also increased by $100,000 in calendar year 2009 only, if the
city:
(1) is located outside of the Minneapolis-St. Paul
standard metropolitan statistical area;
(2) has a 2005 population greater than 7,000 but less than
8,000; and
(3) has a 2005 net tax capacity per capita of less than $500.
(w) The city aid base is increased by $25,000 in calendar
years 2009 to 2013 and the maximum amount of total aid it may receive under
section 477A.013, subdivision 9, is increased by $25,000 in calendar year 2009
only, provided that:
(1) the city is located in the seven-county metropolitan area;
(2) its population in 2006 is less than 200; and
(3) the percentage of its housing stock built before 1940,
according to the 2000 United States Census, is greater than 40 percent.
(x) The city aid base is increased by $90,000 in calendar year
2009 only and the minimum and maximum total amount of aid it may receive under section
477A.013, subdivision 9, is also increased by $90,000 in calendar year 2009
only, provided that the city is located in the seven-county metropolitan area,
has a 2006 population between 5,000 and 7,000 and has a 1997 population of over
7,000.
(y) In calendar year 2010 only, the city aid base for a city
is increased by $225,000 if it was eligible for a $450,000 payment in calendar
year 2008 under Minnesota Statutes 2006, section 477A.011, subdivision 36,
paragraph (e), and the second half of the payment under that paragraph in
December 2008 was canceled due to the governor's unallotment. The payment under this paragraph is not
subject to any aid reductions under section 477A.0133 or any future unallotment
of the city aid under section 16A.152.
(z) The city aid base and the maximum total aid the city may
receive under section 477A.013, subdivision 9, is increased by $25,000 in
calendar year 2010 only if:
(1) the city is a first class city in the seven-county
metropolitan area with a population below 300,000; and
(2) the city has made an equivalent grant to its local
growers' association to reimburse up to $1,000 each for membership fees and
retail leases for members of the association who farm in and around Dakota
County and who incurred crop damage as a result of the hail storm in that area
on July 10, 2008.
The payment under this paragraph is not subject to any aid
reductions under section 477A.0133 or any future unallotment of the city aid
under section 16A.152.
(aa) The city aid base for a city is increased by $106,964 in
2011 only and the minimum and maximum amount of total aid it may receive under
section 477A.013, subdivision 9, is also increased by $106,964 in calendar year
2011 only, if the city had a population as defined in Minnesota Statutes,
section 477A.011, subdivision 3, that was in excess of 1,000 in 2007 and that
was less than 1,000 in 2008.
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(bb) The city aid base for a
city is increased by $50,000 in 2011 and 2012 only, and the minimum and maximum
amount of total aid it may receive under section 477A.013, subdivision 9, is
also increased by $50,000 in calendar year 2011 only, if the city is:
(1) located outside of the
seven-county metropolitan area;
(2) has a 2008 population
between 3,000 and 4,000;
(3) has a commercial
industrial percentage as defined in subdivision 32, for aids payable in 2008 of
less than ten percent; and
(4) experienced the loss of
a major manufacturing facility in the city due to a fire in April 2009.
EFFECTIVE DATE. This section is effective for aids payable in
calendar year 2011 and thereafter.
Sec. 34. Laws 2009, chapter 88, article 2, section 49,
is amended to read:
Sec. 49. TAX
ABATEMENT; NEWLY CONSTRUCTED RESIDENTIAL STRUCTURES IN FLOOD-DAMAGED
CITIES.
Subdivision 1. Eligibility. A residential structure qualifies for a
tax abatement under this section if:
(1) the structure is located
in a city that is eligible to designate a development zone under Minnesota
Statutes, section 469.1731;
(2) the structure is located
in a county designated as an emergency area under presidential declaration FEMA‑3304-EM;
(3) the structure is located
on property classified as class 1a, 1b, 2a, 4a, 4b, 4bb, or 4d under Minnesota
Statutes, section 273.13;
(4) no part of the structure
was in existence prior to January 1, 2009, unless (i) the structure is located
on property classified as 1a, 1b, 2a, 4b, or 4bb; (ii) a building permit was
issued and construction commenced in 2008; and (iii) as of March 26, 2009, the
property was owned by the original builder, was not subject to any form of
purchase contract or agreement, and had never been occupied; and
(5) construction of the
structure is commenced prior to December 31, 2010 2011. For the purposes of this clause, construction
is deemed to have been commenced if a proper building permit has been issued
and the mandatory footing or foundation inspection has been completed.
Subd. 2. Application. Application for the abatement authorized
under this section must be filed by January 2 of the year following the year in
which construction began, except that those qualifying structures for which
construction commenced in 2008 must file an application no later than January
2, 2010, for assessment years 2010 and 2011.
The application must be filed with the assessor of the county or city in
which the property is located on a form prescribed by the commissioner of
revenue.
Subd. 3. Tax
abated. (a) For a property
qualifying under subdivision 1 and classified as either 1a, 1b, 2a, 4b, or 4bb,
the tax attributable to (1) $200,000 of market value, or (2) the entire market
value of the structure, whichever is less, shall be abated. For a property qualifying under subdivision 1
and classified as class 4a or 4d, the tax attributable to (1) $20,000 of market
value per residential unit, or (2) the entire market value of the structure,
whichever is less, shall be abated.
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(b) The abatement under paragraph (a) shall be in effect for two
taxes payable years, corresponding to the two assessment years after
construction has begun. The abatement
shall not apply to any special assessments that have been levied against the
property.
Subd. 4. Reimbursement. By May 1 of each taxes payable year in
which an abatement has been authorized under this section, the auditor shall
report the amount of taxes abated for each jurisdiction within the county to
the commissioner of revenue, on a form prescribed by the commissioner. On or before September 1 of each taxes
payable year in which an abatement has been authorized under this section, the
commissioner of revenue shall reimburse each local jurisdiction for the amount
of taxes abated for the year under this section.
Subd. 5. Appropriation. The amount necessary to make the
reimbursements required under this section is annually appropriated to the
commissioner of revenue from the general fund.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 35. Laws
2009, chapter 88, article 2, section 49, the effective date, is amended to
read:
EFFECTIVE DATE. This section is effective for
assessment years 2010 to 2012 2013, for taxes payable in 2011 to 2013
2014.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 36. FISCAL DISPARITIES STUDY.
The commissioner of revenue shall conduct a study of the
metropolitan revenue distribution program contained in Minnesota Statutes,
chapter 473F, commonly known as the fiscal disparities program. By February 1, 2012, the commissioner shall
submit a report to the chairs and ranking minority members of the house of
representatives and senate tax committees consisting of the findings of the
study and identification of issues for policy makers to consider. The study must analyze:
(1) the extent to which the benefits of economic growth of
the region are shared throughout the region, especially for growth that results
from state or regional decisions;
(2) the program's impact on the variability of tax rates
across jurisdictions of the region;
(3) the program's impact on the distribution of homestead
property tax burdens across jurisdictions of the region; and
(4) the relationship between the impacts of the program and
overburden on jurisdictions containing properties that provide regional
benefits, specifically the costs those properties impose on their host
jurisdictions in excess of their tax payments.
The report must include a description of other property tax, aid,
and local development programs that interact with the fiscal disparities
program.
EFFECTIVE
DATE. This section is effective July 1,
2010.
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Sec. 37. THIEF
RIVER FALLS AIRPORT AUTHORITY; SPECIAL LEVY AUTHORITY.
If an airport authority is
established under Minnesota Statutes, section 360.042, that includes the city
of Thief River Falls within its boundaries, the authority may exercise its levy
authority through a levy on the referendum market value of the area, as defined
in Minnesota Statutes, section 126C.01, subdivision 3, in lieu of a levy on the
net tax capacity of the area. If an
authority exercises its option under this section, the intent to do so must be
stated in the joint agreement establishing the authority.
EFFECTIVE DATE. This section is effective the day following final
enactment, without local approval, as provided by Minnesota Statutes, section
654.023, subdivision 1, paragraph (a).
ARTICLE 2
PROPERTY TAX REFORM,
ACCOUNTABILITY, VALUE, AND EFFICIENCY PROVISIONS
Section 1. [6.90]
COUNCIL ON LOCAL RESULTS AND INNOVATION.
Subdivision 1. Creation. The Council on Local Results and Innovation
consists of 11 members, as follows:
(1) the state auditor;
(2) two persons who are not
members of the legislature, appointed by the chair of the Property and Local
Sales Tax Division of the house of representatives Taxes Committee;
(3) two persons who are not
members of the legislature, appointed by the designated lead minority member of
the Property and Local Sales Tax Division of the house of representatives Taxes
Committee;
(4) two persons who are not
members of the legislature, appointed by the chair of the Taxes Division on
Property Taxes of the senate Taxes Committee;
(5) two persons who are not
members of the legislature, appointed by the designated lead minority member of
the Taxes Division on Property Taxes of the senate Taxes Committee;
(6) one person who is not a
member of the legislature, appointed by the Association of Minnesota Counties;
and
(7) one person who is not a
member of the legislature, appointed by the League of Minnesota Cities.
Each appointment under clauses
(2) to (5) must include one person with expertise or interest in county
government and one person with expertise or interest in city government. The appointing authorities must use their
best efforts to ensure that a majority of council members have experience with
local performance measurement systems.
The membership of the council must include geographically balanced
representation as well as representation balanced between large and small
jurisdictions. The appointments under
clauses (2) to (7) must be made within two months of the date of enactment.
Appointees to the council
under clauses (2) to (5) serve terms of four years, except that one of each of
the initial appointments under clauses (2) to (5) shall serve a term of two
years; each appointing agent must designate which appointee is serving the
two-year term. Subsequent appointments
for members appointed under clauses (2) to (5) must be made by the council,
including appointments to replace any appointees who might resign from the
council prior to completion of their term.
Appointees under clauses (2) to (5) are not eligible to vote on
appointing their successor, nor on the successors of other appointees whose
terms are expiring contemporaneously. In
making appointments, the council shall make all possible efforts to reflect the
geographical distribution and meet the
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qualifications of appointees
required of the initial appointees.
Subsequent appointments for members appointed under clauses (6) and (7)
must be made by the original appointing authority. Appointees to the council under clauses (2)
to (7) may serve no more than two consecutive terms.
Subd. 2. Duties. (a) By February 15, 2011, the council
shall develop a standard set of approximately ten performance measures for
counties and ten performance measures for cities that will aid residents,
taxpayers, and state and local elected officials in determining the efficacy of
counties and cities in providing services, and measure residents' opinions of
those services. In developing its
measures, the council must solicit input from private citizens. Counties and cities that elect to participate
in the standard measures system shall report their results to the state auditor
under section 6.91, who shall compile the results and make them available to
all interested parties by publishing them on the auditor's Web site and report
them to the legislative tax committees.
Each year after the initial designation of performance measures, the
council shall evaluate the usefulness of the standard set of performance
measures and may revise the set by adding or removing measures as it deems
appropriate.
(b) By February 15, 2012,
the council shall develop minimum standards for comprehensive performance
measurement systems, which may vary by size and type of governing jurisdiction.
(c) In addition to its
specific duties under paragraphs (a) and (b), the council shall generally
promote the use of performance measurement for governmental entities across the
state and shall serve as a resource for all governmental entities seeking to
implement a system of local performance measurement. The council may highlight and promote systems
that are innovative, or are ones that it deems to be best practices of local
performance measurement systems across the state and nation. The council should give preference in its
recommendations to systems that are results-oriented. The council may, with the cooperation of the
state auditor, establish and foster a collaborative network of practitioners of
local performance measurement systems.
The council may support the Association of Minnesota Counties and the
League of Minnesota Cities to seek and receive private funding to provide
expert technical assistance to local governments for the purposes of
replicating best practices.
Subd. 3. Reports. (a) The council shall report its initial
set of standard performance measures to the Property and Local Sales Tax
Division of the house of representatives Taxes Committee and the Taxes Division
on Property Taxes of the senate Taxes Committee by February 28, 2011.
(b) By February 1 of each
subsequent year, the council shall report to the committees with jurisdiction
over taxes in the house of representatives and the senate on participation in
and results of the performance measurement system, along with any revisions in
the standard set of performance measures for the upcoming year. These reports may be made by the state
auditor in lieu of the council if agreed to by the auditor and the council.
Subd. 4. Operation
of council. (a) The state
auditor shall convene the initial meeting of the council.
(b) The chair of the council
shall be elected by the members. Once
elected, a chair shall serve a term of two years.
(c) Members of the council
serve without compensation.
(d) Council members shall
share and rotate responsibilities for administrative support of the council.
(e) Chapter 13D does not
apply to meetings of the council.
Meetings of the council must be open to the public and the council must
provide notice of a meeting on the state auditor's Web site at least seven days
before the meeting. A meeting of the
council occurs when a quorum is present.
(f) The council must meet at
least two times prior to the initial release of the standard set of
measurements. After the initial set has
been developed, the council must meet a minimum of once per year.
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of Page 11069
Subd. 5.
Termination. The council expires on January 1,
2020.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 2. [6.91] LOCAL PERFORMANCE MEASUREMENT AND
REPORTING.
Subdivision 1.
Reports of local performance
measures. (a) A county or city
that elects to participate in the standard measures program must report its
results to its citizens annually through publication, direct mailing, posting
on the jurisdiction's Web site, or through a public hearing at which the budget
and levy will be discussed and public input allowed.
(b) Each year, jurisdictions participating in the local
performance measurement and improvement program must file a report with the
state auditor by July 1, in a form prescribed by the auditor. All reports must include a declaration that
the jurisdiction has complied with, or will have complied with by the end of
the year, the requirement in paragraph (a).
For jurisdictions participating in the standard measures program, the
report shall consist of the jurisdiction's results for the standard set of
performance measures under section 6.90, subdivision 2, paragraph (a). In 2012, jurisdictions participating in the
comprehensive performance measurement program must submit a resolution approved
by its local governing body indicating that it either has implemented or is in
the process of implementing a local performance measurement system that meets
the minimum standards specified by the council under section 6.90, subdivision
2, paragraph (b). In 2013 and
thereafter, jurisdictions participating in the comprehensive performance
measurement program must submit a statement approved by its local governing
body affirming that it has implemented a local performance measurement system
that meets the minimum standards specified by the council under section 6.90,
subdivision 2, paragraph (b).
Subd. 2.
Benefits of participation. (a) A county or city that elects to
participate in the standard measures program for 2011 is: (1) eligible for per capita reimbursement of
$0.14 per capita, but not to exceed $25,000 for any government entity; and (2)
exempt from levy limits under sections 275.70 to 275.74 for taxes payable in
2012, if levy limits are in effect.
(b) Any county or city that elects to participate in the
standard measures program for 2012 is eligible for per capita reimbursement of
$0.14 per capita, but not to exceed $25,000 for any government entity. Any jurisdiction participating in the
comprehensive performance measurement program is exempt from levy limits under
sections 275.70 to 275.74 for taxes payable in 2013 if levy limits are in
effect.
(c) Any county or city that elects to participate in the
standard measures program for 2013 or any year thereafter is eligible for per
capita reimbursement of $0.14 per capita, but not to exceed $25,000 for any
government entity. Any jurisdiction
participating in the comprehensive performance measurement program for 2013 or
any year thereafter is exempt from levy limits under sections 275.70 to 275.74
for taxes payable in the following year, if levy limits are in effect.
Subd. 3.
Certification of
participation. (a) The state
auditor shall certify to the commissioner of revenue by August 1 of each year
the counties and cities that are participating in the standard measures program
and the comprehensive performance measurement program.
(b) The commissioner of revenue shall make per capita aid
payments under this section on the second payment date specified in section
477A.015, in the same year that the measurements were reported.
(c) The commissioner of revenue shall notify each county and
city that is entitled to exemption from levy limits by August 10 of each levy
year.
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Subd. 4. Appropriation. (a) The amount necessary to fund
obligations under subdivision 2 is annually appropriated from the general fund
to the commissioner of revenue.
(b) The sum of $6,000 in
fiscal year 2011 and $2,000 in each fiscal year thereafter is annually
appropriated from the general fund to the state auditor to carry out the
auditor's responsibilities under sections 6.90 to 6.91.
EFFECTIVE DATE. This section is effective December 31, 2010.
Sec. 3. [270C.991]
PROPERTY TAX SYSTEM BENCHMARKS AND CRITICAL INDICATORS.
Subdivision 1. Purpose. State policy makers should be provided
with the tools to create a more accountable and efficient property tax
system. This section provides the
principles and available tools necessary to work toward achieving that goal.
Subd. 2. Property
tax principles. To better
evaluate the various property tax proposals that come before the legislature,
the following basic property tax principles should be taken into consideration. The property taxes proposed should be:
(1) transparent and
understandable;
(2) simple and efficient;
(3) equitable;
(4) stable and predictable;
(5) compliance and
accountability;
(6) competitive, both
nationally and globally; and
(7) responsive to economic
conditions.
Subd. 3. Major
indicators. There are many
different types of indicators available to legislators to evaluate tax
legislation. Indicators are useful to
have available as benchmarks when legislators are contemplating changes. Each tool has its own limitation, and no one
tool is perfect or should be used independently. Some of the tools measure the global
characteristics of the entire tax system, while others are only a measure of
the property tax impacts and its administration. The following is a list of the available
major indicators:
(1) property tax principles
scale, the components of which are listed in subdivision 2, as they relate to
the various features of the property tax system;
(2) price of government report,
as required under section 16A.102;
(3) tax incidence report, as
required under section 270C.13;
(4) tax expenditure budget
and report, as required under section 270C.11;
(5) state tax rankings;
(6) property tax levy plus
aid data, and market value and net tax capacity data, by taxing district for
current and past years;
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of Page 11071
(7) effective tax rate (tax as a percent of market value) and
the equalized effective tax rate (effective tax rate adjusted for assessment
differences);
(8) assessment sales ratio study, as required under section
127A.48;
(9) "Voss" database, which matches homeowner
property taxes and household income;
(10) revenue estimates under section 270C.11, subdivision 5,
and state fiscal notes under section 477A.03, subdivision 2b; and
(11) local impact notes under section 3.987.
Subd. 4.
Property tax working group. (a) A property tax working group is
established as provided in this subdivision.
The goals of the working group are:
(1) to investigate ways to simplify the property tax system
and make advisory recommendations on ways to make the system more
understandable;
(2) to reexamine the property tax calendar to determine what
changes could be made to shorten the two-year cycle from assessment through
property tax collection; and
(3) to determine the cost versus the benefits of the various
property tax components, including property classifications, credits, aids,
exclusions, exemptions, and abatements, and to suggest ways to achieve some of
the goals in simpler and more cost-efficient ways.
(b) The 13-member working group shall consist of the
following members:
(1) two state representatives, both appointed by the chair of
the house of representatives Taxes Committee, one from the majority party and
one from the minority party;
(2) two senators, both appointed by the chair of the senate
Taxes Committee, one from the majority party and one from the minority party;
(3) the commissioner of revenue, or designee;
(4) one person, appointed by the Association of Minnesota
Counties;
(5) one person, appointed by the League of Minnesota Cities;
(6) one person, appointed by the Minnesota Association of
Townships;
(7) one person, appointed by the Minnesota Chamber of
Commerce;
(8) one person, appointed by the Minnesota Association of
Assessing Officers;
(9) two homeowners, one who is under 65 years of age, and one
who is 65 years of age or older, both appointed by the commissioner of revenue;
and
(10) one person, jointly appointed by the Minnesota Farm
Bureau and the Minnesota Farmers Union.
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of Page 11072
The commissioner of revenue shall chair the initial meeting,
and the working group shall elect a chair at that initial meeting. The working group will meet at the call of
the chair. Members of the working group
shall serve without compensation. The
commissioner of revenue must provide administrative support to the working
group. Chapter 13D does not apply to
meetings of the working group. Meetings
of the working group must be open to the public and the working group must
provide notice of a meeting to potentially interested persons at least seven
days before the meeting. A meeting of
the council occurs when a quorum is present.
(c) The working group shall make its advisory recommendations
to the chairs of the house of representatives and senate Taxes Committees on or
before February 1, 2012, at which time the working group shall be finished and
this subdivision expires. The advisory
recommendations should be reviewed by the Taxes Committee under
subdivision 5.
Subd. 5.
Taxes Committee review and
resolution. On or before
March 1, 2012, and every two years thereafter, the house of representatives and
senate Taxes Committees must review the major indicators as contained in
subdivision 3, and ascertain the accountability and efficiency of the property
tax system. The house of representatives
and senate Taxes Committees shall prepare a resolution on targets and
benchmarks for use during the current biennium.
Subd. 6.
Department of Revenue; revenue
estimates. As provided under
section 270C.11, subdivision 5, the Department of Revenue is required to
prepare an estimate of the effect on the state's tax revenues which result from
the passage of a legislative bill establishing, extending, or restricting a tax
expenditure. Beginning with the 2011
legislative session, those revenue estimates must also identify how the
property tax principles contained in subdivision 2 apply to the proposed tax
changes. The commissioner of revenue
shall develop a scale for measuring the appropriate principles for each
proposed change. The department shall
quantify the effects, if possible, or at a minimum, shall identify the relevant
factors so that legislators are aware of possible outcomes, including
administrative difficulties and cost.
The interaction of property tax shifting should be identified and
quantified to the degree possible.
Subd. 7.
Appropriation. The sum of $30,000 in fiscal year 2011
and $25,000 in each fiscal year thereafter is appropriated from the general
fund to the commissioner of revenue to carry out the commissioner's added
responsibilities under subdivision 6.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
ARTICLE 3
INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES
Section 1. Minnesota
Statutes 2008, section 289A.08, subdivision 7, is amended to read:
Subd. 7. Composite income tax returns for
nonresident partners, shareholders, and beneficiaries. (a) The commissioner may allow a
partnership with nonresident partners to file a composite return and to pay the
tax on behalf of nonresident partners who have no other Minnesota source
income. This composite return must
include the names, addresses, Social Security numbers, income allocation, and tax
liability for the nonresident partners electing to be covered by the composite
return.
(b) The computation of a partner's tax liability must be
determined by multiplying the income allocated to that partner by the highest
rate used to determine the tax liability for individuals under section 290.06,
subdivision 2c. Nonbusiness deductions,
standard deductions, or personal exemptions are not allowed.
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(c) The partnership must
submit a request to use this composite return filing method for nonresident
partners. The requesting partnership
must file a composite return in the form prescribed by the commissioner of
revenue. The filing of a composite
return is considered a request to use the composite return filing method.
(d) The electing partner
must not have any Minnesota source income other than the income from the
partnership and other electing partnerships.
If it is determined that the electing partner has other Minnesota source
income, the inclusion of the income and tax liability for that partner under
this provision will not constitute a return to satisfy the requirements of
subdivision 1. The tax paid for the
individual as part of the composite return is allowed as a payment of the tax
by the individual on the date on which the composite return payment was
made. If the electing nonresident
partner has no other Minnesota source income, filing of the composite return is
a return for purposes of subdivision 1.
(e) This subdivision does
not negate the requirement that an individual pay estimated tax if the
individual's liability would exceed the requirements set forth in section
289A.25. A composite estimate may,
however, be filed in a manner similar to and containing the information
required under paragraph (a).
(f) If an electing partner's
share of the partnership's gross income from Minnesota sources is less than the
filing requirements for a nonresident under this subdivision, the tax liability
is zero. However, a statement showing
the partner's share of gross income must be included as part of the composite
return.
(g) The election provided in
this subdivision is only available to a partner who has no other Minnesota
source income and who is either (1) a full-year nonresident individual or (2) a
trust or estate that does not claim a deduction under either section 651 or 661
of the Internal Revenue Code.
(h) A corporation defined in
section 290.9725 and its nonresident shareholders may make an election under
this paragraph. The provisions covering
the partnership apply to the corporation and the provisions applying to the
partner apply to the shareholder.
(i) Estates and trusts
distributing current income only and the nonresident individual beneficiaries
of the estates or trusts may make an election under this paragraph. The provisions covering the partnership apply
to the estate or trust. The provisions
applying to the partner apply to the beneficiary.
(j) For the purposes of this
subdivision, "income" means the partner's share of federal adjusted
gross income from the partnership modified by the additions provided in section
290.01, subdivision 19a, clauses (6) to (10), and the subtractions provided
in: (i) section 290.01, subdivision 19b,
clause (9) (8), to the extent the amount is assignable or
allocable to Minnesota under section 290.17; and (ii) section 290.01,
subdivision 19b, clause (14) (13). The subtraction allowed under section 290.01,
subdivision 19b, clause (9) (8), is only allowed on the composite
tax computation to the extent the electing partner would have been allowed the
subtraction.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 2. Minnesota Statutes 2008, section 289A.09,
subdivision 2, is amended to read:
Subd. 2. Withholding
statement. (a) A person required to
deduct and withhold from an employee a tax under section 290.92, subdivision 2a
or 3, or 290.923, subdivision 2, or who would have been required to deduct and
withhold a tax under section 290.92, subdivision 2a or 3, or persons required
to withhold tax under section 290.923, subdivision 2, determined without regard
to section 290.92, subdivision 19, if the employee or payee had claimed no more
than one withholding exemption, or who paid wages or made payments not subject
to withholding under section 290.92, subdivision 2a or 3, or 290.923,
subdivision 2, to an employee or person receiving royalty payments in excess of
$600, or who has entered into a voluntary withholding agreement with a payee
under section 290.92, subdivision 20, must give every employee or person receiving
royalty payments in respect to the remuneration paid
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by the person to the
employee or person receiving royalty payments during the calendar year, on or
before January 31 of the succeeding year, or, if employment is terminated
before the close of the calendar year, within 30 days after the date of receipt
of a written request from the employee if the 30-day period ends before January
31, a written statement showing the following:
(1) name of the person;
(2) the name of the employee or payee and the employee's or
payee's Social Security account number;
(3) the total amount of wages as that term is defined in
section 290.92, subdivision 1, paragraph (1); the total amount of remuneration
subject to withholding under section 290.92, subdivision 20; the amount of sick
pay as required under section 6051(f) of the Internal Revenue Code; and the
amount of royalties subject to withholding under section 290.923, subdivision
2; and
(4) the total amount deducted and withheld as tax under
section 290.92, subdivision 2a or 3, or 290.923, subdivision 2.
(b) The statement required to be furnished by paragraph (a)
with respect to any remuneration must be furnished at those times, must contain
the information required, and must be in the form the commissioner
prescribes.
(c) The commissioner may prescribe rules providing for
reasonable extensions of time, not in excess of 30 days, to employers or payers
required to give the statements to their employees or payees under this
subdivision.
(d) A duplicate of any statement made under this subdivision
and in accordance with rules prescribed by the commissioner, along with a
reconciliation in the form the commissioner prescribes of the statements for
the calendar year, including a reconciliation of the quarterly returns required
to be filed under subdivision 1, must be filed with the commissioner on or
before February 28 of the year after the payments were made.
(e) If an employer cancels the employer's Minnesota
withholding account number required by section 290.92, subdivision 24, the
information required by paragraph (d), must be filed with the commissioner
within 30 days of the end of the quarter in which the employer cancels its
account number.
(f) The employer must submit the statements required to be
sent to the commissioner in the same manner required to satisfy the federal
reporting requirements of section 6011(e) of the Internal Revenue Code and the
regulations issued under it. For
wages paid in calendar year 2008, An employer must submit statements to the
commissioner required by this section by electronic means if the employer is
required to send more than 100 25 statements to the commissioner,
even though the employer is not required to submit the returns federally by
electronic means. For calendar year
2009, the 100 statements threshold is reduced to 50, and for calendar year
2010, the threshold is reduced to 25, and for statements issued for wages
paid in 2011 and after, the threshold is reduced to ten. All statements issued for withholding
required under section 290.92 are aggregated for purposes of determining
whether the electronic submission threshold is met.
(g) A "third-party bulk filer" as defined in
section 290.92, subdivision 30, paragraph (a), clause (2), must submit the
returns required by this subdivision and subdivision 1, paragraph (a), with the
commissioner by electronic means.
EFFECTIVE
DATE. This section is effective for statements
required to be filed after December 31, 2010.
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Sec. 3. Minnesota
Statutes 2008, section 289A.10, subdivision 1, is amended to read:
Subdivision 1. Return required. In the case of a decedent who has an
interest in property with a situs in Minnesota, the personal representative
must submit a Minnesota estate tax return to the commissioner, on a form
prescribed by the commissioner, if:
(1) a federal estate tax return is required to be filed; or
(2) the federal gross estate exceeds $700,000 for estates
of decedents dying after December 31, 2001, and before January 1, 2004;
$850,000 for estates of decedents dying after December 31, 2003, and before
January 1, 2005; $950,000 for estates of decedents dying after December 31,
2004, and before January 1, 2006; and $1,000,000 for estates of
decedents dying after December 31, 2005.
The return must contain a computation of the Minnesota estate
tax due. The return must be signed by
the personal representative.
EFFECTIVE
DATE. This section is effective for
estates of decedents dying after December 31, 2005.
Sec. 4. Minnesota
Statutes 2008, section 289A.12, subdivision 14, is amended to read:
Subd. 14. Regulated investment companies; reporting
exempt-interest dividends. (a) A
regulated investment company paying $10 or more in exempt-interest dividends to
an individual who is a resident of Minnesota must make a return indicating the
amount of the exempt-interest dividends, the name, address, and Social Security
number of the recipient, and any other information that the commissioner
specifies. The return must be provided
to the shareholder no later than 30 days after the close of the taxable year
by February 15 of the year following the year of the payment. The return provided to the shareholder must
include a clear statement, in the form prescribed by the commissioner, that the
exempt-interest dividends must be included in the computation of Minnesota
taxable income. The regulated
investment company is required in a manner prescribed by the commissioner to
file a copy of the return with the commissioner. By June 1 of each year, the regulated
investment company must file a copy of the return with the commissioner.
(b) This subdivision applies to regulated investment
companies required to register under chapter 80A.
(c) For purposes of this subdivision, the following
definitions apply.
(1) "Exempt-interest dividends" mean
exempt-interest dividends as defined in section 852(b)(5) of the Internal
Revenue Code, but does not include the portion of exempt-interest dividends
that are not required to be added to federal taxable income under section 290.01,
subdivision 19a, clause (1)(ii).
(2) "Regulated investment company" means regulated
investment company as defined in section 851(a) of the Internal Revenue Code or
a fund of the regulated investment company as defined in section 851(g) of the
Internal Revenue Code.
EFFECTIVE
DATE. This section is effective for
returns due after December 31, 2010.
Sec. 5. Minnesota
Statutes 2009 Supplement, section 289A.18, subdivision 1, is amended to read:
Subdivision 1. Individual income, fiduciary income,
corporate franchise, and entertainment taxes; partnership and S corporation
returns; information returns; mining company returns. The returns required to be made under
sections 289A.08 and 289A.12 must be filed at the following times:
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of Page 11076
(1) returns made on the basis of the calendar year must be
filed on April 15 following the close of the calendar year, except that returns
of corporations must be filed on March 15 following the close of the
calendar year the due date for filing the federal income tax return;
(2) returns made on the basis of the fiscal year must be
filed on the 15th day of the fourth month following the close of the fiscal
year, except that returns of corporations must be filed on the 15th day of
the third month following the close of the fiscal year due date for
filing the federal income tax return;
(3) returns for a fractional part of a year must be filed on
the 15th day of the fourth month following the end of the month in which
falls the last day of the period for which the return is made, except that the
returns of corporations must be filed on the 15th day of the third month
following the end of the tax year; or, in the case of a corporation which is a
member of a unitary group, the return of the corporation must be filed on the
15th day of the third month following the end of the tax year of the unitary
group in which falls the last day of the period for which the return is made
due date for filing the federal income tax return;
(4) in the case of a final return of a decedent for a
fractional part of a year, the return must be filed on the 15th day of the
fourth month following the close of the 12-month period that began with the
first day of that fractional part of a year;
(5) in the case of the return of a cooperative association,
returns must be filed on or before the 15th day of the ninth month following
the close of the taxable year;
(6) if a corporation has been divested from a unitary group
and files a return for a fractional part of a year in which it was a member of
a unitary business that files a combined report under section 290.17, subdivision
4, the divested corporation's return must be filed on the 15th day of the third
month following the close of the common accounting period that includes the
fractional year;
(7) returns of entertainment entities must be filed on April
15 following the close of the calendar year;
(8) returns required to be filed under section 289A.08,
subdivision 4, must be filed on the 15th day of the fifth month following the
close of the taxable year;
(9) returns of mining companies must be filed on May 1 following
the close of the calendar year; and
(10) returns required to be filed with the commissioner under
section 289A.12, subdivision 2, 4 to 10, or 16 must be filed within 30 days
after being demanded by the commissioner.
EFFECTIVE
DATE. This section is effective for
taxable years beginning after December 31, 2009.
Sec. 6. Minnesota
Statutes 2008, section 289A.30, subdivision 2, is amended to read:
Subd. 2. Estate tax.
Where good cause exists, the commissioner may extend the time for
payment of estate tax for a period of not more than six months. If an extension to pay the federal estate tax
has been granted under section 6161 of the Internal Revenue Code, the time for
payment of the estate tax without penalty is extended for that period. A taxpayer who owes at least $5,000 in taxes
and who, under section 6161 or 6166 of the Internal Revenue Code has been
granted an extension for payment of the tax shown on the return, may elect to
pay the tax due to the commissioner in equal amounts at the same time as
required for federal purposes. A
taxpayer electing to pay the tax in installments shall defer a percentage of
tax that does not exceed the percentage of federal tax deferred and must
notify the commissioner in writing no later than nine months after the death of
the person whose estate is subject to
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of Page 11077
taxation. If the taxpayer
fails to pay an installment on time, unless it is shown that the failure is due
to reasonable cause, the election is revoked and the entire amount of unpaid
tax plus accrued interest is due and payable 90 days after the date on which
the installment was payable.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 7. Minnesota Statutes 2008, section 289A.50,
subdivision 4, is amended to read:
Subd. 4. Notice
of refund. The commissioner shall
determine the amount of refund, if any, that is due, and notify the taxpayer of
the determination as soon as practicable after a claim has been filed.
If the commissioner
determines that the address provided by the taxpayer to claim a refund is
invalid or is no longer the current address of the taxpayer, then the date of
the mailing of the notification provided under this subdivision is considered
the date that the refund is paid for purposes of the payment of interest under
section 289A.56 and is considered the date of issuance of the original warrant
or check for purposes of issuing a new warrant or check under section 270C.347.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 8. Minnesota Statutes 2008, section 289A.60,
subdivision 7, is amended to read:
Subd. 7. Penalty
for frivolous return. If a taxpayer
files what purports to be a tax return or a claim for refund but which does not
contain information on which the substantial correctness of the purported
return or claim for refund may be judged or contains information that on its
face shows that the purported return or claim for refund is substantially
incorrect and the conduct is due to a position that is frivolous or a desire
that appears on the purported return or claim for refund to delay or impede the
administration of Minnesota tax laws, then the individual taxpayer shall
pay a penalty of the greater of $1,000 or 25 percent of the amount of tax
required to be shown on the return. In a
proceeding involving the issue of whether or not a person taxpayer is
liable for this penalty, the burden of proof is on the commissioner.
EFFECTIVE DATE. This section is effective the day following final
enactment and applies to returns filed after that day.
Sec. 9. Minnesota Statutes 2009 Supplement, section
290.01, subdivision 19a, is amended to read:
Subd. 19a. Additions
to federal taxable income. For
individuals, estates, and trusts, there shall be added to federal taxable
income:
(1)(i) interest income on
obligations of any state other than Minnesota or a political or governmental
subdivision, municipality, or governmental agency or instrumentality of any
state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and
(ii) exempt-interest
dividends as defined in section 852(b)(5) of the Internal Revenue Code, except:
(A) the portion of the
exempt-interest dividends exempt from state taxation under the laws of the
United States; and
(B) the portion of the
exempt-interest dividends derived from interest income on obligations of the
state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the
portion of the exempt-interest dividends from such Minnesota sources paid to
all shareholders represents 95 percent or more of the exempt-interest dividends,
including any dividends exempt under subitem (A),
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that are paid by the
regulated investment company as defined in section 851(a) of the Internal
Revenue Code, or the fund of the regulated investment company as defined in
section 851(g) of the Internal Revenue Code, making the payment; and
(iii) for the purposes of
items (i) and (ii), interest on obligations of an Indian tribal government
described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;
(2) the amount of income,
sales and use, motor vehicle sales, or excise taxes paid or accrued within the
taxable year under this chapter and the amount of taxes based on net income
paid, sales and use, motor vehicle sales, or excise taxes paid to any other
state or to any province or territory of Canada, to the extent allowed as a
deduction under section 63(d) of the Internal Revenue Code, but the addition
may not be more than the amount by which the itemized deductions as allowed under
section 63(d) of the Internal Revenue Code exceeds the amount of the standard
deduction as defined in section 63(c) of the Internal Revenue Code,
disregarding the amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of
the Internal Revenue Code. For the
purpose of this paragraph, the disallowance of itemized deductions under
section 68 of the Internal Revenue Code of 1986, income, sales and use, motor
vehicle sales, or excise taxes are the last itemized deductions disallowed;
(3) the capital gain amount
of a lump-sum distribution to which the special tax under section
1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
(4) the amount of income
taxes paid or accrued within the taxable year under this chapter and taxes
based on net income paid to any other state or any province or territory of
Canada, to the extent allowed as a deduction in determining federal adjusted
gross income. For the purpose of this
paragraph, income taxes do not include the taxes imposed by sections 290.0922,
subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
(5) the amount of expense,
interest, or taxes disallowed pursuant to section 290.10 other than expenses or
interest used in computing net interest income for the subtraction allowed under
subdivision 19b, clause (1);
(6) the amount of a
partner's pro rata share of net income which does not flow through to the
partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;
(7) 80 percent of the
depreciation deduction allowed under section 168(k) of the Internal Revenue
Code. For purposes of this clause, if
the taxpayer has an activity that in the taxable year generates a deduction for
depreciation under section 168(k) and the activity generates a loss for the
taxable year that the taxpayer is not allowed to claim for the taxable year,
"the depreciation allowed under section 168(k)" for the taxable year
is limited to excess of the depreciation claimed by the activity under section
168(k) over the amount of the loss from the activity that is not allowed in the
taxable year. In succeeding taxable
years when the losses not allowed in the taxable year are allowed, the
depreciation under section 168(k) is allowed;
(8) 80 percent of the amount
by which the deduction allowed by section 179 of the Internal Revenue Code
exceeds the deduction allowable by section 179 of the Internal Revenue Code of
1986, as amended through December 31, 2003;
(9) to the extent deducted
in computing federal taxable income, the amount of the deduction allowable
under section 199 of the Internal Revenue Code;
(10) the exclusion allowed
under section 139A of the Internal Revenue Code for federal subsidies for
prescription drug plans;
(11) the amount of expenses
disallowed under section 290.10, subdivision 2;
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(12) the amount deducted for
qualified tuition and related expenses under section 222 of the Internal
Revenue Code, to the extent deducted from gross income;
(13) the amount deducted for
certain expenses of elementary and secondary school teachers under section
62(a)(2)(D) of the Internal Revenue Code, to the extent deducted from gross
income;
(14) the additional standard
deduction for property taxes payable that is allowable under section
63(c)(1)(C) of the Internal Revenue Code;
(15) the additional standard
deduction for qualified motor vehicle sales taxes allowable under section
63(c)(1)(E) of the Internal Revenue Code;
(16) discharge of
indebtedness income resulting from reacquisition of business indebtedness and deferred
under section 108(i) of the Internal Revenue Code; and
(17) the amount of
unemployment compensation exempt from tax under section 85(c) of the Internal
Revenue Code.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 10. Minnesota Statutes 2009 Supplement, section
290.01, subdivision 19b, as amended by Laws 2010, chapter 187, section 2, is
amended to read:
Subd. 19b. Subtractions
from federal taxable income. For
individuals, estates, and trusts, there shall be subtracted from federal
taxable income:
(1) net interest income on
obligations of any authority, commission, or instrumentality of the United
States to the extent includable in taxable income for federal income tax
purposes but exempt from state income tax under the laws of the United States;
(2) if included in federal
taxable income, the amount of any overpayment of income tax to Minnesota or to
any other state, for any previous taxable year, whether the amount is received
as a refund or as a credit to another taxable year's income tax liability;
(3) the amount paid to
others, less the amount used to claim the credit allowed under section
290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition,
textbooks, and transportation of each qualifying child in attending an
elementary or secondary school situated in Minnesota, North Dakota, South
Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill
the state's compulsory attendance laws, which is not operated for profit, and
which adheres to the provisions of the Civil Rights Act of 1964 and chapter
363A. For the purposes of this clause,
"tuition" includes fees or tuition as defined in section 290.0674,
subdivision 1, clause (1). As used in
this clause, "textbooks" includes books and other instructional
materials and equipment purchased or leased for use in elementary and secondary
schools in teaching only those subjects legally and commonly taught in public
elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined
and limited in section 290.0674, subdivision 1, clause (3). "Textbooks" does not include
instructional books and materials used in the teaching of religious tenets,
doctrines, or worship, the purpose of which is to instill such tenets,
doctrines, or worship, nor does it include books or materials for, or
transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar
programs. No deduction is permitted for
any expense the taxpayer incurred in using the taxpayer's or the qualifying
child's vehicle to provide such transportation for a qualifying child. For purposes of the subtraction provided by
this clause, "qualifying child" has the meaning given in section
32(c)(3) of the Internal Revenue Code;
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(4) income as provided under
section 290.0802;
(5) to the extent included
in federal adjusted gross income, income realized on disposition of property
exempt from tax under section 290.491;
(6) to the extent not deducted
or not deductible pursuant to section 408(d)(8)(E) of the Internal Revenue Code
in determining federal taxable income by an individual who does not itemize
deductions for federal income tax purposes for the taxable year, an amount
equal to 50 percent of the excess of charitable contributions over $500
allowable as a deduction for the taxable year under section 170(a) of the
Internal Revenue Code, under the provisions of Public Law 109-1 and Public Law
111-126;
(7) for taxable years
beginning before January 1, 2008, the amount of the federal small ethanol
producer credit allowed under section 40(a)(3) of the Internal Revenue Code
which is included in gross income under section 87 of the Internal Revenue
Code;
(8) (7) for individuals who are
allowed a federal foreign tax credit for taxes that do not qualify for a credit
under section 290.06, subdivision 22, an amount equal to the carryover of
subnational foreign taxes for the taxable year, but not to exceed the total
subnational foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, "federal
foreign tax credit" means the credit allowed under section 27 of the
Internal Revenue Code, and "carryover of subnational foreign taxes"
equals the carryover allowed under section 904(c) of the Internal Revenue Code
minus national level foreign taxes to the extent they exceed the federal
foreign tax credit;
(9) (8) in each of the five tax
years immediately following the tax year in which an addition is required under
subdivision 19a, clause (7), or 19c, clause (15), in the case of a shareholder
of a corporation that is an S corporation, an amount equal to one-fifth of the
delayed depreciation. For purposes of
this clause, "delayed depreciation" means the amount of the addition
made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
clause (15), in the case of a shareholder of an S corporation, minus the
positive value of any net operating loss under section 172 of the Internal
Revenue Code generated for the tax year of the addition. The resulting delayed depreciation cannot be
less than zero;
(10) (9) job opportunity building
zone income as provided under section 469.316;
(11) (10) to the extent included in
federal taxable income, the amount of compensation paid to members of the
Minnesota National Guard or other reserve components of the United States
military for active service performed in Minnesota, excluding compensation for
services performed under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
service" means (i) state active service as defined in section 190.05,
subdivision 5a, clause (1); (ii) federally funded state active service as defined
in section 190.05, subdivision 5b; or (iii) federal active service as defined
in section 190.05, subdivision 5c, but "active service" excludes
service performed in accordance with section 190.08, subdivision 3;
(12) (11) to the extent included in
federal taxable income, the amount of compensation paid to Minnesota residents
who are members of the armed forces of the United States or United Nations for
active duty performed outside Minnesota under United States Code, title 10,
section 101(d); United States Code, title 32, section 101(12); or the authority
of the United Nations;
(13) (12) an amount, not to exceed
$10,000, equal to qualified expenses related to a qualified donor's donation,
while living, of one or more of the qualified donor's organs to another person
for human organ transplantation. For
purposes of this clause, "organ" means all or part of an individual's
liver, pancreas, kidney, intestine, lung, or bone marrow; "human organ
transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person;
"qualified expenses" means unreimbursed expenses for both the
individual and the qualified donor for (i) travel, (ii) lodging, and (iii) lost
wages net of sick pay, except that
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such expenses may be
subtracted under this clause only once; and "qualified donor" means
the individual or the individual's dependent, as defined in section 152 of the
Internal Revenue Code. An individual may
claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;
(14) (13) in each of the five tax years immediately
following the tax year in which an addition is required under subdivision 19a,
clause (8), or 19c, clause (16), in the case of a shareholder of a corporation
that is an S corporation, an amount equal to one-fifth of the addition made by
the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
case of a shareholder of a corporation that is an S corporation, minus the
positive value of any net operating loss under section 172 of the Internal
Revenue Code generated for the tax year of the addition. If the net operating loss exceeds the
addition for the tax year, a subtraction is not allowed under this clause;
(15) (14) to the extent included in federal
taxable income, compensation paid to a service member as defined in United States
Code, title 10, section 101(a)(5), for military service as defined in the
Servicemembers Civil Relief Act, Public Law 108-189, section 101(2);
(16) (15) international economic development
zone income as provided under section 469.325;
(17) (16) to the extent included in federal
taxable income, the amount of national service educational awards received from
the National Service Trust under United States Code, title 42, sections 12601
to 12604, for service in an approved Americorps National Service program; and
(18) (17) to the extent included in federal
taxable income, discharge of indebtedness income resulting from reacquisition
of business indebtedness included in federal taxable income under section
108(i) of the Internal Revenue Code.
This subtraction applies only to the extent that the income was included
in net income in a prior year as a result of the addition under section 290.01,
subdivision 19a, clause (16).
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 11.
Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19d, is
amended to read:
Subd. 19d. Corporations; modifications decreasing
federal taxable income. For
corporations, there shall be subtracted from federal taxable income after the
increases provided in subdivision 19c:
(1) the amount of foreign dividend gross-up added to gross
income for federal income tax purposes under section 78 of the Internal Revenue
Code;
(2) the amount of salary expense not allowed for federal
income tax purposes due to claiming the work opportunity credit under section
51 of the Internal Revenue Code;
(3) any dividend (not including any distribution in
liquidation) paid within the taxable year by a national or state bank to the
United States, or to any instrumentality of the United States exempt from
federal income taxes, on the preferred stock of the bank owned by the United
States or the instrumentality;
(4) amounts disallowed for intangible drilling costs due to
differences between this chapter and the Internal Revenue Code in taxable years
beginning before January 1, 1987, as follows:
(i) to the extent the disallowed costs are represented by
physical property, an amount equal to the allowance for depreciation under
Minnesota Statutes 1986, section 290.09, subdivision 7, subject to the
modifications contained in subdivision 19e; and
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(ii) to the extent the
disallowed costs are not represented by physical property, an amount equal to
the allowance for cost depletion under Minnesota Statutes 1986, section 290.09,
subdivision 8;
(5) the deduction for capital
losses pursuant to sections 1211 and 1212 of the Internal Revenue Code, except
that:
(i) for capital losses
incurred in taxable years beginning after December 31, 1986, capital loss
carrybacks shall not be allowed;
(ii) for capital losses
incurred in taxable years beginning after December 31, 1986, a capital loss
carryover to each of the 15 taxable years succeeding the loss year shall be
allowed;
(iii) for capital losses
incurred in taxable years beginning before January 1, 1987, a capital loss carryback
to each of the three taxable years preceding the loss year, subject to the
provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
(iv) for capital losses
incurred in taxable years beginning before January 1, 1987, a capital loss
carryover to each of the five taxable years succeeding the loss year to the
extent such loss was not used in a prior taxable year and subject to the
provisions of Minnesota Statutes 1986, section 290.16, shall be allowed;
(6) an amount for interest and
expenses relating to income not taxable for federal income tax purposes, if (i)
the income is taxable under this chapter and (ii) the interest and expenses
were disallowed as deductions under the provisions of section 171(a)(2), 265 or
291 of the Internal Revenue Code in computing federal taxable income;
(7) in the case of mines,
oil and gas wells, other natural deposits, and timber for which percentage
depletion was disallowed pursuant to subdivision 19c, clause (9), a reasonable
allowance for depletion based on actual cost.
In the case of leases the deduction must be apportioned between the
lessor and lessee in accordance with rules prescribed by the commissioner. In the case of property held in trust, the
allowable deduction must be apportioned between the income beneficiaries and
the trustee in accordance with the pertinent provisions of the trust, or if
there is no provision in the instrument, on the basis of the trust's income
allocable to each;
(8) for certified pollution
control facilities placed in service in a taxable year beginning before
December 31, 1986, and for which amortization deductions were elected under
section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, an amount equal to the allowance for depreciation under Minnesota
Statutes 1986, section 290.09, subdivision 7;
(9) amounts included in
federal taxable income that are due to refunds of income, excise, or franchise
taxes based on net income or related minimum taxes paid by the corporation to
Minnesota, another state, a political subdivision of another state, the
District of Columbia, or a foreign country or possession of the United States
to the extent that the taxes were added to federal taxable income under section
290.01, subdivision 19c, clause (1), in a prior taxable year;
(10) 80 percent of
royalties, fees, or other like income accrued or received from a foreign
operating corporation or a foreign corporation which is part of the same
unitary business as the receiving corporation, unless the income resulting from
such payments or accruals is income from sources within the United States as
defined in subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue
Code;
(11) income or gains from
the business of mining as defined in section 290.05, subdivision 1, clause (a),
that are not subject to Minnesota franchise tax;
(12) the amount of
disability access expenditures in the taxable year which are not allowed to be
deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
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(13) the amount of qualified
research expenses not allowed for federal income tax purposes under section 280C(c)
of the Internal Revenue Code, but only to the extent that the amount exceeds
the amount of the credit allowed under section 290.068;
(14) the amount of salary
expenses not allowed for federal income tax purposes due to claiming the Indian
employment credit under section 45A(a) of the Internal Revenue Code;
(15) for taxable years
beginning before January 1, 2008, the amount of the federal small ethanol
producer credit allowed under section 40(a)(3) of the Internal Revenue Code
which is included in gross income under section 87 of the Internal Revenue
Code;
(16) (15) for a corporation whose
foreign sales corporation, as defined in section 922 of the Internal Revenue
Code, constituted a foreign operating corporation during any taxable year
ending before January 1, 1995, and a return was filed by August 15, 1996,
claiming the deduction under section 290.21, subdivision 4, for income received
from the foreign operating corporation, an amount equal to 1.23 multiplied by
the amount of income excluded under section 114 of the Internal Revenue Code,
provided the income is not income of a foreign operating company;
(17) (16) any decrease in subpart F
income, as defined in section 952(a) of the Internal Revenue Code, for the
taxable year when subpart F income is calculated without regard to the
provisions of Division C, title III, section 303(b) of Public Law 110-343;
(18) (17) in each of the five tax
years immediately following the tax year in which an addition is required under
subdivision 19c, clause (15), an amount equal to one-fifth of the delayed
depreciation. For purposes of this
clause, "delayed depreciation" means the amount of the addition made
by the taxpayer under subdivision 19c, clause (15). The resulting delayed depreciation cannot be
less than zero;
(19) (18) in each of the five tax
years immediately following the tax year in which an addition is required under
subdivision 19c, clause (16), an amount equal to one-fifth of the amount of the
addition; and
(20) (19) to the extent included in
federal taxable income, discharge of indebtedness income resulting from
reacquisition of business indebtedness included in federal taxable income under
section 108(i) of the Internal Revenue Code.
This subtraction applies only to the extent that the income was included
in net income in a prior year as a result of the addition under section 290.01,
subdivision 19c, clause (25).
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 12. Minnesota Statutes 2008, section 290.014,
subdivision 2, is amended to read:
Subd. 2. Nonresident
individuals. Except as provided in
section 290.015, a nonresident individual is subject to the return filing
requirements and to tax as provided in this chapter to the extent that the
income of the nonresident individual is:
(1) allocable to this state
under section 290.17, 290.191, or 290.20;
(2) taxed to the individual
under the Internal Revenue Code (or not taxed under the Internal Revenue Code
by reason of its character but of a character which is taxable under this
chapter) in the individual's capacity as a beneficiary of an estate with income
allocable to this state under section 290.17, 290.191, or 290.20 and the
income, taking into account the income character provisions of section 662(b)
of the Internal Revenue Code, would be allocable to this state under section
290.17, 290.191, or 290.20 if realized by the individual directly from the
source from which realized by the estate;
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of Page 11084
(3) taxed to the individual under the Internal Revenue Code
(or not taxed under the Internal Revenue Code by reason of its character but of
a character that is taxable under this chapter) in the individual's capacity as
a beneficiary or grantor or other person treated as a substantial owner of a
trust with income allocable to this state under section 290.17, 290.191, or
290.20 and the income, taking into account the income character provisions of
section 652(b), 662(b), or 664(b) of the Internal Revenue Code, would be
allocable to this state under section 290.17, 290.191, or 290.20 if realized by
the individual directly from the source from which realized by the trust;
(4) taxed to the individual under the Internal Revenue Code
(or not taxed under the Internal Revenue Code by reason of its character but of
a character which is taxable under this chapter) in the individual's capacity
as a limited or general partner in a partnership with income allocable to this
state under section 290.17, 290.191, or 290.20 and the income, taking into
account the income character provisions of section 702(b) of the Internal
Revenue Code, would be allocable to this state under section 290.17, 290.191,
or 290.20 if realized by the individual directly from the source from which
realized by the partnership; or
(5) taxed to the individual under the Internal Revenue Code
(or not taxed under the Internal Revenue Code by reason of its character but of
a character which is taxable under this chapter) in the individual's capacity
as a shareholder of a corporation treated as an "S" corporation under
section 290.9725, and income allocable to this state under section 290.17,
290.191, or 290.20 and the income, taking into account the income character
provisions of section 1366(b) of the Internal Revenue Code, would be allocable
to this state under section 290.17, 290.191, or 290.20 if realized by the
individual directly from the source from which realized by the corporation;
or
(6) taxed to the individual under the Internal Revenue Code
(or not taxed under the Internal Revenue Code by reason of its character but of
a character which is taxable under this chapter) in the individual's capacity
as the sole member of a limited liability company that is disregarded for
federal income tax purposes, with income allocable to this state under section
290.17, 290.191, or 290.20, as though realized by the individual directly from
the source from which it was realized by the limited liability company.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 13.
Minnesota Statutes 2009 Supplement, section 290.06, subdivision 2c, is
amended to read:
Subd. 2c. Schedules of rates for individuals,
estates, and trusts. (a) The income
taxes imposed by this chapter upon married individuals filing joint returns and
surviving spouses as defined in section 2(a) of the Internal Revenue Code must
be computed by applying to their taxable net income the following schedule of
rates:
(1) On the first $25,680, 5.35 percent;
(2) On all over $25,680, but not over $102,030, 7.05 percent;
(3) On all over $102,030, 7.85 percent.
Married individuals filing separate returns, estates, and
trusts must compute their income tax by applying the above rates to their
taxable income, except that the income brackets will be one-half of the above
amounts.
(b) The income taxes imposed by this chapter upon unmarried
individuals must be computed by applying to taxable net income the following
schedule of rates:
(1) On the first $17,570, 5.35 percent;
(2) On all over $17,570, but not over $57,710, 7.05 percent;
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(3) On all over $57,710,
7.85 percent.
(c) The income taxes imposed
by this chapter upon unmarried individuals qualifying as a head of household as
defined in section 2(b) of the Internal Revenue Code must be computed by
applying to taxable net income the following schedule of rates:
(1) On the first $21,630,
5.35 percent;
(2) On all over $21,630, but
not over $86,910, 7.05 percent;
(3) On all over $86,910,
7.85 percent.
(d) In lieu of a tax
computed according to the rates set forth in this subdivision, the tax of any
individual taxpayer whose taxable net income for the taxable year is less than
an amount determined by the commissioner must be computed in accordance with
tables prepared and issued by the commissioner of revenue based on income
brackets of not more than $100. The
amount of tax for each bracket shall be computed at the rates set forth in this
subdivision, provided that the commissioner may disregard a fractional part of
a dollar unless it amounts to 50 cents or more, in which case it may be
increased to $1.
(e) An individual who is not
a Minnesota resident for the entire year must compute the individual's
Minnesota income tax as provided in this subdivision. After the application of the nonrefundable
credits provided in this chapter, the tax liability must then be multiplied by
a fraction in which:
(1) the numerator is the
individual's Minnesota source federal adjusted gross income as defined in
section 62 of the Internal Revenue Code and increased by the additions required
under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9),
(12), (13), (16), and (17), and reduced by the Minnesota assignable portion of
the subtraction for United States government interest under section 290.01,
subdivision 19b, clause (1), and the subtractions under section 290.01,
subdivision 19b, clauses (9), (10), (14), (15), (16), and (18) (8),
(9), (13), (14), (15), and (17), after applying the allocation and
assignability provisions of section 290.081, clause (a), or 290.17; and
(2) the denominator is the
individual's federal adjusted gross income as defined in section 62 of the
Internal Revenue Code of 1986, increased by the amounts specified in section
290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13),
(16), and (17), and reduced by the amounts specified in section 290.01,
subdivision 19b, clauses (1), (9), (10), (14), (15), (16), and (18)
(8), (9), (13), (14), (15), and (17).
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 14. Minnesota Statutes 2008, section 290.067,
subdivision 1, is amended to read:
Subdivision 1. Amount
of credit. (a) A taxpayer may take
as a credit against the tax due from the taxpayer and a spouse, if any, under
this chapter an amount equal to the dependent care credit for which the
taxpayer is eligible pursuant to the provisions of section 21 of the Internal
Revenue Code subject to the limitations provided in subdivision 2 except that
in determining whether the child qualified as a dependent, income received as a
Minnesota family investment program grant or allowance to or on behalf of the
child must not be taken into account in determining whether the child received
more than half of the child's support from the taxpayer, and the provisions of
section 32(b)(1)(D) of the Internal Revenue Code do not apply.
(b) If a child who has not attained
the age of six years at the close of the taxable year is cared for at a
licensed family day care home operated by the child's parent, the taxpayer is
deemed to have paid employment-related expenses. If the child is 16 months old or younger at
the close of the taxable year, the amount of expenses deemed
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to have been paid equals the
maximum limit for one qualified individual under section 21(c) and (d) of the
Internal Revenue Code. If the child is
older than 16 months of age but has not attained the age of six years at the
close of the taxable year, the amount of expenses deemed to have been paid equals
the amount the licensee would charge for the care of a child of the same age
for the same number of hours of care.
(c) If a married couple:
(1) has a child who has not attained the age of one year at
the close of the taxable year;
(2) files a joint tax return for the taxable year; and
(3) does not participate in a dependent care assistance
program as defined in section 129 of the Internal Revenue Code, in lieu of the
actual employment related expenses paid for that child under paragraph (a) or the
deemed amount under paragraph (b), the lesser of (i) the combined earned income
of the couple or (ii) the amount of the maximum limit for one qualified
individual under section 21(c) and (d) of the Internal Revenue Code will be
deemed to be the employment related expense paid for that child. The earned income limitation of section 21(d)
of the Internal Revenue Code shall not apply to this deemed amount. These deemed amounts apply regardless of
whether any employment-related expenses have been paid.
(d) If the taxpayer is not required and does not file a
federal individual income tax return for the tax year, no credit is allowed for
any amount paid to any person unless:
(1) the name, address, and taxpayer identification number of
the person are included on the return claiming the credit; or
(2) if the person is an organization described in section
501(c)(3) of the Internal Revenue Code and exempt from tax under section 501(a)
of the Internal Revenue Code, the name and address of the person are included
on the return claiming the credit.
In the case
of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer
exercised due diligence in attempting to provide the information required.
In the case of a nonresident, part-year resident, or a person
who has earned income not subject to tax under this chapter including earned
income excluded pursuant to section 290.01, subdivision 19b, clause (10)
(9) or (16) (15), the credit determined under section 21 of
the Internal Revenue Code must be allocated based on the ratio by which the
earned income of the claimant and the claimant's spouse from Minnesota sources
bears to the total earned income of the claimant and the claimant's spouse.
For residents of Minnesota, the subtractions for military pay
under section 290.01, subdivision 19b, clauses (11) (10) and (12)
(11), are not considered "earned income not subject to tax under this
chapter."
For residents of Minnesota, the exclusion of combat pay under
section 112 of the Internal Revenue Code is not considered "earned income
not subject to tax under this chapter."
EFFECTIVE
DATE. This section is effective the day
following final enactment.
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of Page 11087
Sec. 15.
Minnesota Statutes 2009 Supplement, section 290.0671, subdivision 1, is
amended to read:
Subdivision 1. Credit allowed. (a) An individual is allowed a credit
against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer
must be eligible for a credit under section 32 of the Internal Revenue Code.
(b) For individuals with no qualifying children, the credit
equals 1.9125 percent of the first $4,620 of earned income. The credit is reduced by 1.9125 percent of
earned income or adjusted gross income, whichever is greater, in excess of
$5,770, but in no case is the credit less than zero.
(c) For individuals with one qualifying child, the credit
equals 8.5 percent of the first $6,920 of earned income and 8.5 percent of
earned income over $12,080 but less than $13,450. The credit is reduced by 5.73 percent of
earned income or adjusted gross income, whichever is greater, in excess of
$15,080, but in no case is the credit less than zero.
(d) For individuals with two or more qualifying children, the
credit equals ten percent of the first $9,720 of earned income and 20 percent
of earned income over $14,860 but less than $16,800. The credit is reduced by 10.3 percent of
earned income or adjusted gross income, whichever is greater, in excess of
$17,890, but in no case is the credit less than zero.
(e) For a nonresident or part-year resident, the credit must
be allocated based on the percentage calculated under section 290.06,
subdivision 2c, paragraph (e).
(f) For a person who was a resident for the entire tax year
and has earned income not subject to tax under this chapter, including income
excluded under section 290.01, subdivision 19b, clause (10) (9)
or (16) (15), the credit must be allocated based on the ratio of
federal adjusted gross income reduced by the earned income not subject to tax
under this chapter over federal adjusted gross income. For purposes of this paragraph, the
subtractions for military pay under section 290.01, subdivision 19b, clauses (11)
(10) and (12) (11), are not considered "earned income
not subject to tax under this chapter."
For the purposes of this paragraph, the exclusion of combat
pay under section 112 of the Internal Revenue Code is not considered
"earned income not subject to tax under this chapter."
(g) For tax years beginning after December 31, 2007, and
before December 31, 2010, the $5,770 in paragraph (b), the $15,080 in paragraph
(c), and the $17,890 in paragraph (d), after being adjusted for inflation under
subdivision 7, are each increased by $3,000 for married taxpayers filing joint
returns. For tax years beginning after
December 31, 2008, the commissioner shall annually adjust the $3,000 by the
percentage determined pursuant to the provisions of section 1(f) of the
Internal Revenue Code, except that in section 1(f)(3)(B), the word
"2007" shall be substituted for the word "1992." For 2009,
the commissioner shall then determine the percent change from the 12 months
ending on August 31, 2007, to the 12 months ending on August 31, 2008, and in
each subsequent year, from the 12 months ending on August 31, 2007, to the 12
months ending on August 31 of the year preceding the taxable year. The earned income thresholds as adjusted for
inflation must be rounded to the nearest $10.
If the amount ends in $5, the amount is rounded up to the nearest
$10. The determination of the
commissioner under this subdivision is not a rule under the Administrative
Procedure Act.
(h) The commissioner shall construct tables showing the
amount of the credit at various income levels and make them available to
taxpayers. The tables shall follow the
schedule contained in this subdivision, except that the commissioner may
graduate the transition between income brackets.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
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of Page 11088
Sec. 16.
Minnesota Statutes 2008, section 290.081, is amended to read:
290.081 INCOME OF
NONRESIDENTS, RECIPROCITY.
(a) The compensation received for the performance of personal
or professional services within this state by an individual whose residence,
place of abode, and place customarily returned to at least once a month is in
another state, shall be excluded from gross income to the extent such
compensation is subject to an income tax imposed by the state of residence;
provided that such state allows a similar exclusion of compensation received by
residents of Minnesota for services performed therein.
(b) When it is deemed to be in the best interests of the
people of this state, the commissioner may determine that the provisions of
paragraph (a) shall not apply. As long
as the provisions of paragraph (a) apply between Minnesota and Wisconsin, the
provisions of paragraph (a) shall apply to any individual who is domiciled in
Wisconsin.
(c) For the purposes of paragraph (a), whenever the Wisconsin
tax on Minnesota residents which would have been paid Wisconsin without
paragraph (a) exceeds the Minnesota tax on Wisconsin residents which would have
been paid Minnesota without paragraph (a), or vice versa, then the state with
the net revenue loss resulting from paragraph (a) shall receive from
must be compensated by the other state the amount of such loss as
provided in the agreement under paragraph (d). This provision shall be effective for all
years beginning after December 31, 1972.
The data used for computing the loss to either state shall be determined
on or before September 30 of the year following the close of the previous
calendar year.
(d) Interest is payable on all amounts calculated under
paragraph (c) relating to taxable years beginning after December 31, 2000. Interest accrues from July 1 of the taxable
year. The commissioner of revenue is
authorized to enter into agreements with the state of Wisconsin specifying the
compensation required under paragraph (b), the reciprocity payment due
date, conditions constituting delinquency, interest rates, and a method for
computing interest due. Calculation
of compensation under the agreement must specify if the revenue loss is
determined before or after the allowance of each state's credit for taxes paid
to the other state.
(e) If an agreement cannot be reached as to the amount of the
loss, the commissioner of revenue and the taxing official of the state of
Wisconsin shall each appoint a member of a board of arbitration and these
members shall appoint the third member of the board. The board shall select one of its members as chair. Such board may administer oaths, take
testimony, subpoena witnesses, and require their attendance, require the
production of books, papers and documents, and hold hearings at such places as
are deemed necessary. The board shall
then make a determination as to the amount to be paid the other state which
determination shall be final and conclusive.
(f) The commissioner may furnish copies of returns, reports,
or other information to the taxing official of the state of Wisconsin, a member
of the board of arbitration, or a consultant under joint contract with the
states of Minnesota and Wisconsin for the purpose of making a determination as
to the amount to be paid the other state under the provisions of this
section. Prior to the release of any
information under the provisions of this section, the person to whom the
information is to be released shall sign an agreement which provides that the
person will protect the confidentiality of the returns and information revealed
thereby to the extent that it is protected under the laws of the state of
Minnesota.
Sec. 17.
Minnesota Statutes 2009 Supplement, section 290.091, subdivision 2, is
amended to read:
Subd. 2. Definitions. For purposes of the tax imposed by this
section, the following terms have the meanings given:
(a) "Alternative minimum taxable income" means the
sum of the following for the taxable year:
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of Page 11089
(1) the taxpayer's federal alternative minimum taxable income
as defined in section 55(b)(2) of the Internal Revenue Code;
(2) the taxpayer's itemized deductions allowed in computing
federal alternative minimum taxable income, but excluding:
(i) the charitable contribution deduction under section 170
of the Internal Revenue Code;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled
person;
(3) for depletion allowances computed under section 613A(c)
of the Internal Revenue Code, with respect to each property (as defined in
section 614 of the Internal Revenue Code), to the extent not included in
federal alternative minimum taxable income, the excess of the deduction for
depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable
year (determined without regard to the depletion deduction for the taxable year);
(4) to the extent not included in federal alternative minimum
taxable income, the amount of the tax preference for intangible drilling cost
under section 57(a)(2) of the Internal Revenue Code determined without regard
to subparagraph (E);
(5) to the extent not included in federal alternative minimum
taxable income, the amount of interest income as provided by section 290.01,
subdivision 19a, clause (1); and
(6) the amount of addition required by section 290.01,
subdivision 19a, clauses (7) to (9), (12), (13), (16), and (17);
less the sum of the amounts determined under the following:
(1) interest income as defined in section 290.01, subdivision
19b, clause (1);
(2) an overpayment of state income tax as provided by section
290.01, subdivision 19b, clause (2), to the extent included in federal
alternative minimum taxable income;
(3) the amount of investment interest paid or accrued within
the taxable year on indebtedness to the extent that the amount does not exceed
net investment income, as defined in section 163(d)(4) of the Internal Revenue
Code. Interest does not include amounts
deducted in computing federal adjusted gross income; and
(4) amounts subtracted from federal taxable income as
provided by section 290.01, subdivision 19b, clauses (6), (9) (8)
to (16) (15), and (18) (17).
In the case of an estate or trust, alternative minimum
taxable income must be computed as provided in section 59(c) of the Internal
Revenue Code.
(b) "Investment interest" means investment interest
as defined in section 163(d)(3) of the Internal Revenue Code.
(c) "Net minimum tax" means the minimum tax imposed
by this section.
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(d) "Regular tax"
means the tax that would be imposed under this chapter (without regard to this
section and section 290.032), reduced by the sum of the nonrefundable credits
allowed under this chapter.
(e) "Tentative minimum
tax" equals 6.4 percent of alternative minimum taxable income after
subtracting the exemption amount determined under subdivision 3.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 18. Minnesota Statutes 2008, section 290.0921,
subdivision 3, is amended to read:
Subd. 3. Alternative
minimum taxable income. "Alternative
minimum taxable income" is Minnesota net income as defined in section
290.01, subdivision 19, and includes the adjustments and tax preference items
in sections 56, 57, 58, and 59(d), (e), (f), and (h) of the Internal Revenue
Code. If a corporation files a separate
company Minnesota tax return, the minimum tax must be computed on a separate
company basis. If a corporation is part
of a tax group filing a unitary return, the minimum tax must be computed on a
unitary basis. The following adjustments
must be made.
(1) For purposes of the
depreciation adjustments under section 56(a)(1) and 56(g)(4)(A) of the Internal
Revenue Code, the basis for depreciable property placed in service in a taxable
year beginning before January 1, 1990, is the adjusted basis for federal income
tax purposes, including any modification made in a taxable year under section
290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c).
For taxable years beginning
after December 31, 2000, the amount of any remaining modification made under
section 290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c), not previously deducted is a depreciation
allowance in the first taxable year after December 31, 2000.
(2) The portion of the
depreciation deduction allowed for federal income tax purposes under section
168(k) of the Internal Revenue Code that is required as an addition under
section 290.01, subdivision 19c, clause (15), is disallowed in determining
alternative minimum taxable income.
(3) The subtraction for
depreciation allowed under section 290.01, subdivision 19d, clause (18)
(17), is allowed as a depreciation deduction in determining alternative
minimum taxable income.
(4) The alternative tax net
operating loss deduction under sections 56(a)(4) and 56(d) of the Internal
Revenue Code does not apply.
(5) The special rule for
certain dividends under section 56(g)(4)(C)(ii) of the Internal Revenue Code
does not apply.
(6) The special rule for
dividends from section 936 companies under section 56(g)(4)(C)(iii) does not
apply.
(7) The tax preference for
depletion under section 57(a)(1) of the Internal Revenue Code does not
apply.
(8) The tax preference for
intangible drilling costs under section 57(a)(2) of the Internal Revenue Code
must be calculated without regard to subparagraph (E) and the subtraction under
section 290.01, subdivision 19d, clause (4).
(9) The tax preference for
tax exempt interest under section 57(a)(5) of the Internal Revenue Code does
not apply.
(10) The tax preference for
charitable contributions of appreciated property under section 57(a)(6) of the
Internal Revenue Code does not apply.
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of Page 11091
(11) For purposes of calculating the tax preference for
accelerated depreciation or amortization on certain property placed in service
before January 1, 1987, under section 57(a)(7) of the Internal Revenue Code,
the deduction allowable for the taxable year is the deduction allowed under
section 290.01, subdivision 19e.
For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01, subdivision
19e, not previously deducted is a depreciation or amortization allowance in the
first taxable year after December 31, 2004.
(12) For purposes of calculating the adjustment for adjusted
current earnings in section 56(g) of the Internal Revenue Code, the term
"alternative minimum taxable income" as it is used in section 56(g)
of the Internal Revenue Code, means alternative minimum taxable income as
defined in this subdivision, determined without regard to the adjustment for
adjusted current earnings in section 56(g) of the Internal Revenue Code.
(13) For purposes of determining the amount of adjusted current
earnings under section 56(g)(3) of the Internal Revenue Code, no adjustment
shall be made under section 56(g)(4) of the Internal Revenue Code with respect
to (i) the amount of foreign dividend gross-up subtracted as provided in
section 290.01, subdivision 19d, clause (1), (ii) the amount of refunds of
income, excise, or franchise taxes subtracted as provided in section 290.01,
subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other
like income subtracted as provided in section 290.01, subdivision 19d, clause
(10).
(14) Alternative minimum taxable income excludes the income
from operating in a job opportunity building zone as provided under section
469.317.
(15) Alternative minimum taxable income excludes the income
from operating in a biotechnology and health sciences industry zone as provided
under section 469.337.
(16) Alternative minimum taxable income excludes the income
from operating in an international economic development zone as provided under
section 469.326.
Items of tax preference must not be reduced below zero as a
result of the modifications in this subdivision.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 19.
Minnesota Statutes 2008, section 290.17, subdivision 2, is amended to
read:
Subd. 2. Income not derived from conduct of a trade
or business. The income of a
taxpayer subject to the allocation rules that is not derived from the conduct
of a trade or business must be assigned in accordance with paragraphs (a) to
(f):
(a)(1) Subject to paragraphs (a)(2) and (a)(3), income from
wages as defined in section 3401(a) and (f) of the Internal Revenue Code is
assigned to this state if, and to the extent that, the work of the employee is
performed within it; all other income from such sources is treated as income
from sources without this state.
Severance pay shall be considered income from labor or
personal or professional services.
(2) In the case of an individual who is a nonresident of
Minnesota and who is an athlete or entertainer, income from compensation for
labor or personal services performed within this state shall be determined in
the following manner:
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(i) The amount of income to
be assigned to Minnesota for an individual who is a nonresident salaried
athletic team employee shall be determined by using a fraction in which the
denominator contains the total number of days in which the individual is under
a duty to perform for the employer, and the numerator is the total number of
those days spent in Minnesota. For
purposes of this paragraph, off-season training activities, unless conducted at
the team's facilities as part of a team imposed program, are not included in
the total number of duty days. Bonuses
earned as a result of play during the regular season or for participation in championship,
play-off, or all-star games must be allocated under the formula. Signing bonuses are not subject to allocation
under the formula if they are not conditional on playing any games for the
team, are payable separately from any other compensation, and are
nonrefundable; and
(ii) The amount of income to
be assigned to Minnesota for an individual who is a nonresident, and who is an
athlete or entertainer not listed in clause (i), for that person's athletic or
entertainment performance in Minnesota shall be determined by assigning to this
state all income from performances or athletic contests in this state.
(3) For purposes of this
section, amounts received by a nonresident as "retirement income" as
defined in section (b)(1) of the State Income Taxation of Pension Income Act,
Public Law 104-95, are not considered income derived from carrying on a trade
or business or from wages or other compensation for work an employee performed
in Minnesota, and are not taxable under this chapter.
(b) Income or gains from
tangible property located in this state that is not employed in the business of
the recipient of the income or gains must be assigned to this state.
(c) Income or gains from
intangible personal property not employed in the business of the recipient of
the income or gains must be assigned to this state if the recipient of the
income or gains is a resident of this state or is a resident trust or
estate.
Gain on the sale of a
partnership interest is allocable to this state in the ratio of the original
cost of partnership tangible property in this state to the original cost of
partnership tangible property everywhere, determined at the time of the
sale. If more than 50 percent of the
value of the partnership's assets consists of intangibles, gain or loss from
the sale of the partnership interest is allocated to this state in accordance
with the sales factor of the partnership for its first full tax period
immediately preceding the tax period of the partnership during which the
partnership interest was sold.
Gain on the sale of an
interest in a single member limited liability company that is disregarded for
federal income tax purposes is allocable to this state as if the single member
limited liability company did not exist and the assets of the limited liability
company are personally owned by the sole member.
Gain on the sale of goodwill
or income from a covenant not to compete that is connected with a business
operating all or partially in Minnesota is allocated to this state to the extent
that the income from the business in the year preceding the year of sale was
assignable to Minnesota under subdivision 3.
When an employer pays an
employee for a covenant not to compete, the income allocated to this state is
in the ratio of the employee's service in Minnesota in the calendar year
preceding leaving the employment of the employer over the total services
performed by the employee for the employer in that year.
(d) Income from winnings on
a bet made by an individual while in Minnesota is assigned to this state. In this paragraph, "bet" has the
meaning given in section 609.75, subdivision 2, as limited by section 609.75,
subdivision 3, clauses (1), (2), and (3).
(e) All items of gross
income not covered in paragraphs (a) to (d) and not part of the taxpayer's
income from a trade or business shall be assigned to the taxpayer's
domicile.
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(f) For the purposes of this
section, working as an employee shall not be considered to be conducting a
trade or business.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 20. Minnesota Statutes 2008, section 290.21,
subdivision 4, is amended to read:
Subd. 4. Dividends
received from another corporation. (a)(1)
Eighty percent of dividends received by a corporation during the taxable year
from another corporation, in which the recipient owns 20 percent or more of the
stock, by vote and value, not including stock described in section 1504(a)(4)
of the Internal Revenue Code when the corporate stock with respect to which
dividends are paid does not constitute the stock in trade of the taxpayer or
would not be included in the inventory of the taxpayer, or does not constitute
property held by the taxpayer primarily for sale to customers in the ordinary
course of the taxpayer's trade or business, or when the trade or business of
the taxpayer does not consist principally of the holding of the stocks and the
collection of the income and gains therefrom; and
(2)(i) the remaining 20
percent of dividends if the dividends received are the stock in an affiliated
company transferred in an overall plan of reorganization and the dividend is
eliminated in consolidation under Treasury Department Regulation 1.1502-14(a),
as amended through December 31, 1989;
(ii) the remaining 20
percent of dividends if the dividends are received from a corporation which is
subject to tax under section 290.36 and which is a member of an affiliated
group of corporations as defined by the Internal Revenue Code and the dividend
is eliminated in consolidation under Treasury Department Regulation
1.1502-14(a), as amended through December 31, 1989, or is deducted under an
election under section 243(b) of the Internal Revenue Code; or
(iii) the remaining 20
percent of the dividends if the dividends are received from a property and
casualty insurer as defined under section 60A.60, subdivision 8, which is a
member of an affiliated group of corporations as defined by the Internal
Revenue Code and either: (A) the
dividend is eliminated in consolidation under Treasury Regulation 1.1502-14(a),
as amended through December 31, 1989; or (B) the dividend is deducted under an
election under section 243(b) of the Internal Revenue Code.
(b) Seventy percent of
dividends received by a corporation during the taxable year from another
corporation in which the recipient owns less than 20 percent of the stock, by
vote or value, not including stock described in section 1504(a)(4) of the
Internal Revenue Code when the corporate stock with respect to which dividends
are paid does not constitute the stock in trade of the taxpayer, or does not
constitute property held by the taxpayer primarily for sale to customers in the
ordinary course of the taxpayer's trade or business, or when the trade or
business of the taxpayer does not consist principally of the holding of the
stocks and the collection of income and gain therefrom.
(c) The dividend deduction
provided in this subdivision shall be allowed only with respect to dividends
that are included in a corporation's Minnesota taxable net income for the
taxable year.
The dividend deduction
provided in this subdivision does not apply to a dividend from a corporation
which, for the taxable year of the corporation in which the distribution is
made or for the next preceding taxable year of the corporation, is a
corporation exempt from tax under section 501 of the Internal Revenue Code.
The dividend deduction
provided in this subdivision applies to the amount of regulated investment
company dividends only to the extent determined under section 854(b) of the
Internal Revenue Code.
The dividend deduction
provided in this subdivision shall not be allowed with respect to any dividend
for which a deduction is not allowed under the provisions of section 246(c) of
the Internal Revenue Code.
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(d) If dividends received by a corporation that does not have
nexus with Minnesota under the provisions of Public Law 86-272 are included as income
on the return of an affiliated corporation permitted or required to file a
combined report under section 290.17, subdivision 4, or 290.34, subdivision 2,
then for purposes of this subdivision the determination as to whether the trade
or business of the corporation consists principally of the holding of stocks
and the collection of income and gains therefrom shall be made with reference
to the trade or business of the affiliated corporation having a nexus with
Minnesota.
(e) The deduction provided by this subdivision does not apply
if the dividends are paid by a FSC as defined in section 922 of the Internal
Revenue Code.
(f) If one or more of the members of the unitary group whose
income is included on the combined report received a dividend, the deduction
under this subdivision for each member of the unitary business required to file
a return under this chapter is the product of:
(1) 100 percent of the dividends received by members of the group; (2)
the percentage allowed pursuant to paragraph (a) or (b); and (3) the percentage
of the taxpayer's business income apportionable to this state for the taxable
year under section 290.191 or 290.20.
(g) The deduction provided by this subdivision does not apply
to dividends received from a real estate investment trust, if the dividends are
not considered to be dividends under sections 243(d)(3) and 857(c) of the
Internal Revenue Code.
EFFECTIVE
DATE. This section is effective for
taxable years beginning after December 31, 2009.
Sec. 21. Minnesota
Statutes 2009 Supplement, section 291.005, subdivision 1, as amended by Laws
2010, chapter 216, section 15, is amended to read:
Subdivision 1. Scope.
Unless the context otherwise clearly requires, the following terms
used in this chapter shall have the following meanings:
(1) "Commissioner" means the commissioner of revenue
or any person to whom the commissioner has delegated functions under this
chapter.
(2) "Federal gross estate" means the gross estate of
a decedent as required to be valued and otherwise determined for federal
estate tax purposes by federal taxing authorities pursuant to the provisions
of under the Internal Revenue Code.
(3) "Internal Revenue Code" means the United States
Internal Revenue Code of 1986, as amended through March 18, 2010, but
without regard to the provisions of sections 501 and 901 of Public Law 107-16.
(4) "Minnesota adjusted taxable estate" means
federal adjusted taxable estate as defined by section 2011(b)(3) of the
Internal Revenue Code, increased by the amount of deduction for state death
taxes allowed under section 2058 of the Internal Revenue Code.
(5) "Minnesota gross estate" means the federal gross
estate of a decedent after (a) excluding therefrom any property included
therein which has its situs outside Minnesota, and (b) including therein any
property omitted from the federal gross estate which is includable therein, has
its situs in Minnesota, and was not disclosed to federal taxing authorities.
(6) "Nonresident decedent" means an individual whose
domicile at the time of death was not in Minnesota.
(7) "Personal representative" means the executor,
administrator or other person appointed by the court to administer and dispose
of the property of the decedent. If
there is no executor, administrator or other person appointed, qualified, and
acting within this state, then any person in actual or constructive possession
of any
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property having a situs in this state which is included in the
federal gross estate of the decedent shall be deemed to be a personal
representative to the extent of the property and the Minnesota estate tax due
with respect to the property.
(8) "Resident decedent" means an individual whose
domicile at the time of death was in Minnesota.
(9) "Situs of property" means, with respect to real
property, the state or country in which it is located; with respect to tangible
personal property, the state or country in which it was normally kept or
located at the time of the decedent's death; and with respect to intangible
personal property, the state or country in which the decedent was domiciled at
death.
EFFECTIVE
DATE. This section is effective the day
following final enactment and applies regardless of when the decedent died.
Sec. 22.
Minnesota Statutes 2008, section 291.03, is amended by adding a
subdivision to read:
Subd. 1b.
Qualified terminable interest
property. For estates of
decedents dying after December 31, 2009, and before January 1, 2011, if no
federal estate tax return is filed the executor may make a qualified terminable
interest property election, as defined in section 2056(b)(7) of the Internal
Revenue Code, for purposes of computing the tax under this chapter. The election may not reduce the taxable
estate under this chapter below $3,500,000.
The election must be made on the tax return under this chapter and is
irrevocable. All tax under this chapter
must be determined using the qualified terminable interest property election
made on the Minnesota return. For
purposes of applying sections 2044 and 2207A of the Internal Revenue Code when
computing the tax under this chapter for the estate of the decedent's surviving
spouse, regardless of the date of death of the surviving spouse, amounts for
which a qualified terminable interest property election has been made under
this section must be treated as though a valid federal qualified terminable
interest property election under section 2056(b)(7) of the Internal Revenue
Code has been made.
EFFECTIVE
DATE. This section is effective for
estates of decedents dying after December 31, 2009.
Sec. 23. [524.2-712] DECEDENTS DYING AFTER
DECEMBER 31, 2009, AND BEFORE JANUARY 1, 2011; CONSTRUCTION OF CERTAIN FORMULA
CLAUSES BY REFERENCE TO FEDERAL TRANSFER TAX LAW.
(a) A governing instrument, including a will or trust
agreement, of a decedent who dies after December 31, 2009, and before January
1, 2011, that contains a formula or provision referring to the "unified
credit," "estate tax exemption," "applicable exemption
amount," "applicable credit amount," "applicable exclusion
amount," "generation-skipping transfer tax exemption," "GST
exemption," "marital deduction," "maximum marital
deduction," "unlimited marital deduction," "inclusion
ratio," "applicable fraction," or any section of the Internal
Revenue Code relating to the federal estate tax or federal generation-skipping
transfer tax, or that measures a share of an estate or trust by reference to
federal estate taxes or federal generation-skipping transfer taxes, is deemed
to refer to the federal estate tax and the federal generation-skipping transfer
tax laws as they applied with respect to the estates of decedents dying on
December 31, 2009. This paragraph does
not apply to a governing instrument, including a will or trust agreement, that
manifests an intent that a contrary rule applies if the decedent dies on a date
on which there is no then-applicable federal estate or federal
generation-skipping transfer tax.
(b) If the federal estate or federal generation-skipping
transfer tax becomes effective before January 1, 2011, then the reference to
January 1, 2011, in paragraph (a) instead refers to the first date on which the
tax becomes legally effective.
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(c) The personal
representative, trustee, or any interested person under the governing
instrument, including a will or trust agreement, may bring a proceeding to
determine whether the decedent intended that a formula or provision described
in paragraph (a) be construed with respect to the law as it existed after
December 31, 2009. Such a proceeding
must be commenced by December 31, 2011.
EFFECTIVE DATE. This section is effective on January 1, 2010.
Sec. 24. INCOME
TAX RECIPROCITY BENCHMARK STUDY.
Subdivision 1. Study
parameters. (a) The
Department of Revenue, in conjunction with the Wisconsin Department of Revenue,
must conduct a study of individuals who are residents of Minnesota and earn
income for the performance of personal or professional services in Wisconsin,
or who are residents of Wisconsin and earn income for the performance of
personal or professional services in Minnesota.
The purpose of the study is to develop an estimate of net compensation
payable from one state to the other for the income tax revenue foregone as a
result of the two states entering into a new income tax reciprocity agreement,
which would take effect in tax year 2012, with compensation payments from one
state to the other made in the same fiscal year in which the net revenue loss
resulting from reciprocity occurs. The
study must be conducted as soon as practicable, using information obtained from
each state's income tax returns for tax year 2010, and from any other source of
information the departments determine is necessary to complete the study.
(b) The study must include
at least the following:
(1) the number of residents
of each state who earn income from the performance of personal or professional
services in the other state;
(2) the total amount of
income earned by residents of each state who earn income from the performance
of personal or professional services in the other state;
(3) the amount of tax
revenue that would be gained or foregone by each state if an income tax reciprocity
agreement were resumed between the two states under which the taxpayers were
required to pay income taxes on the income only in their state of residence
beginning in tax year 2012;
(4) a calculation of
compensation payable from one state to the other that takes into account the
credit each state allows for taxes paid to other states; and
(5) a methodology for using
the base year results determined by the study to project the amount of
compensation payments in future years.
Subd. 2. Reports. (a) No later than July 15, 2011, the
commissioner of revenue must report to the governor and to the chairs and
ranking minority members of the legislative committees having jurisdiction over
taxes, in compliance with Minnesota Statutes, sections 3.195 and 3.197. The report must include:
(1) the status of
negotiations between the states concerning a reciprocity agreement to commence
for tax year 2012;
(2) a description of data
elements being captured for the study from 2010 income tax returns;
(3) preliminary totals for
the number of residents of each state who earn income from the performance of
personal or professional services in the other state and the amount of that
income; and
(4) any other preliminary
conclusions responsive to the requirements in subdivision 1.
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(b) No later than September 15, 2011, the commissioner of
revenue must report to the governor and to the chairs and ranking minority
members of the legislative committees having jurisdiction over taxes in
compliance with Minnesota Statutes, sections 3.195 and 3.197. The report must include an update of
information provided in paragraph (a).
(c) No later than March 1, 2012, the commissioner of revenue
must submit a final report to the governor and to the chairs and ranking
minority members of the legislative committees having jurisdiction over taxes,
in compliance with Minnesota Statutes, sections 3.195 and 3.197, on the final
results of the study and the status of a reciprocity agreement between the two
states.
ARTICLE 4
SALES AND USE TAXES
Section 1. Minnesota
Statutes 2008, section 289A.50, subdivision 2, is amended to read:
Subd. 2. Refund of sales tax to vendors;
limitation. (a) If a vendor
has collected from a purchaser and remitted to the state a tax on a transaction
that is not subject to the tax imposed by chapter 297A, the tax is refundable
to the vendor only if and to the extent that the tax and any interest earned on
the tax is credited to amounts due to the vendor by the purchaser or returned
to the purchaser by the vendor.
(b) In addition to the requirements of subdivision 1, a
claim for refund under this subdivision must state in writing that the tax and
interest earned on the tax has been or will be refunded or credited to the
purchaser by the vendor.
(c) Within 60 days after the date the commissioner issues the
refund, any amount not refunded or credited to the purchaser by the vendor, as
required by paragraph (a), must be returned to the commissioner by the vendor.
(d) After the commissioner refunds the tax and interest to
the vendor, if the commissioner determines that the vendor did not refund or
credit the tax and interest as provided in this subdivision, or did not return
the amount required to be returned under paragraph (c), the commissioner may
assess the vendor for underpayment of tax and interest equal to that portion of
the amount that was not refunded or credited to the purchaser. The assessment bears interest which is
computed at the rate specified in section 270C.40, subdivision 5, on the unpaid
amount from the date the commissioner issues the refund until the date the
amount is paid to the commissioner. The
assessment may be made at any time within 3-1/2 years after the commissioner
refunds the tax and interest to the vendor.
If part of the refund was induced by fraud or misrepresentation of a material
fact, the assessment may be made at any time.
EFFECTIVE
DATE. This section is effective for
refunds issued after June 30, 2010.
Sec. 2. Minnesota
Statutes 2008, section 297A.62, as amended by Laws 2009, chapter 88, article 4,
section 4, is amended to read:
297A.62 SALES TAX IMPOSED;
RATES.
Subdivision 1. Generally.
Except as otherwise provided in subdivision 3 or in this chapter, a
sales tax of 6.5 percent is imposed on the gross receipts from retail sales as
defined in section 297A.61, subdivision 4, made in this state or to a
destination in this state by a person who is required to have or voluntarily
obtains a permit under section 297A.83, subdivision 1.
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Subd. 1a. Constitutionally
required sales tax increase. Except
as otherwise provided in subdivision 3 or in this chapter, an additional
sales tax of 0.375 percent, as required under the Minnesota Constitution,
article XI, section 15, is imposed on the gross receipts from retail sales as
defined in section 297A.61, subdivision 4, made in this state or to a
destination in this state by a person who is required to have or voluntarily
obtains a permit under section 297A.83, subdivision 1. This additional tax expires July 1, 2034.
Subd. 3. Manufactured
housing and park trailers. For
retail sales of manufactured homes as defined in section 327.31, subdivision 6,
for residential uses, the sales tax under subdivision subdivisions
1 and 1a is imposed on 65 percent of the dealer's cost of the
manufactured home. For retail sales of
new or used park trailers, as defined in section 168.002, subdivision 23, the
sales tax under subdivision subdivisions 1 and 1a is
imposed on 65 percent of the sales price of the park trailer.
Subd. 4. Combined
rates. In this chapter,
wherever there is a reference to the rate under subdivision 1, or to a combined
rate under subdivisions 1 and 1a, the rate to be applied is the combined rate
under subdivisions 1 and 1a until the additional tax imposed by subdivision 1a
expires. This subdivision does not apply
to section 297A.65.
EFFECTIVE DATE. This section is effective retroactively for sales
and purchases made after June 30, 2009, except for sales and purchases subject
to subdivision 3. This section is
effective for sales and purchases subject to subdivision 3 made after June 30,
2010.
Sec. 3. Minnesota Statutes 2008, section 297A.665, is
amended to read:
297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
(a) For the purpose of the
proper administration of this chapter and to prevent evasion of the tax, until
the contrary is established, it is presumed that:
(1) all gross receipts are
subject to the tax; and
(2) all retail sales for
delivery in Minnesota are for storage, use, or other consumption in
Minnesota.
(b) The burden of proving
that a sale is not a taxable retail sale is on the seller. However, a seller is relieved of liability
if:
(1) the seller obtains a
fully completed exemption certificate or all the relevant information required
by section 297A.72, subdivision 2, at the time of the sale or within 90 days
after the date of the sale; or
(2) if the seller has not
obtained a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, within the time
provided in clause (1), within 120 days after a request for substantiation by
the commissioner, the seller either:
(i) obtains in good faith a
fully completed exemption certificate or all the relevant information required
by section 297A.72, subdivision 2, from the purchaser; or
(ii) proves by other means
that the transaction was not subject to tax.
(c) Notwithstanding
paragraph (b), relief from liability does not apply to a seller who:
(1) fraudulently fails to
collect the tax; or
(2) solicits purchasers to
participate in the unlawful claim of an exemption.
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(d) A certified service provider, as defined in section 297A.995,
subdivision 2, is relieved of liability under this section to the extent a
seller who is its client is relieved of liability.
(e) A purchaser of tangible personal property or any items
listed in section 297A.63 that are shipped or brought to Minnesota by the
purchaser has the burden of proving that the property was not purchased from a
retailer for storage, use, or consumption in Minnesota.
(f) If a seller claims that certain sales are exempt and does
not provide the certificate, information, or proof required by paragraph (b),
clause (2), within 120 days after the date of the commissioner's request for
substantiation, then the exemptions claimed by the seller that required
substantiation are disallowed.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 4. Minnesota
Statutes 2008, section 297A.68, subdivision 39, is amended to read:
Subd. 39. Preexisting bids or contracts. (a) The sale of tangible personal
property or services is exempt from tax or a tax rate increase for a period of
six months from the effective date of the law change that results in the
imposition of the tax or the tax rate increase under this chapter if:
(1) the act imposing the tax or increasing the tax rate does
not have transitional effective date language for existing construction
contracts and construction bids; and
(2) the requirements of paragraph (b) are met.
(b) A sale is tax exempt under paragraph (a) if it meets the
requirements of either clause (1) or (2):
(1) For a construction contract:
(i) the goods or services sold must be used for the
performance of a bona fide written lump sum or fixed price construction
contract;
(ii) the contract must be entered into before the date the
goods or services become subject to the sales tax or the tax rate was
increased;
(iii) the contract must not provide for allocation of future
taxes; and
(iv) for each qualifying contract the contractor must give
the seller keep documentation of the contract on which an exemption
is to be claimed.
(2) For a construction bid:
(i) the goods or services sold must be used pursuant to an
obligation of a bid or bids;
(ii) the bid or bids must be submitted and accepted before the
date the goods or services became subject to the sales tax or the tax rate was
increased;
(iii) the bid or bids must not be able to be withdrawn,
modified, or changed without forfeiting a bond; and
(iv) for each qualifying bid, the contractor must give the
seller keep documentation of the bid on which an exemption is to be
claimed.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
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Sec. 5. Minnesota Statutes 2008, section 297A.70,
subdivision 13, is amended to read:
Subd. 13. Fund-raising
sales by or for nonprofit groups. (a)
The following sales by the specified organizations for fund-raising purposes
are exempt, subject to the limitations listed in paragraph (b):
(1) all sales made by an
a nonprofit organization that exists solely for the purpose of providing
educational or social activities for young people primarily age 18 and under;
(2) all sales made by an
organization that is a senior citizen group or association of groups if (i) in
general it limits membership to persons age 55 or older; (ii) it is organized
and operated exclusively for pleasure, recreation, and other nonprofit
purposes; and (iii) no part of its net earnings inures to the benefit of any
private shareholders;
(3) the sale or use of
tickets or admissions to a golf tournament held in Minnesota if the beneficiary
of the tournament's net proceeds qualifies as a tax-exempt organization under
section 501(c)(3) of the Internal Revenue Code; and
(4) sales of candy sold for
fund-raising purposes by a nonprofit organization that provides educational and
social activities primarily for young people age 18 and under.
(b) The exemptions listed in
paragraph (a) are limited in the following manner:
(1) the exemption under
paragraph (a), clauses (1) and (2), applies only if the gross annual receipts
of the organization from fund-raising do not exceed $10,000; and
(2) the exemption under
paragraph (a), clause (1), does not apply if the sales are derived from
admission charges or from activities for which the money must be deposited with
the school district treasurer under section 123B.49, subdivision 2, or be
recorded in the same manner as other revenues or expenditures of the school
district under section 123B.49, subdivision 4.
(c) Sales of tangible
personal property are exempt if the entire proceeds, less the necessary
expenses for obtaining the property, will be contributed to a registered
combined charitable organization described in section 43A.50, to be used
exclusively for charitable, religious, or educational purposes, and the
registered combined charitable organization has given its written permission
for the sale. Sales that occur over a
period of more than 24 days per year are not exempt under this paragraph.
(d) For purposes of this
subdivision, a club, association, or other organization of elementary or
secondary school students organized for the purpose of carrying on sports,
educational, or other extracurricular activities is a separate organization
from the school district or school for purposes of applying the $10,000
limit.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 6. Minnesota Statutes 2008, section 297A.71,
subdivision 23, is amended to read:
Subd. 23. Construction
materials for qualified low-income housing projects. (a) Purchases of materials and supplies
used or consumed in and equipment incorporated into the construction,
improvement, or expansion of qualified low-income housing projects are exempt
from the tax imposed under this chapter if the owner of the qualified
low-income housing project is:
(1) the public housing
agency or housing and redevelopment authority of a political subdivision;
(2) an entity exercising the
powers of a housing and redevelopment authority within a political subdivision;
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of Page 11101
(3) a limited partnership in which the sole or managing
general partner is an authority under clause (1) or an entity under clause (2) or,
(4), or (5);
(4) a nonprofit corporation subject to the provisions of
chapter 317A, and qualifying under section 501(c)(3) or 501(c)(4) of the
Internal Revenue Code of 1986, as amended; or
(5) a limited liability company that consists of a sole
member that is an entity under clause (4); or
(5) (6) an owner entity, as defined in Code
of Federal Regulations, title 24, part 941.604, for a qualified low-income
housing project described in paragraph (b), clause (5).
This exemption applies regardless of whether the purchases
are made by the owner of the facility or a contractor.
(b) For purposes of this exemption, "qualified
low-income housing project" means:
(1) a housing or mixed use project in which at least 20
percent of the residential units are qualifying low-income rental housing units
as defined in section 273.126;
(2) a federally assisted low-income housing project financed
by a mortgage insured or held by the United States Department of Housing and
Urban Development under United States Code, title 12, section 1701s,
1715l(d)(3), 1715l(d)(4), or 1715z-1; United States Code, title 42, section
1437f; the Native American Housing Assistance and Self-Determination Act,
United States Code, title 25, section 4101 et seq.; or any similar successor
federal low-income housing program;
(3) a qualified low-income housing project as defined in
United States Code, title 26, section 42(g), meeting all of the requirements
for a low-income housing credit under section 42 of the Internal Revenue Code
regardless of whether the project actually applies for or receives a low-income
housing credit;
(4) a project that will be operated in compliance with
Internal Revenue Service revenue procedure 96-32; or
(5) a housing or mixed use project in which all or a portion
of the residential units are subject to the requirements of section 5 of the
United States Housing Act of 1937.
(c) For a project, a portion of which is not used for
low-income housing units, the amount of purchases that are exempt under this
subdivision must be determined by multiplying the total purchases, as specified
in paragraph (a), by the ratio of:
(1) the total gross square footage of units subject to the
income limits under section 273.126, the financing for the project, the federal
low-income housing tax credit, revenue procedure 96-32, or section 5 of the
United States Housing Act of 1937, as applicable to the project; and
(2) the total gross square footage of all units in the
project.
(d) The tax must be imposed and collected as if the rate
under section 297A.62, subdivision 1, applied, and then refunded in the manner provided
in section 297A.75.
EFFECTIVE
DATE. This section is effective for sales
and purchases made after June 30, 2010.
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of Page 11102
Sec. 7. Minnesota
Statutes 2008, section 297A.71, subdivision 39, is amended to read:
Subd. 39. Hydroelectric generating facility. Materials and supplies used or consumed
in the construction of a 10.3 megawatt run-of-the-river hydroelectric
generating facility that meets the requirements of this subdivision are
exempt. To qualify for the exemption
under this subdivision, a hydroelectric generating facility must:
(1) utilize between 12 and 16 turbine generators at a dam
site existing on March 31, 1994;
(2) be located on land within 3,000 feet of a 13.8 kilovolt
distribution circuit; and
(3) be eligible to receive a renewable energy production
incentive payment under section 216C.41.
This exemption applies to materials and supplies purchased
after April 30, 2006, and on or before December 31, 2010.
EFFECTIVE
DATE. This section is effective
retroactively for sales and purchases made after December 31, 2009.
Sec. 8. Minnesota
Statutes 2008, section 297A.995, subdivision 10, is amended to read:
Subd. 10. Relief from certain liability. (a) Notwithstanding subdivision 9,
sellers and certified service providers are relieved from liability to the
state for having charged and collected the incorrect amount of sales or use tax
resulting from the seller or certified service provider (1) relying on
erroneous data provided by the commissioner in the database files on tax rates,
boundaries, or taxing jurisdiction assignments, or (2) relying on erroneous
data provided by the state in its taxability matrix concerning the taxability
of products and services.
(b) Notwithstanding subdivision 9, sellers and certified
service providers are relieved from liability to the state for having charged
and collected the incorrect amount of sales or use tax resulting from the
seller or certified service provider relying on the certification by the
commissioner as to the accuracy of a certified automated system as to the
taxability of product categories. The relief
from liability provided by this paragraph does not apply when the sellers or
certified service providers have incorrectly classified an item or transaction
into a product category, unless the item or transaction within a product
category was approved by the commissioner or approved jointly by the states
that are signatories to the agreement.
The sellers and certified service providers must revise a classification
within ten days after receipt of notice from the commissioner that an item or
transaction within a product category is incorrectly classified as to its
taxability, or they are not relieved from liability for the incorrect
classification following the notification.
(c) Notwithstanding subdivision 9, if there are not at least
30 days between the enactment of a new tax rate and the effective date of the
new rate, sellers and certified service providers shall be relieved from
liability for failing to collect tax at the new rate during the first 30 days
of the rate change, beginning on the day after the date of enactment of the
rate change, provided the seller or certified service provider continued to
impose and collect the tax at the immediately preceding tax rate during this
period. Relief from liability provided
by this paragraph shall not apply if the failure to collect at the newly
effective rate extends beyond 30 days after the enactment of the new rate. The relief provided by this paragraph shall
not apply if the commissioner determines that the seller or certified service
provider fraudulently failed to collect at the new rate or that the seller or
certified service provider solicited purchasers based on the immediately
preceding tax rate.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
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of Page 11103
Sec. 9. Minnesota
Statutes 2008, section 297A.995, subdivision 11, is amended to read:
Subd. 11. Purchaser relief from certain
liability. (a) Notwithstanding other
provisions in the law, a purchaser is relieved from liability resulting from
having paid the incorrect amount of sales or use tax if a purchaser, whether or
not holding a the commissioner gave the purchaser direct pay permit
authorization, or a purchaser's seller or certified service provider relied
on erroneous data provided by this state in the database files on tax rates,
boundaries, taxing jurisdiction assignments, or in the taxability matrix. After providing an address-based database for
assigning taxing jurisdictions and their associated rates, no relief for errors
resulting from the purchaser's reliance on a database using zip codes is
allowed.
(b) With respect to reliance on the taxability matrix
provided by this state in paragraph (a), relief is limited to erroneous
classifications in the taxability matrix for items included within the
classifications as "taxable," "exempt," "included in
sales price," "excluded from sales price," "included in the
definition," and "excluded from the definition."
(c) Notwithstanding other provisions in the law, if there are
not at least 30 days between the enactment of a new tax rate and the effective
date of the new rate, a purchaser shall be relieved from liability resulting
from failing to pay the tax at the new rate during the first 30 days of the
rate change, beginning on the day after the date of enactment of the rate
change, whether or not the purchaser has been given direct pay authorization by
the commissioner. Relief from liability
provided by this paragraph shall not apply if the failure to pay at the newly
effective rate extends beyond 30 days after the enactment of the new rate, and
shall not apply to a purchaser that did not continue to pay the tax at the
immediately preceding tax rate during the 30-day period. The relief provided by this paragraph shall
not apply if the commissioner determines that the purchaser fraudulently failed
to pay at the new rate.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 10. [645.025] SPECIAL LAWS; LOCAL TAXES.
Subdivision 1.
Definitions. (a) If a special law grants a local
government unit or group of units the authority to impose a local tax other
than sales tax, including but not limited to taxes such as lodging, entertainment,
admissions, or food and beverage taxes, and the Department of Revenue either
has agreed to or is required to administer the tax, such that the tax is
reported and paid with the chapter 297A taxes, then the local government unit
or group of units must adopt each definition used in the special law as
follows:
(1) the definition must be identical to
the definition found in chapter 297A or in Minnesota Rules, chapter 8130; or
(2) if the specific term is not defined either in chapter
297A or in Minnesota Rules, chapter 8130, then the definition must be
consistent with the position of the Department of Revenue as to the extent of
the tax base.
(b) This subdivision does not apply to terms that are defined
by the authorizing special law.
Subd. 2. Application. This section applies to a special law
that is described in subdivision 1 that was:
(1) originally enacted prior to 2010, and that was amended by
special law in or after 2010, to extend the time for imposing the tax or to
modify the tax base; or
(2) first enacted in or after 2010.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
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of Page 11104
Sec. 11. Laws
2009, chapter 88, article 4, section 5, the effective date, is amended to read:
EFFECTIVE DATE. This section is effective July 1,
2009, and applies to registrations leases or rentals made or
renewed on or after that date.
EFFECTIVE
DATE. This section is effective
retroactively for leases or rentals made or renewed after
June 30, 2009.
ARTICLE 5
LOCAL SALES TAX
Section 1. Laws 2002,
chapter 377, article 3, section 25, as amended by Laws 2009, chapter 88, article
4, section 19, is amended to read:
Sec. 25. ROCHESTER LODGING TAX.
Subdivision 1. Authorization. Notwithstanding Minnesota Statutes,
section 469.190 or 477A.016, or any other law, the city of Rochester may impose
an additional tax of one percent on the gross receipts from the furnishing for
consideration of lodging at a hotel, motel, rooming house, tourist court, or
resort, other than the renting or leasing of it for a continuous period of 30
days or more.
Subd. 1a. Authorization. Notwithstanding Minnesota Statutes,
section 469.190 or 477A.016, or any other law, and in addition to the tax
authorized by subdivision 1, the city of Rochester may impose an additional tax
of one percent on the gross receipts from the furnishing for consideration of
lodging at a hotel, motel, rooming house, tourist court, or resort, other than
the renting or leasing of it for a continuous period of 30 days or more only
upon the approval of the city governing body of a total financial package for
the project.
Subd. 2. Disposition of proceeds. (a) The gross proceeds from the tax
imposed under subdivision 1 must be used by the city to fund a local convention
or tourism bureau for the purpose of marketing and promoting the city as a
tourist or convention center.
(b) The gross proceeds from the one percent tax imposed under
subdivision 1a shall be used to pay for (1) construction, renovation,
improvement, and expansion of the Mayo Civic Center and related skyway access,
lighting, parking, or landscaping; and (2) for payment of any principal,
interest, or premium on bonds issued to finance the construction, renovation,
improvement, and expansion of the Mayo Civic Center Complex.
Subd. 2a.
Bonds. The city of Rochester may issue
general obligation bonds of the city, in one or more series, in the aggregate
principal amount not to exceed $43,500,000, to pay for capital and
administrative costs for the design, construction, renovation, improvement, and
expansion of the Mayo Civic Center Complex, and related skyway, access,
lighting, parking, and landscaping. The
city may pledge the lodging tax authorized by subdivision 1a and the food and
beverage tax authorized under Laws 2009, chapter 88, article 4, section 23, to
the payment of the bonds. The debt
represented by the bonds is not included in computing any debt limitations
applicable to the city, and the levy of taxes required by Minnesota Statutes,
section 475.61, to pay the principal of and interest on the bonds is not
subject to any levy limitation or included in computing or applying any levy
limitation applicable to the city. A
separate election to approve the bonds under Minnesota Statutes, section
475.58, is not required provided that the project financed by these bonds is paid
from revenues generated by the proceeds of taxes listed in this subdivision in
the same manner as obligations financed partially by tax increments under
Minnesota Statutes, section 475.058, subdivision 1, clause (3).
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of Page 11105
Subd. 3. Expiration of taxing authority. The authority of the city to impose a tax
under subdivision 1a shall expire when the principal and interest on any bonds
or other obligations issued prior to December 31, 2014, to finance the
construction, renovation, improvement, and expansion of the Mayo Civic Center
Complex and related skyway access, lighting, parking, or landscaping have been
paid, including any bonds issued to refund such bonds, or at an earlier
time as the city shall, by ordinance, determine. Any funds remaining after completion of
the project and retirement or redemption of the bonds shall be placed in the
general fund of the city.
EFFECTIVE
DATE. This section is effective the day
after the governing body of the city of Rochester and its chief clerical
officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
Sec. 2. Laws 2009,
chapter 88, article 4, section 23, subdivision 4, is amended to read:
Subd. 4. Expiration of taxing authority. The authority granted under subdivision 1
to the city to impose a one percent tax on food and beverages shall expire when
the principal and interest on any bonds or other obligations issued prior to
December 31, 2014, to finance the construction, renovation, improvement, and
expansion of the Mayo Civic Center Complex and related skyway access, lighting,
parking, or landscaping, and any bonds issued to refund such bonds, have
been paid or at an earlier time as the city shall, by ordinance,
determine. Any funds remaining after
completion of the project and retirement or redemption of the bonds shall be
placed in the general fund of the city.
EFFECTIVE
DATE. This section is effective the day after
the governing body of the city of Rochester and its chief clerical officer
comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
Sec. 3. CITY OF DETROIT LAKES; LOCAL TAXES
AUTHORIZED.
Subdivision 1.
Food and beverage tax authorized. Notwithstanding Minnesota Statutes,
section 477A.016, or any ordinance, city charter, or other provision of law,
the city of Detroit Lakes may, by ordinance, impose a sales tax of one-half of
one percent on the gross receipts of all food and beverages sold by a
restaurant or place of refreshment, as defined by resolution of the city, that
is located within the city. For purposes
of this section, "food and beverages" include retail on-sale of intoxicating
liquor and fermented malt beverages.
Subd. 2.
Entertainment tax. Notwithstanding Minnesota Statutes,
section 477A.016, or any ordinance, city charter, or other provision of law,
the city of Detroit Lakes may, by ordinance, impose a tax of one-half of one
percent on the gross receipts on admission to an entertainment event located
within the city. For purposes of this
section, "entertainment event" means any event for which persons pay
money in order to be admitted to the premises and to be entertained, including,
but not limited to, theaters, concerts, and sporting events.
Subd. 3.
Use of proceeds from
authorized taxes. The
proceeds of the taxes imposed under subdivisions 1 and 2 must be used by the
city to pay all or a portion of the expenses of the following projects:
(1) control of flowering rush infestation;
(2) construction and improvement of bike trail facilities;
(3) parking improvements near public facilities; and
(4) redevelopment of the area returned to the city as a result
of realignment of Highway 10.
Subd. 4.
Expiration of taxing
authority. The taxes
authorized under subdivisions 1 and 2 expire when the governing body of the
city determines that sufficient revenues have been raised to finance the
projects in subdivision 3, including the amount to prepay to retire at maturity
the principal, interest, and premium due on any bonds issued for the projects.
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Subd. 5.
Collection, administration,
and enforcement. The city may
enter into an agreement with the commissioner of revenue to administer,
collect, and enforce the taxes under subdivisions 1 and 2. If the commissioner agrees to collect the
tax, the provisions of Minnesota Statutes, section 297A.99, related to
collection, administration, and enforcement apply.
EFFECTIVE
DATE. This section is effective the day
after the governing body of the city of Detroit Lakes and its chief clerical
officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
Sec. 4. CITY OF MARSHALL; SALES AND USE TAX.
Subdivision 1.
Authorization. Notwithstanding Minnesota Statutes,
section 297A.99, subdivisions 1, 2, and 3, or 477A.016, or any other law,
ordinance, or city charter, the city of Marshall, if imposed within two years
of the date of final enactment of this section, may impose any or all of the
taxes described in this section.
Subd. 2.
Bonds. (a) The city of Marshall may issue
bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the
costs of the new and existing facilities of the Minnesota Emergency Response
and Industry Training Center and all or part of the costs of the facilities of the
Southwest Minnesota Regional Amateur Sports Center, and may issue bonds to
refund bonds previously issued.
Authorized expenses include, but are not limited to, acquiring property,
predesign, design, and paying construction, furnishing, and equipment costs
related to these facilities. The
aggregate principal amount of bonds issued under this subdivision may not
exceed $17,290,000, plus an amount to be applied to the payment of the costs of
issuing the bonds. The bonds may be paid
from or secured by any funds available to the city of Marshall.
(b) The bonds are not included in computing any debt
limitation applicable to the city of Marshall, and any levy of taxes under
Minnesota Statutes, section 475.61, to pay principal and interest on the bonds,
is not subject to any levy limitation.
Subd. 3.
Lodging tax. The city of Marshall may impose by
ordinance a tax of up to 1-1/2 percent on the gross receipts subject to the
lodging tax under Minnesota Statutes, section 469.190, for the purposes
specified in subdivision 4. This lodging
tax is in addition to any tax imposed under Minnesota Statutes, section
469.190, and may be imposed within a tax district defined by the city council,
which may include areas of the city of Marshall which are not contiguous.
Subd. 4.
Use of lodging tax revenues. The revenues derived from the tax
imposed under subdivision 3 must be used by the city of Marshall to pay the
costs of collecting and administering the lodging tax, to pay all or part of
the operating costs of the new and existing facilities of the Minnesota
Emergency Response and Industry Training Center, including the payment of debt
service on bonds issued under subdivision 2, and to pay all or part of the
operating costs of the facilities of the Southwest Minnesota Regional Amateur
Sports Center, including the payment of debt service on bonds issued under
subdivision 2.
Subd. 5.
Food and beverages tax. The city of Marshall may impose by
ordinance an additional sales tax of up to 1-1/2 percent on gross receipts of
food and beverages sold primarily for consumption on the premises by
restaurants and places of refreshment that occur in the city of Marshall. The provisions of Minnesota Statutes, section
297A.99, except subdivisions 1, 2, and 3, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.
Subd. 6.
Use of food and beverages tax. The revenues derived from the tax
imposed under subdivision 5 must be used by the city of Marshall to pay the costs
of collecting and administering the food and beverages tax, to pay all or part
of the operating costs of the new and existing facilities of the Minnesota
Emergency Response and Industry Training Center, including the payment of debt
service on bonds issued under subdivision 2, and to pay all or part of the
operating costs of the facilities of the Southwest Minnesota Regional Amateur
Sports Center, including the payment of debt service on bonds issued under
subdivision 2.
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Subd. 7. Termination
of taxes. The taxes imposed
under subdivisions 3 and 5 expire at the earlier of (1) 30 years after the tax
is first imposed, or (2) when the city council determines that the amount of
revenues received from the taxes to pay for the capital, operating, and
administrative costs of the facilities under subdivisions 2, 4, and 6 first
equals or exceeds the amount authorized to be spent for the facilities plus the
additional amount needed to pay the costs related to issuance of the bonds
under subdivision 2, including interest on the bonds. Any funds remaining after payment of all the
costs and retirement or redemption of the bonds must be placed in the general
fund of the city. The taxes imposed
under subdivisions 3 and 5 may expire at an earlier time if the city so determines
by ordinance.
EFFECTIVE DATE. This section is effective the day after compliance
by the governing body of the city of Marshall with Minnesota Statutes, section
645.021, subdivision 3.
Sec. 5. GIANTS
RIDGE RECREATION AREA TAXING AUTHORITY.
Subdivision 1. Additional
taxes authorized. Notwithstanding
Minnesota Statutes, section 477A.016, or any other law, ordinance, or charter
provision to the contrary, the city of Biwabik, upon approval both by its
governing body and by the vote of at least seven members of the Iron Range
Resources and Rehabilitation Board, may impose any or all of the taxes
described in this section.
Subd. 2. Use
of proceeds. The proceeds of
any taxes imposed under this section, less refunds and costs of collection,
must be deposited into the Iron Range Resources and Rehabilitation Board
account enterprise fund created under the provisions of Minnesota Statutes,
section 298.221, paragraph (c), and must be dedicated and expended by the
commissioner of the Iron Range Resources and Rehabilitation Board, upon approval
by the vote of at least seven members of the Iron Range Resources and
Rehabilitation Board, to pay costs for the construction, renovation,
improvement, expansion, and maintenance of public recreational facilities
located in those portions of the city within the Giants Ridge Recreation Area
as defined in Minnesota Statutes, section 298.22, subdivision 7, or to pay any
principal, interest, or premium on any bond issued to finance the construction,
renovation, improvement, or expansion of such public recreational facilities.
Subd. 3. Lodging
tax. The city of Biwabik,
upon approval both by its governing body and by the vote of at least seven
members of the Iron Range Resources and Rehabilitation Board, may impose, by
ordinance, a tax of not more than five percent on the gross receipts subject to
the lodging tax under Minnesota Statutes, section 469.190. This tax is in addition to any tax imposed
under Minnesota Statutes, section 469.190, and may be imposed only on gross
lodging receipts generated within the Giants Ridge Recreation Area as defined
in Minnesota Statutes, section 298.22, subdivision 7.
Subd. 4. Admissions
and recreation tax. (a) The
city of Biwabik, upon approval both by its governing body and by the vote of at
least seven members of the Iron Range Resources and Rehabilitation Board, may
impose, by ordinance, a tax of not more than five percent on admission receipts
to entertainment and recreational facilities and on receipts from the rental of
recreation equipment, at sites within the Giants Ridge Recreation Area as
defined in Minnesota Statutes, section 298.22, subdivision 7. The provisions of Minnesota Statutes, section
297A.99, except for subdivisions 2 and 3, govern the imposition,
administration, collection, and enforcement of the tax authorized in this
subdivision.
(b) If the city imposes the
tax under paragraph (a), it must include in the ordinance an exemption for
purchases of season tickets or passes.
Subd. 5. Food
and beverage tax. The city of
Biwabik, upon approval both by its governing body and by the vote of at least
seven members of the Iron Range Resources and Rehabilitation Board, may impose,
by ordinance, an additional sales tax of not more than one percent on gross
receipts of food and beverages whether it is consumed on or off the premises by
restaurants and places of refreshment as defined by resolution of the city
within the Giants
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Ridge Recreation Area as
defined in Minnesota Statutes, section 298.22, subdivision 7. The provisions of Minnesota Statutes, section
297A.99, except for subdivisions 2 and 3, govern the imposition,
administration, collection, and enforcement of the tax authorized in this
subdivision.
EFFECTIVE
DATE. This section shall be effective the
day after compliance with Minnesota Statutes, section 645.021, subdivisions 2
and 3, by the governing body of the city of Biwabik. Notwithstanding Minnesota Statutes, section
645.021, subdivision 3, the city may comply with Minnesota Statutes, section
645.021, at any time before January 1, 2012.
ARTICLE 6
SPECIAL TAXES
Section 1. Minnesota
Statutes 2008, section 60A.209, subdivision 1, is amended to read:
Subdivision 1. Authorization; regulation. A resident of this state may obtain
insurance from an ineligible surplus lines insurer in this state through a
surplus lines licensee. The licensee
shall first attempt to place the insurance with a licensed insurer, or if that
is not possible, with an eligible surplus lines insurer. If coverage is not obtainable from a licensed
insurer or an eligible surplus lines insurer, the licensee shall certify to the
commissioner, on a form prescribed by the commissioner, that these attempts
were made. Upon obtaining coverage from
an ineligible surplus lines insurer, the licensee shall:
(a) Have printed, typed, or stamped in red ink upon the face
of the policy in not less than 10-point type the following notice: "THIS INSURANCE IS ISSUED PURSUANT TO
THE MINNESOTA SURPLUS LINES INSURANCE ACT.
THIS INSURANCE IS PLACED WITH AN INSURER THAT IS NOT LICENSED BY THE
STATE NOR RECOGNIZED BY THE COMMISSIONER OF COMMERCE AS AN ELIGIBLE SURPLUS
LINES INSURER. IN CASE OF ANY DISPUTE
RELATIVE TO THE TERMS OR CONDITIONS OF THE POLICY OR THE PRACTICES OF THE
INSURER, THE COMMISSIONER OF COMMERCE WILL NOT BE ABLE TO ASSIST IN THE
DISPUTE. IN CASE OF INSOLVENCY, PAYMENT
OF CLAIMS IS NOT GUARANTEED." The notice may not be covered or concealed
in any manner; and
(b) Collect from the insured appropriate premium taxes, as
provided under chapter 297I, and report the transaction to the commissioner
of revenue on a form prescribed by the commissioner. If the insured fails to pay the taxes when
due, the insured shall be subject to a civil fine of not more than $3,000, plus
accrued interest from the inception of the insurance.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 2. Minnesota
Statutes 2008, section 295.55, subdivision 2, is amended to read:
Subd. 2. Estimated tax; hospitals; surgical
centers. (a) Each hospital or
surgical center must make estimated payments of the taxes for the calendar year
in monthly installments to the commissioner within 15 days after the end of the
month.
(b) Estimated tax payments are not required of hospitals or
surgical centers if: (1) the tax for the
current calendar year is less than $500 or less; or (2) the tax
for the previous calendar year is less than $500, if the taxpayer had
a tax liability and was doing business the entire year or less.
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(c) Underpayment of estimated installments bear interest at
the rate specified in section 270C.40, from the due date of the payment until
paid or until the due date of the annual return whichever comes first. An underpayment of an estimated installment
is the difference between the amount paid and the lesser of (1) 90 percent of
one-twelfth of the tax for the calendar year or (2) one-twelfth of the total
tax for the previous calendar year if the taxpayer had a tax liability and
was doing business the entire year.
EFFECTIVE
DATE. This section is effective for gross
revenues received after December 31, 2010.
Sec. 3. Minnesota
Statutes 2008, section 295.55, subdivision 3, is amended to read:
Subd. 3. Estimated tax; other taxpayers. (a) Each taxpayer, other than a hospital
or surgical center, must make estimated payments of the taxes for the calendar
year in quarterly installments to the commissioner by April 15, July 15,
October 15, and January 15 of the following calendar year.
(b) Estimated tax payments are not required if: (1) the tax for the current calendar year is less
than $500 or less; or (2) the tax for the previous calendar year is less
than $500, if the taxpayer had a tax liability and was doing business
the entire year or less.
(c) Underpayment of estimated installments bear interest at
the rate specified in section 270C.40, from the due date of the payment until
paid or until the due date of the annual return whichever comes first. An underpayment of an estimated installment
is the difference between the amount paid and the lesser of (1) 90 percent of
one-quarter of the tax for the calendar year or (2) one-quarter of the total
tax for the previous calendar year if the taxpayer had a tax liability and
was doing business the entire year.
EFFECTIVE
DATE. This section is effective for gross
revenues received after December 31, 2010.
Sec. 4. [296A.061] CANCELLATION OR NONRENEWAL OF
LICENSES.
The commissioner may cancel a license or not renew a license
if one of the following conditions occurs:
(1) the license holder has not filed a petroleum tax return or
report for at least one year;
(2) the license holder has not reported any petroleum tax
liability on the license holder's returns or reports for at least one year; or
(3) the license holder requests cancellation of the license.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 5. Minnesota
Statutes 2008, section 297F.01, subdivision 22a, is amended to read:
Subd. 22a. Weighted average retail price. "Weighted average retail price"
means (1) the average retail price per pack of 20 cigarettes, with the average
price weighted by the number of packs sold at each price, (2) reduced by the
sales tax included in the retail price, and (3) adjusted for the expected
inflation from the time of the survey to the average of the 12 months that
the sales tax will be imposed. The
commissioner shall make the inflation adjustment in accordance with the
Consumer Price Index for all urban consumers inflation indicator as published
in the most recent state budget forecast.
The inflation factor for the calendar year in which the new tax rate
takes effect must be used. If the survey
indicates that the average retail price of cigarettes has not increased
relative to the average retail price in the previous year's survey, then no
inflation adjustment must be made as provided in section 297F.25,
subdivision 1.
EFFECTIVE
DATE. This section is effective January 1,
2011.
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Day - Tuesday, May 4, 2010 - Top of Page 11110
Sec. 6. Minnesota Statutes 2008, section 297F.04, is
amended by adding a subdivision to read:
Subd. 2a. Cancellation
or nonrenewal. The
commissioner may cancel a license or not renew a license if one of the
following conditions occurs:
(1) the license holder has
not filed a cigarette or tobacco products tax return for at least one year;
(2) the license holder has
not reported any cigarette or tobacco products tax liability on the license
holder's returns for at least one year; or
(3) the license holder
requests cancellation of the license.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 7. Minnesota Statutes 2008, section 297F.07,
subdivision 4, is amended to read:
Subd. 4. Sales
to nonqualified buyers. A retailer
who sells or otherwise disposes of unstamped or untaxed stock other than to a
qualified purchaser shall collect from the buyer or transferee the tax imposed
by section 297F.05, and remit the tax to the Department of Revenue at the same
time and manner as required by section 297F.09.
If the retailer fails to collect the tax from the buyer or transferee,
or fails to remit the tax, the retailer is personally responsible for the tax
and the commissioner may seize any product destined to be delivered to the
retailer. The product so seized shall be
considered contraband and be subject to the procedures outlined in section
297F.21, subdivision 3. The proceeds
of the sale of the stock may be applied to any tax liability owed by the
retailer after deducting all costs and expenses.
This
section does not relieve the buyer or possessor of unstamped or untaxed stock
from personal liability for the tax.
EFFECTIVE DATE. This section is effective the day following final
enactment.
Sec. 8. Minnesota Statutes 2008, section 297F.25,
subdivision 1, is amended to read:
Subdivision 1. Imposition. (a) A tax is imposed on
distributors on the sale of cigarettes by a cigarette distributor to a retailer
or cigarette subjobber for resale in this state. The tax is equal to 6.5 percent of the
weighted average retail price. The
weighted average retail price and must be expressed in cents per
pack when rounded to the nearest one-tenth of a cent. The weighted average retail price must be
determined annually, with new rates published by May November 1,
and effective for sales on or after August January 1 of the
following year. The weighted average
retail price must be established by surveying cigarette retailers statewide in
a manner and time determined by the commissioner. The commissioner shall make an inflation
adjustment in accordance with the Consumer Price Index for all urban consumers
inflation indicator as published in the most recent state budget forecast. The commissioner shall use the inflation
factor for the calendar year in which the new tax rate takes effect. If the survey indicates that the average
retail price of cigarettes has not increased relative to the average retail
price in the previous year's survey, then the commissioner shall not make an
inflation adjustment. The
determination of the commissioner pursuant to this subdivision is not a
"rule" and is not subject to the Administrative Procedure Act
contained in chapter 14. As of August
1, 2005, the tax is 25.5 cents per pack of 20 cigarettes. For packs of cigarettes with other than
20 cigarettes, the tax must be adjusted proportionally.
(b) Notwithstanding
paragraph (a), and in lieu of a survey of cigarette retailers, the tax
calculation of the weighted average retail price for the sales of cigarettes
from August 1, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average retail price per
pack of 20 cigarettes from the most recent survey by the percentage change in a
weighted average of the presumed legal prices for cigarettes during the year
after completion of that survey, as reported and published by the Department of
Commerce under section 325D.371; (2) subtracting
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the sales tax included in
the retail price; and (3) adjusting for expected inflation. The rate must be published by May 1 and
is effective for sales after July 31. If
the weighted average of the presumed legal prices indicates that the average
retail price of cigarettes has not increased relative to the average retail
price in the most recent survey, then no inflation adjustment must be
made. For packs of cigarettes with other
than 20 cigarettes, the tax must be adjusted proportionally.
EFFECTIVE
DATE. This section is effective January 1,
2011.
Sec. 9. Minnesota
Statutes 2008, section 297I.01, subdivision 9, is amended to read:
Subd. 9. Gross premiums. "Gross premiums" means total
premiums paid by policyholders and applicants of policies, whether received in
the form of money or other valuable consideration, on property, persons, lives,
interests and other risks located, resident, or to be performed in this state,
but excluding consideration and premiums for reinsurance assumed from other
insurance companies.
The term (a) "Gross
premiums" includes the total consideration paid to bail bond agents for
bail bonds.
(b) For title insurance companies, "gross
premiums" means the charge for title insurance made by a title insurance
company or its agents according to the company's rate filing approved by the
commissioner of commerce without a deduction for commissions paid to or
retained by the agent. Gross premiums of
a title insurance company does not include any other charge or fee for
abstracting, searching, or examining the title, or escrow, closing, or other
related services.
The term (c) "Gross
premiums" includes any workers' compensation special compensation fund
premium surcharge pursuant to section 176.129.
(d) "Gross premiums" for surplus lines insurance includes
all related charges, commissions, and fees received by the licensee. Gross premiums does not include the stamping
fee, as provided under section 60A.2085, subdivision 7, nor the operating
assessment, as provided under section 60A.208, subdivision 8.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 10. Minnesota
Statutes 2008, section 297I.05, subdivision 7, is amended to read:
Subd. 7. Surplus lines tax. (a) A tax is imposed on surplus lines
licensees. The rate of tax is equal to
three percent of the gross premiums less return premiums received by the
licensee minus any licensee association operating assessments paid under
section 60A.208.
(b) If surplus lines insurance placed by a surplus lines
licensee and taxed under this subdivision covers a subject of insurance
residing, located, or to be performed outside this state, a proper pro rata
portion of the entire premium payable for all of that insurance must be
allocated according to the subjects of insurance residing, located, or to be
performed in this state.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 11. Minnesota
Statutes 2008, section 297I.30, subdivision 1, is amended to read:
Subdivision 1. General rule. On or before March 1, every insurer
taxpayer subject to taxation under section 297I.05, subdivisions 1 to 6
5, and 9, 10, 12, paragraphs (a), clauses (1) to (5)
(4), and (b), (c), and (d), and 14, shall file an annual
return for the preceding calendar year setting forth such information as the
commissioner may reasonably require on forms in the form prescribed
by the commissioner.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
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of Page 11112
Sec. 12.
Minnesota Statutes 2008, section 297I.30, subdivision 2, is amended to
read:
Subd. 2. Surplus lines licensees and purchasing
groups. On or before February 15 and
August 15 of each year, every surplus lines licensee subject to taxation under
section 297I.05, subdivision 7, and every purchasing group or member of a
purchasing group subject to tax under section 297I.05, subdivision 12, paragraph
(a), clause (6) (5), shall file a return with the commissioner
for the preceding six-month period ending December 31, or June 30, setting
forth any information the commissioner reasonably prescribes on forms in
the form prescribed by the commissioner.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 13.
Minnesota Statutes 2008, section 297I.30, subdivision 7, is amended to
read:
Subd. 7. Surcharge.
(a)(1) By April 30 of each year, every company required to pay
the surcharge under section 297I.10, subdivision 1, shall file a return for the
five-month period ending March 31 setting forth any information the
commissioner reasonably requires on forms in the form prescribed by
the commissioner.
(2) (b) By June 30 of each year, every company
required to pay the surcharge under section 297I.10, subdivision 1, shall file
a return for the two-month period ending May 31 setting forth any
information the commissioner reasonably requires on forms in the form prescribed
by the commissioner.
(3) (c) By November 30 of each year, every company
required to pay the surcharge under section 297I.10, subdivision 1, shall file
a return for the five-month period ending October 31 setting forth any
information the commissioner reasonably requires on forms in the form prescribed
by the commissioner.
(b) By February 15 and August 15 of each year, every company
required to pay a surcharge under section 297I.10, subdivision 2, must file a
return for the preceding six-month period ending December 31 and June 30.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 14.
Minnesota Statutes 2008, section 297I.30, subdivision 8, is amended to
read:
Subd. 8. Fire insurance surcharge. On or before May 15, August 15, November
15, and February 15 of each year, every insurer required to pay the surcharge
under section 297I.06, subdivisions 1 and 2, shall file a return with the
commissioner for the preceding three-month period ending March 31, June 30, September
30, and December 31, setting forth any information the commissioner
reasonably requires on forms in the form prescribed by the
commissioner.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 15.
Minnesota Statutes 2009 Supplement, section 297I.35, subdivision 2, is
amended to read:
Subd. 2. Electronic payments. If the aggregate amount of tax and
surcharges due under this chapter during a calendar fiscal year ending
June 30 is equal to or exceeds $10,000, or if the taxpayer is required to
make payment of any other tax to the commissioner by electronic means, then all
tax and surcharge payments in the subsequent calendar year must be paid by
electronic means.
EFFECTIVE
DATE. This section is effective for payments
due in calendar year 2010 and thereafter, based upon liabilities incurred in
the fiscal year ending June 30, 2009, and in fiscal years thereafter.
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of Page 11113
Sec. 16. Minnesota
Statutes 2008, section 297I.40, subdivision 1, is amended to read:
Subdivision 1. Requirement to pay. On or before March 15, June 15, September
15, and December 15 of the current year, every taxpayer subject to tax under
section 297I.05, subdivisions 1 to 6 5, and 12, paragraphs
paragraph (a), clauses (1) to (5), (b), and (e) (4), and 14,
must pay to the commissioner an installment equal to one-fourth of the
insurer's total estimated tax for the current year.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 17. Minnesota
Statutes 2008, section 297I.40, subdivision 5, is amended to read:
Subd. 5. Definition of tax. The term "tax" as used in this
section means the tax imposed by section 297I.05, subdivisions 1 to 6
5, 11, and 12, paragraphs (a), clauses (1) to (5) (4), (b),
and (d), and 14, less any offset in section 297I.20.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 18. Minnesota
Statutes 2008, section 297I.65, is amended by adding a subdivision to read:
Subd. 4.
Omission in excess of 25
percent. Additional taxes or
surcharges may be assessed within 6-1/2 years after the due date of the return
or the date the return was filed, whichever is later, if the taxpayer omits
from a gross premiums tax or surcharge return an amount of tax in excess of 25
percent of the tax or surcharge reported in the return.
EFFECTIVE
DATE. This section is effective for premium
taxes due after December 31, 2010.
Sec. 19. Minnesota
Statutes 2008, section 298.282, subdivision 1, is amended to read:
Subdivision 1. Distribution of taconite municipal aid
account. The amount deposited with the
county as provided in section 298.28, subdivision 3, must be distributed as
provided by this section among: (1) the
municipalities comprising a tax relief taconite assistance area
under section 273.134, paragraph (b) 273.1341; (2) a township
that contains a state park consisting primarily of an underground iron ore
mine; and (3) a city located within five miles of that state park, each being
referred to in this section as a qualifying municipality.
EFFECTIVE
DATE. This section is effective for distributions
made after the day following final enactment.
Sec. 20. REPEALER.
Minnesota Statutes 2008, section 297I.30, subdivisions 4, 5,
and 6, are repealed.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
ARTICLE 7
PUBLIC FINANCE
Section 1. Minnesota
Statutes 2008, section 103D.335, subdivision 17, is amended to read:
Subd. 17. Borrowing funds. (a) The managers may borrow funds
from an agency of the federal government, a state agency, a county where the watershed
district is located in whole or in part, or a financial institution authorized
under chapter 47 to do business in this state.
A county board may lend the amount requested by a watershed district. A watershed district may not have more than a
total of $600,000 in loans from counties and financial institutions under this
subdivision outstanding at any time.
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of Page 11114
(b) Notwithstanding paragraph (a), a watershed district may
have up to a total of $2,000,000 in loans from counties and financial
institutions under this subdivision outstanding at any time if the taxable
market value of property within the watershed district is more than
$500,000,000.
Sec. 2. Minnesota
Statutes 2008, section 469.101, subdivision 1, is amended to read:
Subdivision 1. Establishment. An economic development authority may create
and define the boundaries of economic development districts at any place or
places within the city if the district satisfies the requirements of section
469.174, subdivision 10, except that the district boundaries must be
contiguous, and may use the powers granted in sections 469.090 to 469.108 to
carry out its purposes. First the
authority must hold a public hearing on the matter. At least ten days before the hearing, the
authority shall publish notice of the hearing in a daily newspaper of general
circulation in the city. Also, the
authority shall find that an economic development district is proper and
desirable to establish and develop within the city.
EFFECTIVE
DATE. This section is effective for
economic development districts created after the day following final enactment.
Sec. 3. Minnesota
Statutes 2008, section 469.319, subdivision 5, is amended to read:
Subd. 5. Waiver authority. (a) The commissioner may waive all or
part of a repayment required under subdivision 1, if the commissioner, in
consultation with the commissioner of employment and economic development and
appropriate officials from the local government units in which the qualified
business is located, determines that requiring repayment of the tax is not in
the best interest of the state or the local government units and the business
ceased operating as a result of circumstances beyond its control including, but
not limited to:
(1) a natural disaster;
(2) unforeseen industry trends; or
(3) loss of a major supplier or customer.
(b)(1) The commissioner shall waive repayment required under
subdivision 1a if the commissioner has waived repayment by the operating
business under subdivision 1, unless the person that received benefits without
having to operate a business in the zone was a contributing factor in the
qualified business becoming subject to repayment under subdivision 1;
(2) the commissioner shall waive the repayment required under
subdivision 1a, even if the repayment has not been waived for the operating
business if:
(i) the person that received benefits without having to
operate a business in the zone and the business that operated in the zone are
not related parties as defined in section 267(b) of the Internal Revenue Code
of 1986, as amended through December 31, 2007; and
(ii) actions of the person were not a contributing factor in
the qualified business becoming subject to repayment under subdivision 1.
(c) Requests for waiver must be made no later than 60 days
after the notice date of an order issued under subdivision 4, paragraph (d),
or, in the case of property taxes, within 60 days of the date of a tax
statement issued under subdivision 4, paragraph (c).
EFFECTIVE
DATE. This section is effective for waivers
requested in response to notices issued after the day following final
enactment.
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of Page 11115
Sec. 4. Minnesota
Statutes 2008, section 469.3193, is amended to read:
469.3193 CERTIFICATION OF
CONTINUING ELIGIBILITY FOR JOBZ BENEFITS.
(a) By December 1 October 15 of each year,
every qualified business must certify to the commissioner of revenue, on a form
prescribed by the commissioner of revenue, whether it is in compliance with any
agreement required as a condition for eligibility for benefits listed under
section 469.315. A business that fails
to submit the certification, or any business, including those still operating
in the zone, that submits a certification that the commissioner of revenue
later determines materially misrepresents the business's compliance with the
agreement, is subject to the repayment provisions under section 469.319 from
January 1 of the year in which the report is due or the date that the business
became subject to section 469.319, whichever is earlier. Any such business is permanently barred from
obtaining benefits under section 469.315.
For purposes of this section, the bar applies to an entity and also
applies to any individuals or entities that have an ownership interest of at
least 20 percent of the entity.
(b) Before the sanctions under paragraph (a) apply to a
business that fails to submit the certification, the commissioner of revenue
shall send notice to the business, demanding that the certification be
submitted within 30 days and advising the business of the consequences for
failing to do so. The commissioner of
revenue shall notify the commissioner of employment and economic development
and the appropriate job opportunity subzone administrator whenever notice is
sent to a business under this paragraph.
(c) The certification required under this section is
public.
(d) The commissioner of revenue shall promptly notify the commissioner
of employment and economic development of all businesses that certify that they
are not in compliance with the terms of their business subsidy agreement and
all businesses that fail to file the certification.
EFFECTIVE
DATE. This section is effective for
certifications required to be made in 2010 and thereafter.
Sec. 5. Minnesota
Statutes 2008, section 473.39, is amended by adding a subdivision to read:
Subd. 1p.
Obligations. After July 1, 2010, in addition to
other authority in this section, the council may issue certificates of
indebtedness, bonds, or other obligations under this section in an amount not
exceeding $34,600,000 for capital expenditures as prescribed in the council's
transit capital improvement program and for related costs, including the costs
of issuance and sale of the obligations.
EFFECTIVE
DATE. This section is effective the day
following final enactment and applies in the counties of Anoka, Carver, Dakota,
Hennepin, Ramsey, Scott, and Washington.
Sec. 6. Minnesota
Statutes 2008, section 474A.04, subdivision 6, is amended to read:
Subd. 6. Entitlement transfers. An entitlement issuer may enter into an
agreement with another entitlement issuer whereby the recipient entitlement
issuer issues obligations pursuant to bonding authority allocated to the
original entitlement issuer under this section.
An entitlement issuer may enter into an agreement with an issuer which
is not an entitlement issuer whereby the recipient issuer issues qualified
mortgage bonds, up to $100,000 of which are issued pursuant to bonding
authority allocated to the original entitlement issuer under this section. The agreement may be approved and executed by
the mayor of the entitlement issuer with or without approval or review by the
city council. Notwithstanding section
474A.091, subdivision 4, prior to December 1, the Minnesota Housing Finance
Agency, Minnesota Office of Higher Education, and Minnesota Rural Finance
Authority may transfer allocated bonding authority made available under this chapter
to one another under an agreement by each agency and the commissioner.
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Day - Tuesday, May 4, 2010 - Top of Page 11116
Sec. 7. Minnesota Statutes 2008, section 474A.091,
subdivision 3, is amended to read:
Subd. 3. Allocation
procedure. (a) The commissioner
shall allocate available bonding authority under this section on the Monday of
every other week beginning with the first Monday in August through and on the
last Monday in November. Applications
for allocations must be received by the department by 4:30 p.m. on the Monday
preceding the Monday on which allocations are to be made. If a Monday falls on a holiday, the
allocation will be made or the applications must be received by the next
business day after the holiday.
(b) Prior to October 1, only
the following applications shall be awarded allocations from the unified
pool. Allocations shall be awarded in
the following order of priority:
(1) applications for
residential rental project bonds;
(2) applications for small
issue bonds for manufacturing projects; and
(3) applications for small
issue bonds for agricultural development bond loan projects.
(c) On the first Monday in
October through the last Monday in November, allocations shall be awarded from
the unified pool in the following order of priority:
(1) applications for student
loan bonds issued by or on behalf of the Minnesota Office of Higher Education;
(2) applications for
mortgage bonds;
(3) applications for public
facility projects funded by public facility bonds;
(4) applications for small
issue bonds for manufacturing projects;
(5) applications for small
issue bonds for agricultural development bond loan projects;
(6) applications for
residential rental project bonds;
(7) applications for
enterprise zone facility bonds;
(8) applications for
governmental bonds; and
(9) applications for
redevelopment bonds.
(d) If there are two or more
applications for manufacturing projects from the unified pool and there is
insufficient bonding authority to provide allocations for all manufacturing
projects in any one allocation period, the available bonding authority shall be
awarded based on the number of points awarded a project under section 474A.045
with those projects receiving the greatest number of points receiving
allocation first. If two or more
applications for manufacturing projects receive an equal amount of points,
available bonding authority shall be awarded by lot unless otherwise agreed to
by the respective issuers.
(e) If there are two or more
applications for enterprise zone facility projects from the unified pool and
there is insufficient bonding authority to provide allocations for all
enterprise zone facility projects in any one allocation period, the available
bonding authority shall be awarded based on the number of points awarded a
project under section 474A.045 with those projects receiving the greatest
number of points receiving allocation first.
If two or more applications for enterprise zone facility projects
receive an equal amount of points, available bonding authority shall be awarded
by lot unless otherwise agreed to by the respective issuers.
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of Page 11117
(f) If there are two or more applications for residential
rental projects from the unified pool and there is insufficient bonding
authority to provide allocations for all residential rental projects in any one
allocation period, the available bonding authority shall be awarded in the
following order of priority: (1) projects
that preserve existing federally subsidized housing; (2) projects that are not
restricted to persons who are 55 years of age or older; and (3) other
residential rental projects.
(g) From the first Monday in August through the last Monday in
November, $20,000,000 of bonding authority or an amount equal to the total
annual amount of bonding authority allocated to the small issue pool under
section 474A.03, subdivision 1, less the amount allocated to issuers from the
small issue pool for that year, whichever is less, is reserved within the
unified pool for small issue bonds to the extent such amounts are available
within the unified pool.
(h) The total amount of allocations for mortgage bonds from
the housing pool and the unified pool may not exceed:
(1) $10,000,000 for any one city; or
(2) $20,000,000 for any number of cities in any one county.
(i) The total amount of allocations for student loan bonds
from the unified pool may not exceed $10,000,000 $25,000,000 per
year.
(j) If there is insufficient bonding authority to fund all
projects within any qualified bond category other than enterprise zone facility
projects, manufacturing projects, and residential rental projects, allocations
shall be awarded by lot unless otherwise agreed to by the respective issuers.
(k) If an application is rejected, the commissioner must
notify the applicant and return the application deposit to the applicant within
30 days unless the applicant requests in writing that the application be
resubmitted.
(l) The granting of an allocation of bonding authority under
this section must be evidenced by issuance of a certificate of allocation.
Sec. 8. Laws
2010, chapter 216, section 3, is amended by adding a subdivision to read:
Subd. 3a.
Authority. "Authority" means a housing
and redevelopment authority or economic development authority created pursuant
to section 469.003, 469.004, or 469.091, or another entity authorized by law to
exercise the powers of an authority created pursuant to one of those sections.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 9. Laws
2010, chapter 216, section 3, is amended by adding a subdivision to read:
Subd. 3b.
Implementing entity. "Implementing entity" means
the local government or an authority designated by the local government by
resolution to implement and administer programs described in section 216C.436.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
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of Page 11118
Sec. 10. Laws
2010, chapter 216, section 3, subdivision 6, is amended to read:
Subd. 6. Qualifying real property. "Qualifying real property"
means a single-family or multifamily residential dwelling, or a commercial or
industrial building, that the city implementing entity has
determined, after review of an energy audit or renewable energy system
feasibility study, can be benefited by installation of energy improvements.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 11. Laws
2010, chapter 216, section 4, subdivision 1, is amended to read:
Subdivision 1. Program authority. A local government An
implementing entity may establish a program to finance energy improvements
to enable owners of qualifying real property to pay for cost-effective energy
improvements to the qualifying real property with the net proceeds and interest
earnings of revenue bonds authorized in this section. A local government An implementing
entity may limit the number of qualifying real properties for which a
property owner may receive program financing.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 12. Laws
2010, chapter 216, section 4, subdivision 2, is amended to read:
Subd. 2. Program requirements. A financing program must:
(1) impose requirements and conditions on financing
arrangements to ensure timely repayment;
(2) require an energy audit or renewable energy system
feasibility study to be conducted on the qualifying real property and reviewed
by the local government implementing entity prior to approval of
the financing;
(3) require the inspection of all installations and a
performance verification of at least ten percent of the energy improvements
financed by the program;
(4) require that all cost-effective energy improvements be
made to a qualifying real property prior to, or in conjunction with, an
applicant's repayment of financing for energy improvements for that property;
(5) have energy improvements financed by the program performed
by licensed contractors as required by chapter 326B or other law or ordinance;
(6) require disclosures to borrowers by the local
government implementing entity of the risks involved in borrowing,
including the risk of foreclosure if a tax delinquency results from a default;
(7) provide financing only to those who demonstrate an ability
to repay;
(8) not provide financing for a qualifying real property in
which the owner is not current on mortgage or real property tax payments;
(9) require a petition to the implementing entity by
all owners of the qualifying real property requesting collections of repayments
as a special assessment under section 429.101;
(10) provide that payments and assessments are not accelerated
due to a default and that a tax delinquency exists only for assessments not
paid when due; and
(11) require that liability for special assessments related to
the financing runs with the qualifying real property.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
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of Page 11119
Sec. 13. Laws
2010, chapter 216, section 4, subdivision 4, is amended to read:
Subd. 4. Financing terms. Financing provided under this section must
have:
(1) a term not to exceed the weighted average of the useful
life of the energy improvements installed, as determined by the local
government implementing entity, but in no event may a term exceed 20
years;
(2) a principal amount not to exceed the lesser of ten percent
of the assessed value of the real property on which the improvements are to be
installed or the actual cost of installing the energy improvements, including
the costs of necessary equipment, materials, and labor, the costs of each
related energy audit or renewable energy system feasibility study, and the cost
of verification of installation; and
(3) an interest rate sufficient to pay the financing costs of
the program, including the issuance of bonds and any financing delinquencies.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 14. Laws
2010, chapter 216, section 4, subdivision 6, is amended to read:
Subd. 6. Certificate of participation. Upon completion of a project, a local
government an implementing entity shall provide a borrower with a
certificate stating participation in the program and what energy improvements
have been made with financing program proceeds.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 15. Laws
2010, chapter 216, section 4, subdivision 7, is amended to read:
Subd. 7. Repayment.
A local government financing An implementing entity that
finances an energy improvement under this section must:
(1) secure payment with a lien against the benefited
qualifying real property; and
(2) collect repayments as a special assessment as provided for
in section 429.101 or by charter.
If the implementing entity is an authority, the local
government that authorized the authority to act as implementing entity shall
impose and collect special assessments necessary to pay debt service on bonds
issued by the implementing entity under subdivision 8, and shall transfer all
collections of the assessments upon receipt to the authority.
EFFECTIVE DATE. This section
is effective the day following final enactment.
Sec. 16. Laws
2010, chapter 216, section 4, subdivision 8, is amended to read:
Subd. 8. Bond issuance; repayment. (a) A local government An
implementing entity may issue revenue bonds as provided in chapter 475 for
the purposes of this section.
(b) The bonds must be payable as to both principal and
interest solely from the revenues from the assessments established in
subdivision 7.
(c) No holder of bonds issued under this subdivision may
compel any exercise of the taxing power of the implementing entity that
issued the bonds to pay principal or interest on the bonds, and if the
implementing entity is an authority, no holder of the bonds may compel any
exercise of the taxing power of the local government that
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issued the bonds to pay principal or interest on the bonds. Bonds issued under this subdivision are not a
debt or obligation of the issuer or any local government that issued
them, nor is the payment of the bonds enforceable out of any money other than
the revenue pledged to the payment of the bonds.
EFFECTIVE
DATE. This section is effective the day
following final enactment.
Sec. 17. CITY
OF LANDFALL VILLAGE; TAX INCREMENT FINANCING DISTRICT; SPECIAL RULES.
The requirement of Minnesota Statutes, section 469.1763,
subdivision 3, that activities must be undertaken within a five-year period
from the date of certification of a tax increment financing district, is
considered to be met for Tax Increment Financing District No. 1-1 in the
city of Landfall Village if the activities were undertaken within eight years
from the date of certification of the district.
EFFECTIVE
DATE. This section is effective upon
compliance by the governing body of the city of Landfall Village with the
requirements of Minnesota Statutes, section 645.021, subdivision 3.
Sec. 18. CITY OF WAYZATA; TAX INCREMENT FINANCING
DISTRICT; SPECIAL RULES.
Subdivision 1.
Five-year rule. The requirements of Minnesota
Statutes, section 469.1763, that activities must be undertaken within a five-year
period from the date of certification of a tax increment financing district, is
considered to be met for Redevelopment Tax Increment Financing District
No. 5 in the city of Wayzata if the activities were undertaken within ten
years from the date of certification of the district.
Subd. 2.
Parcels deemed occupied. Any parcel in Redevelopment Tax
Increment District No. 5, in the city of Wayzata is deemed to meet the
requirements of Minnesota Statutes, section 469.174, subdivision 10, paragraph
(d), clause (1), if the following conditions are met:
(1) a building on the parcel was demolished by a developer or
the city after the city council found the building to be structurally
substandard upon approval of original tax increment financing plan for the
district; and
(2) the city decertifies Redevelopment Tax Increment Financing
District No. 5, but files a request with the county auditor for
certification of the parcel as part of a subsequent redevelopment or renewal
and renovation district within ten years after the date of demolition.
EFFECTIVE
DATE. This section is effective upon
compliance by the governing body of the city of Wayzata with the requirements
of Minnesota Statutes, section 645.021, subdivision 3.
ARTICLE 8
CASH FLOW
Section 1. Minnesota
Statutes 2009 Supplement, section 137.025, subdivision 1, is amended to read:
Subdivision 1. Monthly payments. The commissioner of management and budget
shall pay 1/12 of the annual appropriation to the University of Minnesota on
by the 21st 25th day of each month. If the 21st 25th day of the
month falls on a Saturday or Sunday, the monthly payment must be made on
by the first business day immediately following the 21st 25th
day of the month.
Sec. 2. Minnesota
Statutes 2008, section 276.112, is amended to read:
276.112 STATE PROPERTY TAXES;
COUNTY TREASURER.
On or before January 25 each year, for the period ending
December 31 of the prior year, and on or before June 28 each year, for the
period ending on the most recent settlement day determined in section 276.09,
and on or before December 2 each year, for the period ending November 20
the estimated payment and settlement dates provided in this chapter for the
settlement of taxes levied by school districts, the county treasurer must
make full settlement with
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the county auditor according to sections 276.09, 276.10,
and 276.111 for all receipts of state property taxes levied under section
275.025, and must transmit those receipts to the commissioner of revenue by
electronic means on the dates and according to the provisions applicable to
distributions to school districts.
EFFECTIVE DATE. This section is effective for distributions
beginning October 1, 2010, and thereafter.
Sec. 3. Minnesota Statutes 2009 Supplement, section
289A.20, subdivision 4, is amended to read:
Subd. 4. Sales
and use tax. (a) The taxes imposed
by chapter 297A are due and payable to the commissioner monthly on or before
the 20th day of the month following the month in which the taxable event
occurred, or following another reporting period as the commissioner prescribes
or as allowed under section 289A.18, subdivision 4, paragraph (f) or (g),
except that:
(1) use taxes due on an annual
use tax return as provided under section 289A.11, subdivision 1, are payable by
April 15 following the close of the calendar year.; and
(2) except as provided in
paragraph (f), for a vendor having a liability of $120,000 or more during a
fiscal year ending June 30, 2009, and fiscal years thereafter, the taxes
imposed by chapter 297A, except as provided in paragraph (b), are due and
payable to the commissioner monthly in the following manner:
(i) On or before the 14th
day of the month following the month in which the taxable event occurred, the
vendor must remit to the commissioner 90 percent of the estimated liability for
the month in which the taxable event occurred.