HF4971

Purpose

• Establish a gross receipts tax on lodging services and pay television services sold by lodging facilities in Minnesota.
• Create a new revenue source and designate how the revenue is used, including deposit to the Minnesota victims of crime account.
• Include a tax return checkoff provision and conforming changes to Minnesota tax statutes.

Main Provisions

• Definitions
  • Gross receipts: total amounts received for lodging services and pay television services sold at retail in Minnesota, including money or barter, but excluding taxes charged directly to customers that are separately stated, and excluding certain discounts not reimbursed by a third party.
  • Lodging services: services defined in statute; lodging facility: facility in Minnesota providing lodging.
  • Pay television service: service defined in statute.
  • Retail sale, sales price: defined terms aligned with existing tax definitions.
• Tax on lodging services (Subd.2)
  • A tax is imposed on lodging facilities that sell lodging services in Minnesota.
  • The tax rate is stated as a percentage of gross receipts from lodging services (exact rate represented by placeholder in text).
  • Lodging facilities may, but are not required to, collect the tax from purchasers if the tax is separately stated on receipts.
  • If lodging is part of a bundled transaction, the entire sales price of the bundle is taxed under this provision.
  • The lodging tax is in addition to any other taxes on lodging services.
• Tax on pay television services (Subd.3)
  • A tax is imposed on lodging facilities that sell pay television services in Minnesota, if these services are not included in the lodging service sales price.
  • The tax rate is a percentage of gross receipts from retail sales of pay television services (rate shown as placeholder).
  • Lodging facilities may, but are not required to, collect the tax from purchasers if the tax is separately stated.
  • If pay television services are included in a bundled transaction, the entire bundled price is taxed under this provision.
• Credit for taxes paid to other states (Subd.4)
  • If a lodging facility paid gross receipts tax to another state or subdivision for the same receipts, it gets a credit up to the lesser of the amount actually paid or the Minnesota tax that would be imposed on the same receipts.
• Administration, compliance, and enforcement (Subds.5–6)
  • Applies audit, assessment, refund, penalty, interest, enforcement, collection, and administrative provisions consistent with chapters 270C and 289A to this tax.
  • Lodging facilities must file a return and remit the tax using a form and filing cycle determined by the commissioner, aligned with other Minnesota lodging or retail tax timing.
  • Interest applies on overpayments and refunds from the date of payment or due date, whichever is later.
• Revenue disposition (Subd.7)
  • Revenues from the tax, including penalties and interest, are deposited into the Minnesota victims of crime account.
• Personal liability (Subd.8)
  • The tax, interest, and penalties are a personal debt of the required filer starting when the liability arises.
  • If a fiduciary distributes assets without reserving enough to pay the tax, the fiduciary is personally liable for any deficiency.

Significant Changes to Existing Law

• Creates a new gross receipts tax framework for lodging facilities on lodging services and pay television services, expanding Minnesota’s tax base beyond existing sales or lodging taxes.
• Introduces specific handling for bundled transactions, separate tax statement on receipts, and the interplay with other taxes.
• Establishes a mechanism to credit taxes paid to other states to avoid double taxation.
• Reallocates revenue to the Minnesota victims of crime account, tying lodging/pay TV tax receipts to this fund.
• Imposes new personal debt and fiduciary liability obligations for tax payment, with standard administration provisions (audit, penalties, interest) carried over from other tax chapters.

What this bill seeks to accomplish

• Add a targeted gross receipts tax on lodging and pay television services to fund state programs (notably the crimes victims fund).
• Clarify definitions and administration to integrate the new tax into existing Minnesota tax structure.
• Provide tax credits for taxes paid in other states to prevent double taxation.

Relevant Terms - gross receipts tax - lodging services - pay television services - lodging facility - bundled transaction - sales price - retail sale - separately stated tax - credit for taxes paid to other states - Minnesota victims of crime account - commissioner of revenue - administration - audit - assessment - refund - penalties - interest - fiduciary liability - personal debt - filing cycle - returns - due date