Legislative Session number- 82

Bill Name: HF0511

hf511 Omnibus tax bill providing property tax reform; income and corporate
franchise tax reform; sales, use and motor vehicle tax reform; providing
miscellaneous tax reforms; granting powers; appropriating money.ARTICLE 1
INDIVIDUAL INCOME TAX REFORM AND RELIEFSection 1: definition of "textbooks" as
pertains to subtractions from federal taxable income restricted; certain federal
tax subtractions eliminated. Sec. 2: schedule of rates for taxable net income
percentages reduced; effective date provided. Sec. 3: tax credit percentage
rates adjusted; tax credit increased; effective date provided. Sec. 4:
definition of "education-related expenses" modified; education-related tax
credit percentage limit imposed. Sec. 5: definition of "income" modified. Sec.
6: definition of "earned income" modified. Sec. 7: credit amount redefined;
effective date provided. Sec. 8: minimum percentage level of taxable income for
tax imposition reduced. Sec. 9: tax credit for prior years' liability effective
dates imposed. Sec. 10-11: withholding tax supplemental payment percentage
reduced. Sec. 12: lottery winnings withholding tax percentage reduced. Sec. 13:
repealer.ARTICLE 2 FEDERAL UPDATESection 1: internal revenue code amended and
effective dates adjusted. Sec. 2: new provisions included in definition of "net
income." Sec. 3: internal revenue code amended and effective dates adjusted.
Sec. 4: determination of sales factor modified to include section 114 of
internal revenue code. Sec. 5-6: internal revenue code amended and effective
dates adjusted.ARTICLE 3 CORPORATE FRANCHISE TAX REFORMSection 1: definitions of
"insurance company," "life insurance company," and "insurance company other than
life" modified. Sec. 2: certain additions to federal taxable income for
corporations removed. Sec. 3: certain subtractions from federal taxable income
for corporations removed or redefined; effective dates established. Sec. 4:
definition of "taxable income" modified. Sec. 5: alternative minimum taxable
income removed from consideration when measuring franchise tax on corporations
by net income. Sec. 6: certain insurance companies added to list of entities
exempt from taxation. Sec. 7: new deductions allowed concerning federal taxable
income on exempt entities. Sec. 8: corporate franchise tax percentage rate
adjusted. Sec. 9: "base amount" redefined as pertains to research expenses. Sec.
10: procedure for determining taxable research expenses provided. Sec. 11:
conditions for determining qualified carryover tax credit restricted; effective
date provided. Sec. 12: expiration date provided. Sec. 13: entities exempt from
certain taxation provided; list modified. Sec. 14: "net operating loss"
definition modified. Sec. 15: regulations for determining net income and
apportionment factors which are part of a unitary business expanded. Sec. 16-17:
income apportionment formula percentage rates adjusted. Sec. 18: computation
method for taxes for a fractional part of a year modified. Sec. 19-21: corporate
taxable net income deductions relating to charitable contributions eliminated.
Sec. 22: provisions used to determine taxable income defined. Sec. 23:
"qualified alternative minimum tax" clarified; effective dates established. Sec.
24: provisions used to determine taxable income defined as pertains to deduction
for depreciation and net operating loss. Sec. 25: "qualified alternative minimum
tax" clarified; effective dates established. Sec. 26: repealer.ARTICLE 4
PROPERTY TAX REFORMSection 1: "residential assessed value" defined; effective
date provided. Sec. 2: "adjusted residential assessed value" defined; effective
date provided. Sec. 3: "adjusted assessed value" defined; effective date
provided. Sec. 4: conditions provided for school district levy adjustments;
transition adjustment, revenue conversion, tax rate adjustment, equalizing
factors, and qualifying rate clarified. Sec. 5: general education tax rate
updated to include fiscal year . Sec. 6: general education levy amount provided
for taxes payable in and thereafter. Sec. 7: effective dates provided for
general education aid, and terms defined. Sec. 8: method for determining a
district's referendum equalization revenue established. Sec. 9: referendum
equalization levy effective dates provided; method for determining referendum
equalization levy established. Sec. 10: referendum equalization aid adjusted to
reflect multiple referendum equalization revenue tiers. Sec. 11: unequalized
referendum levy subdivision updated to reflect new changes to bill. Sec. 12:
referendum tax rate redefined as tax "mill" rate. Sec. 13: school referendum
levy definition modified to levy taxes against residential assessed value. Sec.
14: computation method for school district taxable property modified. Sec. 15:
property tax exemptions for institutions of public charity clarified. Sec. 16:
tax exemptions for personal property used for pollution control modified. Sec.
17: approval procedure for county assessor established. Sec. 18: county assessor
vacancy period increased; conditions for termination of county assessor
provided. Sec. 19: powers and duties of county assessor expanded. Sec. 20:
property tax personnel training and education requirements provided. Sec. 21:
limited market value assessment procedure expanded. Sec. 22: notification
procedure for valuation of real property provided. Sec. 23: homestead
application requirements and procedures clarified. Sec. 24: "assessed value"
defined. Sec. 25: "class 1a" defined; market value class rates provided. Sec.
26: class 2 market value class rates provided. Sec. 27: "class 3" redefined;
market value class rates provided. Sec. 28: "class 4" redefined; market value
class rates provided. Sec. 29: class 5 market value class rates provided. Sec.
30: valuation limits inflation adjustment established. Sec. 31: residential and
agricultural market value homestead tax credits established; payment and
appropriation procedures provided. Sec. 32: market value homestead tax credits
as pertains to school districts certified to the department of children,
families, and learning. Sec. 33: net property tax computation method expanded to
include residential and agricultural homestead market value credits. Sec. 34:
"household adjustment factor" definition modified. Sec. 35: tax credit aid
permanently reduced; procedure for determining reduction provided. Sec. 36:
appropriation modified; effective date provided. Sec. 37-38: manufactured home
homestead and agricultural credit aid redefined; calculation method provided
Sec. 39: manufactured home homestead and agricultural credit aid appropriation
restricted. Sec. 40: state tax on transmission and distribution lines
established. Sec. 41: board of appeal and equalization defined, duties
clarified. Sec. 42: county board of appeal and equalization rules for equalizing
assessments established. Sec. 43: conversion method for net tax capacity rate
levy limit provided. Sec. 44: state tax levy clarified; tax rate certification
method provided. Sec. 45: notification procedure of proposed property taxes
modified. Sec. 46-47: public hearing procedure for public advertisement of
intended property tax levies clarified. Sec. 48: county auditor duties clarified
to include calculating the "mill" rate of all taxes. Sec. 49: county auditor
computation duties clarified to specify "assessed value." Sec. 50: "net tax
capacity" replaced by "assessed value" as pertains to tax rate computation. Sec.
51: local option public safety fee established. Sec. 52: transportation utility
fee established; related terms defined; procedures for adoption and institution
of fee provided. Sec. 53: "rate percent" replaced by "mill rate" and "net tax
capacity" replaced by "assessed value" as pertains to tax lists; auditor duties
detailed. Sec. 54: "market value" replaced by "assessed value" as pertains to
voter approved levy. Sec. 55: tax statement content format adjusted. Sec. 56:
general education tax rate excluded from local tax rate for preceding levy year.
Sec. 57: duties of the commissioner of revenue restricted as pertains to
tax-forfeited lands. Sec. 58: "tax-forfeited lands in a targeted neighborhood"
clarified; duties of commissioner of revenue as pertains to these lands
clarified. Sec. 59: apportionment of proceeds from the sale or rental of
forfeited land expanded. Sec. 60: homeowner property tax rates provided. Sec.
61: renter property tax rates provided. Sec. 62: effective dates provided for
inflation adjustments. Sec. 63: effective dates provided for permission of
deficit pooling. Sec. 64: original local tax rate clarified. Sec. 65: deduction
percent increased as pertains to enforcement costs. Sec. 66: property tax levy
limitation for general tax purposes defined. Sec. 67: general education tax rate
excluded from local tax rate as pertains to school district levy apportionment.
Sec. 68: "net tax capacity" replaced by "assessed value" as pertains to tax
computation and state reimbursement. Sec. 69: "population" defined. Sec. 70:
"population sprawl factor" defined. Sec. 71: "density factor" defined. Sec. 72:
"tax capacity" defined. Sec. 73: "city revenue need" defined; computation
procedure provided. Sec. 74: "city aid base" defined. Sec. 75: aid distribution
method provided as pertains to towns. Sec. 76: "city formula aid" defined. Sec.
77: aid distribution method provided as pertains to cities. Sec. 78: local
government aid payment dates provided. Sec. 79: annual appropriation procedure
clarified. Sec. 80: "net tax capacity" replaced by "market value" as pertains to
aid eligibility. Sec. 81: TIF grant program established; appropriations
clarified. Sec. 82: instructions to revisor of statutes to replace "net tax
capacity" with "assessed value" provided. Sec. 83: repealer.ARTICLE 5 SALES AND
USE TAX REFORMSection 1: timeframe expanded for required returns. Sec. 2: sales
and use tax return due date clarified. Sec. 3: sales and use tax regulations for
vendors having a liability of 120,000 or more eliminated; due dates modified.
Sec. 4: method of computing interest for refunds to purchasers provided. Sec. 5:
penalty for failure to make payment by electronic funds transfer provided. Sec.
6: definitions of "sale" and "purchase" modified to include "sewer services."
Sec. 7: "retail sale" clarified. Sec. 8: "use" clarified. Sec. 9: "sales price"
clarified. Sec. 10: "tangible personal property" defined. Sec. 11: "farm
machinery" clarified. Sec. 12: "service" defined; "taxable services" clarified.
Sec. 13: "telecommunications services" defined. Sec. 14: "cable television
service" defined. Sec. 15: "private communication service" defined. Sec. 16:
"direct satellite service" defined. Sec. 17: sales tax percentage rate reduced;
effective date provided. Sec. 18: sourcing rules and points of use provided;
"receive" and "receipt" defined. Sec. 19: meals exempt at schools clarified.
Sec. 20: exemption rules provided as pertains to medicines, eyeglasses, and
prosthetic devices. Sec. 21: exemption rules provided as pertains to materials
and services used or consumed in industrial production. Sec. 22: materials and
services used in providing taxable services defined; exemption rules provided.
Sec. 23: "capital equipment" defined; exemption rules clarified. Sec. 24: "ships
used in interstate commerce" defined; exemption rules provided. Sec. 25:
exemption rules for petroleum products provided. Sec. 26: exemption rules for
interstate motor vehicles provided. Sec. 27: exemption rules for railroad
rolling stock Sec. 28: scope of tax exemption outlined previously established.
Sec. 29: exemption rules for government sales provided. Sec. 30: exemption rules
for sales to nonprofit groups provided. Sec. 31: exemption rules for nonprofit
sales provided. Sec. 32: expiration dates for exemptions provided. Sec. 33:
retailer duties as pertains to exemption certificates clarified. Sec. 34:
capital equipment removed from list of items exempt from sales tax. Sec. 35:
sales tax refund clarified; clause numbers updated. Sec. 36: application format
clarified. Sec. 37: refund interest rate clarified. Sec. 38: tax credits defined
as pertained to taxes in other states. Sec. 39: requirements for aircraft
registration provided. Sec. 40: duty of commissioner of revenue to receive
payable aircraft registration taxes eliminated. Sec. 41: airflight equipment tax
exemptions provided. Sec. 42: duty of commissioner of transportation to receive
payable aircraft registration taxes established. Sec. 43: occasional sale
provisions clarified. Sec. 44: "sales and purchases" drawing taxes clarified.
Sec. 45: "purchase price" defined. Sec. 46: tax exemptions detailed. Sec. 47:
effective dates for services provided. Sec. 48: appropriations. Sec. 49:
repealer.ARTICLE 6 SPECIAL TAXES REFORMSection 1: imposed mortgage and property
tax rates modified. Sec. 2: property tax rate modified Sec. 3: bingo tax
established Sec. 4: combined receipts tax rates modified. Sec. 5: requirement to
pay due dates modified. Sec. 6: amount of required installment reduced. Sec. 7:
April estimated payment changed to "March" estimated payment. Sec. 8:
repealer.ARTICLE 7 PETROLEUM TAX REFORMSection 1: petroleum inspection fee
modified. Sec. 2: gasoline tax deduction percentage rate reduced. Sec. 3: refund
of tax paid on gasoline sold for storage in an on-farm bulk storage tank
eliminated. Sec. 4: appropriation for systems modifications associated with
petroleum tax reform.ARTICLE 8 MINERALS TAX REFORMSection 1: occupation tax for
persons engaged in the business of mining or producing ores determination method
modified. Sec. 2: "gross income" clarified. Sec. 3: occupation tax imposed on
taconite concentrates percentage rate adjusted. Sec. 4: "gross income"
clarified. Sec. 5: special deductions and net operating loss clarified. Sec. 6:
iron ore concentrate tax rate provided. Sec. 7: distribution of collected tax
proceeds clarified. Sec. 8: school district distributions detailed. Sec. 9: tax
rate per gross ton of taconite increased. Sec. 10: property tax relief as
pertains to electric power plant owners clarified. Sec. 11: distribution amounts
increased. Sec. 12: distributions and payments clarified; appropriations
detailed.ARTICLE 9 MINNESOTACARE TAX REFORMSection 1: health care access fund
reserve established; financing and use detailed. Sec. 2: "gross revenues"
definition modified. Sec. 3: hospital tax percentage rate decreased. Sec. 4:
surgical center tax percentage rate decreased. Sec. 5: health care provider tax
percentage rate decreased. Sec. 6: amounts paid for legend and wholesale drugs
eliminated from list of exemptions. Sec. 7: separate statement of tax format
updated to reflect changes in section . Sec. 8: insurance premiums tax revenues
eliminated from tax revenue list. Sec. 9: section outlining expense authority
updated to reflect changes in section 6. Sec. 10: cigarette tax revenues
credited to health care access fund. Sec. 11: health maintenance organization
(HMO), nonprofit health service plan corporation, and community integrated
service network tax exemptions provided. Sec. 12: repealer.ARTICLE 10 MOTOR
VEHICLE REGISTRATION TAX REFORMSection 1: tax rates for motor vehicle
registration modified; effective dates provided. Sec. 2: general fund share
detailed. Sec. 3: funds appropriated to highway user tax distribution
fund.ARTICLE 11 TAX POLICY PROVISIONSSection 1: all-terrain vehicle (ATV)
purchaser's certificate required for initial registration in Minnesota. Sec. 2:
fees paid by Native American Indian reservations detailed; appropriation
regulations provided. Sec. 3: publication of names of delinquent taxpayers
procedure and format provided. Sec. 4: time period allowed for levy and sale by
sheriff modified. Sec. 5: relevant tax sections clarified as pertains to
notification posting procedure. Sec. 6: procedure for refunding mortgage
registry tax overpayments provided. Sec. 7: refund and redemption procedures
clarified; regulations provided. Sec. 8: political party contribution refund
procedure expanded. Sec. 9: employer notification for "withholding of delinquent
taxes" expiration date extended. Sec. 10: "gross rent" defined. Sec. 11:
regulations clarified for applying claims against outstanding tax liabilities.
Sec. 12: "health care provider" definition expanded. Sec. 13: "storage"
definition restricted; effective date provided. Sec. 14: regulations regarding
issuing permits after revocation clarified. Sec. 15: conditions for violation of
sales and use tax laws expanded. Sec. 16: exemptions clarified. Sec. 17:
revocation of sales and use tax permits regulations established. Sec. 18: use
tax regulations provided as pertains to generator and self-hauler liability and
regulations concerning payment and assessment procedures. Sec. 19: notice to
commissioner.AE