Bill Text: MN HF126 | 2013-2014 | 88th Legislature | Introduced

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Bill Title: Property tax refund modified, threshold percentage decreased for the homestead credit refund for homeowners, and percentage of rent constituting property taxes increased.

Sponsorship: Partisan Bill (Democrat 15)

Status: (Introduced - Dead) 2013-04-16 - Author added Bernardy [HF126 Detail]

Download: Minnesota-2013-HF126-Introduced.html

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A bill for an act

relating to taxation; property; modifying property tax refunds; decreasing the
threshold percentage for the homestead credit refund for homeowners; increasing
the percentage of rent constituting property taxes; amending Minnesota Statutes
2012, sections 290A.03, subdivisions 11, 13; 290A.04, subdivisions 2, 4;
proposing coding for new law in Minnesota Statutes, chapter 290A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

    Section 1. Minnesota Statutes 2012, section 290A.03, subdivision 11, is amended to
read:
    Subd. 11. Rent constituting property taxes. "Rent constituting property taxes"
means 17 18 percent of the gross rent actually paid in cash, or its equivalent, or the portion
of rent paid in lieu of property taxes, in any calendar year by a claimant for the right
of occupancy of the claimant's Minnesota homestead in the calendar year, and which
rent constitutes the basis, in the succeeding calendar year of a claim for relief under this
chapter by the claimant.
EFFECTIVE DATE.This section is effective for claims based on rent paid in
2013 and thereafter.

    Sec. 2. Minnesota Statutes 2012, section 290A.03, subdivision 13, is amended to read:
    Subd. 13. Property taxes payable. "Property taxes payable" means the property tax
exclusive of special assessments, penalties, and interest payable on a claimant's homestead
after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2,
and any other state paid property tax credits in any calendar year, and after any refund
claimed and allowable under section 290A.04, subdivision 2h, that is first payable in
the year that the property tax is payable. In the case of a claimant who makes ground
lease payments, "property taxes payable" includes the amount of the payments directly
attributable to the property taxes assessed against the parcel on which the house is located.
No apportionment or reduction of the "property taxes payable" shall be required for the
use of a portion of the claimant's homestead for a business purpose if the claimant does not
deduct any business depreciation expenses for the use of a portion of the homestead in the
determination of federal adjusted gross income. For homesteads which are manufactured
homes as defined in section 273.125, subdivision 8, and for homesteads which are park
trailers taxed as manufactured homes under section 168.012, subdivision 9, "property
taxes payable" shall also include 17 18 percent of the gross rent paid in the preceding
year for the site on which the homestead is located. When a homestead is owned by
two or more persons as joint tenants or tenants in common, such tenants shall determine
between them which tenant may claim the property taxes payable on the homestead. If
they are unable to agree, the matter shall be referred to the commissioner of revenue
whose decision shall be final. Property taxes are considered payable in the year prescribed
by law for payment of the taxes.
In the case of a claim relating to "property taxes payable," the claimant must have
owned and occupied the homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead property pursuant to section
273.124 , on or before December 15 of the assessment year to which the "property taxes
payable" relate; or (ii) the claimant must provide documentation from the local assessor
that application for homestead classification has been made on or before December 15
of the year in which the "property taxes payable" were payable and that the assessor has
approved the application.
EFFECTIVE DATE.This section is effective for claims based on rent paid in
2013 and thereafter.

    Sec. 3. Minnesota Statutes 2012, section 290A.04, subdivision 2, is amended to read:
    Subd. 2. Homeowners; homestead credit refund. A claimant whose property
taxes payable are in excess of the percentage of the household income stated below shall
pay an amount equal to the percent of income shown for the appropriate household
income level along with the percent to be paid by the claimant of the remaining amount
of property taxes payable. The state refund equals the amount of property taxes payable
that remain, up to the state refund amount shown below.

	Household Income	Percent of Income	Percent Paid by Claimant	Maximum State Refund
	$0 to 1,549	1.0 percent	15 percent	$	2,460
	1,550 to 3,089	1.1 percent	15 percent	$	2,460
	3,090 to 4,669	1.2 percent	15 percent	$	2,460
	4,670 to 6,229	1.3 percent	20 percent	$	2,460
	6,230 to 7,769	1.4 percent	20 percent	$	2,460
	7,770 to 10,879	1.5 percent	20 percent	$	2,460
	10,880 to 12,429	1.6 percent	20 percent	$	2,460
	12,430 to 13,989	1.7 percent	20 percent	$	2,460
	13,990 to 15,539	1.8 percent	20 percent	$	2,460
	15,540 to 17,079	1.9 percent	25 percent	$	2,460
	17,080 to 18,659	2.0 percent	25 percent	$	2,460
	18,660 to 21,759	2.1 percent	25 percent	$	2,460
	21,760 to 23,309	2.2 percent	30 percent	$	2,460
	23,310 to 24,859	2.3 percent	30 percent	$	2,460
	24,860 to 26,419	2.4 percent	30 percent	$	2,460
	26,420 to 32,629	2.5 percent	35 percent	$	2,460
	32,630 to 37,279	2.6 percent	35 percent	$	2,460
	37,280 to 46,609	2.7 percent	35 percent	$	2,000
	46,610 to 54,369	2.8 percent	35 percent	$	2,000
	54,370 to 62,139	2.8 percent	40 percent	$	1,750
	62,140 to 69,909	3.0 percent	40 percent	$	1,440
	69,910 to 77,679	3.0 percent	40 percent	$	1,290
	77,680 to 85,449	3.0 percent	40 percent	$	1,130
	85,450 to 90,119	3.5 percent	45 percent	$	960
	90,120 to 93,239	3.5 percent	45 percent	$	790
	93,240 to 97,009	3.5 percent	50 percent	$	650
	97,010 to 100,779	3.5 percent	50 percent	$	480

	Household Income	Percent of Income	Percent Paid by Claimant	Maximum State Refund
	$0 to 1,619	1.0 percent	15 percent	$	2,570
	1,620 to 3,229	1.1 percent	15 percent	$	2,570
	3,230 to 4,879	1.2 percent	15 percent	$	2,570
	4,880 to 6,509	1.3 percent	20 percent	$	2,570
	6,510 to 8,119	1.4 percent	20 percent	$	2,570
	8,120 to 11,369	1.5 percent	20 percent	$	2,570
	11,370 to 12,989	1.6 percent	20 percent	$	2,570
	12,990 to 14,619	1.7 percent	20 percent	$	2,570
	14,620 to 16,239	1.8 percent	20 percent	$	2,570
	16,240 to 17,849	1.9 percent	25 percent	$	2,570
	17,850 to 22,739	2.0 percent	25 percent	$	2,570
	22,740 to 24,359	2.0 percent	30 percent	$	2,570
	24,360 to 27,609	2.0 percent	30 percent	$	2,570
	27,610 to 38,949	2.0 percent	35 percent	$	2,570
	38,950 to 56,809	2.0 percent	35 percent	$	2,090
	56,810 to 64,929	2.0 percent	40 percent	$	1,830
	64,930 to 73,049	2.1 percent	40 percent	$	1,500
	73,050 to 81,169	2.2 percent	40 percent	$	1,350
	81,170 to 89,289	2.3 percent	40 percent	$	1,180
	89,290 to 94,169	2.4 percent	45 percent	$	1,000
	94,170 to 97,429	2.5 percent	45 percent	$	830
	97,430 to 101,359	2.5 percent	50 percent	$	680
	101,360 to 105,299	2.5 percent	50 percent	$	500

    The payment made to a claimant shall be the amount of the state refund calculated
under this subdivision. No payment is allowed if the claimant's household income is
$100,780 $105,300 or more.
EFFECTIVE DATE.This section is effective for refund claims based on taxes
payable in 2014 and thereafter.

    Sec. 4. Minnesota Statutes 2012, section 290A.04, subdivision 4, is amended to read:
    Subd. 4. Inflation adjustment. (a) Beginning for property tax refunds payable in
calendar year 2002, the commissioner shall annually adjust the dollar amounts of the
income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation.
The commissioner shall make the inflation adjustments in accordance with section 1(f) of
the Internal Revenue Code, except that for purposes of this subdivision the percentage
increase shall be determined as provided in this subdivision.
(b) In adjusting the dollar amounts of the income thresholds and the maximum
refunds under subdivision 2 for inflation, the percentage increase shall be determined
from the year ending on June 30, 2011 2013, to the year ending on June 30 of the year
preceding that in which the refund is payable.
(c) In adjusting the dollar amounts of the income thresholds and the maximum
refunds under subdivision 2a for inflation, the percentage increase shall be determined
from the year ending on June 30, 2000, to the year ending on June 30 of the year preceding
that in which the refund is payable.
(d) The commissioner shall use the appropriate percentage increase to annually
adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for
inflation without regard to whether or not the income tax brackets are adjusted for inflation
in that year. The commissioner shall round the thresholds and the maximum amounts,
as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall
round it up to the next $10 amount.
(e) The commissioner shall annually announce the adjusted refund schedule at the
same time provided under section 290.06. The determination of the commissioner under
this subdivision is not a rule under the Administrative Procedure Act.
EFFECTIVE DATE.This section is effective for refund claims based on taxes
payable in 2014 and thereafter.

    Sec. 5. [290A.28] NOTIFICATION OF POTENTIAL ELIGIBILITY.
(a) By August 1 of each year, the commissioner shall notify, in writing or
electronically, individual homeowners whom the commissioner determines likely will be
eligible for a homestead credit refund under this chapter for that property taxes payable
year. In determining whether to notify a homeowner, the commissioner shall consider the
property tax information available to the commissioner under paragraph (b) and the most
recent income information available to the commissioner from filing under this chapter
for the prior year or under chapter 290 for the current or prior year. The notification
must include information on how to file for the homestead credit refund and the range
of potential homestead credit refunds that the homeowner could qualify to receive. The
notification requirement under this section does not apply to a homeowner who has
already filed for the homestead credit refund for the current or prior year.
(b) By May 15 of each year, each county auditor shall transmit to the commissioner
of revenue the following information for each property classified as a residential or
agricultural homestead under section 273.13, subdivision 22 or 23:
(1) the property taxes payable;
(2) the name and address of the owner;
(3) the Social Security number or numbers of the owners; and
(4) any other information the commissioner deems necessary or useful to carry
out the provisions of this section.
The information must be provided in the form and manner prescribed by the commissioner.
EFFECTIVE DATE.This section is effective for refund claims based on property
taxes payable in 2014 and thereafter.