Bill Text: MN HF21 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Individual income tax reciprocity agreement reinstated with Wisconsin and its termination permitted only by law.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2011-01-18 - Authors added Drazkowski and Shimanski [HF21 Detail]
Download: Minnesota-2011-HF21-Introduced.html
1.2relating to taxation; individual income; reinstating the reciprocity agreement
1.3with the state of Wisconsin and permitting its termination only by law; amending
1.4Minnesota Statutes 2010, section 290.081.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 290.081, is amended to read:
1.7290.081 INCOME OF NONRESIDENTS, RECIPROCITY.
1.8(a) The compensation received for the performance of personal or professional
1.9services within this state by an individual whose residence, place of abode, and place
1.10customarily returned to at least once a month is in another state, shall be excluded from
1.11gross income to the extent such compensation is subject to an income tax imposed by the
1.12state of residence; provided that such state allows a similar exclusion of compensation
1.13received by residents of Minnesota for services performed therein.
1.14(b) When it is deemed to be in the best interests of the people of this state, the
1.15commissioner may determine that the provisions of paragraph (a) shall not apply. As long
1.16as the provisions of paragraph (a) apply between Minnesota and Wisconsin, the provisions
1.17of paragraph (a) shall apply to any individual who is domiciled in Wisconsin.
1.18(c) For the purposes of paragraph (a), whenever the Wisconsin tax on Minnesota
1.19residents which would have been paid Wisconsin without paragraph (a) exceeds the
1.20Minnesota tax on Wisconsin residents which would have been paid Minnesota without
1.21paragraph (a), or vice versa, then the state with the net revenue loss resulting from
1.22paragraph (a) must be compensated by the other state as provided in the agreement under
1.23paragraph (d). This provision shall be effective for all years beginning after December 31,
2.11972. The data used for computing the loss to either state shall be determined on or before
2.2September 30 of the year following the close of the previous calendar year.
2.3(d) Interest is payable on all amounts calculated under paragraph (c) relating to
2.4taxable years beginning after December 31, 2000. Interest accrues from July 1 of the
2.5taxable year. The commissioner of revenue is authorized to enter into agreements with
2.6the state of Wisconsin specifying the compensation required under paragraph (b), the
2.7reciprocity payment due date, conditions constituting delinquency, interest rates, and a
2.8method for computing interest due. Calculation of compensation under the agreement
2.9must specify if the revenue loss is determined before or after the allowance of each state's
2.10credit for taxes paid to the other state.
2.11(e) If an agreement cannot be reached as to the amount of the loss, the commissioner
2.12of revenue and the taxing official of the state of Wisconsin shall each appoint a member
2.13of a board of arbitration and these members shall appoint the third member of the board.
2.14The board shall select one of its members as chair. Such board may administer oaths, take
2.15testimony, subpoena witnesses, and require their attendance, require the production of
2.16books, papers and documents, and hold hearings at such places as are deemed necessary.
2.17The board shall then make a determination as to the amount to be paid the other state
2.18which determination shall be final and conclusive.
2.19(f) The commissioner may furnish copies of returns, reports, or other information to
2.20the taxing official of the state of Wisconsin, a member of the board of arbitration, or a
2.21consultant under joint contract with the states of Minnesota and Wisconsin for the purpose
2.22of making a determination as to the amount to be paid the other state under the provisions
2.23of this section. Prior to the release of any information under the provisions of this section,
2.24the person to whom the information is to be released shall sign an agreement which
2.25provides that the person will protect the confidentiality of the returns and information
2.26revealed thereby to the extent that it is protected under the laws of the state of Minnesota.
2.27(g) Notwithstanding the provisions of paragraph (b) and any contrary action of
2.28the commissioner of revenue, the income tax reciprocity agreement with the state of
2.29Wisconsin authorized under this section that was in effect through December 31, 2009, is
2.30reinstated. The agreement continues in effect until terminated by Minnesota or Wisconsin
2.31law. The commissioner may agree to modify the timing or method of calculating the state
2.32payments to be made under the agreement, consistent with the requirements of paragraphs
2.33(c) and (d), but may not terminate the agreement.
2.34EFFECTIVE DATE.This section is effective the day following final enactment
2.35and applies to taxable years beginning after December 31, 2010.
1.3with the state of Wisconsin and permitting its termination only by law; amending
1.4Minnesota Statutes 2010, section 290.081.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 290.081, is amended to read:
1.7290.081 INCOME OF NONRESIDENTS, RECIPROCITY.
1.8(a) The compensation received for the performance of personal or professional
1.9services within this state by an individual whose residence, place of abode, and place
1.10customarily returned to at least once a month is in another state, shall be excluded from
1.11gross income to the extent such compensation is subject to an income tax imposed by the
1.12state of residence; provided that such state allows a similar exclusion of compensation
1.13received by residents of Minnesota for services performed therein.
1.14(b) When it is deemed to be in the best interests of the people of this state, the
1.15commissioner may determine that the provisions of paragraph (a) shall not apply. As long
1.16as the provisions of paragraph (a) apply between Minnesota and Wisconsin, the provisions
1.17of paragraph (a) shall apply to any individual who is domiciled in Wisconsin.
1.18(c) For the purposes of paragraph (a), whenever the Wisconsin tax on Minnesota
1.19residents which would have been paid Wisconsin without paragraph (a) exceeds the
1.20Minnesota tax on Wisconsin residents which would have been paid Minnesota without
1.21paragraph (a), or vice versa, then the state with the net revenue loss resulting from
1.22paragraph (a) must be compensated by the other state as provided in the agreement under
1.23paragraph (d). This provision shall be effective for all years beginning after December 31,
2.11972. The data used for computing the loss to either state shall be determined on or before
2.2September 30 of the year following the close of the previous calendar year.
2.3(d) Interest is payable on all amounts calculated under paragraph (c) relating to
2.4taxable years beginning after December 31, 2000. Interest accrues from July 1 of the
2.5taxable year. The commissioner of revenue is authorized to enter into agreements with
2.6the state of Wisconsin specifying the compensation required under paragraph (b), the
2.7reciprocity payment due date, conditions constituting delinquency, interest rates, and a
2.8method for computing interest due. Calculation of compensation under the agreement
2.9must specify if the revenue loss is determined before or after the allowance of each state's
2.10credit for taxes paid to the other state.
2.11(e) If an agreement cannot be reached as to the amount of the loss, the commissioner
2.12of revenue and the taxing official of the state of Wisconsin shall each appoint a member
2.13of a board of arbitration and these members shall appoint the third member of the board.
2.14The board shall select one of its members as chair. Such board may administer oaths, take
2.15testimony, subpoena witnesses, and require their attendance, require the production of
2.16books, papers and documents, and hold hearings at such places as are deemed necessary.
2.17The board shall then make a determination as to the amount to be paid the other state
2.18which determination shall be final and conclusive.
2.19(f) The commissioner may furnish copies of returns, reports, or other information to
2.20the taxing official of the state of Wisconsin, a member of the board of arbitration, or a
2.21consultant under joint contract with the states of Minnesota and Wisconsin for the purpose
2.22of making a determination as to the amount to be paid the other state under the provisions
2.23of this section. Prior to the release of any information under the provisions of this section,
2.24the person to whom the information is to be released shall sign an agreement which
2.25provides that the person will protect the confidentiality of the returns and information
2.26revealed thereby to the extent that it is protected under the laws of the state of Minnesota.
2.27(g) Notwithstanding the provisions of paragraph (b) and any contrary action of
2.28the commissioner of revenue, the income tax reciprocity agreement with the state of
2.29Wisconsin authorized under this section that was in effect through December 31, 2009, is
2.30reinstated. The agreement continues in effect until terminated by Minnesota or Wisconsin
2.31law. The commissioner may agree to modify the timing or method of calculating the state
2.32payments to be made under the agreement, consistent with the requirements of paragraphs
2.33(c) and (d), but may not terminate the agreement.
2.34EFFECTIVE DATE.This section is effective the day following final enactment
2.35and applies to taxable years beginning after December 31, 2010.
