Senate File No. 46 is a proposed law in Minnesota that aims to modify how income tax is applied to certain nonresident workers. Under this bill, nonresident individuals who work in Minnesota for a limited time—specifically, 30 days or fewer in a taxable year—are exempt from having their income taxed by the state. This exemption only applies if these individuals also work in other states, their primary residence is in another state, and either their home state has a similar tax exemption, does not have an individual income tax, or their income is already exempt under federal law.

Additionally, the bill outlines: - Definitions involved, including what counts as employment duties and who qualifies as a nonresident. - Exemptions related to tax withholding and filing for eligible nonresident employees, provided they do not exceed the 30-day working limit in Minnesota. - Requirements for employers on how to accurately track and report the working days of employees through a time and attendance system. - Specific conditions under which an employer would not face penalties or interest for failing to withhold taxes if it's found that such withholding wasn't necessary based on employee workday data.

This legislation aims to simplify administrative burdens for employers and offer clear tax exemptions to qualifying nonresidents, fostering a straightforward working environment for out-of-state workers who spend limited time performing duties in Minnesota.