Procedures for the commissioner of revenue to issue revenue rulings provision modification

A bill for an act

relating to taxation; modifying and providing procedures for the commissioner of

revenue to issue revenue rulings; providing for requests for revenue rulings and

required fees charged to requesters; requiring reports; appropriating money;

amending Minnesota Statutes 2024, sections 14.03, subdivision 3, as amended;

270C.07; 270C.08; 270C.085; 270C.15.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 14.03, subdivision 3, as amended by Laws

2025, chapter 21, section 8, is amended to read:

Subd. 3.

Rulemaking procedures.

(a) The definition of a rule in section
14.02,

subdivision 4
, does not include:

(1) rules concerning only the internal management of the agency or other agencies that

do not directly affect the rights of or procedures available to the public;

(2) an application deadline on a form; and the remainder of a form and instructions for

use of the form to the extent that they do not impose substantive requirements other than

requirements contained in statute or rule;

(3) the curriculum adopted by an agency to implement a statute or rule permitting or

mandating minimum educational requirements for persons regulated by an agency, provided

the topic areas to be covered by the minimum educational requirements are specified in

statute or rule;

(4) procedures for sharing data among government agencies, provided these procedures

are consistent with chapter 13 and other law governing data practices.

(b) The definition of a rule in section
14.02, subdivision 4
, does not include:

(1) rules of the commissioner of corrections relating to the release, placement, term, and

supervision of inmates serving a supervised release or conditional release term, the internal

management of institutions under the commissioner's control, and rules adopted under

section
609.105
governing the inmates of those institutions;

(2) rules relating to weight limitations on the use of highways when the substance of the

rules is indicated to the public by means of signs;

(3) opinions of the attorney general;

(4) the data element dictionary and the annual data acquisition calendar of the Department

of Education to the extent provided by section
125B.07
;

(5) the occupational safety and health standards provided in section
182.655
;

(6) revenue
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notices
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rulings
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and tax information bulletins of the commissioner of revenue;

(7) uniform conveyancing forms adopted by the commissioner of commerce under

section
507.09
;

(8) standards adopted by the Electronic Real Estate Recording Commission established

under section
507.0945
;

(9) the interpretive guidelines developed by the commissioner of human services to the

extent provided in chapter 245A; or

(10) the interpretive guidelines developed by the commissioner of children, youth, and

families to the extent provided in chapter 142B.

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EFFECTIVE DATE.

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This section is effective July 1, 2025.

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Sec. 2.

Minnesota Statutes 2024, section 270C.07, is amended to read:

270C.07 REVENUE
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NOTICES
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RULINGS
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.

Subdivision 1.

Authority.

The commissioner may make, adopt, and publish interpretive

revenue
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notices
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rulings
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. A "revenue
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notice
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ruling
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" is a policy statement that has been

published pursuant to subdivision 5 and that provides interpretation, details, or supplementary

information concerning the application of state revenue laws or rules promulgated by the

commissioner. Revenue
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notices
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rulings
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are published for the information and guidance of

taxpayers, local government officials, the department, and others concerned.

Subd. 2.

Effect.

Revenue
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notices
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rulings
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do not have the force and effect of law and

have no precedential effect, but may be relied on by taxpayers
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unless and
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until revoked or

modified.
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A notice may be expressly revoked or modified by the commissioner, by the

issuance of a revenue notice, but may not be revoked or modified retroactively to the

detriment of the taxpayers. A change in the law or an interpretation of the law occurring

after the revenue notice is issued, whether in the form of a statute, court decision,

administrative rule, or revenue notice, results in revocation or modification of the notice to

the extent that the change affects the notice.
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Subd. 2a.

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Revocation or modification.

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The commissioner may expressly revoke or

modify a revenue ruling by issuing a subsequent revenue ruling. The commissioner must

not revoke or modify a revenue ruling retroactively to the detriment of a taxpayer. Revenue

rulings are revoked or modified to the extent they conflict with the law or an interpretation

of the law occurring after the revenue ruling is issued, whether in the form of a statute, court

decision, administrative rule, or revenue ruling.

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Subd. 3.

Retroactivity.

Revenue
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notices
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rulings
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are generally interpretive of existing

law and therefore are retroactive to the effective date of the applicable law provision unless

otherwise stated in the
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notice
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ruling
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.

Subd. 4.

Issuance.

The issuance of revenue
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notices
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rulings
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is at the discretion of the

commissioner. The commissioner shall establish procedures governing the issuance of

revenue
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notices
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rulings
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and tax information bulletins.
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At least one week before publication

of a revenue notice in the State Register, the commissioner shall provide a copy of the notice

to the chairs of the Taxes Committee of the house of representatives and the Taxes and Tax

Laws Committee of the senate.
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Subd. 4a.

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Request.

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(a) Any person may submit a revenue ruling request to the

commissioner. The request must contain the following:

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(1) the tax type;

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(2) the name and characteristics of the taxpayer submitting the request;

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(3) a description of the issue to be addressed;

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(4) information demonstrating the frequency of the issue;

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(5) any supporting materials and documents that provide background information on

the issue;

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(6) any other relevant information and documents identified by the commissioner; and

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(7) a nonrefundable submission fee of $1,000.

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(b) The commissioner must acknowledge all submitted requests within 21 days of receipt.

The person making the request must provide additional information and documents as

requested by the commissioner within 60 days of the request. Failure to timely provide the

requested information and documents may result in the request being denied. Upon the

commissioner's receipt of all requested additional information and documents, the person's

request is considered complete.

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(c) The commissioner must respond to all requests for revenue rulings either by issuance

of a ruling or by a letter explaining why the commissioner declined to issue a ruling. If the

commissioner declines the request, the commissioner must provide the person making the

request with a letter explaining the reasons for declining to do so within 45 days of receipt

of the completed request. If the commissioner does not decline the completed request, the

commissioner shall complete the revenue ruling and submit it for feedback under subdivision

5 within 210 days of the commissioner's receipt of the completed request.

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(d) The commissioner's revenue rulings, decisions to decline to issue revenue rulings,

and other determinations made under this section may not be appealed.

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Subd. 4b.

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Fees.

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(a) The commissioner must charge fees to the person submitting a

revenue ruling request under subdivision 4a to offset the direct and indirect costs of

responding to the request.

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(b) For purposes of this section, "hourly rate" means $140 in calendar year 2025, and

as adjusted each year thereafter. The commissioner must adjust the hourly rate for inflation

as provided in section 270C.22. The statutory year is calendar year 2025.

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(c) The following hours tiers are established for revenue rulings:

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(1) first tier - 0 to 20 hours;

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(2) second tier - 21 to 40 hours;

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(3) third tier - 41 to 80 hours;

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(4) fourth tier - 81 to 120 hours; and

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(5) fifth tier - over 120 hours.

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(d) The commissioner must evaluate all requests and determine which tier applies. The

commissioner must make the determination based on the number of hours the commissioner

estimates it will take to respond to the request.

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(e) The revenue ruling fee charged for each request placed in the first four tiers must

equal the maximum number of hours in the applicable tier multiplied by the hourly rate.

The revenue ruling fee charged for each request placed in the fifth tier equals the hourly

rate multiplied by the commissioner's estimate of the likely time required to respond to the

request. This revenue ruling fee is nonrefundable.

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(f) For all revenue ruling requests, the commissioner must notify the person requesting

the ruling of the estimated revenue ruling fee within 21 days after the request is considered

complete under subdivision 4a, paragraph (b). The person shall pay the estimated revenue

ruling fee to the commissioner within ten days after notification. Failure to timely pay the

fee will result in the request being denied.

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(g) Upon completion of the revenue ruling in response to a request placed in the fifth

tier, if the actual amount of the fee to complete the ruling is greater than the estimated fee,

the commissioner must notify the person of the remaining fee due. The person must pay

the remaining fee due within ten days of notification. Failure to timely pay the remaining

fee due may result in the denial of the request.

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(h) Before a revenue ruling in the first tier is issued, if the person withdraws the request

and so notifies the commissioner, the commissioner may stop work on the request and must

determine the number of hours spent on the request. If those hours, when multiplied by the

hourly rate, exceeds the estimated fee paid, the commissioner must refund the difference

to the person.

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Subd. 5.

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Review and
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publication.

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The commissioner shall seek feedback from the tax

section of the Minnesota State Bar Association and the Minnesota Society of Certified

Public Accountants prior to publication of a revenue ruling.
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The commissioner shall publish

the revenue
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notices
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rulings
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in the State Register and in any other manner that makes them

accessible to the general public.
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The commissioner may charge a reasonable fee for

publications.
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At least two weeks before publication of a revenue ruling in the State Register,

the commissioner shall provide a copy of the ruling to the chairs and ranking minority

members of the legislative committees with jurisdiction over taxes.
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Subd. 6.

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Confidentiality.

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Prior to publication or other public dissemination, the

commissioner shall redact certain information from a revenue ruling or proposed ruling,

including the name and address of the taxpayer and taxpayer's representative.

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Subd. 7.

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Effect of determination.

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A determination of any kind made by the commissioner

pursuant to this section is not a rule and is not subject to the Administrative Procedure Act

under chapter 14, including section 14.386.

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Subd. 8.

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Legislative report.

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(a) On or before January 31, 2027, and on or before January

31 each year thereafter, the commissioner must report in writing to the legislature the

following information for the immediately preceding calendar year:

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(1) the number of revenue ruling requests submitted and the number of those rulings

subsequently issued;

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(2) the tax types for which rulings were requested;

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(3) the types and characteristics of taxpayers requesting rulings;

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(4) the fees recovered under subdivision 4b and the extent to which those fees offset the

direct and indirect cost of responding to requests for revenue rulings from persons under

subdivision 4a; and

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(5) any other information that the commissioner considers relevant to legislative oversight

of revenue rulings.

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(b) The report must be filed as provided in section 3.195, and copies must be provided

to the chairs and ranking minority members of the legislative committees with jurisdiction

over taxes and appropriations to the Department of Revenue.

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EFFECTIVE DATE.

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This section is effective July 1, 2025.

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Sec. 3.

Minnesota Statutes 2024, section 270C.08, is amended to read:

270C.08 TAX INFORMATION BULLETINS.

The commissioner may issue tax information bulletins. "Tax information bulletins" are

informational guides to enable taxpayers and local governmental officials to become more

familiar with state revenue laws and their rights and responsibilities under these laws.

Nothing contained in the tax information bulletins supersedes, alters, or otherwise changes

any provisions of the state revenue laws, administrative rules, court decisions, or revenue
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notices
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rulings
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.

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EFFECTIVE DATE.

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This section is effective July 1, 2025.

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Sec. 4.

Minnesota Statutes 2024, section 270C.085, is amended to read:

270C.085 NOTIFICATION REQUIREMENTS; SALES AND USE TAXES.

The commissioner of revenue shall establish a means of electronically notifying persons

holding a sales tax permit under section
297A.84
of any statutory change in chapter 297A

and any issuance or change in any administrative rule, revenue
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notice
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ruling
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, or sales tax

fact sheet or other written information provided by the department explaining the

interpretation or administration of the tax imposed under that chapter. The notification must

indicate the basic subject of the statute, rule, fact sheet, or other material and provide an

electronic link to the material. Any person holding a sales tax permit that provides an

electronic address to the department must receive these notifications unless they specifically

request electronically, or in writing, to be removed from the notification list. This requirement

does not replace traditional means of notifying the general public or persons without access

to electronic communications of changes in the sales tax law.

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EFFECTIVE DATE.

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This section is effective July 1, 2025.

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Sec. 5.

Minnesota Statutes 2024, section 270C.15, is amended to read:

270C.15 REVENUE DEPARTMENT SERVICE AND RECOVERY SPECIAL

REVENUE FUND.

A Revenue Department service and recovery special revenue fund is created for the

purpose of recovering the costs of furnishing government data and related services or

products, as well as recovering costs associated with collecting local taxes on sales
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and
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,
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the

retail delivery fee established under chapter 168E
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, and the revenue ruling fees established

under this chapter
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. All money collected under this section is deposited in the Revenue

Department service and recovery special revenue fund. Money in the fund is appropriated

to the commissioner to reimburse the department for the costs incurred in administering the

tax law or providing the data, service, or product. Any money paid to the department as a

criminal fine for a violation of state revenue law that is designated by the court to fund

enforcement of state revenue law is appropriated to this fund.

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EFFECTIVE DATE.

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This section is effective July 1, 2025.

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Sec. 6.
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EFFECT OF REVENUE NOTICES.
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A revenue notice published by the commissioner of revenue on or before July 1, 2025,

has the full force and effect of revenue rulings under Minnesota Statutes, section 270C.07.

If the commissioner of revenue modifies a revenue notice after June 30, 2025, the

commissioner of revenue must publish the modification as a revenue ruling pursuant to

Minnesota Statutes, section 270C.07.

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EFFECTIVE DATE.

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This section is effective the day following final enactment.

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Sec. 7.
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APPROPRIATION; REVENUE RULINGS.
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$530,000 in fiscal year 2026 and $530,000 in fiscal year 2027 are appropriated from the

general fund to the commissioner of revenue to administer this act.

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