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HF386 (Legislative Session 94 (2025-2026))

Sales and use tax; vendor allowance provided.

Related bill: SF44

AI Generated Summary

This bill in the Minnesota House of Representatives pertains to changes in sales and use tax regulations. It suggests amendments to how vendors manage and submit their tax payments to the state, with a particular focus on the deadlines and percentages for tax remittance.

Key changes proposed in the bill include:

  1. Amending the deadlines for sales and use tax payments:

    • Taxes are generally due monthly by the 20th day of the following month.
    • Vendors with annual tax liabilities above certain thresholds have specific remittance requirements, particularly in June and the following August.

  2. June Tax Payments:

    • Larger vendors (with $250,000 or more in liabilities) must remit a percentage of their estimated June tax liability two business days before June 30. This percentage changes over the years, initially at 87.5% for 2020 and 2021, then 84.5% from 2022 onward.
    • These vendors must pay any additional amount due by August 20.

  3. Electronic Payment Requirement:

    • Vendors whose liabilities range from $10,000 to less than $250,000 must remit their payments electronically by the 20th day of the following month.
    • Vendors with $250,000 or more in liabilities also follow similar electronic payment protocols.

  4. Exemptions for Religious Beliefs:

    • Individuals who cannot make electronic payments due to religious beliefs may pay by mail, provided they inform the commissioner ahead of the payment on a prescribed form. Mail payments must be postmarked at least two business days before the due date.

  5. Definition of Vendor of Construction Materials:

    • This is specified to include retailers whose 50% or more revenue comes from selling specific construction materials like lumber, wood products, and masonry.

  6. Vendor Allowance:

    • A term called 'net liability,' which is the tax liability after subtracting any vendor allowance, is defined.

The bill aims to streamline tax collection and address specific needs of vendors with higher tax liabilities or special circumstances such as religious exemptions from electronic payments. The adjustments to timing and percentages are designed to better manage tax revenue flows and ensure compliance.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 12, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Introduces revised percentages for estimated June liabilities for vendors."
      ],
      "removed": [
        "N/A"
      ],
      "summary": "This bill amends the payment schedules for sales and use taxes as outlined in section 289A.20.",
      "modified": [
        "Changes the remittance schedule and method for vendors above certain fiscal thresholds."
      ]
    },
    "citation": "289A.20"
  },
  {
    "analysis": {
      "added": [
        "References a clause for reducing percentage of estimated payment."
      ],
      "removed": [
        "N/A"
      ],
      "summary": "Modification in estimation and payment methods for vendor liabilities referring to section 16A.152.",
      "modified": [
        "The method of certifying and adjusting vendor payment percentage."
      ]
    },
    "citation": "16A.152"
  }
]

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