Minnesota 2025-2026 Regular Session

Minnesota House Bill HF3190 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to taxation; imposing a gross receipts tax on various services; proposing
3	3	1.3 coding for new law in Minnesota Statutes, chapter 295.
4	4	1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
5	5	1.5 Section 1. [295.90] BUSINESS-TO-BUSINESS SERVICES GROSS RECEIPTS TAX.
6	6	1.6 Subdivision 1.Definitions.(a) For purposes of this section, the definitions in this
7	7	1.7subdivision have the meanings given.
8	8	1.8 (b) "Commissioner" means the commissioner of revenue.
9	9	1.9 (c) "Gross receipts" means the total amount received in money or by barter or exchange
10	10	1.10for taxable services as measured by the sales price, but does not include any taxes imposed
11	11	1.11directly on the consumer that are separately stated on the invoice, bill of sale, or similar
12	12	1.12document given to the purchaser.
13	13	1.13 (d) "Retail sale" means any sale of a taxable service for any purpose other than resale
14	14	1.14by the purchaser in the normal course of business as defined in section 297A.61, subdivision
15	15	1.1521.
16	16	1.16 (e) "Taxable services" means the sale of the following services by a trade or business
17	17	1.17entity to another trade or business entity:
18	18	1.18 (1) legal;
19	19	1.19 (2) accounting and bookkeeping;
20	20	1.20 (3) architectural and engineering;
21	21	1.21 (4) research and development;
22	22	1Section 1.
23	23	REVISOR EAP/EN 25-0543904/07/25
24	24	State of Minnesota
25	25	This Document can be made available
26	26	in alternative formats upon request
27	27	HOUSE OF REPRESENTATIVES
28	28	H. F. No. 3190
29	29	NINETY-FOURTH SESSION
30	30	Authored by Greenman, Gomez, Howard, Freiberg, Stephenson and others04/21/2025
31	31	The bill was read for the first time and referred to the Committee on Taxes 2.1 (5) specialized design;
32	32	2.2 (6) computer;
33	33	2.3 (7) management consulting;
34	34	2.4 (8) other consulting and development;
35	35	2.5 (9) office administrative;
36	36	2.6 (10) facilities support;
37	37	2.7 (11) employment;
38	38	2.8 (12) business support;
39	39	2.9 (13) professional and technical;
40	40	2.10 (14) automotive repair and maintenance;
41	41	2.11 (15) electronic equipment repair and maintenance;
42	42	2.12 (16) commercial machinery repair and maintenance;
43	43	2.13 (17) repair and maintenance of personal property; and
44	44	2.14 (18) any service enumerated in section 297A.61, subdivision 3, paragraph (g), clauses
45	45	2.15(3), (5), and (6), items (i), (iii), (iv), and (vi).
46	46	2.16 (f) "Trade or business" means activity carried on for the production of income from
47	47	2.17selling goods or performing services.
48	48	2.18 (g) "Trade or business entity" means an entity that engages in a trade or business.
49	49	2.19 Subd. 2.Gross receipts tax imposed.(a) A tax equal to two percent of gross receipts
50	50	2.20from retail sales in Minnesota of taxable services is imposed on any trade or business entity
51	51	2.21that provides taxable services to another trade or business entity. A trade or business entity
52	52	2.22may but is not required to collect the tax imposed by this section from the purchaser as long
53	53	2.23as the tax is separately stated on the receipt, invoice, bill of sale, or similar document given
54	54	2.24to the purchaser.
55	55	2.25 (b) The tax imposed under this section is in addition to any other tax imposed on the
56	56	2.26retail sale of services under chapter 297A or income received for services provided under
57	57	2.27chapter 290.
58	58	2.28 Subd. 3.Use tax imposed; credit for taxes paid.(a) A person who receives taxable
59	59	2.29services for use in Minnesota, other than from a trade or business entity that paid the tax
60	60	2.30under subdivision 2, is subject to tax at the rate imposed under subdivision 2. Liability for
61	61	2Section 1.
62	62	REVISOR EAP/EN 25-0543904/07/25 3.1the tax is incurred when the person has received the taxable services to completion in
63	63	3.2Minnesota. The tax must be remitted to the commissioner in the same manner prescribed
64	64	3.3for taxes imposed under chapter 297A.
65	65	3.4 (b) A trade or business entity that has paid taxes to another state or any subdivision
66	66	3.5thereof on the same transaction and is subject to tax under this section is entitled to a credit
67	67	3.6for the tax legally due and paid to another state or subdivision thereof to the extent of the
68	68	3.7lesser of (1) the tax actually paid to the other state or subdivision thereof, or (2) the amount
69	69	3.8of tax imposed by Minnesota on the transaction subject to tax in the other state or subdivision
70	70	3.9thereof.
71	71	3.10 Subd. 4.Tax collection required.A trade or business entity with nexus in Minnesota
72	72	3.11that is not subject to tax under subdivision 2 is required to collect the tax imposed under
73	73	3.12subdivision 3 from the purchaser of the taxable services and give the purchaser a receipt
74	74	3.13for the tax paid. The tax collected must be remitted to the commissioner in the same manner
75	75	3.14prescribed for the taxes imposed under chapter 297A.
76	76	3.15 Subd. 5.Taxes paid to another state or any subdivision thereof; credit.A trade or
77	77	3.16business entity that has paid taxes to another state or any subdivision thereof measured by
78	78	3.17gross receipts and is subject to tax under this section on the same gross receipts is entitled
79	79	3.18to a credit for the tax legally due and paid to another state or any subdivision thereof to the
80	80	3.19extent of the lesser of (1) the tax actually paid to the other state or any subdivision thereof,
81	81	3.20or (2) the amount of tax imposed by Minnesota on the gross receipts subject to tax in the
82	82	3.21other taxing state or any subdivision thereof.
83	83	3.22 Subd. 6.Sourcing of sales.Section 297A.668 applies to the taxes imposed by this
84	84	3.23section.
85	85	3.24 Subd. 7.Administration.Unless specifically provided otherwise, the audit, assessment,
86	86	3.25refund, penalty, interest, enforcement, collection remedies, appeal, and administrative
87	87	3.26provisions of chapters 270C and 289A that are applicable to taxes imposed under chapter
88	88	3.27297A apply to taxes imposed under this section.
89	89	3.28 Subd. 8.Returns; payment of tax.(a) A trade or business entity must report the tax on
90	90	3.29a return prescribed by the commissioner and must remit the tax in a form and manner
91	91	3.30prescribed by the commissioner. The return must be filed and the tax must be paid using
92	92	3.31the filing cycle and due dates provided for taxes imposed under section 289A.20, subdivision
93	93	3.324, and chapter 297A.
94	94	3.33 (b) Interest must be paid on an overpayment refunded or credited to the taxpayer from
95	95	3.34the date of payment of the tax until the date the refund is paid or credited. For purposes of
96	96	3Section 1.
97	97	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
98	98	4.2payment of the tax, whichever is later.
99	99	4.3 Subd. 9.Deposit of revenues.The commissioner must deposit the revenues, including
100	100	4.4penalties and interest, derived from the tax imposed by this section to the general fund.
101	101	4.5 Subd. 10.Personal debt.The tax imposed by this section, and interest and penalties
102	102	4.6imposed with respect to the tax, are a personal debt of the person required to file a return
103	103	4.7from the time that the liability for it arises, irrespective of when the time for payment of the
104	104	4.8liability occurs. The debt must, in the case of the executor or administrator of the estate of
105	105	4.9a decedent and in the case of a fiduciary, be that of the person in the person's official or
106	106	4.10fiduciary capacity only, unless the person has voluntarily distributed the assets held in that
107	107	4.11capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which
108	108	4.12event the person is personally liable for any deficiency.
109	109	4.13 EFFECTIVE DATE.This section is effective for taxable services received after
110	110	4.14December 31, 2025.
111	111	4Section 1.
112	112	REVISOR EAP/EN 25-0543904/07/25