Senate Counsel, Research
and Fiscal Analysis
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Tom Bottern
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   Senate   
State of Minnesota
 
 
 
 
 
H.F. No. 947 - Omnibus Tax Bill (Conference Committee Report)
 
Author: Senator Carla J. Nelson
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
Eric S. Silvia, Senate Counsel (651/296-1771)
Jack Paulson, Senate Analyst (651/296-4954)
Jay M. Willms, Senate Fiscal Analyst (651/296-2090)
Bjorn E. Arneson, Senate Analyst (651/296-3812)
 
Date: May 20, 2018



 

Article 1

K12 Education

Section 1. Budget reserve; additional revenues priority.  Updates the budget reserve dollar amount to reflect the general fund surplus deposits from the November 2017 Forecast, and eliminates an obsolete priority from the list of allocations of state general fund budget surpluses (this obsolete amount was satisfied by the November 2017 transfer of funds).

Section 2. Staff development revenue.  Authorizes a school board to adopt a written resolution to waive or reduce the staff development set-aside from 2 percent of general education revenue to some other amount for fiscal year 2019 only. Under current law, a district must reserve 2 percent of its basic general education revenue and spend it on staff development activities.

Section 3. One-time school spending for student and school safety.  Transfers $50 million from the state budget reserve account back to the general fund, and appropriates the same $50 million from the general fund to school districts and charters schools through a formula set equal to $57.73 per pupil served (using the unweighted count of students called adjusted average daily membership).  Makes the one-time payment to school districts in September.

Section 4. Community education fund transfers.  Allows a school district, upon approval of the commissioner of education, to transfer any surplus balance from its reserved for community education revenue account to the general fund.  To the extent possible, requires the transfer to be consistent with the district’s school-board-adopted fund balance policy.  Under current law, state statute prevents a school district from transferring money out its community education fund and further restricts the uses of money within that fund.

Article 2

Federal Conformity

This article makes numerous changes to the individual income and corporate franchise tax chapter in response to the changes to the federal tax code made in the Disaster Tax Relief and Airport and Airway Extension Act in September 2017, the Tax Cuts and Jobs Act (TCJA) in December 2017, the Bipartisan Budget Act in February 2018, and the Consolidated Appropriations Act in March 2018.

The provisions in this article are mostly a result of the changes made to the calculation of federal taxable income (FTI) in TCJA. Minnesota currently references federal taxable income (FTI) as its starting point and incorporates federal deductions and exemptions. Changes to those deductions and exemptions therefore affect Minnesota taxpayers. This article decouples the calculation of Minnesota taxable income from FTI and instead uses federal adjusted gross income (FAGI) as the starting point for individual taxpayers.

Many federal itemized deductions were limited or repealed under TCJA. This article retains most of those deductions by reference to a previous version of the Internal Revenue Code (IRC), including:

  • property taxes;
  • retained limitation on deduction for home mortgage indebtedness;
  • theft and casualty losses;
  • moving expenses; and
  • unreimbursed employee expenses.

The article also establishes a state standard deduction at the same amount allowed prior to TCJA. The TCJA repealed personal and dependent exemptions; this article establishes Minnesota personal and dependent exemptions at the same amount allowed prior to TCJA. The TCJA also increased the amount and phaseout thresholds for section 179 expensing and bonus depreciation. Minnesota would conform to those increased amounts but would retain its 80% addback schedule for bonus depreciation. Minnesota would not adopt the 20% deduction for pass-through income that was included in TCJA. This article also adopts the new inflation adjustment calculation under TCJA – Chained Consumer Price Index for Urban Consumers (“chained CPI”), which allows for modification of consumption habits by substituting for other goods and projects a slower measure of growth than the Consumer Price Index for Urban Consumers (CPI).

The changes are generally effective beginning in tax year 2018. Some provisions are effective for tax year 2017, including tax treatment of charitable contributions and certain early retirement account withdrawals made as a result of hurricane disasters that year, and treatment of deferred foreign income that was subject to tax under TCJA for tax year 2017. Other changes applicable to tax year 2017 include tax extenders that have been enacted on a year-to-year or otherwise shorter-term basis at the federal level.

Section 1. Debt. Updates the income thresholds for debtors with medical care debts for purposes of revenue recapture provisions. The income amounts are updated for 2018. Also modifies the method used to calculate inflation from CPI to chained CPI. Effective beginning in tax year 2018.

Section 2. Internal Revenue Code. Updates the reference to the IRC in the administrative chapter. Effective beginning in tax year 2018.

Section 3. Generally; individuals. Requires the commissioner of revenue to determine the income levels at which individuals are required to file a tax return. Currently, individuals must file a return if they are required to file a federal return. This section provides that individuals must file a return if they are required to file a federal return or if they are so required under the income thresholds determined by the commissioner. Effective beginning in tax year 2018.

Section 4. Composite income tax returns for nonresident partners, shareholders, and beneficiaries. Modifies a cross-reference to reflect changes to other references in the article. Effective beginning in tax year 2018.

Section 5. Reporting exempt interest and exempt-interest dividends. Modifies the reference from FTI to FAGI for purposes of reporting exempt interest and interest-exempt dividends. Effective beginning in tax year 2018.

Section 6. Tax on deferred income; election to pay in installments. Allows taxpayers to pay net tax liability on deferred income in the same schedule of installments over eight years (8% of the tax liability for the first five payments; 15% for the sixth payment; 20% for the seventh payment; and 25% for the final payment). Net tax liability is the amount of Minnesota tax due for the taxable year when deferred foreign income was included in federal taxable income, over the Minnesota tax liability for that year excluding deferred foreign income. Effective retroactively for tax years beginning in 2017.

Section 7. Assessments on returns. Modifies the reference from FTI to FAGI for purposes of the commissioner’s authority to audit and adjust returns. Effective beginning in tax year 2018.

Section 8. Surviving spouse. Creates a definition of surviving spouse, referencing the federal definition, for purposes of calculations made under new provisions in the article. A surviving spouse is an unmarried individual whose spouse died in one of the two preceding tax years and who maintains a separate household. Effective beginning in tax year 2018.

Section 9. Net income. Specifies that the current definition of “net income” – which means federal taxable income – applies to corporations, estates, and trusts, as the calculation of taxable income for these entities is not modified from current law. Specifies that “net income” for individuals means FAGI, as modified with Minnesota additions and subtractions. Updates the IRC reference date for purposes of the definition. Effective the day following final enactment, and changes incorporated by federal changes are effective at the same time as effective for federal purposes. Establishing FAGI as the starting point for individuals is effective beginning in tax year 2018.

Section 10. Deferred foreign income. Defines deferred foreign income as the repatriated income included in federal net income, including the deduction allowed by reduced rates of 15.5% on income held as cash and cash equivalents and 8% for illiquid assets. Effective retroactively beginning in tax year 2017.

Section 11. Adjusted gross income; federal adjusted gross income. Adds definitions of “adjusted gross income” and “federal adjusted gross income” that refer to federal law to minimize the need to include repeated references to section 62 of the Internal Revenue Code. Effective the day following final enactment.

Section 12. State itemized deduction. Sets itemized deductions as federal itemized deductions prior to passage of TCJA, but excluding sales and income taxes as deductible taxes. Conforms to the TCJA provisions to reduce the floor for the medical expense deduction from ten percent to 7.5 percent for tax years 2017 and 2018, the repeal of the deduction for amounts paid in exchange for college athletic event seating rights, and the repeal of the substantiation exception for certain contributions reported by the donee organization. Limits the deductions for nonresidents. Effective beginning in tax year 2018.

Section 13. State standard deduction. Sets the standard deduction as equal to the federal standard deduction prior to passage of TCJA ($6,350 in 2017 for individuals; $12,700 for married joint filers), except that it will be indexed using chained CPI. Effective beginning in tax year 2018.

Section 14.  Internal Revenue Code. Updates the reference to the IRC in the income and corporate franchise chapter to reflect changes made by TCJA, except where otherwise specified. Effective the day following final enactment and applies to the tax years incorporated by federal changes, including any retroactive provisions.

Section 15. Definition; scope. Provides that additions to Minnesota taxable income are specific to estates and trusts, as individuals will apply Minnesota additions to FAGI. The additions apply to amounts excluded from calculating federal taxable income for trusts and estates, and FAGI for individuals. Effective beginning in tax year 2018.

Section 16. Income, sales and use, motor vehicle sales, or excise taxes paid. Provides that only trusts and estates must add back state income, sales, and other local taxes that were deducted for federal purposes. Individuals will not have to add these taxes back given the transition to FAGI as the starting point for calculating state tax liability. Effective beginning in tax year 2018.

Sections 17 and 33. Section 179 expensing. Conforms to the increased section 179 federal expensing amounts for income and franchise tax purposes – up to $1,000,000 may be expensed, and the phaseout threshold was increased to $2,500,000. Minnesota taxpayers will now be able to expense the full eligible amount in a single tax year beginning in 2019 instead of the five-year expensing schedule under current law.

Section 18. Disallowed itemized deduction. Provides for the phaseout of Minnesota itemized deductions to be consistent with how the phaseout was calculated prior to TCJA. Effective beginning in tax year 2018.   

Section 19. Disallowed personal exemption amount. Applies the phaseout of personal exemptions to the new Minnesota personal and dependent exemption subtraction established in a later section. Effective beginning in tax year 2018.

Section 20. Qualified business income addition. Requires that trusts and estates add back the 20% of pass-through income deducted under TCJA for purposes of calculating Minnesota taxable income. Effective beginning in tax year 2018.

Section 21. Foreign-derived intangible income (FDII). Requires amounts deducted under TCJA’s deduction for foreign-derived intangible income to be added back to FAGI for individuals (S corporation shareholders) who claim the deduction. FDII allows domestic corporations (including S corporations) with income from selling goods or services to foreign purchasers to deduct a percentage of that income. The amount of the deduction is determined under a complicated formula with percentages that vary from year to year and are subject to a variety of limitations and exclusions. Effective beginning in tax year 2018.

Section 22. 529 Plan distributions. Requires distributions from 529 Plans (Qualified Tuition Plans) that are used to pay K-12 expenses to be added to FAGI. TCJA permits taxpayers to use distributions for K-12 expenses without being subject to tax. The amount added back may not exceed the amount of “earnings” on the account that are excluded from income for the taxable year. Effective beginning in tax year 2018.

Section 23. Definition; scope. Provides that subtractions from Minnesota taxable income are specific to estates and trusts, as individuals will apply Minnesota subtractions to FAGI. The subtractions apply to amounts excluded from calculating federal taxable income for trusts and estates, and FAGI for individuals. Effective beginning in tax year 2018.

Section 24. Charitable contributions for taxpayer who do not itemize. Modifies the charitable contribution deduction for non-itemizers to be based on whether the taxpayer itemizes for Minnesota purposes (rather than federal purposes as under present law) and limits the deduction to resident individuals. Effective beginning in tax year 2018.

Section 25. Personal and dependent exemption allowance. Allows the personal and dependent exemptions (specified in a later section) as a subtraction. Effective beginning in tax year 2018.

Section 26. Military service pension subtraction. Changes a reference from FTI to FAGI for the subtraction for military retirement pay to be consistent with the article’s change in the starting point for calculating Minnesota tax. Effective beginning in tax year 2018.

Section 27. Social Security subtraction; indexing. Resets the dollar amounts of the subtraction for Social Security benefits to the tax year 2018 amounts and provides that indexing (starting for tax year 2019) will be done using chained CPI. In addition, the subtraction for married separate filers is specified as one-half of the married joint amount. Effective beginning in tax year 2018.

Section 28. Moving expenses. Allows moving expenses, suspended by the TCJA as a federal deduction for all but members of the military, as a subtraction. Effective beginning in tax year 2018.

Section 29. GILTI subtraction. Allows the amount of global intangible low-taxed income (GILTI) required to be included in FAGI to be subtracted. TCJA required a portion of this foreign income (for corporations, including S corporations) to be included in FAGI. This bill does not conform to the federal treatment. Effective beginning in tax year 2018.

Section 30. Deferred foreign income of nonresidents. Allows the amount of the deemed repatriation of deferred foreign income (a one-time requirement under TCJA that applies in tax year 2017) received by a nonresident to be subtracted from FAGI. The subtraction prevents Minnesota tax from applying to this non-Minnesota source income when it is received by nonresidents. Effective retroactively to tax year 2017 (the same time that the federal provision applies).

Section 31. Standard or itemized deduction. Allows the amount of the standard or itemized deductions (as specified in earlier sections) as a subtraction from FAGI. Effective beginning in tax year 2018.

Section 32. Special foreign deductions. Allows corporations required to add back the new 100% deduction for foreign dividends under TCJA to reduce the addition by any amounts of the dividends that represent amounts taxed in a prior year under the deemed repatriation provision. The FDII deduction for corporations is required to be added back. The section also eliminates the addition for the special deduction related to deemed repatriation of deferred foreign earnings. That will result in tax applying to the amount of that income that is net of the deduction for the federal participation exemption. Effective date: Retroactively to tax year 2017 (necessary because of the provision modifying addition for the deduction under the repatriation provision).

Section 34. GILTI subtraction. Allows the amount of GILTI required by a C Corporation to be included in FTI to be subtracted in computing Minnesota net income. TCJA subjects a portion of this foreign income to immediate federal taxation. The article does not conform to the federal treatment. Effective beginning in tax year 2018.

Section 35. Certain preferred stock losses; corporate alternative minimum tax (AMT). Eliminates a reference to the corporate AMT, which is repealed in a later section. Effective beginning in tax year 2018.

Section 36. Personal and dependent exemptions. Sets the amount of the personal and dependent exemption allowance at $4,150 for each taxpayer and dependent (the amount that would have been allowed under prior to TCJA for tax year 2018) and indexes this amount in the future using the chained CPI. Effective beginning in tax year 2018.

Section 37. Computation. Modifies the reference from “federal taxable net income” to “taxable net income” for purposes of the lump-sum distribution tax. “Taxable net income” is defined in an earlier section. Effective beginning in tax year 2018.

Section 38. Unrelated business income tax (UBIT); net operating losses (NOLs). Requires a nonprofit corporation required to pay UBIT to add back its federal NOL and claim a Minnesota NOL under the rules applicable to C corporations under the Minnesota tax. This prevents TCJA’s rules requiring separately calculating NOLs for each activity from applying. Effective beginning in tax year 2018.

Section 39. Corporate franchise tax rate. Reduces the corporate franchise tax rate from 9.8 percent to 9.65 percent for tax years 2018 and 2019 and to 9.1 percent for tax years after that. Effective beginning in tax year 2018.

Section 40.  Individual tax rates. Resets the dollar amount of individual income tax brackets to the tax year 2018 amounts and reduces the 7.05 percent tax rate to 6.95 percent for tax years 2018-19 and 6.85 percent beginning in tax year 2020. Reduces the 5.35 percent rate to 5.3 percent for tax years 2018-19 and 5.25 percent beginning in tax year 2020. In addition, conforming and updating changes are made to the allocation percentage that is used to determine the Minnesota-share of tax for nonresidents and part year residents. These changes reflect the repeal of the addition for domestic production activities and the subtractions for GILTI and the deemed repatriation income of nonresidents. Effective beginning in tax year 2018.

Section 41. Inflation adjustment of brackets. Provides for chained CPI adjustments for the individual income tax brackets. Effective beginning in tax year 2018.

Section 42. Amount of credit. Updates the income phaseout thresholds for the dependent care credit for 2018. Effective beginning in tax year 2018.

Section 43. Inflation adjustment. Updates the year reference in the inflation adjustment for the dependent care credit. The income phaseout thresholds for the credit would be adjusted by chained CPI. Effective beginning in tax year 2018.

Section 44. Credit allowed. Adjusts the income phaseout thresholds for the working family credit for 2018. Effective beginning in tax year 2018.

Section 45. Inflation adjustment. Indexes the income phaseout thresholds for the working family credit by chained CPI. Effective beginning in tax year 2018.

Sections 46 and 47. Definitions; credit. Update the reference in the long term care credit to refer to Minnesota instead of federal itemized deductions. Effective beginning in tax year 2018.

Section 48 to 52. Credit for certified historic structure rehabilitation. Updates the Minnesota credit to reflect changes made in TCJA to pay the credit or grant over five taxable years instead of the single year the structure was placed in service. Effective for applications for allocation certificates submitted after December 31, 2017.

Section 53. Credit allowed. Updates the income phaseout thresholds for the 529 plan credit. The threshold amounts would be adjusted for chained CPI. Effective beginning in tax year 2018.

Section 54. Subtraction. Modifies the income reference from FTI to FAGI for the elderly and disabled subtraction. Effective beginning in tax year 2018.

Section 55. Standard or itemized deduction. Allows an individual to claim the state standard deduction or state itemized deduction. Married separate filers must claim the same type of deduction. Allows a subtraction for the state standard or state itemized deduction. Effective beginning in tax year 2018.

Section 56. Definitions. Amends the Minnesota AMT calculation to require the Minnesota addition of QBI deducted at the federal level. Modifies the income calculation reference from FTI to FAGI. Allows the amount allowed to be deducted for casualty losses prior to TCJA to be included in the Minnesota AMT deduction. Effective beginning in tax year 2018.

Section 57. Exemption amount. Updates the AMT exemption amounts for 2018 and updates a cross-reference to the IRC. Adjusts exemption thresholds by chained CPI. Effective beginning in tax year 2018.

Section 58. Corporate AMT carryover credit. Modifies the carryover credit under the corporate AMT to reflect the repeal of the corporate AMT in a later section. The carryover credit allows corporations that pay AMT in one year to use that tax as a credit against regular tax in a later tax year. Carryover credits generated in years prior to repeal could continue to be used in 2018 and later tax years. Effective date: Tax year 2018.

Section 59. Imposition. Updates the bracket thresholds for the corporate minimum fee for 2018. The threshold amounts would be adjusted by chained CPI.

Section 60. Computation and modifications. Provides that the limitation under TCJA to allow corporations to claim 80% of NOLs does not apply to the calculation of NOLs for Minnesota corporate filers. Effective beginning in tax year 2018.

Section 61. Income not derived from conduct of a trade or business. Updates the definition of “wages” to correspond to a new clause of the IRC that requires wage withholding on certain stock option elections that were not available prior to TCJA. Effective beginning in tax year 2018.

Section 62. Dividends received from another corporation. Disallows a dividend-received deduction for dividends paid from stock that is debt-financed, which is disallowed under the IRC. Effective beginning in tax year 2018.

Section 63. Controlled foreign corporations. Provides that deferred foreign income deemed by TCJA to includible in subpart F income for tax year 2017 is dividend income. This follows Minnesota’s practice of treating subpart F income as dividend income and Minnesota’s treatment of subpart F income that was used in the 2004 repatriation tax holiday. Effective retroactively to tax year 2017.

Section 64. Insurance companies; computation of limit on interest expense. Provides that section 163(j) interest limitation for corporations that are part of an affiliated group of companies that include insurance companies (exempt from corporate franchise tax because they pay premium tax) are to be computed by including the insurance company’s income in determining how the limit applies. This parallels the federal treatment, which imposes the corporate income tax on insurance companies. Effective beginning in tax year 2018.

Section 65. Affiliated corporations filing a combined report; interest expense limitation. Provides that section 163(j) interest limitation for corporations that are part of an affiliated group of companies applies to corporations permitted or required to file as part of the affiliated group under Minnesota law. This parallels the federal treatment. Effective beginning in tax year 2018.

Section 66. Wages. Amends the definition of wages subject to Minnesota withholding to correspond to a new IRC provision that requires federal withholding on certain stock option elections. Effective beginning in tax year 2018.

Section 67. Income. Modifies the calculation of income for purposes of the property tax refund to reflect the repeal of the domestic production deduction under TCJA. Specifies that alimony received by the claimant and not already taxed, as well as amounts excluded and deducted from federal adjusted gross income must be added to the calculation of income. Provides a definition of “exemption amount” that reflects what the personal and dependent exemption would have been had TCJA not been enacted. The exemption amount is adjusted for chained CPI. Moves other definitions to a new clause. Effective beginning in tax year 2018.

Section 68. Gross rent. Updates the gross rent amounts for nursing homes, foster care homes, and intermediate care facilities for 2018. Effective beginning in tax year 2018.

Section 69. Internal Revenue Code. Updates the reference to the IRC for purposes of the property tax refund. Effective for refunds based on property taxes payable after December 31, 2018, and rent paid after December 31, 2017.

Section 70. Homeowners property tax refund. Updates the household income and maximum refund amounts for 2018. Effective for refunds based on property taxes payable after December 31, 2017.

Section 71. Renters property tax refund. Updates the household income and maximum refund amounts for 2018. Effective for refunds based on rent paid after December 31, 2016.

Section 72. Inflation adjustment. Provides that the inflation adjustment for the income and credit amounts for the property tax refund are adjusted by chained CPI. Effective for refunds based on property taxes payable after December 31, 2018, and rent paid after December 31, 2017.

Section 73. Scope. Updates the reference to the IRC for purposes of the estate tax chapter. Effective for estates of decedents dying after December 31, 2017.

Section 74. Sale of property used in a trade or business. Provides a past-date IRC reference for purposes of the sales tax exemption for like-kind exchanges. Under TCJA, like-kind treatment for personal property is no longer allowed. Effective retroactively for sales and purchases made after December 31, 2017.

Section 75. Exemptions. Provides a past-date IRC reference for purposes of the motor vehicle sales tax exemption for like-kind exchanges. Under TCJA, like-kind treatment for personal property is no longer allowed. Effective retroactively for sales and purchases made after December 31, 2017.

Sections 76 and 77. Subtraction; Addition. Updates the reference for the first-time homebuyer savings account from FTI to FAGI. Effective beginning in tax year 2018.

Section 78. Application. Updates the reference in the JOBZ chapter from FTI to FAGI. Effective beginning in tax year 2018.

Section 79. Corporate AMT. Eliminates a reference in the JOBZ statute to the corporate AMT, which is repealed in a later section.

Section 80. Estimated taxes; exceptions. Provides an exception to imposition of penalties for underpayment of estimated tax, if the underpayment resulted from the inclusion of deferred foreign income (i.e., resulting from conformity to the federal repatriation tax) in tax year 2017. To avoid the penalty, payment must be made by September 15, 2018. This income is first included in income for tax year 2017. Since it applies retroactively, taxpayers would not have known to make estimated payments based on its taxability.

Section 81. Repealer. Repeals the following provisions in Minnesota Statutes:

290.0131, subdivisions 7 and 11

  • Addition for fines, fees, and penalties (individuals), which is now included federal income;
  • Addition (individuals) for domestic production activities

290.0133, subdivisions 13 and 14

  • Addition for fines, fees, and penalties (corporations) for domestic production activities;
  • Addition for fines, fees, and penalties (corporations), which is now included federal income

290.067, subdivisions 2a

  • Calculation of income for purposes of the dependent care credit, which is no longer necessary with transition to FAGI.

290.0921, subdivisions 1, 2, 3, 3a, 4, and 6

  • Corporate AMT (other than carryover credit)

290.10, subdivisions 2

  • Disallowance of trade or business expense for fines, fees, and penalties, which now are disallowed by federal law

Article 3

Income, Corporate Franchise, and Estate Taxes

Sections 1 and 2. Angel investment credit. Extends the small business investment credit, commonly known as the angel investment credit, for one year and allocates $5 million for the credit. Also extends reporting requirements to correspond to the additional year the credit is available. Effective for tax year 2018.

Section 3. Financial institution. Makes a technical amendment to the definition of “financial institution” to strike an unnecessary reference to the insurance premium tax chapter. Effective retroactively to tax year 2017.

Section 4. Disqualified captive insurance company. Establishes a definition of “disqualified captive insurance company” as one that is licensed as a captive insurance company or derives 80% or more of its total premiums from its unitary business members and receives less than 50% of its gross receipts from premiums, or pays less than 0.25% of its total premiums under state insurance premium tax. Effective retroactively to tax year 2017.

Sections 5 and 6. Disallowed section 280E expenses. Allows a subtraction for purposes of calculating Minnesota individual income, corporate franchise, and alternative minimum tax for business expenses incurred by medical cannabis manufacturers, which are disallowed as business expenses under federal law. Effective beginning in tax year 2018.

Section 7. Exempt entities. Excludes disqualified captive insurance companies from the general income tax exemption for insurance companies. Effective retroactively to tax year 2017.

Sections 8 and 9. Credit allowed. Modifies the stillbirth credit to allow residents who gave birth resulting in stillbirth in another state and residents or spouses of residents who are members of the armed forces stationed outside the state and gave birth resulting in stillbirth, to claim the credit. Limits the credit to the birth mother. Effective retroactively to tax year 2016.

Section 10. Unitary business principle. Requires that the combined report for unitary businesses exclude the income and apportionment factors of a disqualified captive insurance company. Strikes language providing that insurance companies that are part of a unitary business and not licensed in Minnesota or another state that imposes retaliatory taxes must be included on the combined report. Effective retroactively to tax year 2017.

Section 11. Definitions. Corrects a cross-reference in the definition of “qualified heir” for purposes of the qualified small business and qualified farm property subtractions. Effective retroactively the day following final enactment.

Section 12. Qualified small business property. Modifies the requirement for the three-year holding period prior to the decedent’s death to allow ownership of the property by the decedent’s spouse, or undivided or joint interest in the property between the decedent and decedent’s spouse, to meet the property ownership requirement of the qualified small business property subtraction. Effective retroactively for estates of decedents dying after December 31, 2017.

Section 13. Qualified farm property. Modifies the requirement for the three-year holding period prior to the decedent’s death to allow ownership of the property by the decedent’s spouse, or undivided or joint interest in the property between the decedent and decedent’s spouse, to meet the property ownership requirement of the qualified farm property subtraction. Effective retroactively for estates of decedents dying after December 31, 2017.

Section 14. Recapture tax; temporary provision. Provides a temporary special rule under the recapture tax that applies to estates claiming the subtraction for qualified property. The rule is limited to estates of decedents dying after December 31, 2011 and before January 1, 2017, and that filed a return reporting no tax liability and also claimed a qualified property treatment, which is triggering recapture tax. The special rule limits the amount of the qualified property exclusion or subtraction (i.e., amount that triggers recapture tax) to the amount necessary to reduce the estate tax to zero. The commissioner must establish a process for estates to claim refunds. Refunds must be filed before January 1, 2020. The section also corrects a cross reference error that resulted from 2017 tax act’s renumbering of clauses in the qualified property provisions of the estate tax. Effective retroactively for estates of decedents dying after December 31, 2011.

Section 15. Angel credit; application for tax year 2018. Requires DEED to post applications for the angel investment credit (extended under sections 1 and 2) within 30 days of the day following final enactment of the tax bill. Provides that the sections of law governing the angel credit in the economic development chapter apply to the extended credit in sections 1 and 2. Effective the day following final enactment.

Article 4

Sales and use taxes

Section 1. Hospitals, outpatient surgical centers, and critical access dental providers. Exempts sales to a qualifying medical facility from the sales tax. Defines “qualifying medical facility” as a facility that has been granted an abatement of the state general tax (carried in Article 4). Effective for sales and purchases made after June 30, 2018.

Section 2. Ice arenas and rinks. Expands the sales tax exemption for a nonprofit operating an ice arena to the Westonka Sports Association operating the ice arena at the David M. Thaler Sports Center. Effective for sales and purchases made after June 30, 2018.

Section 3. Nonprofit conservation clubs. Provides a sales tax exemption for purchases made by nonprofit 501(c)(3) clubs that provide instruction and training in, and shooting facilities for handguns or rifles. Effective for sales and purchases made after June 30, 2018.

Section 4. Public safety facilities. Provides an upfront exemption for construction of the following public safety facilities:

•   a new fire station in the city of Inver Grove Heights;

•   a new fire station or remodeling of an existing fire station in the city of Virginia;

•   a new fire station in the city of Minnetonka; and

•   remodeling and expansion of an existing fire station in the city of Minnetonka to accommodate its use as a police station.

Applies to purchases by contractors and subcontractors as well as directly by the city. Effective for sales and purchases made after the day following final enactment and before January 1, 2021.

Section 5. Nonprofit snowmobile clubs. Provides a sales tax exemption on building materials and supplies used by a nonprofit snowmobile club to construct, maintain, or improve a state or grant-in-aid snowmobile trail. Effective for sales and purchases made after June 30, 2018.

Section 6. Medical facility in underserved area. Provides a construction materials exemption for qualifying medical facilities, as defined in Article 4. Effective for sales and purchases made after June 30, 2018.

Section 7. Properties destroyed by fire (Mazeppa). Provides a sales tax exemption for reconstruction of the properties affected by the fire in Mazeppa on March 11, 2018. The tax must be paid at the time of purchase and refunded to the property owner. The exemption also covers durable restaurant equipment destroyed in the fire. Effective retroactively to purchases made after March 11, 2018, and before January 1, 2021.

Section 8. Tax collected. Requires that the tax on items exempt in section 8 be paid on items at the time of purchase. Effective for sales and purchases made after June 30, 2018.

Section 9. New taxes prohibited. Prohibits a city, county, town, or other taxing authority from increasing or imposing an excise tax on food or containers. The prohibition relating to food applies at the manufacturer, distributor, wholesale, or retail levels. The prohibition does not apply to license fees imposed by a licensing authority in the exercise of that authority to license a trade, profession, or business. Effective June 1, 2018.

Section 10. Effective date. Extends the sales tax exemption for construction materials for properties destroyed by fire in Melrose, which was authorized in the 2017 omnibus tax bill. Effective the day following final enactment.

Section 11. Municipality owned water treatment facility; city of Elko New Market. Provides a retroactive sales tax exemption for the materials and supplies used in and equipment incorporated into a water treatment facility owned by the city of Elko New Market. The exemption applies to purchases by the city and by contractors, subcontractors, and builders. The city must apply for the refund of taxes paid and the contractor, subcontractors, and builders must provide the city with the information necessary to make the application. Money is appropriated to the commissioner of revenue to pay the refund. Effective retroactively for sales and purchases made after June 1, 2014, and before June 1, 2016.

Article 5 

Property Taxes

Section 1. County historical society levy. Allows a city or town to fund its own historical society from its property tax levy; current law only allows them only to fund the county’s historical society. Effective the day following final enactment.

Sections 2 and 9. Records; data privacy; disclosure. Authorize county veterans’ service officers and county assessors to disclose to each other private data necessary to determine a client’s eligibility for the disabled veteran’s homestead market value exclusion. Effective the day following final enactment.

Section 3. Tribal-owned pharmacy property tax exemption. Provides a property tax exemption for a pharmacy in the city of Minneapolis owned by a federally recognized Indian tribe. The property must have been owned by the tribe on January 1, 2016, and the current assessment year. This exemption is limited to parcels and structures that do not exceed 4,000 square feet, and the exemption expires with taxes payable in 2028. Effective beginning with taxes payable in 2019.

Sections 4 and 18. Manufactured home park cooperative; property taxes payable. Allow manufactured home park cooperative residents to include 17 percent of the rent paid for site rental in the determination of property taxes payable for purposes of the homestead credit refund. Under current law, residents may claim a property tax refund for the property taxes paid on the manufactured home itself, but may not include any taxes attributable to ground lease payments. Effective beginning with claims for refunds for taxes payable in 2019.

Section 5. Homesteads owned by or leased to a farm business entity. Allows agricultural property that is farmed by a business entity other than the business entity that owns the land to qualify for agricultural homestead. Effective beginning with assessment year 2018 and thereafter.

Sections 6 and 7. Agricultural homesteads; special provisions. Allow agricultural property owned by an individual and a trust (of which the individual, their spouse, or deceased spouse is the grantor) or by two different trusts (of which the grantors of each trust are any combination of the individual, their spouse, or deceased spouse) to qualify for agricultural homestead. Effective beginning with taxes payable in 2019.

Section 8. Fractional homesteads. Requires the county assessor to prorate the percentage of a homestead that is owned by each owner of a homestead that has multiple owners based on each owner’s deeded interest in the property. If the percentage ownership cannot be determined in this manner, percent ownership is prorated among owners in equal shares. Effective beginning with assessment year 2018 and thereafter.

Section 10. Class 1 (homestead resorts). Allows a property to qualify for the homestead resort classification when the resort portion of the property is owned by a business entity and the homestead portion is titled in the name of a member of that business entity. Effective beginning with taxes payable in 2019.

Section 11. Class 2 (agricultural purposes). Provides that land will still qualify for agricultural classification even if the greater of three acres or ten percent of the total land area is used to serve environmental purposes such as buffer strips or retention ponds. Also allows land consisting of a holding pond designed to hold back runoff from a rural expressway to retain agricultural classification. Effective beginning with assessment year 2018 and thereafter.

Section 12. Homestead of disabled veteran or family caregiver. Moves the application date for the disabled veterans homestead exclusion from July 1 to December 15, requires the removal of the benefit for non-qualifying homeowners in the taxes payable year following the year that a qualifying veteran sells the property, and allows a qualifying veteran’s spouse to retain the spousal benefit when the spouse moves to a home having a value less than or equal to the value of the first home. Effective beginning with taxes payable in 2019.

Section 13. Homestead market value exclusion. Requires the county assessor to prorate the percentage of a homestead that is owned by each owner in the manner required in section 8 when calculating the homestead market value exclusion. Effective beginning with taxes payable in 2019.

Section 14. Agricultural homestead market value credit. Requires the assessor to prorate the percentage of a homestead that is owned by each owner in the manner provided in section 8 when calculating the agricultural homestead credit. Effective beginning with taxes payable in 2019.

Section 15. Natural gas pipeline; abatements. Requires a county to abate the state general levy on personal property that is part of an intrastate natural gas transportation or distribution pipeline system if construction of the system commenced after January 1, 2018, and the pipelines provides service to an area outside the seven country metropolitan area in which the majority of households or businesses lacked access to natural gas as of January 1, 2018. The abatement under this section is limited to 12 years. Effective beginning with taxes payable in 2020.

Section 16. Medical facility in underserved area. Abates the state general levy for property described in section 25 for 15 years, and provides that the amount of the state general levy will be reduced so that the tax is not shifted onto other properties. Effective beginning with taxes payable in 2019.

Section 17. Duties of the commissioner after sale. Requires the commissioner of revenue to issue a deed for land sold at a tax-forfeiture sale if the county auditor has written confirmation from a closing agent, title insurer, or title insurance agent that funds sufficient to purchase the deed are currently held in escrow. Under current law, the deed may not be issued until after the closing. If a closing does not occur, the county must return the deed to the commissioner of revenue for destruction. Effective the day following final enactment.

Section 19. Senior citizen property tax deferral program; application. Changes the application due date from July 1 to November 1, and clarifies that a taxpayer may preapply for early approval or denial. If denied, the commissioner must notify the taxpayer in writing the reasons for a denial and that the taxpayer may amend and resubmit their application up to November 1. Effective beginning with taxes payable in 2019.

Section 20. Border city enterprise zones; restriction. Provides technical clean-up language changes relating to the restrictions on the types of property that can qualify for border cities enterprise zone tax reductions. Effective the day following final enactment

Section 21. Scope. Adds a conforming change with reference to the new definition in section 24. Effective beginning with taxes payable in 2019.

Section 22. Medical facility. Defines “medical facility” as an office, clinic, building or portion of a building used to provide primary or specialty care; birth center; hospital; urgent care clinic; or outpatient surgical center. Effective the day following final enactment for taxes payable in 2019.

Section 23. Medically underserved county. Defines a “medically underserved county” as a county that includes an area designated by the United States Secretary of Health and Human Services as a medically underserved area. This section also requires the commissioner of health to certify the counties that qualify to the commissioner of revenue, and further requires the commissioner of revenue to provide that information to the counties. Effective beginning with taxes payable in 2019.

Section 24. Medically underserved areas. Abates the state general tax for 15 years for a medical facility that has received a local abatement, provided that: (1) the facility is in a medically underserved county; (2) the facility is outside in the metro area; (3) a local jurisdiction passes a resolution that the facility meets an unmet need; and (4) both the county and city or town grant the local abatement. Effective beginning with taxes payable in 2019.

Sections 25 through 27. Metropolitan agricultural preserve program; expiration. Provide that a metropolitan agricultural preserve expires immediately when a public entity purchases the property or acquires an easement for purposes of a public trail or park. The expiration would apply only to the portion of the preserve used for park or trail purposes. Requires the public entity to notify the preserve authority accordingly. Effective the day following final enactment.

Section 28. Certified aid adjustments. Deletes obsolete provisions and provides onetime extra aid payments to the following two cities for aids payable in 2019 only: $97,260 to the city of Hermantown for their 2018 loss due to a formula glitch and $150,000 to the city of Lilydale for storm sewer costs. Effective for aids payable in calendar year 2019 only.

Section 29. Northwest Minnesota Multicounty HRA; effective date. Extends the levy authority of the Northwest Minnesota Multicounty Housing and Redevelopment authority by five years, to taxes payable in 2024. Effective beginning with taxes payable in 2019.

Sections 30 through 34. Cloquet Area Fire and Ambulance Special Taxing District. Clarify the district’s ability to incur debt by allowing the district to issue certificates of indebtedness or capital notes. These sections also clarify how the levies for ambulance services and for fire services are to be spread, and provides that a levy in a municipality that wishes to withdraw from the district remains in effect until the obligations outstanding on the date of withdrawal are satisfied. Effective upon compliance by the Cloquet Area Fire and Ambulance Special Taxing District Board with approval and filing requirements.

Section 35. Effective date; application (SFIA). Amends the effective date for a provision passed in 2017 that amended the definition of forest land under the Sustainable Forest Incentive Act to include land improved with a paved trail under an easement, lease, or license to the state or a political subdivision. This effective date change clarifies that land improved with a paved trail at the time an SFIA enrollee submits their annual certification meets the new definition. Effective the day following final enactment.

Section 36. Special refund provision; disabled veterans homestead market value exclusion. Provides a refund of property taxes paid by a veteran who received a retroactive 100% total and permanent disability certification from the United States Department of Veteran Affairs after the July 1, 2017 application date. The amount of the refund is equal to the amount of tax paid on the property for taxes payable in 2017 and 2018 in excess of the amount of tax that would have been due for those two years had the property been subject to the exclusion. Effective for refund applications received in 2018, for refunds of tax paid in 2017 and 2018.

Section 37. School Property tax reform. Establishes a school property tax working group to evaluate the impact of school capital investments on farmland property taxes, simplify school levies and coordinate interactions with the state general levy. Membership consists of four members of the house of representatives, four senators, four representatives of different sectors of the property tax base, and four representatives of school district organizations; the commissioners of education and revenue serve as ex-officio members. The group is charged with developing one or more legislative proposals by January 1, 2019. Effective the day following final enactment.

 Article 6

Public Finance

Section 1. Interest. Modifies the interest rate charged on drainage lien principal so that the interest rate may not exceed the rate set by the State Court Administrator, or six percent, whichever is greater.

Section 2. Any relief under bankruptcy code.  Deletes outdated references to the United States Bankruptcy Code.

Section 3. Metropolitan Council debt obligations.  Limits the prohibition on using Metropolitan Council debt for light rail improvements, enacted in 2017, to obligations authorized by the 2017 law. Under current law, the prohibition applies to any debt obligations issued by the council under the section of statute.

Section 4. Public facilities project. Expands the types of district heating/cooling projects that qualify as public facilities projects by allowing both publicly and privately owned facilities. Under current law, the facility must be publicly owned or owned by a nonprofit organization.

Section 5. Definitions. Updates a cross-reference to the definition of “municipality” for purposes of capital improvement bonds.

Article 7

Miscellaneous

Section 1. Occupation taxes to be apportioned; refund. Provides a refund of the occupation tax to taconite producers with any occupation tax revenue remaining in the general fund after all statutory allocations are made. The refund amount shall be equal to the proportion of occupation tax paid by the producer compared to the amount of tax paid by all producers. The total amount of refunds is limited to $5 million per year. Effective beginning with distributions made in 2020 and thereafter.

Section 2. Guaranteed distribution. Guarantees the amount of the production tax on taconite that is distributed to the taconite municipal aid account at 100% of the maximum guarantee amount. Currently, the amount guaranteed declines with production. Effective beginning with distributions made in 2020 and thereafter.

Section 3. Taconite economic development fund (TEDF). Modifies the projects for which TEDF funds may be released, and provides authority for the commissioner of IRRRB to release funds prior to the next board meeting and to deposit any unreleased TEDF funds to the taconite environmental protection fund. Effective the day following final enactment.

Section 4. Taconite economic development fund (TEDF). Clarifies that TEDF distributions must be made to a Minnesota taconite pellet producer’s fund. Effective retroactively from December 31, 2016.

Sections 5 and 6. St. Cloud food and liquor tax; expiration of taxing authority. Authorizes the city to increase its food and liquor tax by up to 0.5%, subject to approval by voters and the city’s governing body. Requires that the increased tax terminate at the earlier of 25 years or when principal and interest on bonds are paid. The city may also terminate the increased tax by ordinance. Effective upon local approval filed with the Secretary of State.

Section 7. St. Cloud lodging tax. Authorizes the city to increase its lodging tax by up to 1%, subject to approval by voters and the city’s governing body. Proceeds of the increased tax must be used exclusively for marketing and promotion of the Municipal Athletic Center. Effective upon local approval filed with the Secretary of State.

Section 8. Minneapolis Liquor, lodging, and restaurant taxes. Modifies the maximum combined rate of Minneapolis lodging taxes, state general taxes, and any other local taxes to 13.875%, which would allow the city to restore its lodging tax to the originally authorized 3%. Effective for sales and purchases made after September 30, 2018.

Section 9. St. Paul lodging tax. Authorizes the city to increase its lodging tax from 3% to 4%. Effective upon local approval filed with the Secretary of State.

Section 10. Bloomington TIF. Extends the five-year rule for the Bloomington Central Station TIF district from 15 years to 20 years, and exempts the district from the requirement that after that period, in-district increments must be used to decertify the district early. Effective upon local approval and filing requirements.

Section 11. Cloquet local sales tax; use of revenues. Provides that the city of Cloquet may shift the use of its sales tax revenue from development along Highway 33 and Interstate 35, to infrastructure projects including roads and bridges as well as the current authorized sewer and water projects. Effective upon local approval filed with the Secretary of State.

Section 12. Appropriation; Melrose fire remediation grants. Adjusts the amounts of fire remediation grants appropriated to the city of Melrose in 2017 so that more of the grant will be directed to the city and a lesser amount to the county. This section also extends the availability of the grants by one year to June 30, 2019.

Section 13. City of Excelsior; taxes authorized. Allows the city to impose up to a 0.5% local sales tax to fund improvements to The Commons area, including walkability and accessibility improvements, enhancement of beach area and facilities, shoreline erosion prevention and management, redesign of the port and bandshell, and playground improvements. Authorizes the city to issue bonds up to $5 million to finance the projects. Any increases in bonding authority require voter approval. The tax terminates at the earlier of 25 years or when the bonds are repaid. Effective upon filing of local approval with the Secretary of State.

Section 14. Champlin TIF. Allows the city of Champlin to elect to extend the five-year rule to 10 years for its Mississippi Crossings TIF district, and exempts the district from the requirement that after that period, in-district increments must be used to decertify the district early. Effective upon local approval and filing requirements.

Section 15. Transfer 2018 distributions. Requires a onetime transfer of 10 cents per ton from the property tax relief account to the IRRRB, but only if there are excess funds in the tax relief account after its required distributions. Effective beginning with distributions in 2018 and the transfer must be made within ten days of the August payment.

Section 16. Appropriation (Mazeppa fire). Appropriates $2,600 to the city of Mazeppa and $2,400 to Wabasha County in fiscal year 2019 to reimburse the city and county for property tax abatements and other costs associated with a fire on March 11, 2018. Effective July 1, 2018.

Section 17. Appropriation. Appropriates $1,977,000 in fiscal year 2018 and $1,978,000 in fiscal year 2019 from the general fund to the Commissioner of Revenue for purposes of administering this act.

Article 8

Department of Revenue; Property Tax; Policy Changes

Section 1. Administration (Small Cities Assistance). Provides that the Commissioner of Transportation will certify aid amounts for the Small Cities Assistance program to the Commissioner of Revenue by June 1. Effective for aids payable in 2018 and thereafter.

Section 2. Assessor sanctions; refusal to license. Requires the Commissioner of Revenue to make recommendations to the Board of Assessors for sanctions and clarifies the notice and hearing procedures for an applicant or licensee who disputes the commissioner’s recommendation. Effective for sanctions or refusals to grant or renew a license recommended by the Commissioner of Revenue after June 30, 2018.

Section 3. Requirement (Certificates of Real Estate Value). Changes the threshold for filing a Certificate of Real Estate Value at consideration in excess of $1,000 to in excess of $3,000. Effective for certificates of value filed after December 31, 2018.

Section 4. Determination of tax (deed tax). Changes the minimum consideration for real property, used in calculating the deed tax, from $500 or less to $3,000 or less. Effective date: Effective for deeds recorded after December 31, 2018.

Article 9

Department of Revenue; Miscellaneous; Policy Changes

Section 1. Disclosure. Allows the commissioner to disclose data identifying the holder of a sales tax permit that has been canceled. Effective the day following final enactment.

Sections 2 and 3. Sales tax permits. Prevent a business from evading a sales tax liability by prohibiting the issuance of a new sales tax permit to a business or person that has an unpaid sales tax liability not under appeal and provides for cancellation with notice. Effective for permits applied for after December 31, 2018.

Article 10

Department of Revenue; Partnership Tax; Policy Changes

Sections 1-4 and 11-16. Various conforming changes. Amend various statutes to correct cross-references and generally comport with the changes in other sections.

Section 5. Definitions relating to federal adjustments. Adds various definitions relating to the reporting of federal adjustments, and federal adjustments to partnership returns.

Section 6. General rule – reporting federal adjustments. Provides the general requirement that taxpayers report federal audit adjustments, and amended federal returns to Minnesota within 180 days. Partnerships having undergone entity-level audits are exempt from this provision and are required to report adjustments to Minnesota under current law.

Section 7. Reporting adjustments following a partnership-level audit. Provides for the reporting of federal adjustments following a partnership-level audit by the IRS. By default, each partnership will be required to file a federal adjustments report related to federal changes, and submit the report to both Minnesota and its direct partners within 90 days. Each partnership reporting changes must also file amended composite and withholding reports for nonresident partners within 180 days. Each direct partner, other than tiered partners, receiving an adjustment report as described above is also required to make a federal adjustment report and pay any additional tax due within 180 days of the final determination date.

Each partnership reporting federal adjustments after a partnership level audit is also eligible to make an election to pay the additional tax due to Minnesota at the entity level. A partnership making the election is required to do so on a federal adjustment report filed with the commissioner within 90 days of the final determination date. A partnership making the election must be able to determine and report the residency status of all direct individual partners, and pay tax on the properly allocated and apportioned share of all income at the highest marginal rate for its individual and corporate partners.

Section 8. Assessment of tax, interest, penalties, and additional amounts (statute of limitations). Provides that when a taxpayer reports federal adjustments pursuant to §§ 289A.382 and 289A.383 in a timely fashion that the statute of limitations on assessment for state tax purposes is extended for a period of one year. When a taxpayer files a federal adjustment report in an untimely fashion the statute of limitations is extended for the shorter of either (1) one year after the filing of the untimely report; or (2) six years.

Section 9. Statute of limitations on refund claims. Provides that the statute of limitations on refund claims related to adjustments made by the IRS is equal to the extended period for additional assessments under Minn. Stat. § 289A.384.

Section 10. Consent to extend refunds. Makes changes to correct cross references and generally comport with the changes in other sections. In addition, eliminates the authority to make assessments for an additional six month period when no federal changes are made.

Section 11. Repealer. Repeals Minn. Stat. § 289A.38, subdivisions 7, 8, and 9, which are replaced by other sections in the bill. 

Article 11

Department of Revenue; Individual Income and Corporate Franchise Taxes; Technical Changes

Section 1. Accelerated recognition. Deletes the phrase “allocable amount” which is unnecessary as the allocation rules provide for the applicable standard following the implementation of the changes in a later section. Effective the day following final enactment.

Section 2. Schedule of rates for individuals, estates, and trusts. Provides that the married filing separate bracket is exactly half of the married filing joint bracket, effective for taxable years beginning in 2018. Also provides for the representation of accelerated installment sale receipts in the nonresident apportionment fraction of taxpayers who pay income taxes on accelerated installment sale gains under section 2, effective the day following final enactment.

Section 3. Inflation adjustment of brackets. Ensures the general tax brackets for married filing separate are exactly half of married filing joint. Effective for taxable years beginning in 2018.

Section 4. Payments to horse racing license holders. Corrects a cross-reference that was moved in a prior session. Effective the day following final enactment.

Section 5. First time homebuyer. Provides that a taxpayer may designate the required beneficiary at the same time as when they file their income tax return. Effective the day following final enactment.

Article 12

Department of Revenue; Sales and Use Taxes; Technical Changes

Section 1. Ships used in interstate commerce. Clarifies an ambiguity created in the chapter 297A recodification in 2000. Effective the day following final enactment.

Section 2. DEED certification of Greater Minnesota businesses. Clarifies that the commissioner of DEED must certify a Greater Minnesota business as a qualifying business and that any purchase and delivery received occurred during the duration of the business subsidy agreement. Effective the day following final enactment.

Section 3. DEED certification of biopharmaceutical manufacturing facilities. Clarifies that the commissioner of DEED must certify to the commissioner of revenue that the biopharmaceutical manufacturing facility is qualified. Effective the day following final enactment.

Section 4. Recordkeeping requirement. Clarifies language inadvertently omitted during the chapter 289A recodification in 1990. Effective the day following final enactment.

 Article 13

Department of Revenue; Tobacco Taxes; Technical Changes

Section 1. Definition of tobacco product. Clarifies that this definition specifically includes vapor products. Effective the day following final enactment.

Section 2. Definition of vapor product. Clarifies that the definition of “vapor product” includes electronic pipes and cigarettes, batteries, heating elements, and other products, devices, components parts, and accessories sold with a nicotine solution. The definition also includes solutions containing nicotine produced from sources other than tobacco. Effective the day following final enactment except the inclusion of non-tobacco nicotine in the definition is effective January 1, 2019.

Section 3. Definition of wholesales sales price. Clarifies that the definition of wholesale sales price does not include the cost electronic pipes and cigarettes, batteries, heating elements, and other products, devices, components parts, and accessories sold with a nicotine solution if the taxpayer separately sells the container of nicotine solution. Effective the day following final enactment.

Article 14

Department of Revenue; Property Taxes; Technical Changes

Section 1. Powers and duties; property tax data reports. Amends the commissioner’s powers to administer the state’s property tax laws by clarifying that the Commissioner of Revenue may collect property tax data at the parcel level or higher in the time, form, and manner as the commissioner may prescribe. This method of collection is consistent with property tax data collection under the Property Record Information System of Minnesota. Effective the day following final enactment.

Section 2. Initial report. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 3. Final report. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 4. Record of proceedings changing net tax capacity; duties of county auditor. Conforming changes to the changes in section 1. Effective the day following final enactment.

Section 5. Additional general duties. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 6. Training and education of property tax personnel. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 7. Reimbursement for lost revenue. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 8. Reimbursement for lost revenue. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 9. Disaster or emergency area. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 10. Reduction amounts submitted to county. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 11. Credit reimbursements. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 12. Credit reimbursements. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 13. Listing, valuation, and assessment of exempt property by county auditors. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 14. Length of session; record. Conforming changes to the changes in section 1. Effective the day following final enactment.

Section 15. Corrected lists, abstracts. Conforming changes to the changes in section 1. Effective the day following final enactment.

Section 16. Levy amount. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 17. Determination; payment. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 18. Original net tax capacity. Conforming changes and cross-references added to the changes in section 1. Effective the day following final enactment.

Section 19. Repealer. Repeals the statute describing the abstract of tax lists. Effective date: Effective the day following final enactment.

Article 15

Department of Revenue; Miscellaneous; Technical Changes

Section 1. Superior National Forest; recreational property for use by disabled veterans. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 2. Certain recreational property for disabled veterans. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 3. Market value definition. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 4. Class 1. Amends the statute to update language for persons who are blind or have a disability. Effective the day following final enactment.

Section 5. Homestead of disabled veteran or family caregiver. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 6. Returns of married persons. Updates gender-specific language for spouses. Effective the day following final enactment.

Section 7. Requirements to pay. Updates gender-specific language for spouses. Effective the day following final enactment.

Section 8. Joint income tax returns. Updates gender-specific language for spouses. Effective the day following final enactment.

Section 9. Order of assessment if joint income tax return. Updates gender-specific language for spouses. Effective the day following final enactment.

Section 10. Subtraction. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 11. Restrictions; married couples. Amends the statutes listed below to update gender-specific language for spouses. Effective the day following final enactment.

Section 12. Definitions. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 13. Income. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 14. Household. Updates gender-specific language for spouses. Effective the day following final enactment.

Section 15. Claimant. Updates gender-specific language for spouses. Effective the day following final enactment.

Section 16. Combined household income. Amends the statutes listed below to update gender-specific language for spouses. Effective the day following final enactment.

Section 17. One claimant per household. Amends the statutes listed below to update gender-specific language for spouses. Effective the day following final enactment.

Section 18. Proof of claim. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 19. Disabled. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 20. Other exempt meals. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 21. Parts and accessories used to make a motor vehicle disabled accessible. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 22. Sales of certain goods and services to government. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 23. Sales to nonprofit groups. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 24. Camp fees. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 25. Materials used to make residential property disabled accessible. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 26. Tax collected. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 27. Purchase price. Amends the statute to update language for persons who have a disability. Effective the day following final enactment.

Section 28. Sale, sells, selling, purchase, purchased, or acquired. Amends the statutes listed below to update gender-specific language for spouses. Effective the day following final enactment.

Section 29. Effective date. Amends the effective date in Laws 2017, First Special Session chapter 1, article 8, section 3 concerning the period of time to file post-trial motions. After June 30, 2018, all cases have 30 days to file post-trial motions. Effective the day following final enactment.

 
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