SF172

Purpose

• This bill aims to modify how sales tax is handled for retailers by providing for a small business sales tax allowance and clarifying remittance requirements. It adds coding to establish the new framework within Minnesota’s sales and use tax statute.

Main Provisions

• Amends Minnesota Statutes 2024 section 297A.77 subdivision 3.
• Section states that the tax collected by a retailer under this section must generally be remitted to the commissioner.
• The only part of the tax that a retailer may retain is the amount allowed under section 297A.816.
• All remittance must follow the applicable rules in chapter 289A and this chapter.
• The bill also notes the creation or mapping (coding) of the small business sales tax allowance within Minnesota Statutes chapter 297A.

Significance and Impact

• Clarifies that retailers are responsible for remitting nearly all collected sales tax to the state, while allowing a retention amount defined by current provisions (297A.816) for small business purposes.
• Introduces or formalizes a small business sales tax allowance, potentially reducing the burden on small retailers while ensuring tax revenues are remitted to the state.
• Connects and updates cross-references to existing tax statutes (chapter 289A) and existing retention provisions (297A.816).

Significant Changes to Existing Law

• Adds a specific requirement that tax collected by retailers be remitted to the commissioner with the exception of the retention allowed under 297A.816.
• Establishes or codifies a small business sales tax allowance within the current framework of Minnesota’s tax statutes.
• Indicates preparation for new codification in Minnesota Statutes chapter 297A.

Practical Implications

• Retailers must continue to remit tax collected, except for amounts they may retain under 297A.816.
• State tax administration remains governed by the existing remittance framework and cross-referenced chapters.

Relevant Terms - small business sales tax allowance - remitted - retailer - commissioner - Minnesota Statutes 2024 - section 297A.77 subdivision 3 - section 297A.816 - chapter 289A - sales tax - taxation - remittance - codification - Minnesota Statutes chapter 297A