SF5122

Purpose

Introduce a new gross receipts tax on certain lodging-related charges in Minnesota. The tax would apply to lodging services and to pay television services sold by lodging facilities, with the resulting revenue deposited into the Minnesota victims of crime account. The bill also makes related definitional and administrative updates to how this tax is collected and enforced.

Key Definitions (from the bill)

• Gross receipts: total money or value received for lodging services and pay television services, measured by the sales price. Excludes taxes charged to the customer and certain discounts not reimbursed by a third party.
• Lodging facility: a Minnesota facility that provides lodging services.
• Lodging services: the lodging-related offerings defined elsewhere in state law.
• Pay television service: pay TV as defined in state law.
• Retail sale and sales price: definitions tied to the above services (as specified in Minn. statutes).

Main Provisions

• Lodging services tax (Subd.2)
  • A gross receipts tax would be imposed on lodging facilities for the lodging services they sell to customers in Minnesota.
  • The tax rate is described as a specific percent of the lodging services’ gross receipts.
  • Lodging facilities may (but are not required to) collect the tax from customers, provided the tax is separately stated on the receipt.
  • If lodging services are sold as part of a bundled transaction, the entire sales price of the bundled transaction is subject to the tax.
  • The lodging tax is in addition to any other tax on lodging services.
• Pay television services tax (Subd.3)
  • A gross receipts tax would be imposed on pay television services sold by lodging facilities if those services are not included in the lodging price.
  • The tax rate is described as a specific percent of the gross receipts from sales of pay television services.
  • Lodging facilities may (but are not required to) collect the tax from customers, provided the tax is separately stated.
  • If pay television is bundled with lodging, the entire bundled price is subject to the tax.
• Credit for taxes paid to other states (Subd.4)
  • If a lodging facility paid taxes to another state (or subdivision) on the same gross receipts, it can receive a credit against the Minnesota tax, up to the lesser of the tax actually paid or the Minnesota tax due on those receipts.
• Administration and collection (Subds.5–6)
  • The tax follows applicable administration provisions from existing tax chapters; audits, penalties, interest, enforcement, collection, and appeals apply as with other taxes.
  • Lodging facilities must file returns and remit the tax on a cycle and using forms/due dates similar to those used for other specified Minnesota taxes.
  • Interest applies to overpayments refunded or credited, with details tied to the return due date or actual payment date.
• Revenue deposit (Subd.7)
  • Revenues (including penalties and interest) from the tax are deposited into the Minnesota victims of crime account.
• Personal liability (Subd.8)
  • The tax is a personal debt of the person required to file the return; fiduciaries are liable for the tax to the extent assets are not reserved to cover it. If a fiduciary distributes assets without reserving enough to pay the tax, they can be personally liable for any deficiency.

Significant Changes to Existing Law

• Establishes a new gross receipts tax on lodging services and pay television services sold by lodging facilities in Minnesota.
• Creates a dedicated revenue stream deposited into the Minnesota victims of crime account.
• Introduces cross-state credit provisions for taxes paid to other states to prevent double taxation.
• Adds specific administration and fiduciary liability rules, aligning with existing tax enforcement and collection frameworks.

Practical Effects (What this means)

• Lodging facilities would face an additional tax on their gross receipts from lodging and, where applicable, from pay television services they provide.
• The tax could affect consumer pricing if facilities choose to pass the cost to customers, especially in bundled offerings.
• Tax revenue would support the Minnesota victims of crime fund.
• Businesses with activity in multiple states may receive credits for taxes paid elsewhere to avoid double taxation.

Relevant Changes in Law Context (summary): - Adds a targeted gross receipts tax to lodging-related services. - Ties tax administration to existing Minnesota tax frameworks. - Creates a new revenue destination within state accounts and clarifies fiduciary responsibilities.

Relevant Terms - gross receipts - lodging services - pay television services - lodging facility - retail sale - sales price - bundled transaction - credit for taxes paid to other state - Minnesota victims of crime account - administration - fiduciary liability - returns - due dates - interest - penalties - enforcement - collection - bundles - separate statement on receipt