Various taxation policy provisions modifications

A bill for an act

relating to taxation; modifying individual income, corporate franchise, sales and

use, and gross receipts taxes and other various taxes and tax-related provisions;

providing appointments; providing for certain federal conformity; modifying

pass-through entity tax provisions; modifying the sustainable aviation fuel credit;

modifying the dependent care credit; modifying the historic structure rehabilitation

credit; imposing a gross receipts tax on firearms; lowering the statewide sales and

use tax rate and expanding the base; imposing a social media tax and dedicating

receipts; making changes to the cannabis gross receipts tax; creating a commission

on artificial intelligence; providing for appointments; requiring reports;

appropriating money; amending Minnesota Statutes 2024, sections 41A.30,

subdivisions 1, 2, 7; 270C.726, subdivisions 2, 3; 289A.02, subdivision 7; 289A.08,

subdivision 7a; 289A.12, subdivisions 4, 12, by adding a subdivision; 289A.60,

subdivision 8; 290.01, subdivisions 19, 31; 290.0122, subdivision 4; 290.0131,

subdivision 9, by adding subdivisions; 290.0132, by adding subdivisions; 290.0133,

subdivision 11, by adding subdivisions; 290.0134, by adding subdivisions; 290.033;

290.06, subdivision 40; 290.067; 290.0921, subdivision 3; 290.21, subdivision 10;

290.92, subdivision 26; 290A.03, subdivision 15; 291.005, subdivision 1; 295.81,

subdivisions 1, 3, 4, 6, 9; 297A.61, subdivision 3; 297A.62, subdivision 1; 297F.25,

subdivision 1; Minnesota Statutes 2025 Supplement, sections 41A.30, subdivision

5; 290.06, subdivisions 2c, 23a; 290.091, subdivision 2; proposing coding for new

law in Minnesota Statutes, chapters 116J; 290; 295.

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

ARTICLE 1

FEDERAL UPDATE

Section 1.

Minnesota Statutes 2024, section 289A.02, subdivision 7, is amended to read:

Subd. 7.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal

Revenue Code" means the Internal Revenue Code of 1986, as amended through
deleted text begin
May 1,

2023
deleted text end
new text begin
March 1, 2026
new text end
.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment, except

the changes incorporated by federal changes are effective retroactively at the same time the

changes were effective for federal purposes.

new text end

Sec. 2.

Minnesota Statutes 2024, section 289A.12, subdivision 4, is amended to read:

Subd. 4.

Returns by persons, corporations, cooperatives, governmental entities, or

school districts.

(a) The commissioner may by notice and demand require to the extent

required by section 6041 of the Internal Revenue Code, a person, corporation, or cooperative,

the state of Minnesota and its political subdivisions, and a city, county, and school district

in Minnesota, making payments in the regular course of a trade or business during the

taxable year to any person or corporation of $600 or more on account of rents or royalties,

or of $10 or more on account of interest, or $10 or more on account of dividends or patronage

dividends, or $600 or more on account of either wages, salaries, commissions, fees, prizes,

awards, pensions, annuities, or any other fixed or determinable gains, profits or income, not

otherwise reportable under section
289A.09, subdivision 2
, or on account of earnings of

$10 or more distributed to its members by savings associations or credit unions chartered

under the laws of this state or the United States, (1) to file with the commissioner a return
deleted text begin

(except in cases where a valid agreement to participate in the combined federal and state

information reporting system has been entered into, and the return is filed only with the

commissioner of internal revenue under the applicable filing and informational reporting

requirements of the Internal Revenue Code)
deleted text end
with respect to the payments in excess of the

amounts named, giving the names and addresses of the persons to whom the payments were

made, the amounts paid to each, and (2) to make a return with respect to the total number

of payments and total amount of payments, for each category of income named, which were

in excess of the amounts named. This subdivision does not apply to the payment of interest

or dividends to a person who was a nonresident of Minnesota for the entire year.

(b) For payments for which a return is covered by paragraph (a), regardless of whether

the commissioner has required filing under paragraph (a), the payor must file a copy of the

return with the commissioner if:

(1) the return is for a payment made to a Minnesota resident, to a recipient with a

Minnesota address, or for activity occurring in the state of Minnesota; and

(2) the payment is for wages, salaries, or other compensation for services provided. The

commissioner may require this information to be filed in electronic or another form that the

commissioner determines is appropriate
deleted text begin
, notwithstanding the provisions of paragraph (c)
deleted text end
.

deleted text begin

(c) A person, corporation, or cooperative required to file returns under this subdivision

must file the returns on magnetic media if magnetic media was used to satisfy the federal

reporting requirement under section 6011(e) of the Internal Revenue Code, unless the person

establishes to the satisfaction of the commissioner that compliance with this requirement

would be an undue hardship.

deleted text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for payments made after

December 31, 2025.

new text end

Sec. 3.

Minnesota Statutes 2024, section 289A.12, subdivision 12, is amended to read:

Subd. 12.

Statements to payees.

A person who can be required to file a return with the

commissioner under subdivisions 4 to 10
new text begin
and 19
new text end
must furnish to a person whose name is

set forth in the return a written statement showing the name and address of the person making

the return, and the aggregate amount of payments to the person shown on the return.

This written statement must be given to the person on or before January 31 of the year

following the calendar year for which the return was made.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for payments made after

December 31, 2025.

new text end

Sec. 4.

Minnesota Statutes 2024, section 289A.12, is amended by adding a subdivision to

read:

new text begin

Subd. 19.

new text end

new text begin

Returns relating to payments made in settlement of payment card and

third-party network transactions, nonemployee income, and miscellaneous income.

new text end

new text begin

(a)

A person that is required or would be required to file a return relating to payments made in

settlement of payment card and third-party network transactions, nonemployee income, or

miscellaneous income pursuant to section 6041(a) or 6050W of the Internal Revenue Code,

is required to file a return with the commissioner under subdivision 4, except:

new text end

new text begin

(1) the threshold must be $600 instead of $2,000 under section 6041(a) of the Internal

Revenue Code; and

new text end

new text begin

(2) section 6050W(e)(2) of the Internal Revenue Code does not apply.

new text end

new text begin

(b) The return must be filed with the commissioner on or before January 31 of the year

following the calendar year for which the payments were made.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for payments made after

December 31, 2025.

new text end

Sec. 5.

Minnesota Statutes 2024, section 289A.60, subdivision 8, is amended to read:

Subd. 8.

Penalties; failure to file informational return; incorrect taxpayer

identification number.

(a) In the case of a failure to file an informational return required

by section
289A.12
with the commissioner on the date prescribed (determined with regard

to any extension of time for filing), the person failing to file the return shall pay a penalty

of $50 for each failure or in the case of a partnership, S corporation, or fiduciary return, $50

for each partner, shareholder, or beneficiary; but the total amount imposed on the delinquent

person for all failures during any calendar year must not exceed $25,000. If a failure to file

a return is due to intentional disregard of the filing requirement, then the penalty imposed

under the preceding sentence must not be less than an amount equal to:

(1) in the case of a return not described in clause (2) or (3), ten percent of the aggregate

amount of the items required to be reported;

(2) in the case of a return required to be filed under section
289A.12, subdivision 5
, five

percent of the gross proceeds required to be reported;
deleted text begin
and
deleted text end

(3) in the case of a return required to be filed under section
289A.12, subdivision 9
,

relating to direct sales, $100 for each failure; however, the total amount imposed on the

delinquent person for intentional failures during a calendar year must not exceed $50,000.

The penalty must be collected in the same manner as a delinquent income tax
deleted text begin
.
deleted text end
new text begin
;
new text end

new text begin

(4) in the case of a statement required to be provided to a payee under section 289A.12,

subdivision 12, $50 for each failure; however, the total amount imposed on the delinquent

person for failures during a calendar year must not exceed $50,000; and

new text end

new text begin

(5) in the case of a return required to be filed under section 289A.12, subdivision 19,

$50 for each failure; however, the total amount imposed on the delinquent person for failures

during a calendar year must not exceed $50,000.

new text end

(b) If a partnership or S corporation files a partnership or S corporation return with an

incorrect tax identification number used for a partner or shareholder after being notified by

the commissioner that the identification number is incorrect, the partnership or S corporation

must pay a penalty of $50 for each such incorrect number.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for payments made after

December 31, 2025.

new text end

Sec. 6.

Minnesota Statutes 2024, section 290.01, subdivision 19, is amended to read:

Subd. 19.

Net income.

(a) For a trust or estate taxable under section
290.03
, and a

corporation taxable under section
290.02
, the term "net income" means the federal taxable

income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through

the date named in this subdivision, incorporating the federal effective dates of changes to

the Internal Revenue Code and any elections made by the taxpayer in accordance with the

Internal Revenue Code in determining federal taxable income for federal income tax

purposes, and with the modifications provided in sections
290.0131
to
290.0136
.

(b) For an individual, the term "net income" means federal adjusted gross income with

the modifications provided in sections
290.0131
,
290.0132
, and
290.0135
to
290.0137
.

(c) In the case of a regulated investment company or a fund thereof, as defined in section

851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment

company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,

except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal

Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue

Code must be applied by allowing a deduction for capital gain dividends and exempt-interest

dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;

and

(3) the deduction for dividends paid must also be applied in the amount of any

undistributed capital gains which the regulated investment company elects to have treated

as provided in section 852(b)(3)(D) of the Internal Revenue Code.

(d) The net income of a real estate investment trust as defined and limited by section

856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust

taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

(e) The net income of a designated settlement fund as defined in section 468B(d) of the

Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal

Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through
deleted text begin
May 1, 2023
deleted text end
new text begin
March 1,

2026
new text end
, applies for taxable years beginning after December 31, 1996.

(g) Except as otherwise provided, references to the Internal Revenue Code in this

subdivision and sections
290.0131
to
290.0136
mean the code in effect for purposes of

determining net income for the applicable year.

(h) In the case of a partnership electing to file a composite return under section
289A.08
,

subdivision 7, "net income" means the partner's share of federal adjusted gross income from

the partnership modified by the additions provided in section
290.0131, subdivisions 8
to

10, 16, and 17, and the subtractions provided in: (1) section
290.0132, subdivisions 9
, 27,

and 28, to the extent the amount is assignable or allocable to Minnesota under section
290.17
;

and (2) section
290.0132, subdivision 14
. The subtraction allowed under section
290.0132
,

subdivision 9, is only allowed on the composite tax computation to the extent the electing

partner would have been allowed the subtraction.

(i) In the case of a qualifying entity electing to pay the pass-through entity tax under

section
289A.08, subdivision 7a
, "net income" means the qualifying owner's share of federal

adjusted gross income from the qualifying entity modified by the additions provided in

section
290.0131, subdivisions 5
, 8 to 10, 16, and 17, and the subtractions provided in: (1)

section
290.0132, subdivisions 3
, 9, 27, and 28, to the extent the amount is assignable or

allocable to Minnesota under section
290.17
; and (2) section
290.0132, subdivision 14
. The

subtraction allowed under section
290.0132, subdivision 9
, is only allowed on the

pass-through entity tax computation to the extent the qualifying owners would have been

allowed the subtraction. The income of both a resident and nonresident qualifying owner

is allocated and assigned to this state as provided for nonresident partners and shareholders

under sections
290.17
,
290.191
, and
290.20
.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment, except

the changes incorporated by federal changes are effective retroactively at the same time the

changes were effective for federal purposes.

new text end

Sec. 7.

Minnesota Statutes 2024, section 290.01, subdivision 19, is amended to read:

Subd. 19.

Net income.

(a) For a trust or estate taxable under section
290.03
, and a

corporation taxable under section
290.02
, the term "net income" means the federal taxable

income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through

the date named in this subdivision, incorporating the federal effective dates of changes to

the Internal Revenue Code and any elections made by the taxpayer in accordance with the

Internal Revenue Code in determining federal taxable income for federal income tax

purposes, and with the modifications provided in sections
290.0131
to
290.0136
.

(b) For an individual, the term "net income" means federal adjusted gross income with

the modifications provided in sections
290.0131
,
290.0132
, and
290.0135
to
290.0137
.

(c) In the case of a regulated investment company or a fund thereof, as defined in section

851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment

company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,

except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal

Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue

Code must be applied by allowing a deduction for capital gain dividends and exempt-interest

dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;

and

(3) the deduction for dividends paid must also be applied in the amount of any

undistributed capital gains which the regulated investment company elects to have treated

as provided in section 852(b)(3)(D) of the Internal Revenue Code.

(d) The net income of a real estate investment trust as defined and limited by section

856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust

taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

(e) The net income of a designated settlement fund as defined in section 468B(d) of the

Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal

Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through May 1, 2023, applies for

taxable years beginning after December 31, 1996.

(g) Except as otherwise provided, references to the Internal Revenue Code in this

subdivision and sections
290.0131
to
290.0136
mean the code in effect for purposes of

determining net income for the applicable year.

(h) In the case of a partnership electing to file a composite return under section
289A.08
,

subdivision 7, "net income" means the partner's share of federal adjusted gross income from

the partnership modified by the additions provided in section
290.0131, subdivisions 8
to

10, 16,
deleted text begin
and
deleted text end
17,
new text begin
21, and 22,
new text end
and the subtractions provided in: (1) section
290.0132,

subdivisions 9
, 27,
deleted text begin
and
deleted text end
28,
new text begin
40, 41, and 42,
new text end
to the extent the amount is assignable or allocable

to Minnesota under section
290.17
; and (2) section
290.0132, subdivision 14
. The subtraction

allowed under section
290.0132
, subdivision 9, is only allowed on the composite tax

computation to the extent the electing partner would have been allowed the subtraction.

(i) In the case of a qualifying entity electing to pay the pass-through entity tax under

section
289A.08, subdivision 7a
, "net income" means the qualifying owner's share of federal

adjusted gross income from the qualifying entity modified by the additions provided in

section
290.0131, subdivisions 5
, 8 to 10, 16,
deleted text begin
and
deleted text end
17,
new text begin
21, and 22,
new text end
and the subtractions

provided in: (1) section
290.0132, subdivisions 3
, 9, 27,
deleted text begin
and
deleted text end
28,
new text begin
40, 41, and 42,
new text end
to the extent

the amount is assignable or allocable to Minnesota under section
290.17
; and (2) section

290.0132, subdivision 14
. The subtraction allowed under section
290.0132, subdivision 9
,

is only allowed on the pass-through entity tax computation to the extent the qualifying

owners would have been allowed the subtraction. The income of both a resident and

nonresident qualifying owner is allocated and assigned to this state as provided for

nonresident partners and shareholders under sections
290.17
,
290.191
, and
290.20
.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 8.

Minnesota Statutes 2024, section 290.01, subdivision 31, is amended to read:

Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal

Revenue Code" means the Internal Revenue Code of 1986, as amended through
deleted text begin
May 1,

2023
deleted text end
new text begin
March 1, 2026
new text end
. Internal Revenue Code also includes any uncodified provision in

federal law that relates to provisions of the Internal Revenue Code that are incorporated

into Minnesota law.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment, except

the changes incorporated by federal changes are effective retroactively at the same time the

changes were effective for federal purposes.

new text end

Sec. 9.

Minnesota Statutes 2024, section 290.0122, subdivision 4, is amended to read:

Subd. 4.

Charitable contributions.

(a) A taxpayer is allowed a deduction for charitable

contributions. The deduction equals the amount of the charitable contribution deduction

allowable to the taxpayer under section 170 of the Internal Revenue Code, including the

denial of the deduction under section 408(d)(8), except that the provisions of section

170(b)(1)(G) apply regardless of the taxable year.
new text begin
A charitable contribution under this

subdivision is allowed as a deduction to the extent that the aggregate of the contributions

exceeds 0.5 percent of the taxpayer's contribution base, as defined in section 170(b)(1)(H),

for the taxable year, and to the extent that the aggregate of cash contributions does not

exceed the excess of 60 percent of the taxpayer's contribution base for the taxable year over

the aggregate amount of contributions taken into account under section 170(b)(1)(A) for

such taxable year.
new text end

(b) For taxable years beginning after December 31, 2017, the determination of carryover

amounts must be made by applying the rules under section 170 of the Internal Revenue

Code based on the charitable contribution deductions claimed and allowable under this

section.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2025, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 10.

Minnesota Statutes 2024, section 290.0131, subdivision 9, is amended to read:

Subd. 9.

Bonus depreciation.

(a) 80 percent of the depreciation deduction allowed under

section 168(k)
new text begin
, (l), (m), and (n)
new text end
of the Internal Revenue Code is an addition.

(b) For the purposes of this subdivision, if the taxpayer has an activity that in the taxable

year generates a deduction for depreciation under section 168(k)
new text begin
, (l), (m), and (n)
new text end
of the

Internal Revenue Code and the activity generates a loss for the taxable year that the taxpayer

is not allowed to claim for the taxable year, "the depreciation deduction allowed under

section 168(k)
new text begin
, (l), (m), and (n)
new text end
" for the taxable year is limited to excess of the depreciation

claimed by the activity under section 168(k)
new text begin
, (l), (m), and (n)
new text end
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)
new text begin
,

(l), (m), and (n)
new text end
is allowed.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 11.

Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision

to read:

new text begin

Subd. 21.

new text end

new text begin

Domestic research and experimental expenditures.

new text end

new text begin

(a) 80 percent of the

amount immediately deducted and allowed under section 174A(a) of the Internal Revenue

Code is an addition.

new text end

new text begin

(b) Any amount deducted under the transitional rules in Public Law 119-21, section

70302(f) is an addition.

new text end

new text begin

(c) If a taxpayer generates a deduction under section 174A, but is not allowed to take

the deduction federally for that taxable year, then 80 percent of the amount in the taxable

year the deduction is allowed is an addition.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 12.

Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision

to read:

new text begin

Subd. 22.

new text end

new text begin

Opportunity zones.

new text end

new text begin

For amounts invested in or property acquired after

December 31, 2026, the amount deferred or excluded pursuant to an election under section

1400Z-2(a) of the Internal Revenue Code is an addition. The addition must be in the year

the gain would have been realized on the sale or exchange absent the treatment under section

1400Z-2(a) of the Internal Revenue Code.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2025, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 13.

Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision

to read:

new text begin

Subd. 40.

new text end

new text begin

Delayed domestic research and experimental expenditures.

new text end

new text begin

(a) In each of

the four taxable years immediately following the taxable year in which an addition is required

under section 290.0131, subdivision 21, paragraph (a) or (c), or 290.0133, subdivision 16,

paragraph (a) or (c), for a shareholder of a corporation that is an S corporation, an amount

equal to one-fourth of the addition is a subtraction.

new text end

new text begin

(b) For the amounts added under section 290.0131, subdivision 21, paragraph (b), an

amount equal to the amount that would have been deducted under section 174 of the Internal

Revenue Code, as amended through May 1, 2023, but for the election under Public Law

119-21, section 70302(f), is a subtraction.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 14.

Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision

to read:

new text begin

Subd. 41.

new text end

new text begin

Opportunity zones.

new text end

new text begin

(a) If a taxpayer has an addition for property under section

290.0131, subdivision 22, the gain realized under section 1400Z-2(b) of the Internal Revenue

Code for the same property is a subtraction. The subtraction must not exceed the amount

added back for such property.

new text end

new text begin

(b) If a taxpayer has a gain realized under section 1400Z-2(b) for property as to which

the gain was previously realized and then adjusted under section 290.993, then the gain

realized under section 1400Z-2(b) is a subtraction. The subtraction is limited to the amount

previously realized under Minnesota law. The subtraction must be made in the tax period

beginning after December 31, 2025, and before January 1, 2027.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2025, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 15.

Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision

to read:

new text begin

Subd. 42.

new text end

new text begin

Net CFC tested income.

new text end

new text begin

The amount calculated under section 290.034,

paragraph (a), is a subtraction. The subtraction must not exceed the amount of net CFC

tested income calculated under section 290.034 for the taxable year.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for taxable years beginning after December

31, 2025.

new text end

Sec. 16.

Minnesota Statutes 2024, section 290.0133, subdivision 11, is amended to read:

Subd. 11.

Bonus depreciation.

80 percent of the depreciation deduction allowed under

section
deleted text begin
168(k)(1)(A) and (k)(4)(A)
deleted text end
new text begin
168(k), (l), (m), and (n)
new text end
of the Internal Revenue Code

is an addition. For purposes of this subdivision, if the taxpayer has an activity that in the

taxable year generates a deduction for depreciation under section
deleted text begin
168(k)(1)(A) and (k)(4)(A)
deleted text end
new text begin

168(k), (l), (m), and (n)
new text end
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
deleted text begin

168(k)(1)(A) and (k)(4)(A)
deleted text end
new text begin
168(k), (l), (m), and (n)
new text end
" for the taxable year is limited to excess

of the depreciation claimed by the activity under section
deleted text begin
168(k)(1)(A) and (k)(4)(A)
deleted text end
new text begin
168(k),

(l), (m), and (n)
new text end
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
deleted text begin
168(k)(1)(A) and (k)(4)(A)
deleted text end
new text begin
168(k), (l), (m), and

(n)
new text end
is allowed.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 17.

Minnesota Statutes 2024, section 290.0133, is amended by adding a subdivision

to read:

new text begin

Subd. 16.

new text end

new text begin

Domestic research and experimental expenditures.

new text end

new text begin

(a) Eighty percent of

the amount immediately expensed, deducted, and allowed under section 174A(a) of the

Internal Revenue Code is an addition.

new text end

new text begin

(b) Any amount deducted under the transitional rules in Public Law 119-21, section

70302(f), is an addition.

new text end

new text begin

(c) If a taxpayer generates a deduction under section 174A, but is not allowed to take

the deduction federally for that taxable year, then 80 percent of the amount in the taxable

year the deduction is allowed is an addition.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 18.

Minnesota Statutes 2024, section 290.0133, is amended by adding a subdivision

to read:

new text begin

Subd. 17.

new text end

new text begin

Opportunity zones.

new text end

new text begin

For amounts invested in or property acquired after

December 31, 2026, the amount deferred or excluded pursuant to an election under section

1400Z-2(a) of the Internal Revenue Code is an addition. The addition must be in the year

the gain would have been realized on the sale or exchange absent the treatment under section

1400Z-2(a) of the Internal Revenue Code.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2025, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 19.

Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision

to read:

new text begin

Subd. 21.

new text end

new text begin

Delayed research and experimental expenditures.

new text end

new text begin

(a) In each of the four

taxable years immediately following the taxable year in which an addition is required under

section 290.0133, subdivision 16, paragraph (a) or (c), an amount equal to one-fourth of

the addition is a subtraction.

new text end

new text begin

(b) For the amounts added under section 290.0133, subdivision 16, paragraph (b), an

amount equal to the amount that would have been deducted under section 174 of the Internal

Revenue Code, as amended through May 1, 2023, but for the election under Public Law

119-21, section 70302(f), is a subtraction.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 20.

Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision

to read:

new text begin

Subd. 22.

new text end

new text begin

Opportunity zones.

new text end

new text begin

(a) If a taxpayer has an addition for property under section

290.0133, subdivision 17, the gain realized under section 1400Z-2(b) for the same property

is a subtraction. The subtraction must not exceed the amount added back for such property.

new text end

new text begin

(b) If a taxpayer has a gain realized under section 1400Z-2(b) for property as to which

the gain was previously realized and then adjusted under section 290.993, then the gain

realized under section 1400Z-2(b) is a subtraction. The subtraction is limited to the amount

previously realized under Minnesota law. The subtraction must be made in the tax period

beginning after December 31, 2025, and before January 1, 2027.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2025, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 21.

Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision

to read:

new text begin

Subd. 23.

new text end

new text begin

Net CFC tested income.

new text end

new text begin

The amount calculated under section 290.034,

paragraph (a), is a subtraction. The subtraction must not exceed the amount of net CFC

tested income calculated under section 290.034 for the taxable year.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for taxable years beginning after December

31, 2025.

new text end

Sec. 22.

Minnesota Statutes 2024, section 290.033, is amended to read:

290.033 NET INVESTMENT INCOME TAX.

(a) For purposes of this section, "net investment income" has the meaning given in

section 1411(c) of the Internal Revenue Code,
deleted text begin
excluding the net gain attributable to the

disposition of property classified as class 2a under section
273.13, subdivision 23
.
deleted text end
new text begin
except:
new text end

new text begin

(1) the net gain attributable to the disposition of property that is classified as class 2a

under section 273.13, subdivision 23, must be excluded;

new text end

new text begin

(2) for amounts invested in or property acquired after December 31, 2026, the amount

deferred or excluded pursuant to an election under section 1400Z-2(a) of the Internal Revenue

Code must be added to net investment income. The addition must be made in the year the

gain would have been realized on the sale or exchange absent the treatment under section

1400Z-2(a) of the Internal Revenue Code; and

new text end

new text begin

(3) if a taxpayer has an addition under clause (2) or a gain that was deferred under section

1400Z-2(a) of the Internal Revenue Code, and the amount was previously realized under

section 290.993, the gain realized under section 1400Z-2(b) is a subtraction. The subtraction

is limited to the amount previously realized under Minnesota law. The subtraction must be

made in the tax period beginning after December 31, 2025, and before January 1, 2027.

new text end

(b) In addition to the tax computed under section
290.06, subdivision 2c
, a tax is imposed

on the net investment income of individuals, estates, and trusts in excess of $1,000,000 at

a rate of one percent.

(c) For an individual who is not a Minnesota resident for the entire taxable year, the tax

under this subdivision must be calculated as if the individual is a Minnesota resident for the

entire year, and that amount must be multiplied by a fraction in which:

(1) the numerator is net investment income allocable under section
290.17
to Minnesota;

and

(2) the denominator is the total amount of net investment income for the taxable year.

(d) For an estate or trust, the tax on net investment income must be computed by

multiplying the net investment income tax liability by a fraction, the numerator of which is

the amount of the estate or trust's net investment income allocated to the state pursuant to

the provisions of sections
290.17
,
290.191
, and
290.20
, and the denominator of which is

the taxpayer's total net investment income.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2025, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 23.

new text begin

[290.034] NET CFC TESTED INCOME.

new text end

new text begin

(a) The amount of net CFC tested income for Minnesota purposes is calculated as follows:

new text end

new text begin

(1) any amounts included in federal taxable income pursuant to section 951A of the

Internal Revenue Code; minus

new text end

new text begin

(2) the amount calculated under section 951A(b)(2)(A) of the Internal Revenue Code,

as amended through May 1, 2023. The calculation excludes section 951A(b)(2)(B). Any

internal references to the calculation refer to the Internal Revenue Code as amended through

May 1, 2023.

new text end

new text begin

(b) The result of the calculation under paragraph (a) must not be less than zero.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for taxable years beginning after December

31, 2025.

new text end

Sec. 24.

Minnesota Statutes 2025 Supplement, section 290.06, subdivision 2c, is amended

to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income taxes

imposed by this chapter upon married individuals filing joint returns and surviving spouses

as defined in section 2(a) of the Internal Revenue Code must be computed by applying to

their taxable net income the following schedule of rates:

(1) On the first $38,770, 5.35 percent;

(2) On all over $38,770, but not over $154,020, 6.8 percent;

(3) On all over $154,020, but not over $269,010, 7.85 percent;

(4) On all over $269,010, 9.85 percent.

Married individuals filing separate returns, estates, and trusts must compute their income

tax by applying the above rates to their taxable income, except that the income brackets

will be one-half of the above amounts after the adjustment required in subdivision 2d.

(b) The income taxes imposed by this chapter upon unmarried individuals must be

computed by applying to taxable net income the following schedule of rates:

(1) On the first $26,520, 5.35 percent;

(2) On all over $26,520, but not over $87,110, 6.8 percent;

(3) On all over $87,110, but not over $161,720, 7.85 percent;

(4) On all over $161,720, 9.85 percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as

a head of household as defined in section 2(b) of the Internal Revenue Code must be

computed by applying to taxable net income the following schedule of rates:

(1) On the first $32,650, 5.35 percent;

(2) On all over $32,650, but not over $131,190, 6.8 percent;

(3) On all over $131,190, but not over $214,980, 7.85 percent;

(4) On all over $214,980, 9.85 percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax

of any individual taxpayer whose taxable net income for the taxable year is less than an

amount determined by the commissioner must be computed in accordance with tables

prepared and issued by the commissioner of revenue based on income brackets of not more

than $100. The amount of tax for each bracket shall be computed at the rates set forth in

this subdivision, provided that the commissioner may disregard a fractional part of a dollar

unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute the

individual's Minnesota income tax as provided in this subdivision. After the application of

the nonrefundable credits provided in this chapter, the tax liability must then be multiplied

by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income as

defined in section 62 of the Internal Revenue Code and increased by:

(i) the additions required under sections
290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19,
deleted text begin

and
deleted text end
20
,
new text begin
21, and 22,
new text end
and
290.0137
, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government

interest under section
290.0132, subdivision 2
, the subtractions under sections
290.0132,

subdivisions 9, 14, 15, 18, 27, 31,
deleted text begin
and
deleted text end
32
,
new text begin
40, 41, and 42,
new text end
and
290.0137
, paragraph (c), after

applying the allocation and assignability provisions of section
290.081
, clause (a), or
290.17
;

and

(2) the denominator is the individual's federal adjusted gross income as defined in section

62 of the Internal Revenue Code, increased by:

(i) the additions required under sections
290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19,
deleted text begin

and
deleted text end
20
,
new text begin
21, and 22,
new text end
and
290.0137
, paragraph (a); and reduced by

(ii) the subtractions under sections
290.0132, subdivisions 2, 9, 14, 15, 18, 27, 31,
deleted text begin
and
deleted text end

32
,
new text begin
40, 41, and 42,
new text end
and
290.0137
, paragraph (c).

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying

owner of a qualifying entity that elects to pay tax as provided in section
289A.08, subdivision

7a
, paragraph (b), the individual must compute the individual's Minnesota income tax as

provided in paragraph (e), and also must include, to the extent attributed to the electing

qualifying entity:

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the

addition under section
290.0131, subdivision 5
; and

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the

subtraction under section
290.0132, subdivision 3
.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 25.

Minnesota Statutes 2025 Supplement, section 290.091, subdivision 2, is amended

to read:

Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following

terms have the meanings given.

(a) "Alternative minimum taxable income" means the sum of the following for the taxable

year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section

55(b)(1)(D) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum

taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a person with a disability;

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue

Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),

to the extent not included in federal alternative minimum taxable income, the excess of the

deduction for depletion allowable under section 611 of the Internal Revenue Code for the

taxable year over the adjusted basis of the property at the end of the taxable year (determined

without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the amount

of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue

Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the amount

of interest income as provided by section
290.0131, subdivision 2
;

(6) the amount of addition required by section
290.0131, subdivisions 9
, 10,
deleted text begin
and
deleted text end
16
new text begin
, 21,

and 22
new text end
;

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent

not included in the addition required under clause (6); and

(8) to the extent not included in federal alternative minimum taxable income, the amount

of foreign-derived intangible income deducted under section 250 of the Internal Revenue

Code;

less the sum of the amounts determined under the following:

(i) interest income as defined in section
290.0132, subdivision 2
;

(ii) an overpayment of state income tax as provided by section
290.0132, subdivision

3
, to the extent included in federal alternative minimum taxable income;

(iii) the amount of investment interest paid or accrued within the taxable year on

indebtedness to the extent that the amount does not exceed net investment income, as defined

in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted

in computing federal adjusted gross income;

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by

section
290.0132, subdivisions 7
, 9 to 15, 17, 21, 24, 26 to 29, 31, and 34 to
deleted text begin
39
deleted text end
new text begin
42
new text end
;

(v) the amount of the net operating loss allowed under section
290.095, subdivision 11
,

paragraph (c); and

(vi) the amount allowable as a Minnesota itemized deduction under section
290.0122,

subdivision 7
.

In the case of an estate or trust, alternative minimum taxable income must be computed

as provided in section 59(c) of the Internal Revenue Code, except alternative minimum

taxable income must be increased by the addition in section
290.0131, subdivision 16
.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of

the Internal Revenue Code.

(c) "Net minimum tax" means the minimum tax imposed by this section.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard

to this section, section
290.033
, and section
290.032
), reduced by the sum of the

nonrefundable credits allowed under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income

after subtracting the exemption amount determined under subdivision 3.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 26.

Minnesota Statutes 2024, 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) 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
290.0133, subdivision 11
, is disallowed in determining alternative minimum taxable

income.

(2) The subtraction for depreciation allowed under section
290.0134, subdivision 13
, is

allowed as a depreciation deduction in determining alternative minimum taxable income.

(3) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)

of the Internal Revenue Code does not apply.

(4) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal

Revenue Code does not apply.

(5) The tax preference for depletion under section 57(a)(1) of the Internal Revenue Code

does not apply.

(6) The tax preference for tax exempt interest under section 57(a)(5) of the Internal

Revenue Code does not apply.

(7) The tax preference for charitable contributions of appreciated property under section

57(a)(6) of the Internal Revenue Code does not apply.

(8) 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.

(9) 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
290.0134
, subdivision 2, or (ii) the amount of refunds of

income, excise, or franchise taxes subtracted as provided in section
290.0134, subdivision

8
.

(10) Alternative minimum taxable income excludes the income from operating in a job

opportunity building zone as provided under section
469.317
.

Items of tax preference must not be reduced below zero as a result of the modifications

in this subdivision.

(11) The subtraction for disallowed section 280E expenses under section
290.0134
,

subdivision 19, is allowed as a deduction in determining alternative minimum taxable

income.

new text begin

(12) The subtraction for domestic research and experimental expenditures under section

290.0134, subdivision 21, is allowed as a deduction in determining alternative minimum

taxable income.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, except the changes incorporated by federal changes are effective

retroactively at the same time the changes were effective for federal purposes.

new text end

Sec. 27.

Minnesota Statutes 2024, section 290.21, subdivision 10, is amended to read:

Subd. 10.

deleted text begin
Global intangible low-taxed
deleted text end
new text begin
Net CFC tested
new text end
income.

deleted text begin
Any amounts
deleted text end
new text begin
The

amount
new text end
included in taxable income pursuant to section
deleted text begin
951A of the Internal Revenue Code,

are
deleted text end
new text begin
290.034 is
new text end
dividend income.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for taxable years beginning after December

31, 2025.

new text end

Sec. 28.

Minnesota Statutes 2024, section 290.92, subdivision 26, is amended to read:

Subd. 26.

Extension of withholding to certain payments where identifying number

not furnished or inaccurate.

(a) If, in the case of any reportable payment, (1) the payee

fails to furnish the payee's Social Security account number to the payor, (2) the payee is

subject to federal backup withholding on the reportable payment under section 3406 of the

Internal Revenue Code, or (3) the commissioner notifies the payor that the Social Security

account number furnished by the payee is incorrect, then the payor shall deduct and withhold

from the payment a tax equal to the amount of the payment multiplied by the highest rate

used in determining the income tax liability of an individual under section
290.06, subdivision

2c
.

(b)(1) In the case of any failure described in paragraph (a), clause (1), paragraph (a)

shall apply to any reportable payment made by the payor during the period during which

the Social Security account number has not been furnished.

(2) In any case where there is a notification described in paragraph (a), clause (3),

paragraph (a) shall apply to any reportable payment made by the payor (i) after the close

of the 30th day after the day on which the payor received the notification, and (ii) before

the payee furnishes another Social Security account number.

(3)(i) Unless the payor elects not to have this clause apply with respect to the payee,

paragraph (a), clause (1), shall also apply to any reportable payment made after the close

of the period described in clause (1) or (2), as the case may be, and before the 30th day after

the close of the period.

(ii) If the payor elects the application of this clause with respect to the payee, paragraph

(a) shall also apply to any reportable payment made during the 30-day period described in

clause (2).

(iii) The payor may elect a period shorter than the grace period set forth in item (i) or

(ii), as the case may be.

(c) The provisions of section 3406 of the Internal Revenue Code shall apply and shall

govern when withholding shall be required and the definition of terms
new text begin
, except the threshold

for reportable payments under sections 6041(a) and 6041A(a) of the Internal Revenue Code

must be $600 instead of $2,000
new text end
. The term "reportable payment" shall include only those

payments for personal services. No tax shall be deducted or withheld under this subdivision

with respect to any amount for which withholding is otherwise required under this section.

For purposes of this section, payments which are subject to withholding under this

subdivision shall be treated as if they were wages paid by an employer to an employee and

amounts deducted and withheld under this subdivision shall be treated as if deducted and

withheld under subdivision 2a.

(d) Whenever the commissioner notifies a payor under this subdivision that the Social

Security account number furnished by any payee is incorrect, the commissioner shall at the

same time furnish a copy of the notice to the payor, and the payor shall promptly furnish

the copy to the payee. If the commissioner notifies a payor under this subdivision that the

Social Security account number furnished by any payee is incorrect and the payee

subsequently furnishes another Social Security account number to the payor, the payor shall

promptly notify the commissioner of the other Social Security account number furnished.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for payments made after

December 31, 2025.

new text end

Sec. 29.

Minnesota Statutes 2024, section 290A.03, subdivision 15, is amended to read:

Subd. 15.

Internal Revenue Code.

"Internal Revenue Code" means the Internal Revenue

Code of 1986, as amended through
deleted text begin
May 1, 2023
deleted text end
new text begin
March 1, 2026
new text end
.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment, except

the changes incorporated by federal changes are effective retroactively at the same time the

changes were effective for federal purposes.

new text end

Sec. 30.

Minnesota Statutes 2024, section 291.005, subdivision 1, is amended to read:

Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following terms

used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the

commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued

and otherwise determined for federal estate tax purposes under the Internal Revenue Code,

increased by the value of any property in which the decedent had a qualifying income interest

for life and for which an election was made under section
291.03, subdivision 1d
, for

Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,

as amended through
deleted text begin
May 1, 2023
deleted text end
new text begin
March 1, 2026
new text end
.

(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a)

excluding therefrom any property included in the estate which has its situs outside Minnesota,

and (b) including any property omitted from the federal gross estate which is includable in

the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of death

was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person appointed

by the court to administer and dispose of the property of the decedent. If there is no executor,

administrator or other person appointed, qualified, and acting within this state, then any

person in actual or constructive possession of any property having a situs in this state which

is included in the federal gross estate of the decedent shall be deemed to be a personal

representative to the extent of the property and the Minnesota estate tax due with respect

to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death was

in Minnesota. The provisions of section
290.01, subdivision 7
, paragraphs (c) and (d), apply

to determinations of domicile under this chapter.

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept or

located at the time of the decedent's death or for a gift of tangible personal property within

three years of death, the state or country in which it was normally kept or located when the

gift was executed;

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue

Code, owned by a nonresident decedent and that is normally kept or located in this state

because it is on loan to an organization, qualifying as exempt from taxation under section

501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is

deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was domiciled

at death or for a gift of intangible personal property within three years of death, the state or

country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with

assets that include real or tangible personal property, situs of the real or tangible personal

property, including qualified works of art, is determined as if the pass-through entity does

not exist and the real or tangible personal property is personally owned by the decedent. If

the pass-through entity is owned by a person or persons in addition to the decedent, ownership

of the property is attributed to the decedent in proportion to the decedent's capital ownership

share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue

Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of whether

it is taxed as an association or is disregarded for federal income tax purposes under Code

of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includable in the decedent's federal gross estate;

but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated

by the Securities and Exchange Commission as a national securities exchange under section

6 of the Securities Exchange Act, United States Code, title 15, section 78f.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment, except

the changes incorporated by federal changes are effective retroactively at the same time the

changes were effective for federal purposes.

new text end

ARTICLE 2

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2024, section 41A.30, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have

the meanings given.

(b) "Aircraft" has the meaning given in section
296A.01, subdivision 3
.

(c) "Aviation gasoline" has the meaning given in section
296A.01, subdivision 7
.

(d) "Commissioner" means the commissioner of agriculture.

(e) "Jet fuel" has the meaning given in section
296A.01, subdivision 8
.

(f) "Qualifying taxpayer" means a taxpayer, as defined in section
290.01, subdivision

6, that is engaged in the business of:

(1) producing sustainable aviation fuel; or

(2) blending sustainable aviation fuel with aviation gasoline or jet fuel.

(g) "Sustainable aviation fuel" means liquid fuel that:

(1) is derived from
new text begin
: (i)
new text end
biomass, as defined in section
41A.15, subdivision 2e
new text begin
, that is

produced in the United States, provided that the agricultural feedstocks are from planted

crops and crop residue harvested from agricultural land cleared or cultivated any time prior

to December 19, 2007, that is either actively managed or fallow; (ii) gaseous carbon oxides;

or (iii) hydrogen that has a carbon intensity not greater than four kilograms of carbon dioxide

equivalent per kilogram of hydrogen produced
new text end
;

(2) is not derived from palm fatty acid distillates; and

(3) achieves at least a 50 percent life cycle greenhouse gas emissions reduction in

comparison with petroleum-based aviation gasoline, aviation turbine fuel, and jet fuel as

determined by a test that shows:

(i) that the fuel production pathway achieves at least a 50 percent life cycle greenhouse

gas emissions reduction in comparison with petroleum-based aviation gasoline, aviation

turbine fuel, and jet fuel utilizing the most recent version of Argonne National Laboratory's

Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model

that accounts for reduced emissions throughout the fuel production process; or

(ii) that the fuel production pathway achieves at least a 50 percent reduction of the

aggregate attributional core life cycle emissions and the positive induced land use change

values under the life cycle methodology for sustainable aviation fuels adopted by the

International Civil Aviation Organization with the agreement of the United States.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, for sustainable aviation fuel sold after June 30, 2025.

new text end

Sec. 2.

Minnesota Statutes 2024, section 41A.30, subdivision 2, is amended to read:

Subd. 2.

Tax credit establishment.

(a) A qualifying taxpayer may claim a tax credit

against the tax due under chapter 290 equal to $1.50 for each gallon of sustainable aviation

fuel that is:

(1) produced in Minnesota or blended with aviation or gasoline or jet fuel in Minnesota
new text begin
,

provided that carbon oxides sequestered as part of the production process are not used as a

tertiary injectant in the qualified enhanced oil recovery project
new text end
; and

(2) sold in Minnesota to a purchaser who certifies that the sustainable aviation fuel is

for use as fuel in an aircraft departing from an airport in Minnesota.

(b) The credit may be claimed only after approval and certification by the commissioner

and is limited to the amount stated on the credit certificate issued under subdivision 3. A

qualifying taxpayer must apply to the commissioner for certification and allocation of a

credit in a form and manner prescribed by the commissioner.

(c) A qualifying taxpayer may claim a credit for blending or producing sustainable

aviation fuel, but not both. If sustainable aviation fuel is blended with aviation gasoline or

jet fuel, the credit is allowed only for the portion of sustainable aviation fuel that is included

in the blended fuel.

(d) If the amount of credit that the taxpayer is eligible to receive under this section

exceeds the liability for tax under chapter 290, the commissioner of revenue must refund

the excess to the taxpayer.

new text begin

(e) Subject to the commissioner's certification, a qualifying taxpayer may claim a

supplemental tax credit against the tax due under chapter 290 equal to the rate of $0.02 per

gallon for each additional whole percentage carbon intensity reduction beyond 50 percent,

but capped at $2.00 per gallon.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2024, for sustainable aviation fuel sold after June 30, 2025.

new text end

Sec. 3.

Minnesota Statutes 2025 Supplement, section 41A.30, subdivision 5, is amended

to read:

Subd. 5.

Allocation limits.

(a) Subject to additional rollover allocation as provided in

paragraph (b), for tax credits allowed under subdivision 2, the commissioner must not issue

credit certificates for more than
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$11,600,000
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$24,300,000
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in total, allocated as follows:

(1) $7,400,000 for fiscal year 2025;
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and
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(2) $2,100,000 for
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each of
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fiscal
deleted text begin
years 2026 and 2027.
deleted text end
new text begin
year 2026;
new text end

new text begin

(3) $7,400,000 for fiscal year 2027;

new text end

new text begin

(4) $5,300,000 for fiscal year 2028; and

new text end

new text begin

(5) $2,100,000 for each fiscal year thereafter.

new text end

(b) Any portion of a fiscal year's credits that is not allocated by the commissioner does

not cancel and may be carried forward to subsequent fiscal years until all credits have been

allocated
new text begin
until the entire allocation has been made
new text end
, except that the commissioner must not

issue any credit certificates for fiscal years beginning after June 30,
deleted text begin
2030
deleted text end
new text begin
2035
new text end
, and any

unallocated amounts cancel on that date.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively for taxable years beginning

after December 31, 2025.

new text end

Sec. 4.

Minnesota Statutes 2024, section 41A.30, subdivision 7, is amended to read:

Subd. 7.

Expiration.

This section expires for taxable years beginning after December

31,
deleted text begin
2030
deleted text end
new text begin
2035
new text end
.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 5.

Minnesota Statutes 2024, section 289A.08, subdivision 7a, is amended to read:

Subd. 7a.

Pass-through entity tax.

(a) For the purposes of this subdivision, the following

terms have the meanings given:

(1) "income" has the meaning given in section
290.01, subdivision 19
, paragraph (i).

The income of a resident qualifying owner of a qualifying entity that is a partnership or

limited liability company taxed as a partnership under the Internal Revenue Code is not

subject to allocation outside this state as provided for resident individuals under section

290.17, subdivision 1
, paragraph (a). The income of a nonresident qualifying owner of a

qualifying entity and the income of a resident qualifying owner of a qualifying entity that

is an S corporation, including a qualified subchapter S subsidiary organized under section

1361(b)(3)(B) of the Internal Revenue Code, are allocated and assigned to this state as

provided for nonresident partners and shareholders under sections
290.17
,
290.191
, and

290.20
;

(2) "qualifying entity" means a partnership, limited liability company taxed as a

partnership or S corporation, or S corporation including a qualified subchapter S subsidiary

organized under section 1361(b)(3)(B) of the Internal Revenue Code that has at least one

qualifying owner. Qualifying entity does not include a publicly traded partnership, as defined

in section 7704 of the Internal Revenue Code; and

(3) "qualifying owner" means:

(i) a resident or nonresident individual or estate that is a partner, member, or shareholder

of a qualifying entity;

(ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an

S corporation; or

(iii) a disregarded entity that has a qualifying owner as its single owner.

(b) For taxable years beginning after December 31, 2020, a qualifying entity may elect

to file a return and pay the pass-through entity tax imposed under paragraph (c). The election:

(1) must be made on or before the due date or extended due date of the qualifying entity's

pass-through entity tax return;

(2) must exclude partners, members, shareholders, or owners who are not qualifying

owners;

(3) may only be made by qualifying owners who collectively hold more than 50 percent

of the ownership interests in the qualifying entity held by qualifying owners;

(4) is binding on all qualifying owners who have an ownership interest in the qualifying

entity; and

(5) once made is irrevocable for the taxable year.

(c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a

qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.

(d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount

of the qualifying owner's income multiplied by the highest tax rate for individuals under

section
290.06, subdivision 2c
. The computation of a qualifying owner's net investment

income tax liability must be computed under section
290.033
. When making this

determination:

(1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed;

and

(2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.

(e) The amount of each credit and deduction used to determine a qualifying owner's tax

liability under paragraph (d) must also be used to determine that qualifying owner's income

tax liability under chapter 290.

(f) This subdivision does not negate the requirement that a qualifying owner pay estimated

tax if the qualifying owner's tax liability would exceed the requirements set forth in section

289A.25
. The qualifying owner's liability to pay estimated tax on the qualifying owner's

tax liability as determined under paragraph (d) is, however, satisfied when the qualifying

entity pays estimated tax in the manner prescribed in section
289A.25
for composite estimated

tax.

(g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the

treatment of distributions, is determined as if the election to pay the pass-through entity tax

under paragraph (b) is not made.

(h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a

pass-through entity tax return must be treated as a composite return and a qualifying entity

filing a pass-through entity tax return must be treated as a partnership filing a composite

return.

(i) The provisions of subdivision 17 apply to the election to pay the pass-through entity

tax under this subdivision.

(j) If a nonresident qualifying owner of a qualifying entity making the election to file

and pay the tax under this subdivision has no other Minnesota source income, filing of the

pass-through entity tax return is a return for purposes of subdivision 1, provided that the

nonresident qualifying owner must not have any Minnesota source income other than the

income from the qualifying entity, other electing qualifying entities, and other partnerships

electing to file a composite return under subdivision 7. If it is determined that the nonresident

qualifying owner has other Minnesota source income, the inclusion of the income and tax

liability for that owner under this provision will not constitute a return to satisfy the

requirements of subdivision 1. The tax paid for the qualifying owner as part of the

pass-through entity tax return is allowed as a payment of the tax by the qualifying owner

on the date on which the pass-through entity tax return payment was made.

(k) Once a credit is claimed by a qualifying owner under section
290.06, subdivision

40
, a qualifying entity cannot receive a refund for tax paid under this subdivision for any

amounts claimed under that section by the qualifying owners. Once a credit is claimed under

section
290.06, subdivision 40
, any refund must be claimed in conjunction with a return

filed by the qualifying owner.

deleted text begin

(l) This subdivision expires at the same time and on the same terms as section

164(b)(6)(B) of the Internal Revenue Code, except that the expiration of this subdivision

does not affect the commissioner's authority to audit or power of examination and assessments

for credits claimed under this section.

deleted text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively from January 1, 2026.

new text end

Sec. 6.

Minnesota Statutes 2024, section 290.01, subdivision 19, is amended to read:

Subd. 19.

Net income.

(a) For a trust or estate taxable under section
290.03
, and a

corporation taxable under section
290.02
, the term "net income" means the federal taxable

income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through

the date named in this subdivision, incorporating the federal effective dates of changes to

the Internal Revenue Code and any elections made by the taxpayer in accordance with the

Internal Revenue Code in determining federal taxable income for federal income tax

purposes, and with the modifications provided in sections
290.0131
to
290.0136
.

(b) For an individual, the term "net income" means federal adjusted gross income with

the modifications provided in sections
290.0131
,
290.0132
, and
290.0135
to
290.0137
.

(c) In the case of a regulated investment company or a fund thereof, as defined in section

851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment

company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,

except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal

Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue

Code must be applied by allowing a deduction for capital gain dividends and exempt-interest

dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;

and

(3) the deduction for dividends paid must also be applied in the amount of any

undistributed capital gains which the regulated investment company elects to have treated

as provided in section 852(b)(3)(D) of the Internal Revenue Code.

(d) The net income of a real estate investment trust as defined and limited by section

856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust

taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

(e) The net income of a designated settlement fund as defined in section 468B(d) of the

Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal

Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through May 1, 2023, applies for

taxable years beginning after December 31, 1996.

(g) Except as otherwise provided, references to the Internal Revenue Code in this

subdivision and sections
290.0131
to
290.0136
mean the code in effect for purposes of

determining net income for the applicable year.

(h) In the case of a partnership electing to file a composite return under section
289A.08
,

subdivision 7, "net income" means the partner's share of federal adjusted gross income from

the partnership modified by the additions provided in section
290.0131, subdivisions 8
to

10, 16, and 17, and the subtractions provided in: (1) section
290.0132, subdivisions 9
, 27,

and 28, to the extent the amount is assignable or allocable to Minnesota under section
290.17
;

and (2) section
290.0132, subdivision 14
. The subtraction allowed under section
290.0132
,

subdivision 9, is only allowed on the composite tax computation to the extent the electing

partner would have been allowed the subtraction.

(i) In the case of a qualifying entity electing to pay the pass-through entity tax under

section
289A.08, subdivision 7a
, "net income" means the qualifying owner's share of federal

adjusted gross income from the qualifying entity modified by the additions provided in

section
290.0131, subdivisions 5
, 8 to 10, 16, and 17, and the subtractions provided in: (1)

section
290.0132, subdivisions 3
, 9, 27, and 28, to the extent the amount is assignable or

allocable to Minnesota under section
290.17
; and (2) section
290.0132, subdivision 14
. The

subtraction allowed under section
290.0132, subdivision 9
, is only allowed on the

pass-through entity tax computation to the extent the qualifying owners would have been

allowed the subtraction.
deleted text begin
The income of both a resident and nonresident qualifying owner

is allocated and assigned to this state as provided for nonresident partners and shareholders

under sections
290.17
,
290.191
, and
290.20
.
deleted text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 7.

Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision

to read:

new text begin

Subd. 21.

new text end

new text begin

Dependent flexible spending accounts.

new text end

new text begin

For a taxpayer who claims the credit

under section 290.067 or for a married taxpayer filing a separate return whose spouse claims

the credit under section 290.067, the amount of dependent care assistance that is excluded

from gross income under section 129 of the Internal Revenue Code is an addition.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for taxable years beginning after December

31, 2025.

new text end

Sec. 8.

Minnesota Statutes 2025 Supplement, section 290.06, subdivision 23a, is amended

to read:

Subd. 23a.

Pass-through entity tax paid to another state.

(a) A credit is allowed against

the tax imposed on a qualifying entity under section
289A.08, subdivision 7a
, for

pass-through entity tax paid to another state. The credit under this subdivision is allowed

as a credit for taxes paid to another state under subdivision 22, paragraph (a), and may only

be claimed by a qualifying owner. The credit allowed under this subdivision must be claimed

in a manner prescribed by the commissioner.

deleted text begin

(b) This subdivision expires at the same time and on the same terms as section

164(b)(6)(B) of the Internal Revenue Code, except that the expiration of this subdivision

does not affect the commissioner's authority to audit or power of examination and assessments

for credits claimed under this section.

deleted text end

deleted text begin

(c)
deleted text end
new text begin
(b)
new text end
As used in this subdivision, the following terms have the meanings given:

(1) "income" has the meaning provided in section
290.01, subdivision 19
, paragraph (i);

(2) "pass-through entity tax" means an entity-level tax imposed on the income of a

partnership, limited liability corporation, or S corporation;

(3) "qualifying entity" has the meaning provided in section
289A.08, subdivision 7a
,

paragraph (a); and

(4) "qualifying owner" has the meaning provided in section
289A.08, subdivision 7a
,

paragraph (b).

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective retroactively from January 1, 2026.

new text end

Sec. 9.

Minnesota Statutes 2024, section 290.06, subdivision 40, is amended to read:

Subd. 40.

Pass-through entity tax credit.

(a) A qualifying owner of a qualifying entity

that elects to pay the pass-through entity tax under section
289A.08, subdivision 7a
, may

claim a credit against the tax due under this chapter equal to the amount of the owner's tax

liability as calculated under section
289A.08, subdivision 7a
, paragraph (d).
new text begin
The

commissioner may disallow a credit if the tax liability of the qualifying entity has not been

paid.
new text end

(b) If the amount of the credit the taxpayer may claim under this subdivision exceeds

the taxpayer's tax liability under this chapter, the commissioner of revenue shall refund the

excess to the taxpayer. The amount necessary to pay the claim for the refund provided in

this subdivision is appropriated from the general fund to the commissioner of revenue.

(c) For purposes of this subdivision, "qualifying entity," "qualifying owner," and "tax

liability" have the meanings given in section
289A.08, subdivision 7a
, paragraphs (a) and

(d).

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 10.

Minnesota Statutes 2024, section 290.067, is amended to read:

290.067 DEPENDENT CARE CREDIT.

Subdivision 1.

Amount of credit.

(a) A taxpayer may take as a credit against the tax

due from the taxpayer and a spouse, if any, under this chapter an amount equal to
deleted text begin
the

dependent care credit for which the taxpayer is eligible pursuant to the provisions of section

21 of the Internal Revenue Code except that in determining whether the child qualified as

a dependent, income received as a Minnesota family investment program grant or allowance

to or on behalf of the child must not be taken into account in determining whether the child

received more than half of the child's support from the taxpayer
deleted text end
new text begin
the taxpayer's eligible

dependent care expenses, as determined under subdivisions 1a and 1b, multiplied by the

taxpayer's credit percentage, as determined under subdivision 1c
new text end
.

deleted text begin

(b) If a child who has not attained the age of six years at the close of the taxable year is

cared for at a licensed family day care home operated by the child's parent, the taxpayer is

deemed to have paid employment-related expenses. If the child is 16 months old or younger

at the close of the taxable year, the amount of expenses deemed to have been paid equals

the maximum limit for one qualifying individual under section 21(c) and (d) of the Internal

Revenue Code. If the child is older than 16 months of age but has not attained the age of

six years at the close of the taxable year, the amount of expenses deemed to have been paid

equals the amount the licensee would charge for the care of a child of the same age for the

same number of hours of care.

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(c) If a taxpayer:

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deleted text begin

(1) has a child who has not attained the age of one year at the close of the taxable year;

and

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deleted text begin

(2) does not participate in a dependent care assistance program as defined in section 129

of the Internal Revenue Code, in lieu of the actual employment related expenses paid for

that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of (i)

the earned income of the taxpayer or (ii) the amount of the maximum limit for one qualifying

individual under section 21(c) and (d) of the Internal Revenue Code will be deemed to be

the employment related expense paid for that child. The earned income limitation of section

21(d) of the Internal Revenue Code shall not apply to this deemed amount. These deemed

amounts apply regardless of whether any employment-related expenses have been paid.

deleted text end

deleted text begin

(d) If the taxpayer is not required and does not file a federal individual income tax return

for the tax year, no credit is allowed for any amount paid to any person unless:

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deleted text begin

(1) the name, address, and taxpayer identification number of the person are included on

the return claiming the credit; or

deleted text end

deleted text begin

(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue

Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name

and address of the person are included on the return claiming the credit.

deleted text end

deleted text begin

In the case of a failure to provide the information required under the preceding sentence,

the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence

in attempting to provide the information required.

deleted text end

deleted text begin

(e)
deleted text end
new text begin
(b)
new text end
In the case of a nonresident or part-year resident, the credit determined under
new text begin
this
new text end

section
deleted text begin
21 of the Internal Revenue Code
deleted text end
must be allocated
deleted text begin
based on the ratio by which the

earned income of the claimant and the claimant's spouse from Minnesota sources bears to

the total earned income of the claimant and the claimant's spouse
deleted text end
new text begin
using the percentage

calculated in section 290.06, subdivision 2c, paragraph (e)
new text end
.

deleted text begin

(f) For residents of Minnesota, the subtractions for military pay under section
290.0132,

subdivisions 11
and 12, are not considered "earned income not subject to tax under this

chapter."

deleted text end

deleted text begin

(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the

Internal Revenue Code is not considered "earned income not subject to tax under this

chapter."

deleted text end

deleted text begin

(h) For taxpayers with federal adjusted gross income in excess of $52,230, the credit is

equal to the lesser of the credit otherwise calculated under this subdivision, or the amount

equal to $600 minus five percent of federal adjusted gross income in excess of $52,230 for

taxpayers with one qualifying individual, or $1,200 minus five percent of federal adjusted

gross income in excess of $52,230 for taxpayers with two or more qualifying individuals,

but in no case is the credit less than zero.

deleted text end

new text begin

(c) For the purposes of this section, the following terms have the meanings given:

new text end

new text begin

(1) "employment-related expenses" has the meaning given in section 21(b)(2) of the

Internal Revenue Code;

new text end

new text begin

(2) "qualifying individual" has the meaning given in section 21(b)(1) of the Internal

Revenue Code, except that in determining whether the child qualified as a dependent, income

received as a Minnesota family investment program grant or allowance to or on behalf of

the child must not be taken into account in determining whether the child received more

than half of the child's support from the taxpayer; and

new text end

new text begin

(3) "young child" means a qualifying individual who had not attained the age of five by

December 31 of the taxable year.

new text end

new text begin

Subd. 1a.

new text end

new text begin

Eligible dependent care expenses.

new text end

new text begin

(a) A taxpayer's eligible dependent care

expenses equals the amount of employment-related expenses incurred during the taxable

year, subject to the limitations in paragraph (b) and subdivision 1b.

new text end

new text begin

(b) Except as provided in subdivision 1b, a taxpayer's eligible dependent care expenses

are limited to:

new text end

new text begin

(1) $3,000 if there was one qualifying individual with respect to the taxpayer; or

new text end

new text begin

(2) $6,000 if there were two or more qualifying individuals with respect to the taxpayer.

new text end

new text begin

Subd. 1b.

new text end

new text begin

Eligible expenses for taxpayers with young children.

new text end

new text begin

For taxable years

beginning after December 31, 2025, and before January 1, 2034, for a taxpayer with a young

child, the limit in subdivision 1a, paragraph (b), is increased as follows:

new text end

new text begin

(1) for a taxpayer with one young child with respect to the taxpayer, the limit is increased

by $3,000;

new text end

new text begin

(2) for a taxpayer with two or more young children with respect to the taxpayer, the limit

is increased by $6,000.

new text end

new text begin

Subd. 1c.

new text end

new text begin

Credit percentage.

new text end

new text begin

(a) The credit percentage equals 50 percent, subject to

the reductions in paragraphs (b) and (c).

new text end

new text begin

(b) A taxpayer's credit percentage is reduced by one percentage point for each $1,000,

or fraction thereof, by which the taxpayer's adjusted gross income exceeds $120,000.

new text end

new text begin

(c) For a married taxpayer filing a separate return, the credit percentage must be calculated

under paragraphs (a) and (b), except the adjusted gross income thresholds are one-half the

amounts for other married filers, as adjusted for inflation under subdivision 2b.

new text end

Subd. 2b.

Inflation adjustment.

The commissioner shall annually adjust the dollar

amount of the income threshold at which the
deleted text begin
maximum
deleted text end
credit
new text begin
percentage
new text end
begins to be

reduced under subdivision
deleted text begin
1
deleted text end
new text begin
1c
new text end
as provided in section
270C.22
. The statutory year is taxable

year
deleted text begin
2019
deleted text end
new text begin
2026
new text end
.

new text begin

Subd. 2c.

new text end

new text begin

Deemed expenses.

new text end

new text begin

(a) If a child who has not attained the age of six years at

the close of the taxable year is cared for at a licensed family day care home operated by the

child's parent, the taxpayer is deemed to have paid employment-related expenses. The

amount of expenses deemed to have been paid equals the amount the licensee would charge

for the care of a child of the same age for the same number of hours of care up to the

maximum eligible expenses allowed, as determined under subdivisions 1a and 1b.

new text end

new text begin

(b) If a taxpayer, regardless of filing status:

new text end

new text begin

(1) has a qualifying individual who has not attained the age of one year at the close of

the taxable year; and

new text end

new text begin

(2) used the deemed amount under paragraph (a) in lieu of the actual employment-related

expenses paid for that child, the amount of deemed employment-related expenses equals

the lesser of:

new text end

new text begin

(i) the earned income of the taxpayer; or

new text end

new text begin

(ii) the amount of the maximum limit for one qualified individual under subdivision 1a,

as increased by subdivision 1b.

new text end

new text begin

The earned income limitation of section 21(d) of the Internal Revenue Code shall not apply

to this deemed amount. These deemed amounts apply regardless of whether any

employment-related expenses have been paid.

new text end

Subd. 3.

Credit to be refundable.

If the amount of credit which a claimant would be

eligible to receive pursuant to this subdivision exceeds the claimant's tax liability under this

chapter, the excess amount of the credit shall be refunded to the claimant by the commissioner

of revenue. The amount needed to pay the refunds required by this section is appropriated

to the commissioner from the general fund.

Subd. 4.

Right to file claim.

The right to file a claim under this section shall be personal

to the claimant and shall not survive death, but such right may be exercised on behalf of a

claimant by the claimant's legal guardian or attorney-in-fact. When a claimant dies after

having filed a timely claim the amount thereof shall be disbursed to another member of the

household as determined by the commissioner of revenue. If the claimant was the only

member of a household, the claim may be paid to the claimant's personal representative,

but if neither is appointed and qualified within two years of the filing of the claim, the

amount of the claim shall escheat to the state.

new text begin

Subd. 5.

new text end

new text begin

Employment-related expenses.

new text end

new text begin

For the purposes of determining

employment-related expenses, the provisions of section 21(d) of the Internal Revenue Code

apply.

new text end

new text begin

Subd. 6.

new text end

new text begin

Special rules.

new text end

new text begin

For purposes of this section, the special rules of section 21(e)

of the Internal Revenue Code apply, except the special rule in section 21(e)(2) of the Internal

Revenue Code, requiring married couples to file a joint return, does not apply.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for taxable years beginning after December

31, 2025.

new text end

Sec. 11.
new text begin
REVIVAL AND REENACTMENT.
new text end

new text begin

Minnesota Statutes, sections 289A.08, subdivision 7a, and 290.06, subdivision 23a, are

revived and reenacted retroactively from January 1, 2026.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

ARTICLE 3

SALES AND USE TAXES AND GROSS RECEIPTS TAXES

Section 1.

new text begin

[116J.4012] COUNCIL ON ARTIFICIAL INTELLIGENCE READINESS.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Establishment.

new text end

new text begin

The Council on Artificial Intelligence Readiness is

established to examine and mitigate the impacts of artificial intelligence on the state's

workforce and economic development landscape and to allocate money for these purposes.

new text end

new text begin

Subd. 2.

new text end

new text begin

Membership; appointment.

new text end

new text begin

(a) The council must consist of the following 11

members:

new text end

new text begin

(1) the commissioner of employment and economic development or the commissioner's

designee;

new text end

new text begin

(2) the commissioner of information technology or the commissioner's designee;

new text end

new text begin

(3) one member of the senate appointed by the senate majority leader;

new text end

new text begin

(4) one member of the house of representatives appointed by the speaker of the house;

new text end

new text begin

(5) one member appointed by the governor representing an entity with experience

delivering workforce development services;

new text end

new text begin

(6) one member appointed by the governor representing an entity with experience in

economic development;

new text end

new text begin

(7) one member appointed by the governor representing business or economic

development;

new text end

new text begin

(8) one member appointed by the governor from the University of Minnesota; and

new text end

new text begin

(9) three members appointed by the governor with expertise in the field of artificial

intelligence.

new text end

new text begin

(b) Member compensation and reimbursement for expenses are governed by section

15.059, subdivision 3.

new text end

new text begin

Subd. 3.

new text end

new text begin

Chair; meetings.

new text end

new text begin

(a) The commissioner of employment and economic

development must convene the first meeting of the council no later than January 31, 2027.

The commissioner of employment and economic development or the commissioner's designee

shall chair the council.

new text end

new text begin

(b) The council must meet at least quarterly.

new text end

new text begin

(c) Council meetings are subject to the Open Meeting Law under chapter 13D.

new text end

new text begin

Subd. 4.

new text end

new text begin

Administrative support.

new text end

new text begin

The commissioner of employment and economic

development must provide administrative support and meeting space for the council.

new text end

new text begin

Subd. 5.

new text end

new text begin

Duties.

new text end

new text begin

At a minimum, the council must:

new text end

new text begin

(1) review current information on the adoption and expansion of artificial intelligence

in Minnesota;

new text end

new text begin

(2) analyze the impact of artificial intelligence on Minnesota's workforce; and

new text end

new text begin

(3) allocate money from the artificial intelligence readiness account for the purposes

provided under section 116J.4013.

new text end

new text begin

Subd. 6.

new text end

new text begin

Use of money.

new text end

new text begin

The council must consider uses of money in the account to

engage businesses in mitigating the effects of artificial intelligence and adopting and utilizing

artificial intelligence if practical and to de-risk the hiring of workers, and to directly support

businesses with training needs to hire workers impacted by artificial intelligence.

new text end

new text begin

Subd. 7.

new text end

new text begin

Report.

new text end

new text begin

Beginning February 15, 2028, and each year thereafter, the council

must submit a report to the chairs and ranking minority members of the legislative committees

and divisions with jurisdiction over workforce development and artificial intelligence. Each

report must describe activities under subdivision 5; allocations from the artificial intelligence

readiness account; and recipients, outcomes, and data resulting from the allocations.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 2.

new text begin

[116J.4013] ARTIFICIAL INTELLIGENCE READINESS ACCOUNT.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Account creation.

new text end

new text begin

The artificial intelligence readiness account is

established in the special revenue fund in the state treasury. The account consists of money

appropriated by law and any other money donated, allotted, transferred, or otherwise provided

to the account. Earnings, including the interest, dividends, and any other earnings arising

from assets of the account, are credited to the account. Money remaining in the account at

the end of a fiscal year does not cancel to the general fund but remains in the account until

expended.

new text end

new text begin

Subd. 2.

new text end

new text begin

Appropriation; uses.

new text end

new text begin

Money in the artificial intelligence readiness account is

appropriated to the commissioner of employment and economic development for allocation

by the Council on Artificial Intelligence Readiness under section 116J.4012, unless otherwise

appropriated in law or statute.

new text end

new text begin

Subd. 3.

new text end

new text begin

Administration.

new text end

new text begin

(a) The commissioner of employment and economic

development may retain up to three percent of revenues each fiscal year for staffing and

administration of the Council on Artificial Intelligence Readiness under section 116J.4012

and any grants the council awards. The amount is appropriated each fiscal year from the

artificial intelligence readiness account to the commissioner of employment and economic

development for this purpose.

new text end

new text begin

(b) The commissioner of revenue is appropriated $849,000 in fiscal year 2027 and

$1,433,000 each fiscal year thereafter from the artificial intelligence readiness account for

administration of the social media consumer data collection tax imposed under section

295.90.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 3.

new text begin

[295.85] HANDGUNS, FIREARMS, AND AMMUNITION.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Definitions.

new text end

new text begin

(a) For purposes of this section, the following terms have

the meanings given.

new text end

new text begin

(b) "Ammunition" means shells, cartridges, and any articles consisting of a projectile,

explosive, and container that are designed, assembled, and ready for use without further

manufacture in handguns and firearms.

new text end

new text begin

(c) "Ammunition retailer" means a retailer that sells ammunition and that is a:

new text end

new text begin

(1) retailer maintaining a place of business in this state, as defined in section 297A.66,

subdivision 1, paragraph (a);

new text end

new text begin

(2) marketplace provider maintaining a place of business in this state, as defined in

section 297A.66, subdivision 1, paragraph (a);

new text end

new text begin

(3) retailer not maintaining a place of business in this state, as defined in section 297A.66,

subdivision 1, paragraph (b); or

new text end

new text begin

(4) marketplace provider not maintaining a place of business in this state, as defined in

section 297A.66, subdivision 1, paragraph (b).

new text end

new text begin

(d) "Bundled transaction" means the retail sale of two or more products when the products

are otherwise distinct and identifiable and the products are sold for one nonitemized price.

new text end

new text begin

(e) "Commissioner" means the commissioner of revenue.

new text end

new text begin

(f) "Firearm" means any portable weapon, except a handgun as defined in paragraph (i),

from which a shot, bullet, or other projectile may be discharged by an explosive.

new text end

new text begin

(g) "Firearm retailer" means a retailer that sells a handgun or firearm and that is a:

new text end

new text begin

(1) retailer maintaining a place of business in this state, as defined in section 297A.66,

subdivision 1, paragraph (a);

new text end

new text begin

(2) marketplace provider maintaining a place of business in this state, as defined in

section 297A.66, subdivision 1, paragraph (a);

new text end

new text begin

(3) retailer not maintaining a place of business in this state, as defined in section 297A.66,

subdivision 1, paragraph (b); or

new text end

new text begin

(4) marketplace provider not maintaining a place of business in this state, as defined in

section 297A.66, subdivision 1, paragraph (b).

new text end

new text begin

(h) "Gross receipts" means the total amount received in money or by barter or exchange

for all handgun, firearm, and ammunition sales at retail as measured by the sales price.

Gross receipts include but are not limited to delivery charges and packaging costs. Gross

receipts do not include:

new text end

new text begin

(1) any taxes imposed directly on the purchaser that are separately stated on the invoice,

bill of sales, or similar document given to the purchaser; and

new text end

new text begin

(2) discounts, including cash, terms, or coupons, that are not reimbursed by a third party

and that are allowed by the seller and taken by a purchaser on a sale.

new text end

new text begin

(i) "Handgun" means a pistol, revolver, or any short stock firearm that is designed to be

held and fired by the use of a single hand.

new text end

new text begin

(j) "Pistol" means a small projectile firearm that has a short one-hand stock or butt at an

angle to the line of bore and a short barrel or barrels and is designed, made, and intended

to be aimed and fired by the use of a single hand.

new text end

new text begin

(k) "Retail sale" has the meaning given in section 297A.61, subdivision 4.

new text end

new text begin

(l) "Revolver" means a small projectile firearm of the pistol type that has a breechloading

chambered cylinder so arranged that the cocking of the hammer or movement of the trigger

rotates it and brings the next cartridge in line with the barrel for firing.

new text end

new text begin

Subd. 2.

new text end

new text begin

Gross receipts tax imposed.

new text end

new text begin

(a) A tax equal to ten percent of gross receipts

from retail sales of handguns in Minnesota is imposed on any firearm retailer that sells

firearms to purchasers. A firearm retailer may collect the tax imposed under this section

from the purchaser. If separately stated on the receipt, invoice, bill of sale, or similar

document given to the purchaser, the tax is excluded from the sales price for purposes of

the tax imposed under chapter 297A.

new text end

new text begin

(b) A tax equal to 11 percent of gross receipts from retail sales of firearms and

ammunition in Minnesota is imposed on firearm retailers and ammunition retailers that sell

these products to purchasers. A firearm retailer and ammunition retailer may collect the tax

imposed by this section from the purchaser. If separately stated on the receipt, invoice, bill

of sale, or similar document given to the purchaser, the tax is excluded from the sales price

for purposes of the tax imposed under chapter 297A.

new text end

new text begin

(c) If a product subject to the tax imposed under this section is included in a bundled

transaction, the entire sales price of the bundled transaction is subject to the tax imposed

under this section.

new text end

new text begin

(d) The tax imposed under this section is in addition to any other tax imposed on the

sale or use of handguns, firearms, or ammunition.

new text end

new text begin

Subd. 3.

new text end

new text begin

Use tax imposed; credit for taxes paid.

new text end

new text begin

(a) A person who receives a handgun,

firearm, or ammunition for use or storage in Minnesota, other than from a firearm retailer

or ammunition retailer that paid the tax under subdivision 2, is subject to tax at the rate

imposed under subdivision 2. Liability for the tax is incurred when the person has possession

of the handgun, firearm, or ammunition in Minnesota. The tax must be remitted to the

commissioner in the same manner prescribed for taxes imposed under chapter 297A.

new text end

new text begin

(b) A person who has paid taxes to another state or any subdivision thereof measured

by gross receipts and is subject to tax under this section on the same gross receipts is entitled

to a credit for the tax legally due and paid to another state or subdivision thereof to the

extent of the lesser of (1) the tax actually paid to the other state or subdivision thereof, or

(2) the amount of tax imposed by Minnesota on the gross receipts subject to tax in the other

state or subdivision thereof.

new text end

new text begin

Subd. 4.

new text end

new text begin

Exemptions.

new text end

new text begin

(a) The tax imposed in this section does not apply to sales of

handguns, firearms, or ammunition if the handguns, firearms, or ammunition are purchased:

new text end

new text begin

(1) for use by peace officers, as defined in section 626.84, subdivision 1, when used in

operation of their employment as a peace officer;

new text end

new text begin

(2) for use by members of the Minnesota National Guard when used in operation of their

position as a member of the National Guard; or

new text end

new text begin

(3) by the United States and its agencies and instrumentalities.

new text end

new text begin

(b) Unless otherwise specified in this section, the exemptions applicable to taxes imposed

under chapter 297A are not applicable to the taxes imposed under this section.

new text end

new text begin

Subd. 5.

new text end

new text begin

Tax collection required.

new text end

new text begin

A firearm retailer with nexus in Minnesota that is

not subject to the tax under subdivision 2, is required to collect the tax imposed under

subdivision 3 from the purchaser of the handgun, firearm, or ammunition and give the

purchaser a receipt for the tax paid. The tax collected must be remitted to the commissioner

in the same manner prescribed for taxes imposed under chapter 297A.

new text end

new text begin

Subd. 6.

new text end

new text begin

Taxes paid to another state or any subdivision thereof; credit.

new text end

new text begin

A firearm

retailer that has paid taxes to another state or any subdivision thereof measured by gross

receipts and is subject to tax under this section on the same gross receipts is entitled to a

credit for the tax legally due and paid to another state or any subdivision thereof to the extent

of the lesser of (1) the tax actually paid to the other state or any subdivision thereof, or (2)

the amount of tax imposed by Minnesota on the gross receipts subject to tax in the other

taxing state or any subdivision thereof.

new text end

new text begin

Subd. 7.

new text end

new text begin

Sourcing of sales.

new text end

new text begin

Section 297A.668 applies to the taxes imposed by this

section.

new text end

new text begin

Subd. 8.

new text end

new text begin

Administration.

new text end

new text begin

Unless specifically provided otherwise, the audit, assessment,

refund, penalty, interest, enforcement, collection remedy, appeal, and administrative

provisions of chapters 270C and 289A that are applicable to taxes imposed under chapter

297A apply to the tax imposed under this section.

new text end

new text begin

Subd. 9.

new text end

new text begin

Returns; payment of tax.

new text end

new text begin

(a) A firearm retailer and ammunition retailer must

report the tax on a return prescribed by the commissioner and must remit the tax in a form

and manner prescribed by the commissioner. The return and the tax must be filed and paid

using the filing cycle and due dates provided for taxes imposed under chapter 297A.

new text end

new text begin

(b) Interest must be paid on an overpayment refunded or credited to the taxpayer from

the date of payment of the tax until the date the refund is paid or credited. For purposes of

this subdivision, the date of payment is the due date of the return or the date of actual

payment of the tax, whichever is later.

new text end

new text begin

Subd. 10.

new text end

new text begin

Deposit of revenues.

new text end

new text begin

The commissioner must deposit all revenues, including

penalties and interest, derived from the tax imposed by this section in the general fund.

new text end

new text begin

Subd. 11.

new text end

new text begin

Personal debt.

new text end

new text begin

The tax imposed by this section, and interest and penalties

imposed with respect to it, are a personal debt of the person required to file a return from

the time that the liability for it arises, irrespective of when the time for payment of the

liability occurs. The debt must, in the case of the executor or administrator of the estate of

a decedent and in the case of a fiduciary, be that of the person in the person's official or

fiduciary capacity only, unless the person has voluntarily distributed the assets held in that

capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which

event the person is personally liable for any deficiency.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for sales and purchases made after

September 30, 2026.

new text end

Sec. 4.

new text begin

[295.86] HANDGUNS, FIREARMS, AND AMMUNITION LOCAL TAX

PROHIBITED.

new text end

new text begin

A political subdivision of this state is prohibited from imposing a tax solely on the sale

of handguns, firearms, or ammunition, as defined in section 295.85, subdivision 1.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for sales and purchases made after

September 30, 2026.

new text end

Sec. 5.

new text begin

[295.90] SOCIAL MEDIA CONSUMER DATA COLLECTION TAX.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Definitions.

new text end

new text begin

(a) For purposes of this section, the following terms have

the meanings given.

new text end

new text begin

(b) "Collects" means collects, engages, maintains, uses, processes, or shares.

new text end

new text begin

(c) "Commissioner" means the commissioner of revenue.

new text end

new text begin

(d) "Consumer" means an individual who establishes an account with a social media

platform business or who accesses a social media platform through an account registered

with a social media platform business and whose consumer data is collected by the social

media platform business, regardless of whether the individual is charged for establishing

the account.

new text end

new text begin

(e) "Consumer data" means any information that identifies, relates to, describes, is

capable of being associated with, or could reasonably be linked with a consumer, whether

directly submitted to the social media platform business by the consumer or derived from

other sources.

new text end

new text begin

(f) "Minnesota consumer" means a consumer who is a resident of Minnesota.

new text end

new text begin

(g) "Resident" has the meaning given in section 290.01, subdivision 7.

new text end

new text begin

(h) "Social media platform" has the meaning given in section 325M.31, paragraph (j).

new text end

new text begin

(i) "Social media platform business" means a for-profit entity that: (1) owns, controls,

or operates a social media platform; and (2) collects consumer data in support of the entity's

business activities.

new text end

new text begin

Subd. 2.

new text end

new text begin

Tax imposed.

new text end

new text begin

A tax is imposed on social media platform businesses based on

the number of Minnesota social media platform consumers from whom a social media

platform business collects data within a month:

new text end

new text begin

Minnesota consumers

new text end

new text begin

Tax

new text end

new text begin

Fewer than or equal to 100,000

new text end

new text begin

Zero;

new text end

new text begin

Over 100,000 but not more than 500,000

new text end

new text begin

$0.10 per month on the number of Minnesota

consumers over 100,000 but not more than

500,000;

new text end

new text begin

Over 500,000 but not more than 1,000,000

new text end

new text begin

$40,000 plus $0.25 per month on the number

of Minnesota consumers over 500,000 but

not more than 1,000,000; and

new text end

new text begin

Over 1,000,000

new text end

new text begin

$165,000 plus $0.50 per month on the number

of Minnesota consumers over 1,000,000.

new text end

new text begin

Subd. 3.

new text end

new text begin

Business entities.

new text end

new text begin

Business entities that are part of a controlled group of

corporations as defined in section 1563(a) of the Internal Revenue Code shall be treated as

a single entity for purposes of meeting the definition of a social media platform business

under this section. The entities constituting the single taxpayer are jointly and severally

liable for the tax.

new text end

new text begin

Subd. 4.

new text end

new text begin

Counting Minnesota consumers.

new text end

new text begin

(a) A Minnesota consumer must be counted

only once in the calculation of tax imposed under this section. Until the contrary is

established, it is presumed that each account is an individual consumer. The burden of

proving that multiple accounts are one consumer is on the social media platform business.

new text end

new text begin

(b) The single member of a single member limited liability company must be treated as

a consumer under this section.

new text end

new text begin

(c) Until the contrary is established, it is presumed that a consumer whose information

on record with or available to a social media platform business indicates a Minnesota home

address, a Minnesota mailing address, or an internet protocol address connected with a

Minnesota location is a Minnesota consumer for purposes of this section. The burden of

proving that a consumer is not a Minnesota resident is on the social media platform business.

new text end

new text begin

(d) A social media platform business and the commissioner may agree on a methodology

for determining the number of Minnesota consumers for purposes of calculating the tax.

new text end

new text begin

Subd. 5.

new text end

new text begin

Credit against tax paid to another jurisdiction.

new text end

new text begin

A social media platform

business that has paid tax under this section may claim a credit against the tax paid with

respect to a Minnesota consumer if another state imposes an excise tax identical to the tax

imposed under this section with respect to the same consumer.

new text end

new text begin

Subd. 6.

new text end

new text begin

Record keeping.

new text end

new text begin

A social media platform business must maintain records

necessary to demonstrate compliance with this section or as required by the commissioner.

new text end

new text begin

Subd. 7.

new text end

new text begin

Administration.

new text end

new text begin

Unless specifically provided otherwise, the audit, assessment,

refund, penalty, interest, criminal penalty, enforcement, collection remedy, appeal, and

administrative provisions of chapters 270C and 289A that are applicable to taxes imposed

under chapter 297A apply to the tax imposed under this section.

new text end

new text begin

Subd. 8.

new text end

new text begin

Returns; payment of tax.

new text end

new text begin

(a) On or before the 20th of the month following

the month that tax liability is incurred under subdivision 2, a social media platform business

must report the tax on a return prescribed by the commissioner and must remit the tax in a

form and manner prescribed by the commissioner.

new text end

new text begin

(b) A social media platform business that owes tax imposed under this section must file

a return in subsequent months until it reports no tax liability for 12 consecutive months.

new text end

new text begin

(c) Interest must be paid on an overpayment refunded or credited to the taxpayer from

the date of payment of the tax until the date the refund is paid or credited. For purposes of

this subdivision, the date of payment is the due date of the return or the date of actual

payment of the tax, whichever is later.

new text end

new text begin

Subd. 9.

new text end

new text begin

Deposit of revenues.

new text end

new text begin

The commissioner must deposit the revenues, including

penalties and interest, derived from the tax imposed under this section to the general fund.

new text end

new text begin

Subd. 10.

new text end

new text begin

Personal debt.

new text end

new text begin

The tax imposed under this section, and interest and penalties

imposed with respect to the tax, are a personal debt of the person required to file a return

from the time that the liability for the tax arises, irrespective of when the time for payment

of the liability occurs. The debt must, in the case of the executor or administrator of the

estate of a decedent and in the case of a fiduciary, be that of the person in the person's official

or fiduciary capacity only, unless the person has voluntarily distributed the assets held in

that capacity without reserving sufficient assets to pay the tax, interest, and penalties, in

which event the person is personally liable for any deficiency.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for consumer data collected after

December 31, 2026.

new text end

Sec. 6.

Minnesota Statutes 2024, section 297A.61, subdivision 3, is amended to read:

Subd. 3.

Sale and purchase.

(a) "Sale" and "purchase" include, but are not limited to,

each of the transactions listed in this subdivision. In applying the provisions of this chapter,

the terms "tangible personal property" and "retail sale" include the taxable services listed

in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision of these taxable

services, unless specifically provided otherwise. Services performed by an employee for

an employer are not taxable. Services performed by a partnership or association for another

partnership or association are not taxable if one of the entities owns or controls more than

80 percent of the voting power of the equity interest in the other entity. Services performed

between members of an affiliated group of corporations are not taxable. For purposes of

the preceding sentence, "affiliated group of corporations" means those entities that would

be classified as members of an affiliated group as defined under United States Code, title

26, section 1504, disregarding the exclusions in section 1504(b).

(b) Sale and purchase include:

(1) any transfer of title or possession, or both, of tangible personal property, whether

absolutely or conditionally, for a consideration in money or by exchange or barter; and

(2) the leasing of or the granting of a license to use or consume, for a consideration in

money or by exchange or barter, tangible personal property, other than a manufactured

home used for residential purposes for a continuous period of 30 days or more.

(c) Sale and purchase include the production, fabrication, printing, or processing of

tangible personal property for a consideration for consumers who furnish either directly or

indirectly the materials used in the production, fabrication, printing, or processing.

(d) Sale and purchase include the preparing for a consideration of food. Notwithstanding

section
297A.67, subdivision 2
, taxable food includes, but is not limited to, the following:

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy; and

(4) dietary supplements.

(e) A sale and a purchase includes the furnishing for a consideration of electricity, gas,

water, or steam for use or consumption within this state.

(f) A sale and a purchase includes the transfer for a consideration of prewritten computer

software whether delivered electronically, by load and leave, or otherwise.

(g) A sale and a purchase includes the furnishing for a consideration of the following

services:

(1) the privilege of admission to places of amusement, recreational areas, or athletic

events, and the making available of amusement devices, tanning facilities, reducing salons,

steam baths, health clubs, and spas or athletic facilities;

(2) lodging and related services by a hotel, rooming house, resort, campground, motel,

or trailer camp, including furnishing the guest of the facility with access to telecommunication

services, and the granting of any similar license to use real property in a specific facility,

other than the renting or leasing of it for a continuous period of 30 days or more under an

enforceable written agreement that may not be terminated without prior notice and including

accommodations intermediary services provided in connection with other services provided

under this clause;

(3) nonresidential parking services, whether on a contractual, hourly, or other periodic

basis, except for parking at a meter;

(4) the granting of membership in a club, association, or other organization if:

(i) the club, association, or other organization makes available for the use of its members

sports and athletic facilities, without regard to whether a separate charge is assessed for use

of the facilities; and

(ii) use of the sports and athletic facility is not made available to the general public on

the same basis as it is made available to members.

Granting of membership means both onetime initiation fees and periodic membership dues.

Sports and athletic facilities include golf courses; tennis, racquetball, handball, and squash

courts; basketball and volleyball facilities; running tracks; exercise equipment; swimming

pools; and other similar athletic or sports facilities;

(5) delivery of aggregate materials by a third party, excluding delivery of aggregate

material used in road construction; and delivery of concrete block by a third party if the

delivery would be subject to the sales tax if provided by the seller of the concrete block.

For purposes of this clause, "road construction" means construction of:

(i) public roads;

(ii) cartways; and

(iii) private roads in townships located outside of the seven-county metropolitan area

up to the point of the emergency response location sign; and

(6) services as provided in this clause:

(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,

and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,

drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not

include services provided by coin operated facilities operated by the customer;

(ii) motor vehicle washing, waxing, and cleaning services, including services provided

by coin operated facilities operated by the customer, and rustproofing, undercoating, and

towing of motor vehicles;

(iii) building and residential cleaning, maintenance, and disinfecting services and pest

control and exterminating services;

(iv) detective, security, burglar, fire alarm, and armored car services; but not including

services performed within the jurisdiction they serve by off-duty licensed peace officers as

defined in section
626.84, subdivision 1
, or services provided by a nonprofit organization

or any organization at the direction of a county for monitoring and electronic surveillance

of persons placed on in-home detention pursuant to court order or under the direction of the

Minnesota Department of Corrections;

(v) pet grooming services;

(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting

and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor plant

care; tree, bush, shrub, and stump removal, except when performed as part of a land clearing

contract as defined in section
297A.68, subdivision 40
; and tree trimming for public utility

lines. Services performed under a construction contract for the installation of shrubbery,

plants, sod, trees, bushes, and similar items are not taxable;

(vii) massages, except when provided by a licensed health care facility or professional

or upon written referral from a licensed health care facility or professional for treatment of

illness, injury, or disease; and

(viii) the furnishing of lodging, board, and care services for animals in kennels and other

similar arrangements, but excluding veterinary and horse boarding services.

(h) A sale and a purchase includes the furnishing for a consideration of tangible personal

property or taxable services by the United States or any of its agencies or instrumentalities,

or the state of Minnesota, its agencies, instrumentalities, or political subdivisions.

(i) A sale and a purchase includes the furnishing for a consideration of

telecommunications services, ancillary services associated with telecommunication services,

and pay television services. Telecommunication services include, but are not limited to, the

following services, as defined in section
297A.669
: air-to-ground radiotelephone service,

mobile telecommunication service, postpaid calling service, prepaid calling service, prepaid

wireless calling service, and private communication services. The services in this paragraph

are taxed to the extent allowed under federal law.

(j) A sale and a purchase includes the furnishing for a consideration of installation if the

installation charges would be subject to the sales tax if the installation were provided by

the seller of the item being installed.

(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer to a

customer when (1) the vehicle is rented by the customer for a consideration, or (2) the motor

vehicle dealer is reimbursed pursuant to a service contract as defined in section
59B.02,

subdivision
11.

(l) A sale and a purchase includes furnishing for a consideration of specified digital

products or other digital products or granting the right for a consideration to use specified

digital products or other digital products on a temporary or permanent basis and regardless

of whether the purchaser is required to make continued payments for such right. Wherever

the term "tangible personal property" is used in this chapter, other than in subdivisions 10

and 38, the provisions also apply to specified digital products, or other digital products,

unless specifically provided otherwise or the context indicates otherwise.

(m) The sale of the privilege of admission under section
297A.61, subdivision 3
,

paragraph (g), clause (1), to a place of amusement, recreational area, or athletic event

includes all charges included in the privilege of admission's sales price, without deduction

for amenities that may be provided, unless the amenities are separately stated and the

purchaser of the privilege of admission is entitled to add or decline the amenities, and the

amenities are not otherwise taxable.

(n) A sale and purchase includes the transfer for consideration of a taxable cannabis

product as defined in section
295.81, subdivision 1
, paragraph (r).

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(o) A sale and purchase includes the furnishing for a consideration of the following

services when purchased by a person other than a trade or business:

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(1) accounting services, including but not limited to audit, bookkeeping, financial

statement preparation, payroll, and tax return preparation services, but excluding tax

preparation services used to claim the Minnesota child tax credit under section 290.0661

or the Minnesota working family credit under section 290.0671;

new text end

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(2) banking and brokerage services, including but not limited to account maintenance

fees, safety deposit boxes, credit card fees, loan servicing, payment services, wealth

management, financial planning, retirement planning, trust management, and investment

management, but excluding origination fees, overdraft fees, late fees, and the management

of defined benefit pension funds; and

new text end

new text begin

(3) legal services, including but not limited to attorney fees, paralegal and legal assistant

services, law clerk services, notary fees, process serving, mediation and arbitration, and

title search, but excluding legal aid services funded as described in section 480.242.

new text end

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(p) A seller of the services listed in paragraph (o) must retain records identifying through

reasonable and verifiable standards whether the services were purchased by a trade or

business or a person other than a trade or business.

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EFFECTIVE DATE.

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This section is effective for sales and purchases made after

September 30, 2026.

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Sec. 7.

Minnesota Statutes 2024, section 297A.62, subdivision 1, is amended to read:

Subdivision 1.

Generally.

Except as otherwise provided in subdivision 3 or in this

chapter, a sales tax of
deleted text begin
6.5
deleted text end
new text begin
6.425
new text end
percent is imposed on the gross receipts from retail sales

as defined in section
297A.61, subdivision 4
, made in this state or to a destination in this

state by a person who is required to have or voluntarily obtains a permit under section

297A.83, subdivision 1
.

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EFFECTIVE DATE.

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new text begin

This section is effective for sales and purchases made after

September 30, 2026.

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Sec. 8.

Minnesota Statutes 2024, section 297F.25, subdivision 1, is amended to read:

Subdivision 1.

Imposition.

(a) A tax is imposed on distributors on the sale of cigarettes

by a cigarette distributor to a retailer or cigarette subjobber for resale in this state. The tax

is equal to
deleted text begin
the combined tax rate under section
297A.62
deleted text end
new text begin
6.875 percent
new text end
, multiplied by the

weighted average retail price and must be expressed in cents per pack rounded to the nearest

one-tenth of a cent. The weighted average retail price must be determined annually, with

new rates published by November 1, and effective for sales on or after January 1 of the

following year. The weighted average retail price must be established by surveying cigarette

retailers statewide in a manner and time determined by the commissioner. The commissioner

shall make an inflation adjustment in accordance with the Consumer Price Index for all

urban consumers inflation indicator as published in the most recent state budget forecast.

The commissioner shall use the inflation factor for the calendar year in which the new tax

rate takes effect. If the survey indicates that the average retail price of cigarettes has not

increased relative to the average retail price in the previous year's survey, then the

commissioner shall not make an inflation adjustment. The determination of the commissioner

pursuant to this subdivision is not a "rule" and is not subject to the Administrative Procedure

Act contained in chapter 14. For packs of cigarettes with other than 20 cigarettes, the tax

must be adjusted proportionally.

(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the tax

calculation of the weighted average retail price for the sales of cigarettes from August 1,

2011, through December 31, 2011, shall be calculated by: (1) increasing the average retail

price per pack of 20 cigarettes from the most recent survey by the percentage change in a

weighted average of the presumed legal prices for cigarettes during the year after completion

of that survey, as reported and published by the Department of Commerce under section

325D.371
; (2) subtracting the sales tax included in the retail price; and (3) adjusting for

expected inflation. The rate must be published by May 1 and is effective for sales after July

31. If the weighted average of the presumed legal prices indicates that the average retail

price of cigarettes has not increased relative to the average retail price in the most recent

survey, then no inflation adjustment must be made. For packs of cigarettes with other than

20 cigarettes, the tax must be adjusted proportionally.

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EFFECTIVE DATE.

new text end

new text begin

This section is effective for sales and purchases made after

September 30, 2026.

new text end

ARTICLE 4

CANNABIS TAXES

Section 1.

Minnesota Statutes 2024, section 270C.726, subdivision 2, is amended to read:

Subd. 2.

Sales prohibited.

Beginning the third business day after the list is posted, no

cannabis cultivator, cannabis manufacturer, cannabis microbusiness, cannabis mezzobusiness,

medical cannabis combination business, cannabis wholesaler,
new text begin
lower-potency hemp edible

manufacturer, lower-potency hemp edible wholesaler,
new text end
or industrial hemp grower as defined

in chapter 342 may sell or deliver any product to a taxpayer included on the posted list.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for sales and purchases made after June

30, 2026.

new text end

Sec. 2.

Minnesota Statutes 2024, section 270C.726, subdivision 3, is amended to read:

Subd. 3.

Penalty.

A cannabis cultivator, cannabis manufacturer, cannabis microbusiness,

cannabis mezzobusiness, medical cannabis combination business, cannabis wholesaler,
new text begin

lower-potency hemp edible manufacturer, lower-potency hemp edible wholesaler,
new text end
or

industrial hemp grower as defined in chapter 342 who violates subdivision 2 is subject to

the penalties provided in sections
342.19
and
342.21
.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for sales and purchases made after June

30, 2026.

new text end

Sec. 3.

Minnesota Statutes 2024, section 295.81, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have

the meanings given.

(b) "Bundled transaction" means the retail sale of two or more products when the products

are otherwise distinct and identifiable and the products are sold for one nonitemized price.

(c) "Cannabis flower" has the meaning given in section
342.01, subdivision 16
.

(d) "Cannabis product" has the meaning given in section
342.01, subdivision 20
.

(e) "Cannabis solution product" means any cartridge, bottle, or other package that contains

a taxable cannabis product in a solution that is consumed or meant to be consumed through

the use of a heating element, power source, electronic circuit, or other electronic, chemical,

or mechanical means that produces vapor or aerosol. A cannabis solution product includes

any electronic delivery system, electronic vaping device, electronic vape pen, electronic

oral device, electronic delivery device, or similar product or device, and any batteries,

heating elements, or other components, parts, or accessories sold with and meant to be used

in the consumption of a solution containing a taxable cannabis product.

(f) "Cannabis mezzobusiness" means a cannabis business licensed under section
342.29
.

(g) "Cannabis microbusiness" means a cannabis business licensed under section
342.28
.

(h) "Cannabis retailer" means a cannabis business licensed under section
342.32
.

(i) "Commissioner" means the commissioner of revenue.

(j) "Gross receipts" means the total amount received in money or by barter or exchange

for all taxable cannabis product sales at retail as measured by the sales price. Gross receipts

include but are not limited to delivery charges and packaging costs. Gross receipts do not

include:

(1) any taxes imposed directly on the customer that are separately stated on the invoice,

bill of sale, or similar document given to the purchaser; and

(2) discounts, including cash, terms, or coupons, that are not reimbursed by a third party

and that are allowed by the seller and taken by a purchaser on a sale.

(k) "Hemp-derived consumer product" has the meaning given in section
342.01
,

subdivision 37.

(l) "Lower-potency hemp edible" has the meaning given in section
342.01, subdivision

50.

(m) "Lower-potency hemp edible retailer" means a cannabis business licensed under

section
342.43, subdivision 1
, clause (2).

(n) "Medical cannabis flower" has the meaning given in section
342.01, subdivision 54
.

(o) "Medical cannabinoid product" has the meaning given in section
342.01, subdivision

52.

(p) "Medical cannabis paraphernalia" has the meaning given in section
342.01
,

subdivision 55.

new text begin

(q) "Registry program" has the meaning given in section 342.01, subdivision 65.

new text end

deleted text begin

(q)
deleted text end
new text begin
(r)
new text end
"Retail sale" has the meaning given in section
297A.61, subdivision 4
.

deleted text begin

(r)
deleted text end
new text begin
(s)
new text end
"Taxable cannabis product" means cannabis flower, cannabis product, cannabis

solution product, hemp-derived consumer product, lower-potency hemp edible, and any

substantially similar item.
new text begin
Taxable cannabis product does not include medical items purchased

by or for a patient enrolled in the registry program or Tribal medical cannabis program,

including medical cannabis flower, medical cannabinoid products, or medical cannabis

paraphernalia.
new text end

deleted text begin

(s)
deleted text end
new text begin
(t)
new text end
"Taxable cannabis product retailer" means a retailer that sells any taxable cannabis

product, and includes a cannabis retailer, cannabis microbusiness, cannabis mezzobusiness,

medical cannabis combination business, and lower-potency hemp edible retailer. Taxable

cannabis product retailer includes but is not limited to a:

(1) retailer maintaining a place of business in this state;

(2) marketplace provider maintaining a place of business in this state, as defined in

section
297A.66, subdivision 1
, paragraph (a);

(3) retailer not maintaining a place of business in this state; and

(4) marketplace provider not maintaining a place of business in this state, as defined in

section
297A.66, subdivision 1
, paragraph (b).

new text begin

(u) "Tribal medical cannabis program" has the meaning given in section 342.01,

subdivision 69d.

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

(a) For medical items purchased by or for a patient in the registry

program, the amendment to paragraph (s) is effective the day following final enactment.

new text end

new text begin

(b) For medical items purchased by or for a patient in a Tribal medical cannabis program,

the amendment to paragraph (s) is effective for sales and purchases made after June 30,

2026.

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new text begin

(c) The addition of paragraphs (q) and (u) is effective for sales and purchases made after

June 30, 2026.

new text end

Sec. 4.

Minnesota Statutes 2024, section 295.81, subdivision 3, is amended to read:

Subd. 3.

Use tax imposed; credit for taxes paid.

(a) A person that receives taxable

cannabis products for use or storage in Minnesota, other than from a taxable cannabis product

retailer that paid the tax under subdivision 2, is subject to tax at the rate imposed under

subdivision 2. Liability for the tax is incurred when the person has possession of the taxable

cannabis product in Minnesota. The tax must be remitted to the commissioner in the same

manner prescribed for taxes imposed under chapter 297A.

(b) A person that has paid taxes to another state or any subdivision thereof
deleted text begin
on the same

transaction
deleted text end
new text begin
measured by gross receipts
new text end
and is subject to tax under this section
new text begin
on the same

gross receipts
new text end
is entitled to a credit for the tax legally due and paid to another state or

subdivision thereof to the extent of the lesser of (1) the tax actually paid to the other state

or subdivision thereof, or (2) the amount of tax imposed by Minnesota on the
deleted text begin
transaction
deleted text end
new text begin

gross receipts
new text end
subject to tax in the other state or subdivision thereof.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 5.

Minnesota Statutes 2024, section 295.81, subdivision 4, is amended to read:

Subd. 4.

Exemptions.

(a) The use tax imposed under subdivision 3, paragraph (a), does

not apply to the possession, use, or storage of taxable cannabis products if (1) the taxable

cannabis products have an aggregate cost in any calendar month to the customer of $100

or less, and (2) the taxable cannabis products were carried into this state by the customer.
new text begin

If a customer carries taxable cannabis products having an aggregate cost in any calendar

month of more than $100 into this state, the customer must pay the use tax imposed under

subdivision 3, paragraph (a), on the entire monthly cost amount.
new text end

deleted text begin

(b) The tax imposed under this section does not apply to sales of medical items purchased

by or for a patient enrolled in the registry program, including medical cannabis flower,

medical cannabinoid products, or medical cannabis paraphernalia.

deleted text end

deleted text begin

(c)
deleted text end
new text begin
(b)
new text end
Unless otherwise specified in this section, the exemptions applicable to taxes

imposed under chapter 297A are not applicable to the taxes imposed under this section.

deleted text begin

(d)
deleted text end
new text begin
(c)
new text end
The tax imposed under this section does not apply to:

(1) sales made on Tribally regulated land as defined in section
3.9228, subdivision 1
,

by a cannabis business licensed by a Minnesota Tribal government, as defined in section

3.9228, subdivision 1
, paragraph (f); or

(2) use tax owed on taxable cannabis products purchased on Tribally regulated land as

defined in section
3.9228, subdivision 1
, from a cannabis business licensed by a Minnesota

Tribal government as defined in section
3.9228, subdivision 1
, paragraph (f).

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 6.

Minnesota Statutes 2024, section 295.81, subdivision 6, is amended to read:

Subd. 6.

Taxes paid to another state or any subdivision thereof; credit.

A taxable

cannabis product retailer that has paid taxes to another state or any subdivision thereof

measured by gross receipts and is subject to tax under this section on the same gross receipts

is entitled to a credit for the tax legally due and paid to another state or
deleted text begin
any
deleted text end
subdivision

thereof to the extent of the lesser of (1) the tax actually paid to the other state or
deleted text begin
any
deleted text end

subdivision thereof, or (2) the amount of tax imposed by Minnesota on the gross receipts

subject to tax in the other taxing state or
deleted text begin
any
deleted text end
subdivision thereof.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 7.

Minnesota Statutes 2024, section 295.81, subdivision 9, is amended to read:

Subd. 9.

Returns; payment of tax.

(a) A taxable cannabis product retailer must report

the tax on a return prescribed by the commissioner and must remit the tax in a form and

manner prescribed by the commissioner. The return and the tax must be filed and paid using

the filing cycle and due dates provided for taxes imposed under
deleted text begin
section
289A.20, subdivision

4, and
deleted text end
chapter 297A.

(b) Interest must be paid on an overpayment refunded or credited to the taxpayer from

the date of payment of the tax until the date the refund is paid or credited. For purposes of

this subdivision, the date of payment is the due date of the return or the date of actual

payment of the tax, whichever is later.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

ARTICLE 5

MISCELLANEOUS

Section 1.
new text begin
ADMINISTRATIVE APPROPRIATIONS.
new text end

new text begin

(a) $91,000 in fiscal year 2027 is appropriated from the general fund to the commissioner

of revenue to administer the gross receipts tax on handguns, firearms, and ammunition under

Minnesota Statutes, section 295.85. The base for this appropriation is $170,000 in fiscal

year 2028 and thereafter.

new text end

new text begin

(b) $885,000 in fiscal year 2027 is appropriated from the general fund to the commissioner

of revenue for purposes of auditing pass-through entities. The base for this appropriation

is $1,833,000 in fiscal year 2028 and thereafter. This appropriation is meant to supplement

and not supplant existing funding.

new text end

new text begin

(c) $912,000 in fiscal year 2027 is appropriated from the general fund to the commissioner

of revenue to administer this act. The base for this appropriation is $936,000 in fiscal year

2028 and $875,000 each fiscal year thereafter. This appropriation is meant to supplement

and not supplant existing funding.

new text end