Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF1058 Compare Versions

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Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to transportation; amending imposition and allocation of certain taxes;
3	3	1.3 repealing retail delivery fee; amending Minnesota Statutes 2024, sections 174.49,
4	4	1.4 subdivisions 2, 3; 270C.15; 297A.94; 297A.9915, subdivision 4; repealing
5	5	1.5 Minnesota Statutes 2024, sections 168E.01; 168E.03; 168E.05; 168E.07; 168E.09.
6	6	1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
7	7	1.7 Section 1. Minnesota Statutes 2024, section 174.49, subdivision 2, is amended to read:
8	8	1.8 Subd. 2.Transportation advancement account.A transportation advancement account
9	9	1.9is established in the special revenue fund. The account consists of funds under sections
10	10	1.10168E.09, subdivision 2, and section 297A.94, and as provided by law and any other money
11	11	1.11donated, allotted, transferred, or otherwise provided to the account.
12	12	1.12 EFFECTIVE DATE.This section is effective July 1, 2025.
13	13	1.13 Sec. 2. Minnesota Statutes 2024, section 174.49, subdivision 3, is amended to read:
14	14	1.14 Subd. 3.Distribution.The commissioner must distribute or transfer the funds in the
15	15	1.15transportation advancement account as follows:
16	16	1.16 (1) 36 percent to metropolitan counties in the manner provided under subdivision 5;
17	17	1.17 (2) ten (1) 28 percent to the county state-aid highway fund;
18	18	1.18 (3) 15 (2) 23 percent to the larger cities assistance account under section 162.146,
19	19	1.19subdivision 1;
20	20	1.20 (4) 27 (3) 34 percent to the small cities assistance account under section 162.145,
21	21	1.21subdivision 2; and
22	22	1Sec. 2.
23	23	25-02323 as introduced01/16/25 REVISOR KRB/BM
24	24	SENATE
25	25	STATE OF MINNESOTA
26	26	S.F. No. 1058NINETY-FOURTH SESSION
27	27	(SENATE AUTHORS: DRAZKOWSKI and Miller)
28	28	OFFICIAL STATUSD-PGDATE
29	29	Introduction and first reading02/06/2025
30	30	Referred to Transportation 2.1 (5) 11 (4) 15 percent to the town road account under section 162.081; and.
31	31	2.2 (6) one percent to the food delivery support account under section 256.9752, subdivision
32	32	2.31a.
33	33	2.4 EFFECTIVE DATE.This section is effective July 1, 2025.
34	34	2.5 Sec. 3. Minnesota Statutes 2024, section 270C.15, is amended to read:
35	35	2.6 270C.15 REVENUE DEPARTMENT SERVICE AND RECOVERY SPECIAL
36	36	2.7REVENUE FUND.
37	37	2.8 A Revenue Department service and recovery special revenue fund is created for the
38	38	2.9purpose of recovering the costs of furnishing government data and related services or
39	39	2.10products, as well as recovering costs associated with collecting local taxes on sales and the
40	40	2.11retail delivery fee established under chapter 168E. All money collected under this section
41	41	2.12is deposited in the Revenue Department service and recovery special revenue fund. Money
42	42	2.13in the fund is appropriated to the commissioner to reimburse the department for the costs
43	43	2.14incurred in administering the tax law or providing the data, service, or product. Any money
44	44	2.15paid to the department as a criminal fine for a violation of state revenue law that is designated
45	45	2.16by the court to fund enforcement of state revenue law is appropriated to this fund.
46	46	2.17 EFFECTIVE DATE.This section is effective July 1, 2025.
47	47	2.18 Sec. 4. Minnesota Statutes 2024, section 297A.94, is amended to read:
48	48	2.19 297A.94 DEPOSIT OF REVENUES.
49	49	2.20 (a) Except as provided in this section, the commissioner shall deposit the revenues,
50	50	2.21including interest and penalties, derived from the taxes imposed by this chapter in the state
51	51	2.22treasury and credit them to the general fund.
52	52	2.23 (b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
53	53	2.24account in the special revenue fund if:
54	54	2.25 (1) the taxes are derived from sales and use of property and services purchased for the
55	55	2.26construction and operation of an agricultural resource project; and
56	56	2.27 (2) the purchase was made on or after the date on which a conditional commitment was
57	57	2.28made for a loan guaranty for the project under section 41A.04, subdivision 3.
58	58	2.29The commissioner of management and budget shall certify to the commissioner the date on
59	59	2.30which the project received the conditional commitment. The amount deposited in the loan
60	60	2Sec. 4.
61	61	25-02323 as introduced01/16/25 REVISOR KRB/BM 3.1guaranty account must be reduced by any refunds and by the costs incurred by the Department
62	62	3.2of Revenue to administer and enforce the assessment and collection of the taxes.
63	63	3.3 (c) The commissioner shall deposit the revenues, including interest and penalties, derived
64	64	3.4from the taxes imposed on sales and purchases included in section 297A.61, subdivision 3,
65	65	3.5paragraph (g), clauses (1) and (4), in the state treasury, and credit them as follows:
66	66	3.6 (1) first to the general obligation special tax bond debt service account in each fiscal
67	67	3.7year the amount required by section 16A.661, subdivision 3, paragraph (b); and
68	68	3.8 (2) after the requirements of clause (1) have been met, the balance to the general fund.
69	69	3.9 (d) Beginning with sales taxes remitted after July 1, 2017, The commissioner shall
70	70	3.10deposit in the state treasury the revenues collected under section 297A.64, subdivision 1,
71	71	3.11including interest and penalties and minus refunds, and credit them to the highway user tax
72	72	3.12distribution fund transportation advancement account under section 174.49.
73	73	3.13 (e) The commissioner shall deposit the revenues, including interest and penalties,
74	74	3.14collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
75	75	3.15general fund. By July 15 of each year the commissioner shall transfer to the highway user
76	76	3.16tax distribution fund an amount equal to the excess fees collected under section 297A.64,
77	77	3.17subdivision 5, for the previous calendar year.
78	78	3.18 (f) Beginning with sales taxes remitted after July 1, 2017, in conjunction with the deposit
79	79	3.19of revenues under paragraph (d), the commissioner shall deposit into the state treasury and
80	80	3.20credit to the highway user tax distribution fund an amount equal to the estimated revenues
81	81	3.21derived from the tax rate imposed under section 297A.62, subdivision 1, on the lease or
82	82	3.22rental for not more than 28 days of rental motor vehicles subject to section 297A.64. The
83	83	3.23commissioner shall estimate the amount of sales tax revenue deposited under this paragraph
84	84	3.24based on the amount of revenue deposited under paragraph (d).
85	85	3.25 (g) The commissioner must deposit the revenues derived from the taxes imposed under
86	86	3.26section 297A.62, subdivision 1, on the sale and purchase of motor vehicle repair and
87	87	3.27replacement parts in the state treasury and credit:
88	88	3.28 (1) 43.5 percent in each fiscal year to the highway user tax distribution fund;
89	89	3.29 (2) a percentage to the transportation advancement account under section 174.49 as
90	90	3.30follows:
91	91	3.31 (i) 3.5 percent in fiscal year 2024;
92	92	3.32 (ii) 4.5 percent in fiscal year 2025;
93	93	3Sec. 4.
94	94	25-02323 as introduced01/16/25 REVISOR KRB/BM 4.1 (iii) 5.5 percent in fiscal year 2026;
95	95	4.2 (iv) 7.5 percent in fiscal year 2027;
96	96	4.3 (v) 14.5 percent in fiscal year 2028;
97	97	4.4 (vi) 21.5 percent in fiscal year 2029;
98	98	4.5 (vii) 28.5 percent in fiscal year 2030;
99	99	4.6 (viii) 36.5 percent in fiscal year 2031;
100	100	4.7 (ix) 44.5 percent in fiscal year 2032; and
101	101	4.8 (x) 56.5 percent in fiscal year 2033 and thereafter; and
102	102	4.9 (3) the remainder in each fiscal year to the general fund.
103	103	4.10For purposes of this paragraph, "motor vehicle" has the meaning given in section 297B.01,
104	104	4.11subdivision 11, and "motor vehicle repair and replacement parts" includes (i) all parts, tires,
105	105	4.12accessories, and equipment incorporated into or affixed to the motor vehicle as part of the
106	106	4.13motor vehicle maintenance and repair, and (ii) paint, oil, and other fluids that remain on or
107	107	4.14in the motor vehicle as part of the motor vehicle maintenance or repair. For purposes of this
108	108	4.15paragraph, "tire" means any tire of the type used on highway vehicles, if wholly or partially
109	109	4.16made of rubber and if marked according to federal regulations for highway use.
110	110	4.17 (h) 81.56 percent of the revenues, including interest and penalties, transmitted to the
111	111	4.18commissioner under section 297A.65, must be deposited by the commissioner in the state
112	112	4.19treasury as follows:
113	113	4.20 (1) 47.5 percent of the receipts must be deposited in the heritage enhancement account
114	114	4.21in the game and fish fund, and may be spent only on activities that improve, enhance, or
115	115	4.22protect fish and wildlife resources, including conservation, restoration, and enhancement
116	116	4.23of land, water, and other natural resources of the state;
117	117	4.24 (2) 22.5 percent of the receipts must be deposited in the natural resources fund, and may
118	118	4.25be spent only for state parks and trails;
119	119	4.26 (3) 22.5 percent of the receipts must be deposited in the natural resources fund, and may
120	120	4.27be spent only on metropolitan park and trail grants;
121	121	4.28 (4) three percent of the receipts must be deposited in the natural resources fund, and
122	122	4.29may be spent only on local trail grants;
123	123	4Sec. 4.
124	124	25-02323 as introduced01/16/25 REVISOR KRB/BM 5.1 (5) two percent of the receipts must be deposited in the natural resources fund, and may
125	125	5.2be spent only for the Minnesota Zoological Garden, the Como Park Zoo and Conservatory,
126	126	5.3and the Duluth Zoo; and
127	127	5.4 (6) 2.5 percent of the receipts must be deposited in the pollinator account established in
128	128	5.5section 103B.101, subdivision 19.
129	129	5.6 (i) 1.5 percent of the revenues, including interest and penalties, transmitted to the
130	130	5.7commissioner under section 297A.65 must be deposited in a regional parks and trails account
131	131	5.8in the natural resources fund and may only be spent for parks and trails of regional
132	132	5.9significance outside of the seven-county metropolitan area under section 85.535, based on
133	133	5.10recommendations from the Greater Minnesota Regional Parks and Trails Commission under
134	134	5.11section 85.536.
135	135	5.12 (j) 1.5 percent of the revenues, including interest and penalties, transmitted to the
136	136	5.13commissioner under section 297A.65 must be deposited in an outdoor recreational
137	137	5.14opportunities for underserved communities account in the natural resources fund and may
138	138	5.15only be spent on projects and activities that connect diverse and underserved Minnesotans
139	139	5.16through expanding cultural environmental experiences, exploration of their environment,
140	140	5.17and outdoor recreational activities.
141	141	5.18 (k) The revenue dedicated under paragraph (h) may not be used as a substitute for
142	142	5.19traditional sources of funding for the purposes specified, but the dedicated revenue shall
143	143	5.20supplement traditional sources of funding for those purposes. Land acquired with money
144	144	5.21deposited in the game and fish fund under paragraph (h) must be open to public hunting
145	145	5.22and fishing during the open season, except that in aquatic management areas or on lands
146	146	5.23where angling easements have been acquired, fishing may be prohibited during certain times
147	147	5.24of the year and hunting may be prohibited. At least 87 percent of the money deposited in
148	148	5.25the game and fish fund for improvement, enhancement, or protection of fish and wildlife
149	149	5.26resources under paragraph (h) must be allocated for field operations.
150	150	5.27 (l) The commissioner must deposit the revenues, including interest and penalties minus
151	151	5.28any refunds, derived from the sale of items regulated under section 624.20, subdivision 1,
152	152	5.29that may be sold to persons 18 years old or older and that are not prohibited from use by
153	153	5.30the general public under section 624.21, in the state treasury and credit:
154	154	5.31 (1) 25 percent to the volunteer fire assistance grant account established under section
155	155	5.3288.068;
156	156	5.33 (2) 25 percent to the fire safety account established under section 297I.06, subdivision
157	157	5.343; and
158	158	5Sec. 4.
159	159	25-02323 as introduced01/16/25 REVISOR KRB/BM 6.1 (3) the remainder to the general fund.
160	160	6.2 For purposes of this paragraph, the percentage of total sales and use tax revenue derived
161	161	6.3from the sale of items regulated under section 624.20, subdivision 1, that are allowed to be
162	162	6.4sold to persons 18 years old or older and are not prohibited from use by the general public
163	163	6.5under section 624.21, is a set percentage of the total sales and use tax revenues collected in
164	164	6.6the state, with the percentage determined under Laws 2017, First Special Session chapter
165	165	6.71, article 3, section 39.
166	166	6.8 (m) The revenues deposited under paragraphs (a) to (l) do not include the revenues,
167	167	6.9including interest and penalties, generated by the sales tax imposed under section 297A.62,
168	168	6.10subdivision 1a, which must be deposited as provided under the Minnesota Constitution,
169	169	6.11article XI, section 15.
170	170	6.12 EFFECTIVE DATE.This section is effective for taxes remitted after June 30, 2025.
171	171	6.13 Sec. 5. Minnesota Statutes 2024, section 297A.9915, subdivision 4, is amended to read:
172	172	6.14 Subd. 4.Deposit.Proceeds of the regional transportation sales tax must be allocated as
173	173	6.15follows:
174	174	6.16 (1) 83 74 percent to the Metropolitan Council for the purposes specified under section
175	175	6.17473.4465; and
176	176	6.18 (2) 17 26 percent to metropolitan counties, as defined in section 174.49, subdivision 1,
177	177	6.19in the manner provided under section 174.49, subdivision 5.
178	178	6.20 EFFECTIVE DATE.This section is effective for taxes remitted after June 30, 2025.
179	179	6.21 Sec. 6. REPEALER.
180	180	6.22 Minnesota Statutes 2024, sections 168E.01; 168E.03; 168E.05; 168E.07; and 168E.09,
181	181	6.23are repealed.
182	182	6.24 EFFECTIVE DATE.This section is effective July 1, 2025.
183	183	6Sec. 6.
184	184	25-02323 as introduced01/16/25 REVISOR KRB/BM 168E.01 DEFINITIONS.
185	185	Subdivision 1.Scope.As used in this chapter, the following terms have the meanings given.
186	186	Subd. 2.Accessories and supplies."Accessories and supplies" has the meaning given in section
187	187	297A.67, subdivision 7a.
188	188	Subd. 3.Baby products."Baby products" means breast pumps, baby bottles and nipples,
189	189	pacifiers, teething rings, infant syringes, baby wipes, cribs and bassinets, crib and bassinet mattresses,
190	190	crib and bassinet sheets, changing tables, changing pads, strollers, car seats and car seat bases, baby
191	191	swings, bottle sterilizers, and infant eating utensils.
192	192	Subd. 4.Clothing."Clothing" has the meaning given in section 297A.67, subdivision 8.
193	193	Subd. 5.Commissioner."Commissioner" means the commissioner of revenue.
194	194	Subd. 6.Drugs and medical devices."Drugs and medical devices" has the meaning given in
195	195	section 297A.67, subdivision 7.
196	196	Subd. 7.Food and beverage service establishment."Food and beverage service establishment"
197	197	has the meaning given in section 157.15, subdivision 5.
198	198	Subd. 8.Food and food ingredients."Food and food ingredients" has the meaning given in
199	199	section 297A.67, subdivision 2.
200	200	Subd. 9.Marketplace provider."Marketplace provider" has the meaning given in section
201	201	297A.66, subdivision 1, paragraph (d).
202	202	Subd. 10.Person."Person" has the meaning given in section 297A.61, subdivision 2.
203	203	Subd. 11.Prepared food."Prepared food" has the meaning given in section 297A.61, subdivision
204	204	31.
205	205	Subd. 12.Retail delivery.(a) "Retail delivery" means a delivery to a person located in Minnesota
206	206	of the following items as part of a retail sale:
207	207	(1) tangible personal property that is subject to taxation under chapter 297A; and
208	208	(2) clothing, as defined under section 297A.67, subdivision 8, excluding cloth and disposable
209	209	child and adult diapers.
210	210	(b) Retail delivery does not include pickup at the retailer's place of business, including curbside
211	211	delivery.
212	212	Subd. 13.Retail delivery fee."Retail delivery fee" means the fee imposed under section 168E.03
213	213	on retail deliveries.
214	214	Subd. 14.Retail sale."Retail sale" has the meaning given in section 297A.61, subdivision 4.
215	215	Subd. 15.Retailer."Retailer" means any person making sales, leases, or rental of personal
216	216	property or services within or into the state of Minnesota. Retailer includes a:
217	217	(1) retailer maintaining a place of business in this state;
218	218	(2) marketplace provider maintaining a place of business in this state, as defined in section
219	219	297A.66, subdivision 1, paragraph (a);
220	220	(3) retailer not maintaining a place of business in this state; and
221	221	(4) marketplace provider not maintaining a place of business in this state, as defined in section
222	222	297A.66, subdivision 1, paragraph (b).
223	223	Subd. 16.Tangible personal property."Tangible personal property" has the meaning given
224	224	in section 297A.61, subdivision 10.
225	225	Subd. 17.Threshold amount."Threshold amount" means $100, before application of the tax
226	226	imposed under section 297A.62, subdivisions 1 and 1a, and any applicable local sales and use taxes,
227	227	and excluding exempt items under section 168E.05.
228	228	168E.03 FEE IMPOSED.
229	229	Subdivision 1.Retail delivery fee imposed.(a) A fee is imposed on each retailer equal to 50
230	230	cents on each transaction that equals or exceeds the threshold amount involving retail delivery in
231	231	Minnesota. The retailer may, but is not required to, collect the fee from the purchaser. If separately
232	232	1R
233	233	APPENDIX
234	234	Repealed Minnesota Statutes: 25-02323 stated on the invoice, bill of sale, or similar document given to the purchaser, the fee is excluded
235	235	from the sales price for purposes of the tax imposed under chapter 297A.
236	236	(b) If the retailer collects the fee from the purchaser:
237	237	(1) the retail delivery fee must be charged in addition to any other delivery fee; and
238	238	(2) the retailer must show the total of the retail delivery fee and other delivery fees as separate
239	239	items and distinct from the sales price and any other taxes or fees imposed on the retail delivery on
240	240	the purchaser's receipt, invoice, or other bill of sale. The receipt, invoice, or other bill of sale must
241	241	state the retail delivery fee as "road improvement and food delivery fee."
242	242	Subd. 2.Multiple items or shipments.The fee imposed under subdivision 1 is imposed once
243	243	per transaction regardless of the number of shipments necessary to deliver the items of tangible
244	244	personal property purchased or of the number of items of tangible personal property purchased.
245	245	Subd. 3.Returns and cancellations.The fee imposed under subdivision 1 is nonrefundable if
246	246	any or all items purchased are returned to a retailer or if the retailer provides a refund or credit in
247	247	the amount equal to or less than the purchase price. The fee must be refunded to the purchaser if
248	248	the retail delivery is canceled by the purchaser, retailer, or delivery provider.
249	249	168E.05 EXEMPTIONS.
250	250	Subdivision 1.Transactions.The following retail deliveries are exempt from the fee imposed
251	251	by this chapter:
252	252	(1) a retail delivery to a purchaser who is exempt from tax under chapter 297A;
253	253	(2) a retail delivery on a motor vehicle for which a permit issued by the commissioner of
254	254	transportation or a road authority is required under chapter 169 or 221 and the retailer has maintained
255	255	books and records through reasonable and verifiable standards that the retail delivery was on a
256	256	qualifying vehicle;
257	257	(3) a retail delivery resulting from a retail sale of food and food ingredients or prepared food;
258	258	(4) a retail delivery resulting from a retail sale by a food and beverage service establishment,
259	259	regardless of whether the retail delivery is made by a third party other than the food and beverage
260	260	service establishment; and
261	261	(5) a retail delivery resulting from a retail sale of drugs and medical devices, accessories and
262	262	supplies, or baby products.
263	263	Subd. 2.Small businesses.(a) The fee imposed by this chapter and the requirements of this
264	264	chapter do not apply to:
265	265	(1) a retailer that made retail sales totaling less than $1,000,000 in the previous calendar year;
266	266	and
267	267	(2) a marketplace provider when facilitating the sale of a retailer that made retail sales totaling
268	268	less than $100,000 in the previous calendar year through the marketplace provider.
269	269	(b) A retailer or marketplace provider must begin collecting and remitting the delivery fee to
270	270	the commissioner on the first day of a calendar month occurring no later than 60 days after the
271	271	retailer or marketplace provider exceeds a retail sales threshold in paragraph (a).
272	272	168E.07 COLLECTION AND ADMINISTRATION.
273	273	Subdivision 1.Returns; payment of fees.A retailer must report the fee on a return prescribed
274	274	by the commissioner and must remit the fee with the return. The return and fee must be filed and
275	275	paid using the filing cycle and due dates provided for taxes imposed under chapter 297A.
276	276	Subd. 2.Collection and remittance.A retailer that collects the fee from the purchaser must
277	277	collect the fee in the same manner as the tax collected under chapter 297A. A retailer using a
278	278	third-party entity to collect and remit the tax imposed under chapter 297A may elect to have that
279	279	third-party entity collect and remit the fee imposed under this chapter.
280	280	Subd. 3.Administration.Unless specifically provided otherwise by this chapter, the audit,
281	281	assessment, refund, penalty, interest, enforcement, collection remedies, appeal, and administrative
282	282	provisions of chapters 270C and 289A, that are applicable to taxes imposed under chapter 297A,
283	283	apply to the fee imposed under this chapter.
284	284	2R
285	285	APPENDIX
286	286	Repealed Minnesota Statutes: 25-02323 Subd. 4.Interest on overpayments.The commissioner must pay interest on an overpayment
287	287	refunded or credited to the retailer from the date of payment of the fee until the date the refund is
288	288	paid or credited. For purposes of this subdivision, the date of payment is the due date of the return
289	289	or the date of actual payment of the fee, whichever is later.
290	290	168E.09 DEPOSIT OF PROCEEDS.
291	291	Subdivision 1.Costs deducted.The commissioner must retain an amount that does not exceed
292	292	the total cost of collecting, administering, and enforcing the retail delivery fee and must deposit the
293	293	amount in the revenue department service and recovery special revenue fund.
294	294	Subd. 2.Deposits.After deposits under subdivision 1, the commissioner must deposit the
295	295	balance of proceeds from the retail delivery fee in the transportation advancement account under
296	296	section 174.49.
297	297	3R
298	298	APPENDIX
299	299	Repealed Minnesota Statutes: 25-02323