Bill Text: MN HF489 | 2013-2014 | 88th Legislature | Introduced

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Bill Title: Income and franchise taxes, property taxes, sales and use taxes, and other taxes and tax provisions technical and clarifying changes made.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2013-02-28 - Committee report, without further recommendation re-refer to Civil Law [HF489 Detail]

Download: Minnesota-2013-HF489-Introduced.html

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A bill for an act

relating to taxation; making technical and clarifying changes to income and
franchise taxes, property taxes, sales and use taxes, and other taxes and tax
provisions;amending Minnesota Statutes 2012, sections 13.4965, subdivision
3; 16A.46; 270.41, subdivision 5; 270C.42, subdivision 2; 272.01, subdivision
2; 272.02, subdivision 97; 273.032; 273.124, subdivision 13; 273.1315,
subdivisions 1, 2; 273.19, subdivision 1; 273.39; 279.06, subdivision 1;
287.20, by adding a subdivision; 287.385, subdivision 7; 289A.10, by adding
a subdivision; 289A.12, by adding a subdivision; 289A.18, by adding a
subdivision; 289A.20, subdivisions 3, 4, by adding a subdivision; 289A.26,
subdivisions 3, 4, 7, 9; 289A.55, subdivision 9; 289A.60, subdivision 4; 290.01,
subdivisions 6b, 19b, 19c, 19d; 290.0921, subdivision 3; 290.17, subdivision
4; 290A.25; 296A.22, subdivisions 1, 3; 297B.11; 297E.14, subdivision 7;
297F.09, subdivision 9; 297F.18, subdivision 7; 297G.04, subdivision 2;
297G.09, subdivision 8; 297G.17, subdivision 7; 297I.05, subdivision 11;
297I.80, subdivision 1; 298.01, subdivision 3; 298.018; 373.01, subdivision 1;
469.319, subdivision 4; 469.340, subdivision 4; proposing coding for new law in
Minnesota Statutes, chapter 273; repealing Minnesota Statutes 2012, sections
272.69; 273.11, subdivisions 1a, 22; 289A.60, subdivision 31.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

INCOME AND FRANCHISE TAXES

    Section 1. Minnesota Statutes 2012, section 289A.26, subdivision 3, is amended to read:
    Subd. 3. Short taxable year. (a) A corporation or an entity with a short taxable year
of less than 12 months, but at least four months, must pay estimated tax in equal installments
on or before the 15th day of the third, sixth, ninth, and final month of the short taxable
year, to the extent applicable based on the number of months in the short taxable year.
(b) A corporation or an entity is not required to make estimated tax payments for a
short taxable year unless its tax liability before the first day of the last month of the taxable
year can reasonably be expected to exceed $500.
(c) No payment is required for a short taxable year of less than four months.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 289A.26, subdivision 4, is amended to read:
    Subd. 4. Underpayment of estimated tax. If there is an underpayment of estimated
tax by a corporation or an entity, there shall be added to the tax for the taxable year an
amount determined at the rate in section 270C.40 on the amount of the underpayment,
determined under subdivision 5, for the period of the underpayment determined under
subdivision 6. This subdivision does not apply in the first taxable year that a corporation is
subject to the tax imposed under section 290.02 or an entity is subject to the tax imposed
under section 290.05, subdivision 3.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 289A.26, subdivision 7, is amended to read:
    Subd. 7. Required installments. (a) Except as otherwise provided in this
subdivision, the amount of a required installment is 25 percent of the required annual
payment.
(b) Except as otherwise provided in this subdivision, the term "required annual
payment" means the lesser of:
(1) 100 percent of the tax shown on the return for the taxable year, or, if no return is
filed, 100 percent of the tax for that year; or
(2) 100 percent of the tax shown on the return of the corporation or entity for the
preceding taxable year provided the return was for a full 12-month period, showed a
liability, and was filed by the corporation or entity.
(c) Except for determining the first required installment for any taxable year,
paragraph (b), clause (2), does not apply in the case of a large corporation. The term
"large corporation" means a corporation or any predecessor corporation that had taxable
net income of $1,000,000 or more for any taxable year during the testing period. The
term "testing period" means the three taxable years immediately preceding the taxable
year involved. A reduction allowed to a large corporation for the first installment that is
allowed by applying paragraph (b), clause (2), must be recaptured by increasing the next
required installment by the amount of the reduction.
(d) In the case of a required installment, if the corporation or entity establishes that
the annualized income installment is less than the amount determined in paragraph (a), the
amount of the required installment is the annualized income installment and the recapture
of previous quarters' reductions allowed by this paragraph must be recovered by increasing
later required installments to the extent the reductions have not previously been recovered.
(e) The "annualized income installment" is the excess, if any, of:
(1) an amount equal to the applicable percentage of the tax for the taxable year
computed by placing on an annualized basis the taxable income:
(i) for the first two months of the taxable year, in the case of the first required
installment;
(ii) for the first two months or for the first five months of the taxable year, in the
case of the second required installment;
(iii) for the first six months or for the first eight months of the taxable year, in the
case of the third required installment; and
(iv) for the first nine months or for the first 11 months of the taxable year, in the
case of the fourth required installment, over
(2) the aggregate amount of any prior required installments for the taxable year.
(3) For the purpose of this paragraph, the annualized income shall be computed
by placing on an annualized basis the taxable income for the year up to the end of the
month preceding the due date for the quarterly payment multiplied by 12 and dividing
the resulting amount by the number of months in the taxable year (2, 5, 6, 8, 9, or 11 as
the case may be) referred to in clause (1).
(4) The "applicable percentage" used in clause (1) is:

		For the following required installments:			The applicable percentage is:
			1st		25
			2nd		50
			3rd		75
			4th		100

(f)(1) If this paragraph applies, the amount determined for any installment must
be determined in the following manner:
(i) take the taxable income for the months during the taxable year preceding the
filing month;
(ii) divide that amount by the base period percentage for the months during the
taxable year preceding the filing month;
(iii) determine the tax on the amount determined under item (ii); and
(iv) multiply the tax computed under item (iii) by the base period percentage for the
filing month and the months during the taxable year preceding the filing month.
(2) For purposes of this paragraph:
(i) the "base period percentage" for a period of months is the average percent that the
taxable income for the corresponding months in each of the three preceding taxable years
bears to the taxable income for the three preceding taxable years;
(ii) the term "filing month" means the month in which the installment is required
to be paid;
(iii) this paragraph only applies if the base period percentage for any six consecutive
months of the taxable year equals or exceeds 70 percent; and
(iv) the commissioner may provide by rule for the determination of the base period
percentage in the case of reorganizations, new corporations or entities, and other similar
circumstances.
(3) In the case of a required installment determined under this paragraph, if the
corporation or entity determines that the installment is less than the amount determined in
paragraph (a), the amount of the required installment is the amount determined under this
paragraph and the recapture of previous quarters' reductions allowed by this paragraph
must be recovered by increasing later required installments to the extent the reductions
have not previously been recovered.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2012, section 289A.26, subdivision 9, is amended to read:
    Subd. 9. Failure to file an estimate. In the case of a corporation or an entity
that fails to file an estimated tax for a taxable year when one is required, the period of
the underpayment runs from the four installment dates in subdivision 2 or 3, whichever
applies, to the earlier of the periods in subdivision 6, clauses (1) and (2).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2012, section 290.01, subdivision 6b, is amended to read:
    Subd. 6b. Foreign operating corporation. The term "foreign operating
corporation," when applied to a corporation, means a domestic corporation with the
following characteristics:
    (1) it is part of a unitary business at least one member of which is taxable in this state;
    (2) it is not a foreign sales corporation under section 922 of the Internal Revenue
Code, as amended through December 31, 1999, for the taxable year;
    (3) it is not an interest charge domestic international sales corporation under sections
992, 993, 994, and 995 of the Internal Revenue Code;
    (4) either (i) it has in effect a valid election under section 936 of the Internal Revenue
Code; or (ii) at least 80 percent of the gross income from all sources of the corporation in
the tax year is active foreign business income; and
    (5) for purposes of this subdivision, active foreign business income means gross
income that is (i) derived from sources without the United States, as defined in subtitle A,
chapter 1, subchapter N, part 1, of the Internal Revenue Code; and (ii) attributable to the
active conduct of a trade or business in a foreign country.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:
    (1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;
    (2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;
    (3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. No
deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
the qualifying child's vehicle to provide such transportation for a qualifying child. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;
    (4) income as provided under section 290.0802;
    (5) to the extent included in federal adjusted gross income, income realized on
disposition of property exempt from tax under section 290.491;
    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
under the provisions of Public Law 109-1 and Public Law 111-126;
    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
of subnational foreign taxes for the taxable year, but not to exceed the total subnational
foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
"federal foreign tax credit" means the credit allowed under section 27 of the Internal
Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
the extent they exceed the federal foreign tax credit;
    (8) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (7), or 19c, clause (15) (14), in the case
of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
clause (15) (14), in the case of a shareholder of an S corporation, minus the positive value
of any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. The resulting delayed depreciation cannot be less than zero;
    (9) job opportunity building zone income as provided under section 469.316;
    (10) to the extent included in federal taxable income, the amount of compensation
paid to members of the Minnesota National Guard or other reserve components of the
United States military for active service, excluding compensation for services performed
under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
5b , but "active service" excludes service performed in accordance with section 190.08,
subdivision 3 ;
    (11) to the extent included in federal taxable income, the amount of compensation
paid to Minnesota residents who are members of the armed forces of the United States
or United Nations for active duty performed under United States Code, title 10; or the
authority of the United Nations;
    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
qualified donor's donation, while living, of one or more of the qualified donor's organs
to another person for human organ transplantation. For purposes of this clause, "organ"
means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
"human organ transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person; "qualified
expenses" means unreimbursed expenses for both the individual and the qualified donor
for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
may be subtracted under this clause only once; and "qualified donor" means the individual
or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
individual may claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;
    (13) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (8), or 19c, clause (16) (15), in the case
of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of
the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16)
(15), in the case of a shareholder of a corporation that is an S corporation, minus the
positive value of any net operating loss under section 172 of the Internal Revenue Code
generated for the tax year of the addition. If the net operating loss exceeds the addition for
the tax year, a subtraction is not allowed under this clause;
    (14) to the extent included in the federal taxable income of a nonresident of
Minnesota, compensation paid to a service member as defined in United States Code, title
10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
Act, Public Law 108-189, section 101(2);
    (15) to the extent included in federal taxable income, the amount of national service
educational awards received from the National Service Trust under United States Code,
title 42, sections 12601 to 12604, for service in an approved Americorps National Service
program;
(16) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under section 290.01, subdivision 19a, clause (16); and
(17) the amount of the net operating loss allowed under section 290.095, subdivision
11 , paragraph (c).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
there shall be added to federal taxable income:
    (1) the amount of any deduction taken for federal income tax purposes for income,
excise, or franchise taxes based on net income or related minimum taxes, including but not
limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
another state, a political subdivision of another state, the District of Columbia, or any
foreign country or possession of the United States;
    (2) interest not subject to federal tax upon obligations of: the United States, its
possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its municipalities, or any
of its governmental agencies or instrumentalities; the District of Columbia; or Indian
tribal governments;
    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
Revenue Code;
    (4) the amount of any net operating loss deduction taken for federal income tax
purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
deduction under section 810 of the Internal Revenue Code;
    (5) the amount of any special deductions taken for federal income tax purposes
under sections 241 to 247 and 965 of the Internal Revenue Code;
    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
clause (a), that are not subject to Minnesota income tax;
    (7) the amount of any capital losses deducted for federal income tax purposes under
sections 1211 and 1212 of the Internal Revenue Code;
    (8) the exempt foreign trade income of a foreign sales corporation under sections
921(a) and 291 of the Internal Revenue Code;
    (9) the amount of percentage depletion deducted under sections 611 through 614 and
291 of the Internal Revenue Code;
    (10) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, the amount of the amortization deduction allowed in computing federal taxable
income for those facilities;
    (11) the amount of any deemed dividend from a foreign operating corporation
determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
shall be reduced by the amount of the addition to income required by clauses (19), (20),
(21), and (22), and (23);
    (12) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;
    (13) the amount of net income excluded under section 114 of the Internal Revenue
Code;
    (14) (13) any increase in subpart F income, as defined in section 952(a) of the
Internal Revenue Code, for the taxable year when subpart F income is calculated without
regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
    (15) (14) 80 percent of the depreciation deduction allowed under section
168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
the taxpayer has an activity that in the taxable year generates a deduction for depreciation
under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
over the amount of the loss from the activity that is not allowed in the taxable year. In
succeeding taxable years when the losses not allowed in the taxable year are allowed, the
depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
    (16) (15) 80 percent of the amount by which the deduction allowed by section 179 of
the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;
    (17) (16) to the extent deducted in computing federal taxable income, the amount of
the deduction allowable under section 199 of the Internal Revenue Code;
    (18) (17) for taxable years beginning before January 1, 2013, the exclusion allowed
under section 139A of the Internal Revenue Code for federal subsidies for prescription
drug plans;
    (19) (18) the amount of expenses disallowed under section 290.10, subdivision 2;
    (20) (19) an amount equal to the interest and intangible expenses, losses, and
costs paid, accrued, or incurred by any member of the taxpayer's unitary group to or for
the benefit of a corporation that is a member of the taxpayer's unitary business group
that qualifies as a foreign operating corporation. For purposes of this clause, intangible
expenses and costs include:
    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
use, maintenance or management, ownership, sale, exchange, or any other disposition of
intangible property;
    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
transactions;
    (iii) royalty, patent, technical, and copyright fees;
    (iv) licensing fees; and
    (v) other similar expenses and costs.
For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.
This clause does not apply to any item of interest or intangible expenses or costs paid,
accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
to such item of income to the extent that the income to the foreign operating corporation
is income from sources without the United States as defined in subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code;
    (21) (20) except as already included in the taxpayer's taxable income pursuant to
clause (20) (19), any interest income and income generated from intangible property
received or accrued by a foreign operating corporation that is a member of the taxpayer's
unitary group. For purposes of this clause, income generated from intangible property
includes:
    (i) income related to the direct or indirect acquisition, use, maintenance or
management, ownership, sale, exchange, or any other disposition of intangible property;
    (ii) income from factoring transactions or discounting transactions;
    (iii) royalty, patent, technical, and copyright fees;
    (iv) licensing fees; and
    (v) other similar income.
For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.
This clause does not apply to any item of interest or intangible income received or accrued
by a foreign operating corporation with respect to such item of income to the extent that
the income is income from sources without the United States as defined in subtitle A,
chapter 1, subchapter N, part 1, of the Internal Revenue Code;
    (22) (21) the dividends attributable to the income of a foreign operating corporation
that is a member of the taxpayer's unitary group in an amount that is equal to the dividends
paid deduction of a real estate investment trust under section 561(a) of the Internal
Revenue Code for amounts paid or accrued by the real estate investment trust to the
foreign operating corporation;
    (23) (22) the income of a foreign operating corporation that is a member of the
taxpayer's unitary group in an amount that is equal to gains derived from the sale of real or
personal property located in the United States;
    (24) (23) for taxable years beginning before January 1, 2010, the additional amount
allowed as a deduction for donation of computer technology and equipment under section
170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
(25) (24) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
corporations, there shall be subtracted from federal taxable income after the increases
provided in subdivision 19c:
    (1) the amount of foreign dividend gross-up added to gross income for federal
income tax purposes under section 78 of the Internal Revenue Code;
    (2) the amount of salary expense not allowed for federal income tax purposes due to
claiming the work opportunity credit under section 51 of the Internal Revenue Code;
    (3) any dividend (not including any distribution in liquidation) paid within the
taxable year by a national or state bank to the United States, or to any instrumentality of
the United States exempt from federal income taxes, on the preferred stock of the bank
owned by the United States or the instrumentality;
    (4) amounts disallowed for intangible drilling costs due to differences between
this chapter and the Internal Revenue Code in taxable years beginning before January
1, 1987, as follows:
    (i) to the extent the disallowed costs are represented by physical property, an amount
equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7 , subject to the modifications contained in subdivision 19e; and
    (ii) to the extent the disallowed costs are not represented by physical property, an
amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
290.09, subdivision 8 ;
    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
Internal Revenue Code, except that:
    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
capital loss carrybacks shall not be allowed;
    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
allowed;
    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
capital loss carryback to each of the three taxable years preceding the loss year, subject to
the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
a capital loss carryover to each of the five taxable years succeeding the loss year to the
extent such loss was not used in a prior taxable year and subject to the provisions of
Minnesota Statutes 1986, section 290.16, shall be allowed;
    (6) an amount for interest and expenses relating to income not taxable for federal
income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
291 of the Internal Revenue Code in computing federal taxable income;
    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
reasonable allowance for depletion based on actual cost. In the case of leases the deduction
must be apportioned between the lessor and lessee in accordance with rules prescribed
by the commissioner. In the case of property held in trust, the allowable deduction must
be apportioned between the income beneficiaries and the trustee in accordance with the
pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
of the trust's income allocable to each;
    (8) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
1986, section 290.09, subdivision 7;
    (9) amounts included in federal taxable income that are due to refunds of income,
excise, or franchise taxes based on net income or related minimum taxes paid by the
corporation to Minnesota, another state, a political subdivision of another state, the
District of Columbia, or a foreign country or possession of the United States to the extent
that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
clause (1), in a prior taxable year;
    (10) 80 percent of royalties, fees, or other like income accrued or received from a
foreign operating corporation or a foreign corporation which is part of the same unitary
business as the receiving corporation, unless the income resulting from such payments or
accruals is income from sources within the United States as defined in subtitle A, chapter
1, subchapter N, part 1, of the Internal Revenue Code;
    (11) income or gains from the business of mining as defined in section 290.05,
subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
    (12) the amount of disability access expenditures in the taxable year which are not
allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
    (13) the amount of qualified research expenses not allowed for federal income tax
purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
the amount exceeds the amount of the credit allowed under section 290.068;
    (14) the amount of salary expenses not allowed for federal income tax purposes due to
claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;
    (15) for a corporation whose foreign sales corporation, as defined in section 922
of the Internal Revenue Code, constituted a foreign operating corporation during any
taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
claiming the deduction under section 290.21, subdivision 4, for income received from
the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
income excluded under section 114 of the Internal Revenue Code, provided the income is
not income of a foreign operating company;
    (16) (15) any decrease in subpart F income, as defined in section 952(a) of the
Internal Revenue Code, for the taxable year when subpart F income is calculated without
regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
    (17) (16) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (15) (14), an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
amount of the addition made by the taxpayer under subdivision 19c, clause (15) (14). The
resulting delayed depreciation cannot be less than zero;
    (18) (17) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (16) (15), an amount equal to one-fifth
of the amount of the addition; and
(19) (18) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under section 290.01, subdivision 19c, clause (25) (24).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
income" is Minnesota net income as defined in section 290.01, subdivision 19, and
includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
Minnesota tax return, the minimum tax must be computed on a separate company basis.
If a corporation is part of a tax group filing a unitary return, the minimum tax must be
computed on a unitary basis. The following adjustments must be made.
(1) For purposes of the depreciation adjustments under section 56(a)(1) and
56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
income tax purposes, including any modification made in a taxable year under section
290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
paragraph (c).
For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
allowance in the first taxable year after December 31, 2000.
(2) The portion of the depreciation deduction allowed for federal income tax
purposes under section 168(k) of the Internal Revenue Code that is required as an addition
under section 290.01, subdivision 19c, clause (15) (14), is disallowed in determining
alternative minimum taxable income.
(3) The subtraction for depreciation allowed under section 290.01, subdivision
19d , clause (17) (16), is allowed as a depreciation deduction in determining alternative
minimum taxable income.
(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
of the Internal Revenue Code does not apply.
(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
Revenue Code does not apply.
(6) The special rule for dividends from section 936 companies under section
56(g)(4)(C)(iii) does not apply.
(7) (6) The tax preference for depletion under section 57(a)(1) of the Internal
Revenue Code does not apply.
(8) (7) The tax preference for intangible drilling costs under section 57(a)(2) of the
Internal Revenue Code must be calculated without regard to subparagraph (E) and the
subtraction under section 290.01, subdivision 19d, clause (4).
(9) (8) The tax preference for tax exempt interest under section 57(a)(5) of the
Internal Revenue Code does not apply.
(10) (9) The tax preference for charitable contributions of appreciated property
under section 57(a)(6) of the Internal Revenue Code does not apply.
(11) (10) For purposes of calculating the tax preference for accelerated depreciation
or amortization on certain property placed in service before January 1, 1987, under section
57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
deduction allowed under section 290.01, subdivision 19e.
For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, not previously deducted is a
depreciation or amortization allowance in the first taxable year after December 31, 2004.
(12) (11) For purposes of calculating the adjustment for adjusted current earnings
in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
minimum taxable income as defined in this subdivision, determined without regard to the
adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
(13) (12) For purposes of determining the amount of adjusted current earnings
under section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under
section 56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign
dividend gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1),
(ii) the amount of refunds of income, excise, or franchise taxes subtracted as provided in
section 290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other
like income subtracted as provided in section 290.01, subdivision 19d, clause (10).
(14) (13) Alternative minimum taxable income excludes the income from operating
in a job opportunity building zone as provided under section 469.317.
(15) (14) Alternative minimum taxable income excludes the income from operating
in a biotechnology and health sciences industry zone as provided under section 469.337.
Items of tax preference must not be reduced below zero as a result of the
modifications in this subdivision.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2012, section 290.17, subdivision 4, is amended to read:
    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
within this state or partly within and partly without this state is part of a unitary business,
the entire income of the unitary business is subject to apportionment pursuant to section
290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
business is considered to be derived from any particular source and none may be allocated
to a particular place except as provided by the applicable apportionment formula. The
provisions of this subdivision do not apply to business income subject to subdivision 5,
income of an insurance company, or income of an investment company determined under
section 290.36.
(b) The term "unitary business" means business activities or operations which
result in a flow of value between them. The term may be applied within a single legal
entity or between multiple entities and without regard to whether each entity is a sole
proprietorship, a corporation, a partnership or a trust.
(c) Unity is presumed whenever there is unity of ownership, operation, and use,
evidenced by centralized management or executive force, centralized purchasing,
advertising, accounting, or other controlled interaction, but the absence of these
centralized activities will not necessarily evidence a nonunitary business. Unity is also
presumed when business activities or operations are of mutual benefit, dependent upon or
contributory to one another, either individually or as a group.
(d) Where a business operation conducted in Minnesota is owned by a business
entity that carries on business activity outside the state different in kind from that
conducted within this state, and the other business is conducted entirely outside the state, it
is presumed that the two business operations are unitary in nature, interrelated, connected,
and interdependent unless it can be shown to the contrary.
(e) Unity of ownership is does not deemed to exist when a corporation is two or
more corporations are involved unless that corporation is a member of a group of two or
more business entities and more than 50 percent of the voting stock of each member of
the group corporation is directly or indirectly owned by a common owner or by common
owners, either corporate or noncorporate, or by one or more of the member corporations
of the group. For this purpose, the term "voting stock" shall include membership interests
of mutual insurance holding companies formed under section 66A.40.
(f) The net income and apportionment factors under section 290.191 or 290.20 of
foreign corporations and other foreign entities which are part of a unitary business shall
not be included in the net income or the apportionment factors of the unitary business.
A foreign corporation or other foreign entity which is required to file a return under this
chapter shall file on a separate return basis. The net income and apportionment factors
under section 290.191 or 290.20 of foreign operating corporations shall not be included in
the net income or the apportionment factors of the unitary business except as provided in
paragraph (g).
(g) The adjusted net income of a foreign operating corporation shall be deemed to
be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
proportion to each shareholder's ownership, with which such corporation is engaged in
a unitary business. Such deemed dividend shall be treated as a dividend under section
290.21, subdivision 4 .
Dividends actually paid by a foreign operating corporation to a corporate shareholder
which is a member of the same unitary business as the foreign operating corporation shall
be eliminated from the net income of the unitary business in preparing a combined report
for the unitary business. The adjusted net income of a foreign operating corporation
shall be its net income adjusted as follows:
(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
Rico, or a United States possession or political subdivision of any of the foregoing shall
be a deduction; and
(2) the subtraction from federal taxable income for payments received from foreign
corporations or foreign operating corporations under section 290.01, subdivision 19d,
clause (10), shall not be allowed.
If a foreign operating corporation incurs a net loss, neither income nor deduction from
that corporation shall be included in determining the net income of the unitary business.
(h) For purposes of determining the net income of a unitary business and the factors
to be used in the apportionment of net income pursuant to section 290.191 or 290.20, there
must be included only the income and apportionment factors of domestic corporations or
other domestic entities other than foreign operating corporations that are determined to
be part of the unitary business pursuant to this subdivision, notwithstanding that foreign
corporations or other foreign entities might be included in the unitary business.
(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter
that are connected with or allocable against dividends, deemed dividends described
in paragraph (g), or royalties, fees, or other like income described in section 290.01,
subdivision 19d , clause (10), shall not be disallowed.
(j) Each corporation or other entity, except a sole proprietorship, that is part of a
unitary business must file combined reports as the commissioner determines. On the
reports, all intercompany transactions between entities included pursuant to paragraph
(h) must be eliminated and the entire net income of the unitary business determined in
accordance with this subdivision is apportioned among the entities by using each entity's
Minnesota factors for apportionment purposes in the numerators of the apportionment
formula and the total factors for apportionment purposes of all entities included pursuant
to paragraph (h) in the denominators of the apportionment formula.
(k) If a corporation has been divested from a unitary business and is included in a
combined report for a fractional part of the common accounting period of the combined
report:
(1) its income includable in the combined report is its income incurred for that part
of the year determined by proration or separate accounting; and
(2) its sales, property, and payroll included in the apportionment formula must
be prorated or accounted for separately.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 2

ESTATE TAX

    Section 1. Minnesota Statutes 2012, section 289A.10, is amended by adding a
subdivision to read:
    Subd. 1a. Recapture tax return required. If a disposition or cessation as provided
by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as
defined under section 291.03, subdivision 8, paragraph (c), or personal representative of
the decedent's estate must submit a recapture tax return to the commissioner.
EFFECTIVE DATE.This section is effective for estates of decedents dying after
June 30, 2011.

    Sec. 2. Minnesota Statutes 2012, section 289A.12, is amended by adding a subdivision
to read:
    Subd. 18. Returns by qualified heirs. A qualified heir, as defined in section 291.03,
subdivision 8, paragraph (c), must file two returns with the commissioner attesting that
no disposition or cessation as provided by section 291.03, subdivision 11, paragraph
(a), occurred. The first return must be filed no earlier than 24 months and no later than
26 months after the decedent's death. The second return must be filed no earlier than 36
months and no later than 39 months after the decedent's death.
EFFECTIVE DATE.This section is effective for returns required to be filed after
December 31, 2013.

    Sec. 3. Minnesota Statutes 2012, section 289A.18, is amended by adding a subdivision
to read:
    Subd. 3a. Recapture tax return. A recapture tax return must be filed with the
commissioner within six months after the date of the disposition or cessation as provided
by section 291.03, subdivision 11, paragraph (a).
EFFECTIVE DATE.This section is effective for estates of decedents dying after
June 30, 2011.

    Sec. 4. Minnesota Statutes 2012, section 289A.20, subdivision 3, is amended to read:
    Subd. 3. Estate tax. Taxes imposed by chapter 291 section 291.03, subdivision 1,
take effect at and upon the death of the person whose estate is subject to taxation and are
due and payable on or before the expiration of nine months from that death.
EFFECTIVE DATE.This section is effective for estates of decedents dying after
June 30, 2011.

    Sec. 5. Minnesota Statutes 2012, section 289A.20, is amended by adding a subdivision
to read:
    Subd. 3a. Recapture tax. The additional estate tax imposed by section 291.03,
subdivision 11, paragraph (b), is due and payable on or before the expiration of the date
provided by section 291.03, subdivision 11, paragraph (c).
EFFECTIVE DATE.This section is effective for estates of decedents dying after
June 30, 2011.

ARTICLE 3

PROPERTY TAXES

    Section 1. Minnesota Statutes 2012, section 13.4965, subdivision 3, is amended to read:
    Subd. 3. Homestead and other applications. The classification and disclosure of
certain information collected to determine eligibility of property for a homestead or other
classification or benefit under section 273.13 are governed by section sections 273.124,
subdivision subdivisions 13, 13a, 13b, 13c, and 13d; 273.1245; and 273.1315.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 270.41, subdivision 5, is amended to read:
    Subd. 5. Prohibited activity. A licensed assessor or other person employed by an
assessment jurisdiction or contracting with an assessment jurisdiction for the purpose
of valuing or classifying property for property tax purposes is prohibited from making
appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report
as defined in section 82B.021, subdivisions 2, 4, 6, and 7, on any property within the
assessment jurisdiction where the individual is employed or performing the duties of the
assessor under contract. Violation of this prohibition shall result in immediate revocation
of the individual's license to assess property for property tax purposes. This prohibition
must not be construed to prohibit an individual from carrying out any duties required
for the proper assessment of property for property tax purposes or performing duties
enumerated in section 273.061, subdivision 7 or 8. If a formal resolution has been adopted
by the governing body of a governmental unit, which specifies the purposes for which
such work will be done, this prohibition does not apply to appraisal activities undertaken
on behalf of and at the request of the governmental unit that has employed or contracted
with the individual. The resolution may only allow appraisal activities which are related to
condemnations, right-of-way acquisitions, land exchanges, or special assessments.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 272.01, subdivision 2, is amended to read:
    Subd. 2. Exempt property used by private entity for profit. (a) When any real or
personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is
leased, loaned, or otherwise made available and used by a private individual, association,
or corporation in connection with a business conducted for profit, there shall be imposed a
tax, for the privilege of so using or possessing such real or personal property, in the same
amount and to the same extent as though the lessee or user was the owner of such property.
    (b) The tax imposed by this subdivision shall not apply to:
    (1) property leased or used as a concession in or relative to the use in whole
or part of a public park, market, fairgrounds, port authority, economic development
authority established under chapter 469, municipal auditorium, municipal parking facility,
municipal museum, or municipal stadium;
    (2) property of an airport owned by a city, town, county, or group thereof which is:
    (i) leased to or used by any person or entity including a fixed base operator; and
    (ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods,
services, or facilities to the airport or general public;
the exception from taxation provided in this clause does not apply to:
    (i) property located at an airport owned or operated by the Metropolitan Airports
Commission or by a city of over 50,000 population according to the most recent federal
census or such a city's airport authority; or
    (ii) hangars leased by a private individual, association, or corporation in connection
with a business conducted for profit other than an aviation-related business;
    (3) property constituting or used as a public pedestrian ramp or concourse in
connection with a public airport;
    (4) property constituting or used as a passenger check-in area or ticket sale counter,
boarding area, or luggage claim area in connection with a public airport but not the
airports owned or operated by the Metropolitan Airports Commission or cities of over
50,000 population or an airport authority therein. Real estate owned by a municipality
in connection with the operation of a public airport and leased or used for agricultural
purposes is not exempt;
    (5) property leased, loaned, or otherwise made available to a private individual,
corporation, or association under a cooperative farming agreement made pursuant to
section 97A.135; or
    (6) property leased, loaned, or otherwise made available to a private individual,
corporation, or association under section 272.68, subdivision 4.
    (c) Taxes imposed by this subdivision are payable as in the case of personal property
taxes and shall be assessed to the lessees or users of real or personal property in the same
manner as taxes assessed to owners of real or personal property, except that such taxes
shall not become a lien against the property. When due, the taxes shall constitute a debt due
from the lessee or user to the state, township, city, county, and school district for which the
taxes were assessed and shall be collected in the same manner as personal property taxes.
If property subject to the tax imposed by this subdivision is leased or used jointly by two or
more persons, each lessee or user shall be jointly and severally liable for payment of the tax.
    (d) The tax on real property of the federal government, the state or any of its political
subdivisions that is leased by, loaned, or otherwise made available to a private individual,
association, or corporation and becomes taxable under this subdivision or other provision
of law must be assessed and collected as a personal property assessment. The taxes do
not become a lien against the real property.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2012, section 273.032, is amended to read:
273.032 MARKET VALUE DEFINITION.
For the purpose of determining any property tax levy limitation based on market
value, any qualification to receive state aid based on market value, or any state aid amount
based on market value, the terms "market value," "taxable market value," and "market
valuation," whether equalized or unequalized, mean the total taxable market value of
property within the local unit of government before any adjustments for tax increment,
fiscal disparity, powerline credit, or wind energy values, but after the limited market
adjustments under section 273.11, subdivision 1a, and after the market value exclusions of
certain improvements to homestead property under section 273.11, subdivision 16. Unless
otherwise provided, "market value," "taxable market value," and "market valuation" for
purposes of this paragraph, refer to the taxable market value for the previous assessment
year.
For the purpose of determining any net debt limit based on market value, or any limit
on the issuance of bonds, certificates of indebtedness, or capital notes based on market
value, the terms "market value," "taxable market value," and "market valuation," whether
equalized or unequalized, mean the total taxable market value of property within the local
unit of government before any adjustments for tax increment, fiscal disparity, powerline
credit, or wind energy values, but after the limited market value adjustments under section
273.11, subdivision 1a, and after the market value exclusions of certain improvements to
homestead property under section 273.11, subdivision 16. Unless otherwise provided,
"market value," "taxable market value," and "market valuation" for purposes of this
paragraph, mean the taxable market value as last finally equalized.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2012, section 273.124, subdivision 13, is amended to read:
    Subd. 13. Homestead application. (a) A person who meets the homestead
requirements under subdivision 1 must file a homestead application with the county
assessor to initially obtain homestead classification.
    (b) The format and contents of a uniform homestead application shall be prescribed
by the commissioner of revenue. The application must clearly inform the taxpayer that
this application must be signed by all owners who occupy the property or by the qualifying
relative and returned to the county assessor in order for the property to receive homestead
treatment.
    (c) Every property owner applying for homestead classification must furnish to the
county assessor the Social Security number of each occupant who is listed as an owner
of the property on the deed of record, the name and address of each owner who does not
occupy the property, and the name and Social Security number of each owner's spouse who
occupies the property. The application must be signed by each owner who occupies the
property and by each owner's spouse who occupies the property, or, in the case of property
that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
    If a property owner occupies a homestead, the property owner's spouse may not
claim another property as a homestead unless the property owner and the property owner's
spouse file with the assessor an affidavit or other proof required by the assessor stating that
the property qualifies as a homestead under subdivision 1, paragraph (e).
    Owners or spouses occupying residences owned by their spouses and previously
occupied with the other spouse, either of whom fail to include the other spouse's name
and Social Security number on the homestead application or provide the affidavits or
other proof requested, will be deemed to have elected to receive only partial homestead
treatment of their residence. The remainder of the residence will be classified as
nonhomestead residential. When an owner or spouse's name and Social Security number
appear on homestead applications for two separate residences and only one application is
signed, the owner or spouse will be deemed to have elected to homestead the residence for
which the application was signed.
    The Social Security numbers, state or federal tax returns or tax return information,
including the federal income tax schedule F required by this section, or affidavits or other
proofs of the property owners and spouses submitted under this or another section to
support a claim for a property tax homestead classification are private data on individuals as
defined by section 13.02, subdivision 12, but, notwithstanding that section, the private data
may be disclosed to the commissioner of revenue, or, for purposes of proceeding under the
Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
    (d) If residential real estate is occupied and used for purposes of a homestead by a
relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
order for the property to receive homestead status, a homestead application must be filed
with the assessor. The Social Security number of each relative and spouse of a relative
occupying the property shall be required on the homestead application filed under this
subdivision. If a different relative of the owner subsequently occupies the property, the
owner of the property must notify the assessor within 30 days of the change in occupancy.
The Social Security number of a relative or relative's spouse occupying the property
is private data on individuals as defined by section 13.02, subdivision 12, but may be
disclosed to the commissioner of revenue, or, for the purposes of proceeding under the
Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
    (e) The homestead application shall also notify the property owners that the
application filed under this section will not be mailed annually and that if the property
is granted homestead status for any assessment year, that same property shall remain
classified as homestead until the property is sold or transferred to another person, or
the owners, the spouse of the owner, or the relatives no longer use the property as their
homestead. Upon the sale or transfer of the homestead property, a certificate of value must
be timely filed with the county auditor as provided under section 272.115. Failure to
notify the assessor within 30 days that the property has been sold, transferred, or that the
owner, the spouse of the owner, or the relative is no longer occupying the property as a
homestead, shall result in the penalty provided under this subdivision and the property
will lose its current homestead status.
    (f) If the homestead application is not returned within 30 days, the county will send a
second application to the present owners of record. The notice of proposed property taxes
prepared under section 275.065, subdivision 3, shall reflect the property's classification. If
a homestead application has not been filed with the county by December 15, the assessor
shall classify the property as nonhomestead for the current assessment year for taxes
payable in the following year, provided that the owner may be entitled to receive the
homestead classification by proper application under section 375.192.
    Subd. 13a. Occupant list. (g) At the request of the commissioner, each county
must give the commissioner a list that includes the name and Social Security number
of each occupant of homestead property who is the property owner, property owner's
spouse, qualifying relative of a property owner, or a spouse of a qualifying relative. The
commissioner shall use the information provided on the lists as appropriate under the law,
including for the detection of improper claims by owners, or relatives of owners, under
chapter 290A.
    Subd. 13b. Improper homestead. (h) (a) If the commissioner finds that a
property owner may be claiming a fraudulent homestead, the commissioner shall notify
the appropriate counties. Within 90 days of the notification, the county assessor shall
investigate to determine if the homestead classification was properly claimed. If the
property owner does not qualify, the county assessor shall notify the county auditor who
will determine the amount of homestead benefits that had been improperly allowed. For the
purpose of this section subdivision, "homestead benefits" means the tax reduction resulting
from the classification as a homestead under section 273.13, the taconite homestead credit
under section 273.135, the residential homestead and agricultural homestead credits under
section 273.1384, and the supplemental homestead credit under section 273.1391.
    The county auditor shall send a notice to the person who owned the affected property
at the time the homestead application related to the improper homestead was filed,
demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
of the homestead benefits. The person notified may appeal the county's determination
by serving copies of a petition for review with county officials as provided in section
278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax
Court within 60 days of the date of the notice from the county. Procedurally, the appeal
is governed by the provisions in chapter 271 which apply to the appeal of a property tax
assessment or levy, but without requiring any prepayment of the amount in controversy. If
the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
has been filed, the county auditor shall certify the amount of taxes and penalty to the county
treasurer. The county treasurer will add interest to the unpaid homestead benefits and
penalty amounts at the rate provided in section 279.03 for real property taxes becoming
delinquent in the calendar year during which the amount remains unpaid. Interest may be
assessed for the period beginning 60 days after demand for payment was made.
    If the person notified is the current owner of the property, the treasurer may add the
total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
otherwise payable on the property by including the amounts on the property tax statements
under section 276.04, subdivision 3. The amounts added under this paragraph to the ad
valorem taxes shall include interest accrued through December 31 of the year preceding
the taxes payable year for which the amounts are first added. These amounts, when added
to the property tax statement, become subject to all the laws for the enforcement of real or
personal property taxes for that year, and for any subsequent year.
    If the person notified is not the current owner of the property, the treasurer may
collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment
of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
tax obligations of the person who owned the property at the time the application related to
the improperly allowed homestead was filed. The treasurer may relieve a prior owner of
personal liability for the homestead benefits, penalty, interest, and costs, and instead extend
those amounts on the tax lists against the property as provided in this paragraph to the extent
that the current owner agrees in writing. On all demands, billings, property tax statements,
and related correspondence, the county must list and state separately the amounts of
homestead benefits, penalty, interest and costs being demanded, billed or assessed.
    (i) (b) Any amount of homestead benefits recovered by the county from the property
owner shall be distributed to the county, city or town, and school district where the
property is located in the same proportion that each taxing district's levy was to the total
of the three taxing districts' levy for the current year. Any amount recovered attributable
to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
deposited in the taconite property tax relief account. Any amount recovered that is
attributable to supplemental homestead credit is to be transmitted to the commissioner of
revenue for deposit in the general fund of the state treasury. The total amount of penalty
collected must be deposited in the county general fund.
    (j) (c) If a property owner has applied for more than one homestead and the county
assessors cannot determine which property should be classified as homestead, the county
assessors will refer the information to the commissioner. The commissioner shall make
the determination and notify the counties within 60 days.
    Subd. 13c. Property lists. (k) In addition to lists of homestead properties, the
commissioner may ask the counties to furnish lists of all properties and the record owners.
The Social Security numbers and federal identification numbers that are maintained by
a county or city assessor for property tax administration purposes, and that may appear
on the lists retain their classification as private or nonpublic data; but may be viewed,
accessed, and used by the county auditor or treasurer of the same county for the limited
purpose of assisting the commissioner in the preparation of microdata samples under
section 270C.12. The commissioner shall use the information provided on the lists as
appropriate under the law, including for the detection of improper claims by owners, or
relatives of owners, under chapter 290A.
    Subd. 13d. Homestead data. (l) On or before April 30 each year beginning in 2007,
each county must provide the commissioner with the following data for each parcel of
homestead property by electronic means as defined in section 289A.02, subdivision 8:
    (i) (1) the property identification number assigned to the parcel for purposes of
taxes payable in the current year;
    (ii) (2) the name and Social Security number of each occupant of homestead property
who is the property owner, property owner's spouse, qualifying relative of a property
owner, or spouse of a qualifying relative;
    (iii) (3) the classification of the property under section 273.13 for taxes payable
in the current year and in the prior year;
    (iv) (4) an indication of whether the property was classified as a homestead for
taxes payable in the current year because of occupancy by a relative of the owner or
by a spouse of a relative;
    (v) (5) the property taxes payable as defined in section 290A.03, subdivision 13, for
the current year and the prior year;
    (vi) (6) the market value of improvements to the property first assessed for tax
purposes for taxes payable in the current year;
    (vii) (7) the assessor's estimated market value assigned to the property for taxes
payable in the current year and the prior year;
    (viii) (8) the taxable market value assigned to the property for taxes payable in the
current year and the prior year;
    (ix) (9) whether there are delinquent property taxes owing on the homestead;
    (x) (10) the unique taxing district in which the property is located; and
    (xi) (11) such other information as the commissioner decides is necessary.
    The commissioner shall use the information provided on the lists as appropriate
under the law, including for the detection of improper claims by owners, or relatives
of owners, under chapter 290A.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. [273.1245] CLASSIFICATION OF DATA.
    Subdivision 1. Private or nonpublic data. The following data are private or
nonpublic data as defined in 13.02, subdivisions 9 and 12, when they are submitted to a
county or local assessor under section 273.124, 273.13, or another section, to support a
claim for the property tax homestead classification under section 273.13, or other property
tax classification or benefit that is provided under section 273.13:
(1) Social Security numbers;
(2) copies of state or federal income tax returns; and
(3) state or federal income tax return information, including the federal income
tax schedule F.
    Subd. 2. Disclosure. The assessor shall disclose the data described in subdivision 1
to the commissioner of revenue as provided by law. The assessor shall also disclose all or
portions of the data described in subdivision 1 to the county treasurer solely for the purpose
of proceeding under the Revenue Recapture Act to recover personal property taxes owing.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2012, section 273.1315, subdivision 1, is amended to read:
    Subdivision 1. Class 1b homestead declaration before 2009. Any property owner
seeking classification and assessment of the owner's homestead as class 1b property
pursuant to section 273.13, subdivision 22, paragraph (b), on or before October 1, 2008,
shall file with the commissioner of revenue a 1b homestead declaration, on a form
prescribed by the commissioner. The declaration shall contain the following information:
    (a) (1) the information necessary to verify that on or before June 30 of the filing year,
the property owner or the owner's spouse satisfies the requirements of section 273.13,
subdivision 22 , paragraph (b), for 1b classification; and
    (b) (2) any additional information prescribed by the commissioner.
    The declaration must be filed on or before October 1 to be effective for property
taxes payable during the succeeding calendar year. The declaration and any supplementary
information received from the property owner pursuant to this subdivision shall be subject
to chapter 270B. If approved by the commissioner, the declaration remains in effect until
the property no longer qualifies under section 273.13, subdivision 22, paragraph (b).
Failure to notify the commissioner within 30 days that the property no longer qualifies
under that paragraph because of a sale, change in occupancy, or change in the status
or condition of an occupant shall result in the penalty provided in section 273.124,
subdivision 13 13b, computed on the basis of the class 1b benefits for the property, and
the property shall lose its current class 1b classification.
    The commissioner shall provide to the assessor on or before November 1 a listing
of the parcels of property qualifying for 1b classification.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2012, section 273.1315, subdivision 2, is amended to read:
    Subd. 2. Class 1b homestead declaration 2009 and thereafter. (a) Any property
owner seeking classification and assessment of the owner's homestead as class 1b property
pursuant to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file
with the county assessor a class 1b homestead declaration, on a form prescribed by the
commissioner of revenue. The declaration must contain the following information:
    (1) the information necessary to verify that, on or before June 30 of the filing year,
the property owner or the owner's spouse satisfies the requirements of section 273.13,
subdivision 22, paragraph (b), for class 1b classification; and
    (2) any additional information prescribed by the commissioner.
    (b) The declaration must be filed on or before October 1 to be effective for property
taxes payable during the succeeding calendar year. The Social Security numbers and
income and medical information received from the property owner pursuant to this
subdivision are private data on individuals as defined in section 13.02. If approved by
the assessor, the declaration remains in effect until the property no longer qualifies under
section 273.13, subdivision 22, paragraph (b). Failure to notify the assessor within 30
days that the property no longer qualifies under that paragraph because of a sale, change in
occupancy, or change in the status or condition of an occupant shall result in the penalty
provided in section 273.124, subdivision 13 13b, computed on the basis of the class 1b
benefits for the property, and the property shall lose its current class 1b classification.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2012, section 273.19, subdivision 1, is amended to read:
    Subdivision 1. Tax-exempt property; lease. Except as provided in subdivision 3 or
4, tax-exempt property held under a lease for a term of at least one year, and not taxable
under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall be
considered, for all purposes of taxation, as the property of the person holding it. In this
subdivision, "tax-exempt property" means property owned by the United States, the state
or any of its political subdivisions, a school, or any religious, scientific, or benevolent
society or institution, incorporated or unincorporated, or any corporation whose property
is not taxed in the same manner as other property. This subdivision does not apply to
property exempt from taxation under section 272.01, subdivision 2, paragraph (b), clauses
(2), (3), and (4), or to property exempt from taxation under section 272.0213.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2012, section 273.39, is amended to read:
273.39 RURAL AREA.
As used in sections 273.39 to 273.41, the term "rural area" shall be deemed to mean
any area of the state not included within the boundaries of any incorporated statutory
city or home rule charter city, and such term shall be deemed to include both farm and
nonfarm population thereof.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2012, section 279.06, subdivision 1, is amended to read:
    Subdivision 1. List and notice. Within five days after the filing of such list, the
court administrator shall return a copy thereof to the county auditor, with a notice prepared
and signed by the court administrator, and attached thereto, which may be substantially in
the following form:

	State of Minnesota	)
		) ss.
	County of .....	)
				District Court
				..... Judicial District.

The state of Minnesota, to all persons, companies, or corporations who have or claim
any estate, right, title, or interest in, claim to, or lien upon, any of the several parcels of
land described in the list hereto attached:
The list of taxes and penalties on real property for the county of ...............................
remaining delinquent on the first Monday in January, ......., has been filed in the office of
the court administrator of the district court of said county, of which that hereto attached is a
copy. Therefore, you, and each of you, are hereby required to file in the office of said court
administrator, on or before the 20th day after the publication of this notice and list, your
answer, in writing, setting forth any objection or defense you may have to the taxes, or any
part thereof, upon any parcel of land described in the list, in, to, or on which you have or
claim any estate, right, title, interest, claim, or lien, and, in default thereof, judgment will
be entered against such parcel of land for the taxes on such list appearing against it, and
for all penalties, interest, and costs. Based upon said judgment, the land shall be sold to
the state of Minnesota on the second Monday in May, ....... The period of redemption for
all lands sold to the state at a tax judgment sale shall be three years from the date of sale to
the state of Minnesota if the land is within an incorporated area unless it is:
(a) nonagricultural homesteaded land as defined in section 273.13, subdivision 22;
(b) homesteaded agricultural land as defined in section 273.13, subdivision 23,
paragraph (a);
(c) seasonal residential recreational land as defined in section 273.13, subdivisions
22, paragraph (c) , and 25, paragraph (d), clause (1), in which event the period of
redemption is five years from the date of sale to the state of Minnesota;
(d) abandoned property and pursuant to section 281.173 a court order has been
entered shortening the redemption period to five weeks; or
(e) vacant property as described under section 281.174, subdivision 2, and for which
a court order is entered shortening the redemption period under section 281.174.
The period of redemption for all other lands sold to the state at a tax judgment sale
shall be five years from the date of sale.
Inquiries as to the proceedings set forth above can be made to the county auditor of
..... county whose address is ......

		(Signed) ..... ,
		Court Administrator of the District Court of the County of .....
		(Here insert list.)

The notice must contain a narrative description of the various periods to redeem
specified in sections 281.17, 281.173, and 281.174, in the manner prescribed by the
commissioner of revenue under subdivision 2.
The list referred to in the notice shall be substantially in the following form:
List of real property for the county of ......................., on which taxes remain
delinquent on the first Monday in January, .......

Town of (Fairfield),

Township (40), Range (20),

	Names (and Current Filed Addresses) for the Taxpayers and Fee Owners and in Addition Those Parties Who Have Filed Their Addresses Pursuant to section 276.041	Subdivision of Section	Section	Tax Parcel Number	Total Tax and Penalty
					$ cts.
	John Jones (825 Fremont Fairfield, MN 55000)	S.E. 1/4 of S.W. 1/4	10	23101	2.20
	Bruce Smith (2059 Hand Fairfield, MN 55000) and Fairfield State Bank (100 Main Street Fairfield, MN 55000)	That part of N.E. 1/4 of S.W. 1/4 desc. as follows: Beg. at the S.E. corner of said N.E. 1/4 of S.W. 1/4; thence N. along the E. line of said N.E. 1/4 of S.W. 1/4 a distance of 600 ft.; thence W. parallel with the S. line of said N.E. 1/4 of S.W. 1/4 a distance of 600 ft.; thence S. parallel with said E. line a distance of 600 ft. to S. line of said N.E. 1/4 of S.W. 1/4; thence E. along said S. line a distance of 600 ft. to the point of beg.	21	33211	3.15

As to platted property, the form of heading shall conform to circumstances and be
substantially in the following form:

City of (Smithtown)

Brown's Addition, or Subdivision

	Names (and Current Filed Addresses) for the Taxpayers and Fee Owners and in Addition Those Parties Who Have Filed Their Addresses Pursuant to section 276.041	Lot	Block	Tax Parcel Number	Total Tax and Penalty
					$ cts.
	John Jones (825 Fremont Fairfield, MN 55000)	15	9	58243	2.20
	Bruce Smith (2059 Hand Fairfield, MN 55000) and Fairfield State Bank (100 Main Street Fairfield, MN 55000)	16	9	58244	3.15

The names, descriptions, and figures employed in parentheses in the above forms are
merely for purposes of illustration.
The name of the town, township, range or city, and addition or subdivision, as the
case may be, shall be repeated at the head of each column of the printed lists as brought
forward from the preceding column.
Errors in the list shall not be deemed to be a material defect to affect the validity
of the judgment and sale.
EFFECTIVE DATE.This section is effective for lists and notices required after
December 31, 2013.

    Sec. 12. Minnesota Statutes 2012, section 290A.25, is amended to read:
290A.25 VERIFICATION OF SOCIAL SECURITY NUMBERS.
Annually, the commissioner of revenue shall furnish a list to the county assessor
containing the names and Social Security numbers of persons who have applied for both
homestead classification under section 273.13 and a property tax refund as a renter
under this chapter.
Within 90 days of the notification, the county assessor shall investigate to determine
if the homestead classification was improperly claimed. If the property owner does
not qualify, the county assessor shall notify the county auditor who will determine the
amount of homestead benefits that has been improperly allowed. For the purpose of this
section, "homestead benefits" has the meaning given in section 273.124, subdivision 13,
paragraph (h) 13b. The county auditor shall send a notice to persons who owned the
affected property at the time the homestead application related to the improper homestead
was filed, demanding reimbursement of the homestead benefits plus a penalty equal to
100 percent of the homestead benefits. The person notified may appeal the county's
determination with the Minnesota Tax Court within 60 days of the date of the notice from
the county as provided in section 273.124, subdivision 13, paragraph (h) 13b.
If the amount of homestead benefits and penalty is not paid within 60 days, and if
no appeal has been filed, the county auditor shall certify the amount of taxes and penalty
to the county treasurer. The county treasurer will add interest to the unpaid homestead
benefits and penalty amounts at the rate provided for delinquent personal property taxes
for the period beginning 60 days after demand for payment was made until payment. If
the person notified is the current owner of the property, the treasurer may add the total
amount of benefits, penalty, interest, and costs to the real estate taxes otherwise payable on
the property in the following year. If the person notified is not the current owner of the
property, the treasurer may collect the amounts due under the Revenue Recapture Act in
chapter 270A, or use any of the powers granted in sections 277.20 and 277.21 without
exclusion, to enforce payment of the benefits, penalty, interest, and costs, as if those
amounts were delinquent tax obligations of the person who owned the property at the time
the application related to the improperly allowed homestead was filed. The treasurer may
relieve a prior owner of personal liability for the benefits, penalty, interest, and costs, and
instead extend those amounts on the tax lists against the property for taxes payable in the
following year to the extent that the current owner agrees in writing.
Any amount of homestead benefits recovered by the county from the property owner
shall be distributed to the county, city or town, and school district where the property is
located in the same proportion that each taxing district's levy was to the total of the three
taxing districts' levy for the current year. Any amount recovered attributable to taconite
homestead credit shall be transmitted to the St. Louis County auditor to be deposited in
the taconite property tax relief account. Any amount recovered that is attributable to
supplemental homestead credit is to be transmitted to the commissioner of revenue for
deposit in the general fund of the state treasury. The total amount of penalty collected
must be deposited in the county general fund.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2012, section 373.01, subdivision 1, is amended to read:
    Subdivision 1. Public corporation; listed powers. (a) Each county is a body politic
and corporate and may:
    (1) Sue and be sued.
    (2) Acquire and hold real and personal property for the use of the county, and lands
sold for taxes as provided by law.
    (3) Purchase and hold for the benefit of the county real estate sold by virtue of
judicial proceedings, to which the county is a party.
    (4) Sell, lease, and convey real or personal estate owned by the county, and give
contracts or options to sell, lease, or convey it, and make orders respecting it as deemed
conducive to the interests of the county's inhabitants.
    (5) Make all contracts and do all other acts in relation to the property and concerns
of the county necessary to the exercise of its corporate powers.
    (b) No sale, lease, or conveyance of real estate owned by the county, except the lease
of a residence acquired for the furtherance of an approved capital improvement project, nor
any contract or option for it, shall be valid, without first advertising for bids or proposals in
the official newspaper of the county for three consecutive weeks and once in a newspaper
of general circulation in the area where the property is located. The notice shall state the
time and place of considering the proposals, contain a legal description of any real estate,
and a brief description of any personal property. Leases that do not exceed $15,000 for any
one year may be negotiated and are not subject to the competitive bid procedures of this
section. All proposals estimated to exceed $15,000 in any one year shall be considered at
the time set for the bid opening, and the one most favorable to the county accepted, but the
county board may, in the interest of the county, reject any or all proposals.
    (c) Sales of personal property the value of which is estimated to be $15,000 or
more shall be made only after advertising for bids or proposals in the county's official
newspaper, on the county's Web site, or in a recognized industry trade journal. At the same
time it posts on its Web site or publishes in a trade journal, the county must publish in the
official newspaper, either as part of the minutes of a regular meeting of the county board
or in a separate notice, a summary of all requests for bids or proposals that the county
advertises on its Web site or in a trade journal. After publication in the official newspaper,
on the Web site, or in a trade journal, bids or proposals may be solicited and accepted by
the electronic selling process authorized in section 471.345, subdivision 17. Sales of
personal property the value of which is estimated to be less than $15,000 may be made
either on competitive bids or in the open market, in the discretion of the county board.
"Web site" means a specific, addressable location provided on a server connected to the
Internet and hosting World Wide Web pages and other files that are generally accessible
on the Internet all or most of a day.
    (d) Notwithstanding anything to the contrary herein, the county may, when acquiring
real property for county highway right-of-way, exchange parcels of real property of
substantially similar or equal value without advertising for bids. The estimated values for
these parcels shall be determined by the county assessor.
(e) Notwithstanding anything in this section to the contrary, the county may, when
acquiring real property for purposes other than county highway right-of-way, exchange
parcels of real property of substantially similar or equal value without advertising for
bids. The estimated values for these parcels must be determined by the county assessor
or a private appraisal performed by a licensed Minnesota real estate appraiser. For the
purpose of determining for the county the estimated values of parcels proposed to be
exchanged, the county assessor need not be licensed under chapter 82B. Before giving
final approval to any exchange of land, the county board shall hold a public hearing on
the exchange. At least two weeks before the hearing, the county auditor shall post a
notice in the auditor's office and the official newspaper of the county of the hearing that
contains a description of the lands affected.
    (f) If real estate or personal property remains unsold after advertising for and
consideration of bids or proposals the county may employ a broker to sell the property.
The broker may sell the property for not less than 90 percent of its appraised market value
as determined by the county. The broker's fee shall be set by agreement with the county but
may not exceed ten percent of the sale price and must be paid from the proceeds of the sale.
    (g) A county or its agent may rent a county-owned residence acquired for the
furtherance of an approved capital improvement project subject to the conditions set
by the county board and not subject to the conditions for lease otherwise provided by
paragraph (a), clause (4), and paragraphs (b), (c), (d), (f), and (h).
    (h) In no case shall lands be disposed of without there being reserved to the county
all iron ore and other valuable minerals in and upon the lands, with right to explore for,
mine and remove the iron ore and other valuable minerals, nor shall the minerals and
mineral rights be disposed of, either before or after disposition of the surface rights,
otherwise than by mining lease, in similar general form to that provided by section 93.20
for mining leases affecting state lands. The lease shall be for a term not exceeding 50
years, and be issued on a royalty basis, the royalty to be not less than 25 cents per ton of
2,240 pounds, and fix a minimum amount of royalty payable during each year, whether
mineral is removed or not. Prospecting options for mining leases may be granted for
periods not exceeding one year. The options shall require, among other things, periodical
showings to the county board of the results of exploration work done.
    (i) Notwithstanding anything in this subdivision to the contrary, the county may,
when selling real property owned in fee simple that cannot be improved because of
noncompliance with local ordinances regarding minimum area, shape, frontage, or access,
proceed to sell the nonconforming parcel without advertising for bid. At the county's
discretion, the real property may be restricted to sale to adjoining landowners or may be
sold to any other interested party. The property shall be sold to the highest bidder, but in no
case shall the property be sold for less than 90 percent of its fair market value as determined
by the county assessor. All owners of land adjoining the land to be sold shall be given a
written notice at least 30 days before the sale. This paragraph shall be liberally construed to
encourage the sale of nonconforming real property and promote its return to the tax roles.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. REPEALER.
Minnesota Statutes 2012, sections 272.69; and 273.11, subdivisions 1a and 22, are
repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 4

SALES AND USE TAXES; SPECIAL TAXES

    Section 1. Minnesota Statutes 2012, section 287.20, is amended by adding a
subdivision to read:
    Subd. 11. Partition. "Partition" means the division by conveyance of real property
that is held jointly or in common by two or more persons into individually owned interests.
If one of the co-owners gives consideration for all or a part of the individually owned
interest conveyed to them, that portion of the conveyance is not a part of the partition.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 289A.20, subdivision 4, is amended to read:
    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following
the month in which the taxable event occurred, or following another reporting period
as the commissioner prescribes or as allowed under section 289A.18, subdivision 4,
paragraph (f) or (g), except that:
(1) use taxes due on an annual use tax return as provided under section 289A.11,
subdivision 1 , are payable by April 15 following the close of the calendar year; and.
(2) except as provided in paragraph (f), for a vendor having a liability of $120,000
or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the taxes
imposed by chapter 297A, except as provided in paragraph (b), are due and payable to the
commissioner monthly in the following manner:
(i) On or before the 14th day of the month following the month in which the taxable
event occurred, the vendor must remit to the commissioner 90 percent of the estimated
liability for the month in which the taxable event occurred.
(ii) On or before the 20th day of the month in which the taxable event occurs, the
vendor must remit to the commissioner a prepayment for the month in which the taxable
event occurs equal to 67 percent of the liability for the previous month.
(iii) On or before the 20th day of the month following the month in which the taxable
event occurred, the vendor must pay any additional amount of tax not previously remitted
under either item (i) or (ii ) or, if the payment made under item (i) or (ii) was greater than
the vendor's liability for the month in which the taxable event occurred, the vendor may
take a credit against the next month's liability in a manner prescribed by the commissioner.
(iv) Once the vendor first pays under either item (i) or (ii), the vendor is required to
continue to make payments in the same manner, as long as the vendor continues having a
liability of $120,000 or more during the most recent fiscal year ending June 30.
(v) Notwithstanding items (i), (ii), and (iv), if a vendor fails to make the required
payment in the first month that the vendor is required to make a payment under either item
(i) or (ii), then the vendor is deemed to have elected to pay under item (ii) and must make
subsequent monthly payments in the manner provided in item (ii).
(vi) For vendors making an accelerated payment under item (ii), for the first month
that the vendor is required to make the accelerated payment, on the 20th of that month, the
vendor will pay 100 percent of the liability for the previous month and a prepayment for
the first month equal to 67 percent of the liability for the previous month.
    (b) Notwithstanding paragraph (a), A vendor having a liability of $120,000 or more
during a fiscal year ending June 30 must remit the June liability for the next year in the
following manner:
    (1) Two business days before June 30 of the year, the vendor must remit 90 percent
of the estimated June liability to the commissioner.
    (2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.
    (c) A vendor having a liability of:
    (1) $10,000 or more, but less than $120,000 during a fiscal year ending June 30,
2009, and fiscal years thereafter, must remit by electronic means all liabilities on returns
due for periods beginning in the subsequent calendar year on or before the 20th day of
the month following the month in which the taxable event occurred, or on or before the
20th day of the month following the month in which the sale is reported under section
289A.18, subdivision 4 ; or
(2) $120,000 or more, during a fiscal year ending June 30, 2009, and fiscal years
thereafter, must remit by electronic means all liabilities in the manner provided in
paragraph (a), clause (2), on returns due for periods beginning in the subsequent calendar
year, except for 90 percent of the estimated June liability, which is due two business days
before June 30. The remaining amount of the June liability is due on August 20.
(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
religious beliefs from paying electronically shall be allowed to remit the payment by mail.
The filer must notify the commissioner of revenue of the intent to pay by mail before
doing so on a form prescribed by the commissioner. No extra fee may be charged to a
person making payment by mail under this paragraph. The payment must be postmarked
at least two business days before the due date for making the payment in order to be
considered paid on a timely basis.
(e) Whenever the liability is $120,000 or more separately for: (1) the tax imposed
under chapter 297A; (2) a fee that is to be reported on the same return as and paid with the
chapter 297A taxes; or (3) any other tax that is to be reported on the same return as and
paid with the chapter 297A taxes, then the payment of all the liabilities on the return must
be accelerated as provided in this subdivision.
(f) At the start of the first calendar quarter at least 90 days after the cash flow account
established in section 16A.152, subdivision 1, and the budget reserve account established in
section 16A.152, subdivision 1a, reach the amounts listed in section 16A.152, subdivision
2 , paragraph (a), the remittance of the accelerated payments required under paragraph (a),
clause (2), must be suspended. The commissioner of management and budget shall notify
the commissioner of revenue when the accounts have reached the required amounts.
Beginning with the suspension of paragraph (a), clause (2), for a vendor with a liability of
$120,000 or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the
taxes imposed by chapter 297A are due and payable to the commissioner on the 20th day
of the month following the month in which the taxable event occurred. Payments of tax
liabilities for taxable events occurring in June under paragraph (b) are not changed.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read:
    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages
is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year
beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
take the credit on the 18th day of each month, but the total credit allowed may not exceed
in any fiscal year the lesser of:
(1) the liability for tax; or
(2) $115,000.
For purposes of this subdivision, a "qualified brewer" means a brewer, whether
or not located in this state, manufacturing less than 100,000 barrels of fermented malt
beverages in the calendar year immediately preceding the calendar fiscal year for which
the credit under this subdivision is claimed. In determining the number of barrels, all
brands or labels of a brewer must be combined. All facilities for the manufacture of
fermented malt beverages owned or controlled by the same person, corporation, or other
entity must be treated as a single brewer.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2012, section 297I.05, subdivision 11, is amended to read:
    Subd. 11. Retaliatory provisions. (a) If any other state or country imposes any
taxes, fines, deposits, penalties, licenses, or fees upon any insurance companies of this
state and their agents doing business in another state or country that are in addition to or in
excess of those imposed by the laws of this state upon foreign insurance companies and
their agents doing business in this state, the same taxes, fines, deposits, penalties, licenses,
and fees are imposed upon every similar insurance company of that state or country and
their agents doing or applying to do business in this state.
(b) If any conditions precedent to the right to do business in any other state or
country are imposed by the laws of that state or country, beyond those imposed upon
foreign companies by the laws of this state, the same conditions precedent are imposed
upon every similar insurance company of that state or country and their agents doing or
applying to do business in that state.
(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or
fees" means an amount of money that is deposited in the general revenue fund of the state
or other similar fund in another state or country and is not dedicated to a special purpose
or use or money deposited in the general revenue fund of the state or other similar fund in
another state or country and appropriated to the commissioner of commerce or insurance
for the operation of the Department of Commerce or other similar agency with jurisdiction
over insurance. Taxes, fines, deposits, penalties, licenses, or fees do not include:
(1) special purpose obligations or assessments imposed in connection with particular
kinds of insurance, including but not limited to assessments imposed in connection with
residual market mechanisms; or
(2) assessments made by the insurance guaranty association, life and health
guarantee association, or similar association.
(d) This subdivision applies to taxes imposed under subdivisions 1,; 3,; 4, 6, and; 12,
paragraph (a), clauses (1) and (2); and 14.
(e) This subdivision does not apply to insurance companies organized or domiciled
in a state or country, the laws of which do not impose retaliatory taxes, fines, deposits,
penalties, licenses, or fees or which grant, on a reciprocal basis, exemptions from
retaliatory taxes, fines, deposits, penalties, licenses, or fees to insurance companies
domiciled in this state.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. REPEALER.
Minnesota Statutes 2012, section 289A.60, subdivision 31, is repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 5

MINERALS TAXES

    Section 1. Minnesota Statutes 2012, section 272.02, subdivision 97, is amended to read:
    Subd. 97. Property used in business of mining subject to net proceeds tax. The
following property used in the business of mining that is subject to the net proceeds tax
under section 298.015 is exempt:
(1) deposits of ores, metals, and minerals and the lands in which they are contained;
(2) all real and personal property used in mining, quarrying, producing, or refining
ores, minerals, or metals, including lands occupied by or used in connection with the
mining, quarrying, production, or ore refining facilities; and
(3) concentrate or direct reduced ore.
This exemption applies for each year that a person subject to tax under section
298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or
minerals.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
    Subd. 3. Occupation tax; other ores. Every person engaged in the business of
mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
in this subdivision. For purposes of this subdivision, mining includes the application of
hydrometallurgical processes. Hydrometallurgical processes are processes that extract
the ores, metals, or minerals, by use of aqueous solutions that leach, concentrate, and
recover the ore, metal, or mineral. The tax is determined in the same manner as the tax
imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17,
subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must
be computed by applying to taxable income the rate of 2.45 percent. A person subject
to occupation tax under this section shall apportion its net income on the basis of the
percentage obtained by taking the sum of:
(1) 75 percent of the percentage which the sales made within this state in connection
with the trade or business during the tax period are of the total sales wherever made in
connection with the trade or business during the tax period;
(2) 12.5 percent of the percentage which the total tangible property used by the
taxpayer in this state in connection with the trade or business during the tax period is of
the total tangible property, wherever located, used by the taxpayer in connection with the
trade or business during the tax period; and
(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
in this state or paid in respect to labor performed in this state in connection with the trade
or business during the tax period are of the taxpayer's total payrolls paid or incurred in
connection with the trade or business during the tax period.
The tax is in addition to all other taxes.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 298.018, is amended to read:
298.018 DISTRIBUTION OF PROCEEDS.
    Subdivision 1. Within taconite assistance area. The proceeds of the tax paid
under sections 298.015 and 298.016 on ores, metals, or minerals and energy resources
mined or extracted within the taconite assistance area defined in section 273.1341, shall
be allocated as follows:
(1) five percent to the city or town within which the minerals or energy resources
are mined or extracted;
(2) ten percent to the taconite municipal aid account to be distributed as provided
in section 298.282;
(3) ten percent to the school district within which the minerals or energy resources
are mined or extracted;
(4) 20 percent to a group of school districts comprised of those school districts
wherein the mineral or energy resource was mined or extracted or in which there is a
qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion
to school district indexes as follows: for each school district, its pupil units determined
under section 126C.05 for the prior school year shall be multiplied by the ratio of the
average adjusted net tax capacity per pupil unit for school districts receiving aid under
this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
Each district shall receive that portion of the distribution which its index bears to the sum
of the indices for all school districts that receive the distributions;
(5) 20 percent to the county within which the minerals or energy resources are
mined or extracted;
(6) 20 percent to St. Louis County acting as the counties' fiscal agent to be
distributed as provided in sections 273.134 to 273.136;
(7) five percent to the Iron Range Resources and Rehabilitation Board for the
purposes of section 298.22;
(8) five percent to the Douglas J. Johnson economic protection trust fund; and
(9) five percent to the taconite environmental protection fund.
The proceeds of the tax shall be distributed on July 15 each year.
    Subd. 2. Outside taconite assistance area. The proceeds of the tax paid under
sections 298.015 and 298.016 on ores, metals, or minerals and energy resources mined
or extracted outside of the taconite assistance area defined in section 273.1341, shall
be deposited in the general fund.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 6

MISCELLANEOUS

    Section 1. Minnesota Statutes 2012, section 16A.46, is amended to read:
16A.46 LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.
    Subdivision 1. Duplicate warrant. The commissioner may issue a duplicate of an
unpaid warrant to an owner if the owner certifies that the original was lost or destroyed. The
commissioner may require certification be documented by affidavit. The commissioner
may refuse to issue a duplicate of an unpaid state warrant. If the commissioner acts in
good faith, the commissioner is not liable, whether the application is granted or denied.
    Subd. 2. Original warrant is void. When the duplicate is issued, the original is
void. The commissioner may require an indemnity bond from the applicant to the state for
double the amount of the warrant for anyone damaged by the issuance of the duplicate.
The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the
commissioner acts in good faith the commissioner is not liable, whether the application is
granted or denied is not liable to any holder who took the void original warrant for value,
whether or not the commissioner required an indemnity bond from the applicant.
    Subd. 3. Unpaid refund or rebate. For an unpaid refund or rebate issued under a
tax law administered by the commissioner of revenue that has been lost or destroyed, an
affidavit is not required for the commissioner to issue a duplicate if the duplicate is issued
to the same name and Social Security number as the original warrant and that information
is verified on a tax return filed by the recipient.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 270C.42, subdivision 2, is amended to read:
    Subd. 2. Penalty for failure to pay electronically. In addition to other applicable
penalties imposed by law, after notification from the commissioner to the taxpayer that
payments for a tax payable to the commissioner are required to be made by electronic
means, and the payments are remitted by some other means, there is a penalty in the
amount of five percent of each payment that should have been remitted electronically.
After the commissioner's initial notification to the taxpayer that payments are required to
be made by electronic means, the commissioner is not required to notify the taxpayer in
subsequent periods if the initial notification specified the amount of tax liability at which a
taxpayer is required to remit payments by electronic means. The penalty can be abated
under the abatement procedures prescribed in section 270C.34 if the failure to remit the
payment electronically is due to reasonable cause. The penalty bears interest at the rate
specified in section 270C.40 from the due date of the payment of the tax provided in
section 270C.40, subdivision 3, to the date of payment of the penalty.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 287.385, subdivision 7, is amended to read:
    Subd. 7. Interest on penalties. A penalty imposed under this chapter bears interest
from the date payment was required to be paid, including any extensions, provided in
section 270C.40, subdivision 3, to the date of payment of the penalty.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2012, section 289A.55, subdivision 9, is amended to read:
    Subd. 9. Interest on penalties. (a) A penalty imposed under section 289A.60,
subdivision 1 , 2, 2a, 4, 5, 6, or 21 bears interest from the date the return or payment
was required to be filed or paid, including any extensions provided in section 270C.40,
subdivision 3, to the date of payment of the penalty.
(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
60 days from the date of notice. In that case interest is imposed from the date of notice
to the date of payment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2012, section 289A.60, subdivision 4, is amended to read:
    Subd. 4. Substantial understatement of liability; penalty. (a) The commissioner
of revenue shall impose a penalty for substantial understatement of any tax payable to the
commissioner, except a tax imposed under chapter 297A.
(b) There must be added to the tax an amount equal to 20 percent of the amount of any
underpayment attributable to the understatement. There is a substantial understatement of
tax for the period if the amount of the understatement for the period exceeds the greater of:
(1) ten percent of the tax required to be shown on the return for the period; or
(2)(i) $10,000 in the case of a mining company or a corporation, other than an S
corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or
section 298.01 or 298.015, or
(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or
a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015.
(c) For a corporation, other than an S corporation, there is also a substantial
understatement of tax for any taxable year if the amount of the understatement for the
taxable year exceeds the lesser of:
(1) ten percent of the tax required to be shown on the return for the taxable year
(or, if greater, $10,000); or
(2) $10,000,000.
(d) The term "understatement" means the excess of the amount of the tax required
to be shown on the return for the period, over the amount of the tax imposed that is
shown on the return. The excess must be determined without regard to items to which
subdivision 27 applies. The amount of the understatement shall be reduced by that part of
the understatement that is attributable to the tax treatment of any item by the taxpayer if
(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to
which the relevant facts affecting the item's tax treatment are adequately disclosed in the
return or in a statement attached to the return and (ii) there is a reasonable basis for the tax
treatment of the item. The exception for substantial authority under clause (1) does not
apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the
Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment
of an item attributable to a multiple-party financing transaction if the treatment does not
clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B)
of the Internal Revenue Code. The special rules in cases involving tax shelters provided in
section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax
shelter the principal purpose of which is the avoidance or evasion of state taxes.
(e) The commissioner may abate all or any part of the addition to the tax provided
by this section on a showing by the taxpayer that there was reasonable cause for the
understatement, or part of it, and that the taxpayer acted in good faith. The additional tax
and penalty shall bear interest at the rate as specified in section 270C.40 from the time
the tax should have been paid until paid.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2012, section 296A.22, subdivision 1, is amended to read:
    Subdivision 1. Penalty for failure to pay tax, general rule. Upon the failure of
any person to pay any tax or fee when due, a penalty of one percent per day for the first
ten days of delinquency shall accrue, and thereafter the tax, fees, and penalty shall bear
interest at the rate specified in section 270C.40 until paid.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2012, section 296A.22, subdivision 3, is amended to read:
    Subd. 3. Operating without license. If any person operates as a distributor, special
fuel dealer, bulk purchaser, or motor carrier without first securing the license required
under this chapter, any tax or fee imposed by this chapter shall become immediately due
and payable. A penalty of 25 percent is imposed upon the tax and fee due. The tax, and
fees, and penalty shall bear interest at the rate specified in section 270C.40. The penalty
imposed in this subdivision shall bear interest from the date provided in section 270C.40,
subdivision 3, to the date of payment of the penalty.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2012, section 297B.11, is amended to read:
297B.11 REGISTRAR AS AGENT OF COMMISSIONER OF REVENUE;
POWERS.
The state commissioner of revenue is charged with the administration of the
sales tax on motor vehicles. The commissioner may prescribe all rules not inconsistent
with the provisions of this chapter, necessary and advisable for the proper and efficient
administration of the law. The collection of this sales tax on motor vehicles shall be
carried out by the motor vehicle registrar who shall act as the agent of the commissioner
and who shall be subject to all rules not inconsistent with the provisions of this chapter,
that may be prescribed by the commissioner.
The provisions of chapters 270C, 289A, and 297A relating to the commissioner's
authority to audit, assess, and collect the tax, and to issue refunds and to hear appeals,
are applicable to the sales tax on motor vehicles. The commissioner may impose civil
penalties as provided in chapters 289A and 297A, and the additional tax and penalties
are subject to interest at the rate provided in section 270C.40 from the date provided in
section 270C.40, subdivision 3, until paid.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2012, section 297E.14, subdivision 7, is amended to read:
    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297E.12,
subdivision 1 , 2, 3, 4, or 5, bears interest from the date the return or payment was required
to be filed or paid, including any extensions provided in section 270C.40, subdivision
3, to the date of payment of the penalty.
(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
ten days from the date of notice. In that case interest is imposed from the date of notice
to the date of payment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2012, section 297F.09, subdivision 9, is amended to read:
    Subd. 9. Interest. The amount of tax not timely paid, together with any penalty
imposed in this section, bears interest at the rate specified in section 270C.40 from the
time such tax should have been paid until paid. The penalty imposed in this section bears
interest at the rate specified in section 270C.40 from the date provided in section 270C.40,
subdivision 3, to the date of payment of the penalty. Any interest and penalty is added to
the tax and collected as a part of it.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2012, section 297F.18, subdivision 7, is amended to read:
    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297F.19,
subdivisions 2 to 7, bears interest from the date the return or payment was required to be
filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
date of payment of the penalty.
(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
ten days from the date of the notice. In that case interest is imposed from the date of notice
to the date of payment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2012, section 297G.09, subdivision 8, is amended to read:
    Subd. 8. Interest. The amount of tax not timely paid, together with any penalty
imposed by this chapter, bears interest at the rate specified in section 270C.40 from the
time the tax should have been paid until paid. Any penalty imposed by this chapter bears
interest from the date provided in section 270C.40, subdivision 3, to the date of payment
of the penalty. Any interest and penalty is added to the tax and collected as a part of it.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2012, section 297G.17, subdivision 7, is amended to read:
    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297G.18,
subdivisions 2 to 7, bears interest from the date the return or payment was required to be
filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
date of payment of the penalty.
(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
ten days from the date of the notice. In that case interest is imposed from the date of notice
to the date of payment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2012, section 297I.80, subdivision 1, is amended to read:
    Subdivision 1. Payable to commissioner. (a) When interest is required under this
section, interest is computed at the rate specified in section 270C.40.
(b) If a tax or surcharge is not paid within the time named by law for payment, the
unpaid tax or surcharge bears interest from the date the tax or surcharge should have been
paid until the date the tax or surcharge is paid.
(c) Whenever a taxpayer is liable for additional tax or surcharge because of a
redetermination by the commissioner or other reason, the additional tax or surcharge
bears interest from the time the tax or surcharge should have been paid until the date the
tax or surcharge is paid.
(d) A penalty bears interest from the date the return or payment was required to be
filed or paid provided in section 270C.40, subdivision 3, to the date of payment of the
penalty.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Minnesota Statutes 2012, section 469.319, subdivision 4, is amended to read:
    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
file an amended return with the commissioner of revenue and pay any taxes required
to be repaid within 30 days after becoming subject to repayment under this section.
The amount required to be repaid is determined by calculating the tax for the period or
periods for which repayment is required without regard to the exemptions and credits
allowed under section 469.315.
    (b) For the repayment of taxes imposed under chapter 297B, a business must pay any
taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of
revenue, within 30 days after becoming subject to repayment under this section.
    (c) For the repayment of property taxes, the county auditor shall prepare a tax
statement for the business, applying the applicable tax extension rates for each payable
year and provide a copy to the business and to the taxpayer of record. The business must
pay the taxes to the county treasurer within 30 days after receipt of the tax statement. The
business or the taxpayer of record may appeal the valuation and determination of the
property tax to the Tax Court within 30 days after receipt of the tax statement.
    (d) The provisions of chapters 270C and 289A relating to the commissioner's
authority to audit, assess, and collect the tax and to hear appeals are applicable to the
repayment required under paragraphs (a) and (b). The commissioner may impose civil
penalties as provided in chapter 289A, and the additional tax and penalties are subject
to interest at the rate provided in section 270C.40,. The additional tax shall bear interest
from 30 days after becoming subject to repayment under this section until the date the
tax is paid. Any penalty imposed pursuant to this section shall bear interest from the date
provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
    (e) If a property tax is not repaid under paragraph (c), the county treasurer shall
add the amount required to be repaid to the property taxes assessed against the property
for payment in the year following the year in which the auditor provided the statement
under paragraph (c).
    (f) For determining the tax required to be repaid, a reduction of a state or local sales or
use tax is deemed to have been received on the date that the good or service was purchased
or first put to a taxable use. In the case of an income tax or franchise tax, including the
credit payable under section 469.318, a reduction of tax is deemed to have been received
for the two most recent tax years that have ended prior to the date that the business became
subject to repayment under this section. In the case of a property tax, a reduction of tax is
deemed to have been received for the taxes payable in the year that the business became
subject to repayment under this section and for the taxes payable in the prior year.
    (g) The commissioner may assess the repayment of taxes under paragraph (d) any
time within two years after the business becomes subject to repayment under subdivision
1, or within any period of limitations for the assessment of tax under section 289A.38,
whichever period is later. The county auditor may send the statement under paragraph
(c) any time within three years after the business becomes subject to repayment under
subdivision 1.
    (h) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business becomes subject to
repayment under this section nor for any year thereafter. Property is not exempt from tax
under section 272.02, subdivision 64, for any taxes payable in the year following the year
in which the property became subject to repayment under this section nor for any year
thereafter. A business is not eligible for any sales tax benefits beginning with goods
or services purchased or first put to a taxable use on the day that the business becomes
subject to repayment under this section.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 16. Minnesota Statutes 2012, section 469.340, subdivision 4, is amended to read:
    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
file an amended return with the commissioner of revenue and pay any taxes required to be
repaid within 30 days after ceasing to do business in the zone. The amount required to be
repaid is determined by calculating the tax for the period or periods for which repayment
is required without regard to the exemptions and credits allowed under section 469.336.
(b) For the repayment of property taxes, the county auditor shall prepare a tax
statement for the business, applying the applicable tax extension rates for each payable
year and provide a copy to the business. The business must pay the taxes to the county
treasurer within 30 days after receipt of the tax statement. The taxpayer may appeal the
valuation and determination of the property tax to the Tax Court within 30 days after
receipt of the tax statement.
(c) The provisions of chapters 270C and 289A relating to the commissioner's
authority to audit, assess, and collect the tax and to hear appeals are applicable to the
repayment required under paragraph (a). The commissioner may impose civil penalties as
provided in chapter 289A, and the additional tax and penalties are subject to interest at the
rate provided in section 270C.40,. The additional tax shall bear interest from 30 days after
ceasing to do business in the biotechnology and health sciences industry zone until the
date the tax is paid. Any penalty imposed pursuant to this section shall bear interest from
the date provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
(d) If a property tax is not repaid under paragraph (b), the county treasurer shall add
the amount required to be repaid to the property taxes assessed against the property for
payment in the year following the year in which the treasurer discovers that the business
ceased to operate in the biotechnology and health sciences industry zone.
(e) For determining the tax required to be repaid, a tax reduction is deemed to have
been received on the date that the tax would have been due if the taxpayer had not been
entitled to the exemption, or on the date a refund was issued for a refundable credit.
(f) The commissioner may assess the repayment of taxes under paragraph (c) any
time within two years after the business ceases to operate in the biotechnology and health
sciences industry zone, or within any period of limitations for the assessment of tax under
section 289A.38, whichever period is later.
EFFECTIVE DATE.This section is effective the day following final enactment.