Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF46 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; individual income; providing an exemption for income earned
3	3	1.3 by certain nonresident employees; proposing coding for new law in Minnesota
4	4	1.4 Statutes, chapter 290.
5	5	1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
6	6	1.6 Section 1. [290.0811] INCOME OF CERTAIN NONRESIDENTS.
7	7	1.7 Subdivision 1.Exemption allowed.Notwithstanding section 290.081, compensation
8	8	1.8received by a qualifying nonresident individual for employment duties in Minnesota is
9	9	1.9excluded from gross income, subject to the limitations in this section.
10	10	1.10 Subd. 2.Definitions.(a) For purposes of this section, the following terms have the
11	11	1.11meanings given.
12	12	1.12 (b) "Employee" and "employer" have the meanings given in section 290.92, subdivision
13	13	1.131.
14	14	1.14 (c) "Employment duties" means professional or personal services performed for an
15	15	1.15employer by an employee who is a qualifying nonresident individual.
16	16	1.16 (d) "Entertainer" has the meaning given in section 290.9201.
17	17	1.17 (e) "Qualifying nonresident individual" means an individual:
18	18	1.18 (1) whose residence, place of abode, and place customarily returned to at least once a
19	19	1.19month is in another state;
20	20	1.20 (2) who is paid wages for employment duties, excluding duties performed as an
21	21	1.21entertainer, in Minnesota on 30 or fewer days in the taxable year;
22	22	1Section 1.
23	23	25-00683 as introduced11/22/24 REVISOR EAP/HL
24	24	SENATE
25	25	STATE OF MINNESOTA
26	26	S.F. No. 46NINETY-FOURTH SESSION
27	27	(SENATE AUTHORS: REST, Dibble and Weber)
28	28	OFFICIAL STATUSD-PGDATE
29	29	Introduction and first reading01/16/2025
30	30	Referred to Taxes 2.1 (3) who performed employment duties in more than one state during the calendar year;
31	31	2.2and
32	32	2.3 (4) whose state of residence provides a substantially similar exclusion or does not impose
33	33	2.4an individual income tax, or whose income is exempt from taxation in Minnesota under the
34	34	2.5United States Constitution, or the Internal Revenue Code.
35	35	2.6 (f) "Time and attendance system" means a system through which an employee is required,
36	36	2.7on a contemporaneous basis, to record the employee's work location for every day worked
37	37	2.8outside the state where the employee's employment duties are primarily performed and is
38	38	2.9designed to allow the employer to allocate the employee's compensation for income tax
39	39	2.10purposes among all states in which the employee performs employment duties for the
40	40	2.11employer.
41	41	2.12 Subd. 3.Withholding exemption; limitation.(a) Wages paid to a qualifying nonresident
42	42	2.13individual are exempt from the withholding requirements under section 290.92, and the
43	43	2.14filing requirements under section 289A.09, subject to the limitations of paragraph (b).
44	44	2.15 (b) If during the taxable year, the number of days an employee spends performing
45	45	2.16employment duties in Minnesota exceeds the 30-day threshold under subdivision 1, the
46	46	2.17withholding requirements under section 290.92, and the filing requirements under section
47	47	2.18289A.09, apply for every day in that calendar year, including the first 30 days, on which
48	48	2.19the employee performs employment duties in Minnesota.
49	49	2.20 Subd. 4.Employers; application of penalties.The commissioner shall not apply
50	50	2.21penalties or interest otherwise applicable under chapter 289A for failing to deduct and
51	51	2.22withhold income taxes as required under section 290.92, if when determining whether
52	52	2.23withholding was required, the employer met either of the following conditions:
53	53	2.24 (1) the employer at its sole discretion maintains a time and attendance system and relied
54	54	2.25on data from that system; or
55	55	2.26 (2) if the employer does not maintain a time and attendance system, and the employer
56	56	2.27relies on either:
57	57	2.28 (i) the employer's own records maintained in the regular course of business of the
58	58	2.29employee's location; or
59	59	2.30 (ii) the employee's reasonable determination of the time the employee expected to spend
60	60	2.31performing employment duties in Minnesota, the employer has no actual knowledge of
61	61	2.32fraud by employee in making the determination, and the employer and the employee did
62	62	2.33not collude to evade taxation in making the determination.
63	63	2Section 1.
64	64	25-00683 as introduced11/22/24 REVISOR EAP/HL 3.1 Subd. 5.Timing of employment duties performed.For the purposes of this section,
65	65	3.2an employee shall be considered to be performing employment duties within Minnesota for
66	66	3.3a day if the employee performs more of the employee's employment duties in Minnesota
67	67	3.4than in any other state during that day. Any portion of the day during which the employee
68	68	3.5is in transit must not be considered in determining the location of an employee's performance
69	69	3.6of employment duties.
70	70	3.7 Subd. 6.Severability.If any provision of this section or the application of a provision
71	71	3.8of this section to any person or circumstance is held to be unconstitutional, then all other
72	72	3.9provisions of this section shall remain valid and any rights, remedies, and privileges that
73	73	3.10have been otherwise accrued by this section shall remain in effect, and may be proceeded
74	74	3.11with and concluded under the provisions of this chapter or other applicable law.
75	75	3.12 EFFECTIVE DATE.This section is effective for taxable years beginning after December
76	76	3.1331, 2025.
77	77	3Section 1.
78	78	25-00683 as introduced11/22/24 REVISOR EAP/HL