Bill Text: MN SF780 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Contractor two percent withholding tax requirement repeal
Sponsorship: Partisan Bill (Republican 3)
Status: (Introduced - Dead) 2011-03-14 - Referred to Taxes [SF780 Detail]
Download: Minnesota-2011-SF780-Introduced.html
1.2relating to taxation; repealing two percent contractor withholding;amending
1.3Minnesota Statutes 2010, section 289A.31, subdivision 5; repealing Minnesota
1.4Statutes 2010, section 290.92, subdivision 31.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 289A.31, subdivision 5, is amended to
1.7read:
1.8 Subd. 5. Withholding tax, withholding from payments to out-of-state
1.9contractors, and withholding by partnerships and small business corporations. (a)
1.10Except as provided in paragraph (b), an employer or person withholding tax under section
1.11290.92
or
290.923, subdivision 2 , who fails to pay to or deposit with the commissioner a
1.12sum or sums required by those sections to be deducted, withheld, and paid, is personally
1.13and individually liable to the state for the sum or sums, and added penalties and interest,
1.14and is not liable to another person for that payment or payments. The sum or sums
1.15deducted and withheld under section290.92, subdivision 2a or 3, or
290.923, subdivision
1.162 , must be held as a special fund in trust for the state of Minnesota.
1.17(b) If the employer or person withholding tax under section290.92 or
290.923,
1.18subdivision 2 , fails to deduct and withhold the tax in violation of those sections, and later
1.19the taxes against which the tax may be credited are paid, the tax required to be deducted
1.20and withheld will not be collected from the employer. This does not, however, relieve the
1.21employer from liability for any penalties and interest otherwise applicable for failure to
1.22deduct and withhold. This paragraph does not apply to an employer subject to paragraph
1.23(g), or to a contractor required to withhold under section
290.92, subdivision 31
2.1(c) Liability for payment of withholding taxes includes a responsible person or entity
2.2described in the personal liability provisions of section270C.56 .
2.3(d) Liability for payment of withholding taxes includes a third-party lender or surety
2.4described in section270C.59 .
2.5(e) A partnership or S corporation required to withhold and remit tax under section
2.6290.92, subdivisions 4b and 4c
, is liable for payment of the tax to the commissioner, and a
2.7person having control of or responsibility for the withholding of the tax or the filing of
2.8returns due in connection with the tax is personally liable for the tax due.
2.9(f) A payor of sums required to be withheld under section290.9705, subdivision
2.101 , is liable to the state for the amount required to be deducted, and is not liable to an
2.11out-of-state contractor for the amount of the payment.
2.12(g) If an employer fails to withhold tax from the wages of an employee when
2.13required to do so under section290.92, subdivision 2a , by reason of treating such
2.14employee as not being an employee, then the liability for tax is equal to three percent of
2.15the wages paid to the employee. The liability for tax of an employee is not affected by
2.16the assessment or collection of tax under this paragraph. The employer is not entitled to
2.17recover from the employee any tax determined under this paragraph.
2.18EFFECTIVE DATE.This section is effective for payments made after June 30,
2.192011.
2.20 Sec. 2. REPEALER.
2.21Minnesota Statutes 2010, section 290.92, subdivision 31, is repealed.
2.22EFFECTIVE DATE.This section is effective for payments made after June 30,
2.232011.
1.3Minnesota Statutes 2010, section 289A.31, subdivision 5; repealing Minnesota
1.4Statutes 2010, section 290.92, subdivision 31.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 289A.31, subdivision 5, is amended to
1.7read:
1.8 Subd. 5. Withholding tax, withholding from payments to out-of-state
1.9contractors, and withholding by partnerships and small business corporations. (a)
1.10Except as provided in paragraph (b), an employer or person withholding tax under section
1.12sum or sums required by those sections to be deducted, withheld, and paid, is personally
1.13and individually liable to the state for the sum or sums, and added penalties and interest,
1.14and is not liable to another person for that payment or payments. The sum or sums
1.15deducted and withheld under section
1.162
1.17(b) If the employer or person withholding tax under section
1.18subdivision 2
1.19the taxes against which the tax may be credited are paid, the tax required to be deducted
1.20and withheld will not be collected from the employer. This does not, however, relieve the
1.21employer from liability for any penalties and interest otherwise applicable for failure to
1.22deduct and withhold. This paragraph does not apply to an employer subject to paragraph
1.23(g)
2.1(c) Liability for payment of withholding taxes includes a responsible person or entity
2.2described in the personal liability provisions of section
2.3(d) Liability for payment of withholding taxes includes a third-party lender or surety
2.4described in section
2.5(e) A partnership or S corporation required to withhold and remit tax under section
2.7person having control of or responsibility for the withholding of the tax or the filing of
2.8returns due in connection with the tax is personally liable for the tax due.
2.9(f) A payor of sums required to be withheld under section
2.101
2.11out-of-state contractor for the amount of the payment.
2.12(g) If an employer fails to withhold tax from the wages of an employee when
2.13required to do so under section
2.14employee as not being an employee, then the liability for tax is equal to three percent of
2.15the wages paid to the employee. The liability for tax of an employee is not affected by
2.16the assessment or collection of tax under this paragraph. The employer is not entitled to
2.17recover from the employee any tax determined under this paragraph.
2.18EFFECTIVE DATE.This section is effective for payments made after June 30,
2.192011.
2.20 Sec. 2. REPEALER.
2.21Minnesota Statutes 2010, section 290.92, subdivision 31, is repealed.
2.22EFFECTIVE DATE.This section is effective for payments made after June 30,
2.232011.
