1.1 A bill for an act
1.2 relating to taxation; imposing a gross receipts tax on various services; proposing
1.3 coding for new law in Minnesota Statutes, chapter 295.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [295.90] BUSINESS-TO-BUSINESS SERVICES GROSS RECEIPTS TAX.
1.6 Subdivision 1.Definitions.(a) For purposes of this section, the definitions in this
1.7subdivision have the meanings given.
1.8 (b) "Commissioner" means the commissioner of revenue.
1.9 (c) "Gross receipts" means the total amount received in money or by barter or exchange
1.10for taxable services as measured by the sales price, but does not include any taxes imposed
1.11directly on the consumer that are separately stated on the invoice, bill of sale, or similar
1.12document given to the purchaser.
1.13 (d) "Retail sale" means any sale of a taxable service for any purpose other than resale
1.14by the purchaser in the normal course of business as defined in section 297A.61, subdivision
1.1521.
1.16 (e) "Taxable services" means the sale of the following services by a trade or business
1.17entity to another trade or business entity:
1.18 (1) legal;
1.19 (2) accounting and bookkeeping;
1.20 (3) architectural and engineering;
1.21 (4) research and development;
1Section 1.
REVISOR EAP/EN 25-0543904/07/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 3190
NINETY-FOURTH SESSION
Authored by Greenman, Gomez, Howard, Freiberg, Stephenson and others04/21/2025
The bill was read for the first time and referred to the Committee on Taxes 2.1 (5) specialized design;
2.2 (6) computer;
2.3 (7) management consulting;
2.4 (8) other consulting and development;
2.5 (9) office administrative;
2.6 (10) facilities support;
2.7 (11) employment;
2.8 (12) business support;
2.9 (13) professional and technical;
2.10 (14) automotive repair and maintenance;
2.11 (15) electronic equipment repair and maintenance;
2.12 (16) commercial machinery repair and maintenance;
2.13 (17) repair and maintenance of personal property; and
2.14 (18) any service enumerated in section 297A.61, subdivision 3, paragraph (g), clauses
2.15(3), (5), and (6), items (i), (iii), (iv), and (vi).
2.16 (f) "Trade or business" means activity carried on for the production of income from
2.17selling goods or performing services.
2.18 (g) "Trade or business entity" means an entity that engages in a trade or business.
2.19 Subd. 2.Gross receipts tax imposed.(a) A tax equal to two percent of gross receipts
2.20from retail sales in Minnesota of taxable services is imposed on any trade or business entity
2.21that provides taxable services to another trade or business entity. A trade or business entity
2.22may but is not required to collect the tax imposed by this section from the purchaser as long
2.23as the tax is separately stated on the receipt, invoice, bill of sale, or similar document given
2.24to the purchaser.
2.25 (b) The tax imposed under this section is in addition to any other tax imposed on the
2.26retail sale of services under chapter 297A or income received for services provided under
2.27chapter 290.
2.28 Subd. 3.Use tax imposed; credit for taxes paid.(a) A person who receives taxable
2.29services for use in Minnesota, other than from a trade or business entity that paid the tax
2.30under subdivision 2, is subject to tax at the rate imposed under subdivision 2. Liability for
2Section 1.
REVISOR EAP/EN 25-0543904/07/25 3.1the tax is incurred when the person has received the taxable services to completion in
3.2Minnesota. The tax must be remitted to the commissioner in the same manner prescribed
3.3for taxes imposed under chapter 297A.
3.4 (b) A trade or business entity that has paid taxes to another state or any subdivision
3.5thereof on the same transaction and is subject to tax under this section is entitled to a credit
3.6for the tax legally due and paid to another state or subdivision thereof to the extent of the
3.7lesser of (1) the tax actually paid to the other state or subdivision thereof, or (2) the amount
3.8of tax imposed by Minnesota on the transaction subject to tax in the other state or subdivision
3.9thereof.
3.10 Subd. 4.Tax collection required.A trade or business entity with nexus in Minnesota
3.11that is not subject to tax under subdivision 2 is required to collect the tax imposed under
3.12subdivision 3 from the purchaser of the taxable services and give the purchaser a receipt
3.13for the tax paid. The tax collected must be remitted to the commissioner in the same manner
3.14prescribed for the taxes imposed under chapter 297A.
3.15 Subd. 5.Taxes paid to another state or any subdivision thereof; credit.A trade or
3.16business entity that has paid taxes to another state or any subdivision thereof measured by
3.17gross receipts and is subject to tax under this section on the same gross receipts is entitled
3.18to a credit for the tax legally due and paid to another state or any subdivision thereof to the
3.19extent of the lesser of (1) the tax actually paid to the other state or any subdivision thereof,
3.20or (2) the amount of tax imposed by Minnesota on the gross receipts subject to tax in the
3.21other taxing state or any subdivision thereof.
3.22 Subd. 6.Sourcing of sales.Section 297A.668 applies to the taxes imposed by this
3.23section.
3.24 Subd. 7.Administration.Unless specifically provided otherwise, the audit, assessment,
3.25refund, penalty, interest, enforcement, collection remedies, appeal, and administrative
3.26provisions of chapters 270C and 289A that are applicable to taxes imposed under chapter
3.27297A apply to taxes imposed under this section.
3.28 Subd. 8.Returns; payment of tax.(a) A trade or business entity must report the tax on
3.29a return prescribed by the commissioner and must remit the tax in a form and manner
3.30prescribed by the commissioner. The return must be filed and the tax must be paid using
3.31the filing cycle and due dates provided for taxes imposed under section 289A.20, subdivision
3.324, and chapter 297A.
3.33 (b) Interest must be paid on an overpayment refunded or credited to the taxpayer from
3.34the date of payment of the tax until the date the refund is paid or credited. For purposes of
3Section 1.
REVISOR EAP/EN 25-0543904/07/25 4.1this subdivision, the date of payment is the due date of the return or the date of actual
4.2payment of the tax, whichever is later.
4.3 Subd. 9.Deposit of revenues.The commissioner must deposit the revenues, including
4.4penalties and interest, derived from the tax imposed by this section to the general fund.
4.5 Subd. 10.Personal debt.The tax imposed by this section, and interest and penalties
4.6imposed with respect to the tax, are a personal debt of the person required to file a return
4.7from the time that the liability for it arises, irrespective of when the time for payment of the
4.8liability occurs. The debt must, in the case of the executor or administrator of the estate of
4.9a decedent and in the case of a fiduciary, be that of the person in the person's official or
4.10fiduciary capacity only, unless the person has voluntarily distributed the assets held in that
4.11capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which
4.12event the person is personally liable for any deficiency.
4.13 EFFECTIVE DATE.This section is effective for taxable services received after
4.14December 31, 2025.
4Section 1.
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