1.1                          A bill for an act 
  1.2             relating to taxation; including nontaxable social 
  1.3             security and disability income in calculating the 
  1.4             sales tax rebate; amending Laws 1999, chapter 243, 
  1.5             article 1, section 2. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Laws 1999, chapter 243, article 1, section 2, 
  1.8   is amended to read: 
  1.9      Sec. 2.  [SALES TAX REBATE.] 
  1.10     (a) An individual who: 
  1.11     (1) was eligible for a credit under Laws 1997, chapter 231, 
  1.12  article 1, section 16, as amended by Laws 1997, First Special 
  1.13  Session chapter 5, section 35, and Laws 1997, Third Special 
  1.14  Session chapter 3, section 11, and Laws 1998, chapter 304, and 
  1.15  Laws 1998, chapter 389, article 1, section 3, and who filed for 
  1.16  or received that credit on or before June 15, 1999; or 
  1.17     (2) filed a 1997 Minnesota income tax return on or before 
  1.18  June 15, 1999, and had a tax liability before refundable credits 
  1.19  on that return of at least $1 but did not file the claim for 
  1.20  credit authorized under Laws 1997, chapter 231, article 1, 
  1.21  section 16, as amended, and who was not allowed to be claimed as 
  1.22  a dependent on a 1997 federal income tax return filed by another 
  1.23  person; or 
  1.24     (3) had the property taxes payable on his or her homestead 
  1.25  abated to zero under Laws 1997, chapter 231, article 2, section 
  2.1   64, 
  2.2   shall receive a sales tax rebate. 
  2.3      (b) The sales tax rebate for taxpayers who qualify under 
  2.4   paragraph (a) as married filing joint or head of household must 
  2.5   be computed according to the following schedule: 
  2.6        Income                             Sales Tax Rebate
  2.7    less than $2,500                              $  358
  2.8    at least $2,500 but less than $5,000          $  469
  2.9    at least $5,000 but less than $10,000         $  502
  2.10   at least $10,000 but less than $15,000        $  549
  2.11   at least $15,000 but less than $20,000        $  604
  2.12   at least $20,000 but less than $25,000        $  641
  2.13   at least $25,000 but less than $30,000        $  690
  2.14   at least $30,000 but less than $35,000        $  762
  2.15   at least $35,000 but less than $40,000        $  820
  2.16   at least $40,000 but less than $45,000        $  874
  2.17   at least $45,000 but less than $50,000        $  921
  2.18   at least $50,000 but less than $60,000        $  969
  2.19   at least $60,000 but less than $70,000        $1,071
  2.20   at least $70,000 but less than $80,000        $1,162
  2.21   at least $80,000 but less than $90,000        $1,276
  2.22   at least $90,000 but less than $100,000       $1,417
  2.23   at least $100,000 but less than $120,000      $1,535
  2.24   at least $120,000 but less than $140,000      $1,682
  2.25   at least $140,000 but less than $160,000      $1,818
  2.26   at least $160,000 but less than $180,000      $1,946
  2.27   at least $180,000 but less than $200,000      $2,067
  2.28   at least $200,000 but less than $400,000      $2,644
  2.29   at least $400,000 but less than $600,000      $3,479
  2.30   at least $600,000 but less than $800,000      $4,175
  2.31   at least $800,000 but less than $1,000,000    $4,785
  2.32   $1,000,000 and over                           $5,000
  2.33     (c) The sales tax rebate for individuals who qualify under 
  2.34  paragraph (a) as single or married filing separately must be 
  2.35  computed according to the following schedule: 
  2.36        Income                                 Sales Tax Rebate
  3.1    less than $2,500                              $  204
  3.2    at least $2,500 but less than $5,000          $  249
  3.3    at least $5,000 but less than $10,000         $  299
  3.4    at least $10,000 but less than $15,000        $  408
  3.5    at least $15,000 but less than $20,000        $  464
  3.6    at least $20,000 but less than $25,000        $  496
  3.7    at least $25,000 but less than $30,000        $  515
  3.8    at least $30,000 but less than $40,000        $  570
  3.9    at least $40,000 but less than $50,000        $  649
  3.10   at least $50,000 but less than $70,000        $  776
  3.11   at least $70,000 but less than $100,000       $  958
  3.12   at least $100,000 but less than $140,000      $1,154
  3.13   at least $140,000 but less than $200,000      $1,394
  3.14   at least $200,000 but less than $400,000      $1,889
  3.15   at least $400,000 but less than $600,000      $2,485
  3.16   $600,000 and over                             $2,500
  3.17     (d) Individuals who were not residents of Minnesota for any 
  3.18  part of 1997 and who paid more than $10 in Minnesota sales tax 
  3.19  on nonbusiness consumer purchases in that year qualify for a 
  3.20  rebate under this paragraph only.  Qualifying nonresidents must 
  3.21  file a claim for rebate on a form prescribed by the commissioner 
  3.22  before the later of June 15, 1999, or 30 days after the date of 
  3.23  enactment of this act.  The claim must include receipts showing 
  3.24  the Minnesota sales tax paid and the date of the sale.  Taxes 
  3.25  paid on purchases allowed in the computation of federal taxable 
  3.26  income or reimbursed by an employer are not eligible for the 
  3.27  rebate.  The commissioner shall determine the qualifying taxes 
  3.28  paid and rebate the lesser of: 
  3.29     (1) 69.0 percent of that amount; or 
  3.30     (2) the maximum amount for which the claimant would have 
  3.31  been eligible as determined under paragraph (b) if the taxpayer 
  3.32  filed the 1997 federal income tax return as a married taxpayer 
  3.33  filing jointly or head of household, or as determined under 
  3.34  paragraph (c) for other taxpayers. 
  3.35     (e) "Income," for purposes of this section other than 
  3.36  paragraph (d), is taxable income as defined in section 63 of the 
  4.1   Internal Revenue Code of 1986, as amended through December 31, 
  4.2   1996, plus the sum of any additions to federal taxable income 
  4.3   for the taxpayer under Minnesota Statutes, section 290.01, 
  4.4   subdivision 19a, and reported on the original 1997 income tax 
  4.5   return including subsequent adjustments to that return made 
  4.6   within the time limits specified in paragraph (h).  For an 
  4.7   individual who was a resident of Minnesota for less than the 
  4.8   entire year, the sales tax rebate equals the sales tax rebate 
  4.9   calculated under paragraph (b) or (c) multiplied by the 
  4.10  percentage determined pursuant to Minnesota Statutes, section 
  4.11  290.06, subdivision 2c, paragraph (e), as calculated on the 
  4.12  original 1997 income tax return including subsequent adjustments 
  4.13  to that return made within the time limits specified in 
  4.14  paragraph (h).  For purposes of paragraph (d), "income" is 
  4.15  taxable income as defined in section 63 of the Internal Revenue 
  4.16  Code of 1986, as amended through December 31, 1996, and reported 
  4.17  on the taxpayer's original federal tax return for the first 
  4.18  taxable year beginning after December 31, 1996. 
  4.19     (f) Before payment, the commissioner of revenue shall 
  4.20  adjust the rebate as follows: 
  4.21     (1) the rebates calculated in paragraphs (b), (c), and (d) 
  4.22  must be proportionately reduced to account for 1997 income tax 
  4.23  returns that are filed on or after January 1, 1999, but before 
  4.24  July 1, 1999, so that the amount of sales tax rebates payable 
  4.25  under paragraphs (b), (c), and (d) does not exceed 
  4.26  $1,250,000,000; and 
  4.27     (2) the commissioner of finance shall certify by July 15, 
  4.28  1999, preliminary fiscal year 1999 general fund net nondedicated 
  4.29  revenues.  The certification shall exclude the impact of any 
  4.30  legislation enacted during the 1999 regular session.  If 
  4.31  certified net nondedicated revenues exceed the amount forecast 
  4.32  in February 1999, up to $50,000,000 of the increase shall be 
  4.33  added to the total amount rebated.  The commissioner of revenue 
  4.34  shall adjust all rebates proportionally to reflect any 
  4.35  increases.  The total amount of the rebate under paragraphs (b), 
  4.36  (c), and (d) shall not exceed $1,300,000,000. 
  5.1   The adjustments under this paragraph are not rules subject to 
  5.2   Minnesota Statutes, chapter 14. 
  5.3      (g) The commissioner of revenue may begin making sales tax 
  5.4   rebates by August 1, 1999.  Sales tax rebates authorized in 
  5.5   paragraphs (b), (c), and (d) not paid by October 1, 1999, bear 
  5.6   interest at the rate specified in Minnesota Statutes, section 
  5.7   270.75.  Sales tax rebates authorized in paragraph (s) not paid 
  5.8   by October 1, 2000, bear interest at the rate specified in 
  5.9   Minnesota Statutes, section 270.75. 
  5.10     (h) A sales tax rebate shall not be adjusted based on 
  5.11  changes to a 1997 income tax return that are made by order of 
  5.12  assessment after June 15, 1999, or made by the taxpayer that are 
  5.13  filed with the commissioner of revenue after June 15, 1999. 
  5.14     (i) Individuals who filed a joint income tax return for 
  5.15  1997 shall receive a joint sales tax rebate.  After the sales 
  5.16  tax rebate has been issued, but before the check has been 
  5.17  cashed, either joint claimant may request a separate check for 
  5.18  one-half of the joint sales tax rebate.  Notwithstanding 
  5.19  anything in this section to the contrary, if prior to payment, 
  5.20  the commissioner has been notified that persons who filed a 
  5.21  joint 1997 income tax return are living at separate addresses, 
  5.22  as indicated on their 1998 income tax return or otherwise, the 
  5.23  commissioner may issue separate checks to each person.  The 
  5.24  amount payable to each person is one-half of the total joint 
  5.25  rebate. 
  5.26     (j) The sales tax rebate is a "Minnesota tax law" for 
  5.27  purposes of Minnesota Statutes, section 270B.01, subdivision 8. 
  5.28     (k) The sales tax rebate is "an overpayment of any tax 
  5.29  collected by the commissioner" for purposes of Minnesota 
  5.30  Statutes, section 270.07, subdivision 5.  For purposes of this 
  5.31  paragraph, a joint sales tax rebate is payable to each spouse 
  5.32  equally. 
  5.33     (l) If the commissioner of revenue cannot locate an 
  5.34  individual entitled to a sales tax rebate by July 1, 2001, or if 
  5.35  an individual to whom a sales tax rebate was issued has not 
  5.36  cashed the check by July 1, 2001, the right to the sales tax 
  6.1   rebate lapses and the check must be deposited in the general 
  6.2   fund. 
  6.3      (m) Individuals entitled to a sales tax rebate pursuant to 
  6.4   paragraph (a), but who did not receive one, and individuals who 
  6.5   receive a sales tax rebate that was not correctly computed, must 
  6.6   file a claim with the commissioner before July 1, 2000, in a 
  6.7   form prescribed by the commissioner.  Individuals entitled to a 
  6.8   rebate under paragraph (s), but who did not receive one, and 
  6.9   individuals who receive a sales tax rebate that was not 
  6.10  correctly computed, must file a claim with the commissioner 
  6.11  before July 1, 2002, in a form prescribed by the commissioner.  
  6.12  These claims must be treated as if they are a claim for refund 
  6.13  under Minnesota Statutes, section 289A.50, subdivisions 4 and 7. 
  6.14     (n) The sales tax rebate is a refund subject to revenue 
  6.15  recapture under Minnesota Statutes, chapter 270A.  The 
  6.16  commissioner of revenue shall remit the entire refund to the 
  6.17  claimant agency, which shall, upon the request of the spouse who 
  6.18  does not owe the debt, refund one-half of the joint sales tax 
  6.19  rebate to the spouse who does not owe the debt. 
  6.20     (o) The rebate is a reduction of fiscal year 1999 sales tax 
  6.21  revenues.  The amount necessary to make the sales tax rebates 
  6.22  and interest provided in this section is appropriated from the 
  6.23  general fund to the commissioner of revenue in fiscal year ~~1999~~ 
  6.24  2000 and is available until June 30, ~~2001~~ 2002. 
  6.25     (p) If a sales tax rebate check is cashed by someone other 
  6.26  than the payee or payees of the check, and the commissioner of 
  6.27  revenue determines that the check has been forged or improperly 
  6.28  endorsed, the commissioner may issue an order of assessment for 
  6.29  the amount of the check against the person or persons cashing 
  6.30  it.  The assessment must be made within two years after the 
  6.31  check is cashed, but if cashing the check constitutes theft 
  6.32  under Minnesota Statutes, section 609.52, or forgery under 
  6.33  Minnesota Statutes, section 609.631, the assessment can be made 
  6.34  at any time.  The assessment may be appealed administratively 
  6.35  and judicially.  The commissioner may take action to collect the 
  6.36  assessment in the same manner as provided by Minnesota Statutes, 
  7.1   chapter 289A, for any other order of the commissioner assessing 
  7.2   tax. 
  7.3      (q) Notwithstanding Minnesota Statutes, sections 9.031, 
  7.4   16A.40, 16B.49, 16B.50, and any other law to the contrary, the 
  7.5   commissioner of revenue may take whatever actions the 
  7.6   commissioner deems necessary to pay the rebates required by this 
  7.7   section, and may, in consultation with the commissioner of 
  7.8   finance and the state treasurer, contract with a private vendor 
  7.9   or vendors to process, print, and mail the rebate checks or 
  7.10  warrants required under this section and receive and disburse 
  7.11  state funds to pay those checks or warrants. 
  7.12     (r) The commissioner may pay rebates required by this 
  7.13  section by electronic funds transfer to individuals who 
  7.14  requested that their 1998 individual income tax refund be paid 
  7.15  through electronic funds transfer.  The commissioner may make 
  7.16  the electronic funds transfer payments to the same financial 
  7.17  institution and into the same account as the 1998 individual 
  7.18  income tax refund. 
  7.19     (s)(1) An individual who received nontaxable social 
  7.20  security benefits or nontaxable disability income is allowed a 
  7.21  sales tax rebate as provided by this paragraph. 
  7.22     (2) To qualify for a rebate, the taxpayer must file a claim 
  7.23  for a rebate on a form prescribed by the commissioner before the 
  7.24  later of June 15, 2000, or 30 days after enactment of this act.  
  7.25  The claim must include taxable income, nontaxable social 
  7.26  security benefits, nontaxable disability income, the amount of 
  7.27  the 1999 sales tax rebate previously paid to the taxpayer, and 
  7.28  any other information prescribed by the commissioner. 
  7.29     (3) The amount of the rebate allowed to a taxpayer under 
  7.30  this paragraph equals: 
  7.31     (i) the amount determined under paragraph (b) or (c), as 
  7.32  adjusted by paragraph (f), except that the measure of income is 
  7.33  increased by the amount of nontaxable social security benefits 
  7.34  and nontaxable disability income; less 
  7.35     (ii) the amount of the sales tax rebate paid to the 
  7.36  taxpayer under Laws 1999, chapter 243, article 1, section 2. 
  8.1      (4)(i) For purposes of this paragraph, the following terms 
  8.2   have the meanings given: 
  8.3      (ii) "Nontaxable social security benefits" means social 
  8.4   security benefits received by the taxpayer or the taxpayer's 
  8.5   spouse during the calendar year 1997 that were not required to 
  8.6   be included in the computation of adjusted gross income as 
  8.7   defined under the Internal Revenue Code of 1986, as amended 
  8.8   through December 31, 1996. 
  8.9      (iii) "Nontaxable disability income" means any nontaxable 
  8.10  disability benefits received by the taxpayer or the taxpayer's 
  8.11  spouse during the calendar year 1997 as defined in section 
  8.12  22(c)(3) of the Internal Revenue Code of 1986, as amended 
  8.13  through December 31, 1996. 
  8.14     Sec. 2.  [EFFECTIVE DATE.] 
  8.15     Section 1 is effective the day following final enactment.