AI Generated Summary
The bill SF No 6 proposes changes to how certain types of trusts are defined as residents for tax purposes in Minnesota. It aims to modify existing laws by setting specific criteria under which trusts are considered residents of the state, affecting how they are taxed.
For trusts that became irrevocable or were first administered in Minnesota before December 31, 1995:
- They are considered resident trusts only if at least two of the following are true: a) The majority of decisions about investing the trust’s assets are made in Minnesota. b) The majority of decisions about distributing the trust's income and principal are made in Minnesota. c) The trust's official records and meeting minutes are kept in Minnesota.
For trusts established or becoming irrevocable after December 31, 1995:
- A trust qualifies as a resident if: a) It was created by the will of someone who lived in Minnesota at the time of their death, or b) It is an irrevocable trust where the person who set up the trust (the grantor) lived in Minnesota when the trust became irrevocable.
- Additionally, at least two of the same conditions regarding decision-making and record-keeping (as listed above) must be met.
Additional provisions clarify that if trustees delegate their decision-making powers to an agent, those decisions do not count towards determining if a trust is administered in Minnesota, provided specific conditions about oversight and revocation powers are met.
In summary, this bill clarifies and updates the conditions under which trusts are classified as Minnesotan for taxation, focusing on where decisions are made and where records are kept, with special provisions for trusts set up or becoming irrevocable after 1995.
Bill text versions
- Introduction PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| January 15, 2025 | Senate | Floor | Action | Introduction and first reading | |
| January 15, 2025 | Senate | Floor | Action | Referred to | Taxes |
Citations
[
{
"analysis": {
"added": [
"Clarification of conditions that establish a trust as 'resident' if first administered or becoming irrevocable after December 31, 1995."
],
"removed": [],
"summary": "The bill modifies the definition of a 'resident trust' in Minnesota tax law under section 29001, subdivision 7b.",
"modified": [
"Adjusted language for determining residency based on trustee decisions and location of books and records."
]
},
"citation": "29001, subdivision 7b"
},
{
"analysis": {
"added": [
"Incorporates federal tax code definitions into state statute application."
],
"removed": [],
"summary": "References to sections 671 to 678 of the Internal Revenue Code pertain to determining the tax implications for grantor type trusts.",
"modified": [
"Clarifies applicability of rules for grantor versus non-grantor trusts."
]
},
"citation": "671 to 678 of the Internal Revenue Code"
}
]