Minnesota 2023-2024 Regular Session

Minnesota House Bill HF2815

Introduced
3/9/23  

Caption

Income tax provisions modified, and definition of resident trust modified.

Impact

The revisions mandated by HF2815 are poised to streamline the taxation process for trusts in Minnesota, ensuring that there is a clear framework governing which trusts are subject to state income taxes. This could affect both individuals and institutions involved in trust management, as it impacts how trusts operate within the state’s tax landscape. By clarifying the residency criteria of trusts, the bill may reduce ambiguity and lead to more consistent application of tax laws, thus benefiting state revenue generated from these entities.

Summary

HF2815 is a bill that seeks to modify the definitions and provisions related to income taxation in Minnesota, specifically addressing the definition of 'resident trust' as stipulated in Minnesota Statutes 2022, section 290.01, subdivision 7b. One of the main changes includes clarifying the conditions under which a trust can be considered a resident trust, particularly focusing on the decision-making authority of trustees regarding trust assets and distributions. The bill stipulates that trusts established before a certain cut-off date, along with specific administrative conditions, can be classified as resident trusts liable for state income tax.

Contention

The bill's provisions may spark debate among various stakeholders, especially concerning the potential implications for trust administrators and beneficiaries. Critics may argue that the changes could disproportionately affect certain trust arrangements, particularly those established for estate planning purposes. There may be concerns about affecting the interests of beneficiaries who rely on these trusts for financial security, especially if the amendments lead to increased tax burdens or compliance requirements. Additionally, discussions around the definition of 'resident trust' could become contentious, with differing interpretations of trust management practices and their implications for taxation.

Companion Bills

MN SF2729

Similar To Definition modification of resident trust

Previously Filed As

MN SF2729

Definition modification of resident trust

MN HF940

Income tax; definition of resident trust modified.

MN SF6

Resident trust definition modification

MN SB886

Modifies provisions relating to trusts

MN HF31

Individual income and corporate franchise tax provisions modified, and federal tax provisions conformity provided.

MN HF4481

Property tax classifications consolidated, classification rates modified, definition of referendum market value modified, state general levy on seasonal residential recreational property eliminated, and other property tax provisions modified.

MN HF2768

Individual income taxes, corporate franchise taxes, sales and use taxes, and other various taxes and tax-related provisions modified; various policy and technical changes made; income tax credits and subtractions modified; and enforcement, return, and audit provisions modified.

MN HF2256

Individual income tax provisions modified, and pass-through entity tax modified.

MN SB1482

Modifies provisions relating to the Missouri Family Trust Company Act

MN SF783

Tax provisions modifications

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