Legislative Session number- 82

Bill Name: SF0473

Relating to taxationARTICLE 1 INDIVIDUAL INCOME TAX REFORM AND RELIEFModifying
the income tax subtraction for education expenses, eliminating transportation as
a qualifying expense and limiting expenditures for textbooks to instructional
books; eliminating the subtractions for contributions to certain pension plans
and for the amount of unrecovered accelerated cost recovery system deductions;
reducing individual income tax rates and providing for future reductions;
modifying the formula for computation of income taxes paid by nonresidents;
increasing the working family credit; modifying the education and marriage
penalty credits; reducing the alternative minimum tax rate and providing for a
credit; reducing the withholding rates for certain supplemental wages, for
certain payments to horse racing license holders and for lottery winnings;
repealing the credit for property taxes paid on seasonal residential
recreational property, the dependent care credit and certain alternative minimum
tax provisions ARTICLE 2 FEDERAL UPDATEUpdating certain state income tax
provisions to changes in the internal revenue code (IRC) under the consolidated
appropriation act of 2001, the installment tax correction act of 2000 and the
FSC repeal and extraterritorial income exclusion act of 2000; updating the
definition of internal revenue code for property tax refund and estate tax
purposes ARTICLE 3 CORPORATE FRANCHISE TAX REFORM Defining insurance company for
franchise tax purposes; eliminating certain additions to and eliminating or
modifying certain subtractions from federal taxable income; exempting insurance
companies with a gross premium tax liability from the tax; reducing the
franchise tax rate; modifying the definition of base amount and defining initial
research expense for research credit purposes; sunsetting the alternative
minimum tax; eliminating certain provisions relating to foreign corporations
under the unitary business principle; modifying the net income apportionment
formula; repealing the definition of foreign operating corporation, the job
training program credit, certain AMT provisions, deductions allowed to
corporations, certain insurance company provisions, certain requirements
relating to substantially residential development districts representation on
city development district advisory boards and the business income tax incentive
for projects outside border city development zones ARTICLE 4 PROPERTY TAX
REFORMDefining certain terms for school district funding purposes and requiring
certain levy adjustments by the commissioner of children, families and learning
in consultation with the commissioner of revenue; reducing the general education
tax rate and levy amount to zero and modifying the formulas for general
education aid and referendum equalization revenue, levy and aid; modifying the
determination of the unequalized referendum levy and changing referendum tax
rate percentage to referendum tax mill rate; changing market value to
residential assessed value for referendum levy purposes and net tax capacity to
assessed value for certain assessment or adjustment purposes; modifying the
property tax exemption for institutions of public charity and expanding the
exemption for personal property used for pollution control; authorizing the
commissioner of revenue to approve county assessor appointments on a
probationary basis; extending the time limit for county commissioners to fill
county assessor vacancies and clarifying the authority of the commissioners to
terminate county assessor terms; authorizing county assessors to require the
attendance of licensed assessors working in the county at department of revenue
instructional meetings; specifying certain training and education requirements
for property tax personnel; modifying certain limited market value determination
procedures and valuation notice requirements; defining assessed value for
property tax classification purposes; increasing the market value limits for the
first tier of residential and agricultural homestead, commercial and industrial
and certain nonhomestead residential property and reducing the classification
rates for homestead, seasonal residential recreational, commercial and
industrial, rental (apartment) and mining property; requiring and providing for
commissioner of revenue annual inflation adjustment of certain valuation limits;
providing for residential and agricultural homestead market value credits,
specifying certain duties of county auditors and the commissioner; modifying the
determination of household adjustment factor for homestead and agricultural
credit aid (HACA) purposes, permanently reducing the aid to counties and
eliminating the aid to cities, towns and school and special taxing districts;
modifying the payment of manufactured home homestead and agricultural credit
aid, eliminating payment to cities, towns and school and special taxing
districts; imposing a state tax on transmission and distribution lines; changing
local boards of review or equalization to boards of appeal and equalization and
eliminating certain county informational meeting requirements relating to the
valuation of noncommercial seasonal residential recreational property; requiring
the commissioner to prescribe the factors and methodology for use by county
auditors for conversion of net tax capacity rate levy limit; modifying the
application of the state tax levy, providing for computation of the tax rate by
the commissioner and requiring commissioner certification of the rate in lieu of
the state auditor; modifying certain proposed property tax notice and hearing
(truth in taxation) requirements; modifying certain rate computation and tax
list preparation duties of county auditors; authorizing and providing for city
imposition of local option public safety and transportation utility fees;
modifying certain property tax statement content requirements; excluding the
general education tax rate from the local tax rate for tax levy apportionment
purposes; modifying certain tax-forfeited land conveyance authority of the
commissioner and the apportionment of proceeds from sales or rentals of
tax-forfeited land; modifying the property tax refund schedules for homeowners
and renters and the inflation adjustment requirement; modifying certain tax
increment pooling and computation provisions; modifying the metropolitan council
transit tax levy limit; modifying the definitions of population and city revenue
need and defining population sprawl factor, density factor, tax capacity and
city aid base for local government aid purposes; modifying the LGA distribution
formulas for towns and cities and the payment dates and providing or modifying
certain appropriations; requiring and providing for commissioner grants for
deficits in TIF districts caused by changes in property tax classification rates
and the elimination of the state determined general education property tax levy;
specifying certain phrase replacement instructions to the revisor of statutes;
repealing the general education tax rate establishment requirement of the
commissioner, the expiration of school district referendum levy authority, the
definitions of gross and net tax capacity, the education homestead and
agricultural credits, a certain tax rate increase provision, attached machinery
aid, the reduction in state TIF aid, certain LGA definitions, a certain
provision providing for additional money for city LGA, the definition of
constant spending levy amount for proposed property tax notice purposes and
certain tax forfeited land conveyance and reversion provisions ARTICLE 5 - SALES
AND USE TAX REFORMEliminating the accelerated June sales tax payment liability
of retailers; modifying or expanding certain definitions for sales and use tax
imposition purposes, expanding the sales tax on services; reducing the general
sales tax rate; providing certain sourcing rules for tax payment or collection
obligation determination purposes; modifying or clarifying certain exemptions,
providing a direct exemption for capital equipment and exempting interstate
for-hire transportation vehicles, railroad rolling stock and sales to local
government units from the tax; modifying the exemptions for sales by or to
nonprofit groups and for flight equipment; providing an expiration date for the
exemption for building materials, supplies and equipment; expanding the offset
for taxes paid in other states; authorizing and providing for the commissioner
of transportation (DOT) to act as an agent of the commissioner of revenue for
collection of the sales tax on aircraft; exempting additions or modifications to
make motor vehicles into ready mixed concrete vehicles from the sales tax on
motor vehicles; providing a transitional provision for expansion of the sales
tax on services; appropriating money to the commissioner of revenue for tax
administration purposes; repealing certain exemptions from the sales tax ARTICLE
6 SPECIAL TAXES REFORM Modifying the mortgage registry and deed tax rates;
changing the lawful gambling tax to a tax on bingo and modifying the combined
receipts tax schedule; modifying certain insurance estimated tax payment
requirements; repealing the alcoholic beverage bottle tax and certain provisions
providing for insurance premium tax equivalent payments by automobile risk self
insurers ARTICLE 7 PETROLEUM TAX REFORMModifying the imposition of the petroleum
inspection fee; reducing the shrinkage allowance for gasoline tax reporting
purposes; eliminating the credit for gasoline sold for storage in on farm bulk
storage tanks; appropriating money to the commissioner of revenue for systems
modifications associated with petroleum tax reform ARTICLE 8 MINERALS TAX
REFORMSpecifying the occupation rate as a percentage of taxable income;
modifying the gross income apportionment factor; eliminating certain
depreciation deduction provisions; specifying the taconite tax rate for
concentrates produced in 2001; providing for the distribution of taconite tax
proceeds to school districts by the commissioner of children, families and
learning; increasing the allocation to counties, reducing a certain allocation
to St. Louis county for property tax relief purposes; modifying a certain
provision providing for distribution of the remainder of taconite tax proceeds,
defining distributions and payments for clarification purposes ARTICLE 9 -
MINNESOTACARE TAX REFORMEstablishing a reserve within the health care access
fund to preserve access to publicly funded basic health care services; reducing
the gross earnings tax on hospitals, surgical centers and health care providers
and exempting wholesale drug distributors and pharmacies from the tax; requiring
a certain percentage of taxes on cigarettes to be credited to the health care
access fund; permanently exempting health maintenance organizations (HMO),
nonprofit health service plan corporations and community integrated service
networks (CISN) from the insurance gross premium tax; repealing the health care
access fund federal contingency reserve ARTICLE 10 - MOTOR VEHICLE REGISTRATION
TAX REFORMReducing the initial motor vehicle registration tax on passenger
automobiles to a flat rate after a certain date; gradually increasing the
percentage of motor vehicle sales tax proceeds required to be deposited in the
highway user tax distribution fund and eliminating a certain future
appropriation from the general fund to the highway user tax distribution fund
ARTICLE 11 TAX POLICY PROVISIONSRequiring a proof of sales tax payment
certificate for initial registration of all-terrain vehicles (ATV), exception;
authorizing and providing for the commissioner of revenue to enter into
agreements with governing bodies of federally recognized Indian reservations
relating to refund or sharing of fees imposed on reservation activities and to
publish names of certain delinquent taxpayers; modifying the time limit for levy
and sale of property for failure to pay taxes; expanding a certain provision
providing for the posting of lists of delinquent taxpayers; modifying certain
provisions providing for refund of mortgage registry and deed tax overpayments;
modifying the administration of the political contribution refund relating to
Internet claims; extending the effectiveness of notices by the commissioner to
employers for the withholding of delinquent taxes from employee compensation;
defining gross rent for residents of nursing homes, intermediate care facilities
for persons with mental retardation (ICF MR) or adult foster care homes for
property tax refund purposes, requiring and providing for annual inflation
adjustments; expanding the authority of the commissioner to apply property tax
refunds to delinquent tax liability; excluding adult day care centers from the
definition of health care provider for MinnesotaCare health care provider gross
earnings tax payment purposes; expanding the definition of storage for sales and
use tax imposition purposes; authorizing the commissioner to cancel sales tax
permits issued in error after revocation, specifying certain notice
requirements; authorizing the revocation of sales and use tax permits for
nonconformance with cigarette and tobacco products tax requirements; clarifying
the exemption from the motor vehicle sales tax for nonresidents and excepting
public schools, universities or libraries from the exemption for charitable,
religious or educational organizations; imposing a use tax on mixed municipal
solid waste management services received by residential and commercial
generators and self haulers and on the volume of certain nonmixed municipal
solid waste; requiring notice to the commissioner by municipal tobacco licensing
authorities of certain license issuance information (ra, mk, je)