HF4119

Purpose

• The bill intends to increase property tax refunds and renters credits by reducing the copay percentages that renters must pay. It would modify how the renters’ credit is calculated under Minnesota law, with the goal of raising the amount of money returned to eligible renters.

Main Provisions

• Section 290.0693 Subd.3 (Renters) is amended to change how the renter’s credit is calculated:
  • The credit is defined as the portion of rent that constitutes property taxes remaining after subtracting the renter’s copay, up to a stated maximum credit amount.
  • The calculation uses an income-based table that pairs a “percent of income” (income bracket) with a “percent paid by claimant” (copay) and the corresponding maximum credit. This table determines how much the renter must pay out of pocket and how much credit they can receive up to the cap.
  • The credit is limited to a maximum amount shown in the table; there is an upper income cutoff beyond which no credit is allowed.
• The commissioner must annually adjust the dollar amounts of the income thresholds and the maximum refunds (in line with Minnesota Statutes section 270C.22). The statutory year for these adjustments is set for 2024 through 2026.
• The commissioner must construct and provide a comprehensive table showing:
  • the rent that constitutes property taxes to be paid by the renter, and
  • the refund allowed at various income and assessment levels.
  • The table follows the specified schedule of income brackets, percentages, and maximums, and the commissioner may adjust transitions between brackets (gradually) as needed.
• All refunds must be computed according to the tables the commissioner prepares and issues.
• An explicit upper-income limit is provided: no credit is allowed for households whose income reaches a specified high level (the text includes a bracket around 75,389 to 79,330 or more).
• Additional sections (1.2 and 1.3) emphasize the annual adjustment process and the ongoing requirement to make the comprehensive table available to taxpayers.

How this Changes Existing Law

• Replaces the prior method of computing the renters’ credit with a new, income-based table and copay structure.
• Introduces annual updates to income thresholds and refunds, rather than fixed values.
• Adds a defined upper-income limit for eligibility and formalizes a process for publishing a detailed, taxpayer-facing table to guide credits.

Practical Impact

• For eligible renters, the refund amount and the required copay will be determined by the new income-based table, potentially increasing refunds by lowering copay amounts in many brackets.
• Renters will face a clearly defined set of income thresholds and copay percentages that determine their refund level.
• Taxpayers will need to consult the commissioner’s table annually to determine their credit amount.

Administrative Aspects

• The commissioner of revenue is responsible for:
  • setting and updating the income thresholds and maximum refunds each year,
  • preparing a comprehensive table that maps income, rent constituting property taxes, and refunds,
  • ensuring refunds are calculated according to the official table.

Significance

• This bill represents a structural change to how renters’ property tax relief is calculated, moving to a detailed, income-bracketed credit with annual adjustments and an explicit eligibility threshold.
• It aims to increase overall property tax relief to renters by reducing copay requirements and expanding the visibility and predictability of refunds through a published table.

Relevant terms - Renters credit - Property taxes - Copay (copayment) - Percent of income (income brackets) - Percent paid by claimant - Maximum credit - Income thresholds - Comprehensive table - Commissioner of revenue - 270C.22 (annual adjustments) - Refunds - Upper-income limit / eligibility cutoff - Minnesota Statutes 2024 sections 290.0693 and 290A.04