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SF172 (Legislative Session 94 (2025-2026))

Small business tax allowance establishment

AI Generated Summary

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

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
January 16, 2025SenateActionIntroduction and first reading
January 16, 2025SenateActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Clarifies remittance requirements for taxes collected under 297A.77, subd. 3; retailer may retain amounts under 297A.816 are exempt from remittance."
      ],
      "removed": [],
      "summary": "This bill amends Minn. Stat. 2024, § 297A.77, subd. 3 to specify that tax collected under this section must be remitted to the commissioner, with an exception for amounts the retailer may retain under Minn. Stat. § 297A.816.",
      "modified": [
        "Remittance provisions for the small business sales tax as described in 297A.77, subd. 3."
      ]
    },
    "citation": "297A.77",
    "subdivision": "subd. 3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references Minn. Stat. ch. 289A for remittance provisions; does not modify 289A itself.",
      "modified": []
    },
    "citation": "289A",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References Minn. Stat. ch. 297A for the proposed coding of new law; the text does not itself modify the existing 297A.",
      "modified": []
    },
    "citation": "297A",
    "subdivision": ""
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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