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A bill for an act
relating to taxation; corporations; imposing a tax on certain credit card interest
income; proposing coding for new law in Minnesota Statutes, chapter 290.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[290.034] EXCESS CREDIT CARD INTEREST INCOME TAX.
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Subdivision 1.
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Definitions.
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(a) For purposes of this section, the following terms have
the meanings given.
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(b) "Annual percentage rate" has the meaning given in Code of Federal Regulations,
title 12, part 226.
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(c) "Credit card" means a card or device issued under an arrangement pursuant to which
a financial institution gives to a cardholder the privilege of obtaining credit from the financial
institution or other person in purchasing or leasing property or services, obtaining loans, or
otherwise. A transaction is "pursuant to a credit card" only if credit is obtained according
to the terms of the arrangement by transmitting information contained on the card or device
orally, in writing, by mechanical or electronic methods, or in any other manner.
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(d) "Finance charge" has the meaning given in Code of Federal Regulations, title 12,
part 226.
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(e) "Financial institution" means a state or federally chartered bank, a state or federally
chartered bank and trust, a trust company with banking powers, a state or federally chartered
savings bank, a state or federally chartered savings association, an industrial loan and thrift
company organized under chapter 53, a regulated lender organized under chapter 56, or an
operating subsidiary of any such institution.
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(f) "Excess credit card interest income" means the aggregate amount of a financial
institution's interest income included in gross income from credit card finance charges in
excess of a ten percent annual percentage rate. For financial institutions subject to
apportionment under section 290.17, subdivision 3, the aggregate amount must be multiplied
by the financial institution's Minnesota apportionment percentage as determined under
section 290.191 or 290.20.
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Subd. 2.
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Tax imposed.
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In addition to the tax imposed under section 290.06, subdivision
1, a tax is imposed on a financial institution's excess credit card interest income at the rate
of 100 percent.
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EFFECTIVE DATE.
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This section is effective for taxable years beginning after December
31, 2026.
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