1.1 A bill for an act
1.2 relating to taxation; income; modifying the definition of resident trust; amending
1.3 Minnesota Statutes 2024, section 290.01, subdivision 7b.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2024, section 290.01, subdivision 7b, is amended to read:
1.6 Subd. 7b.Resident trust.(a) Resident trust means A trust, except a grantor type trust,
1.7which either that became irrevocable on or before December 31, 1995, or was first
1.8administered in Minnesota on or before December 31, 1995, is a resident trust only if two
1.9or more of the following conditions are satisfied:
1.10 (1) a majority of the discretionary decisions of the trustees relative to the investment of
1.11trust assets are made in Minnesota;
1.12 (2) a majority of the discretionary decisions of the trustees relative to the distributions
1.13of trust income and principal are made in Minnesota; or
1.14 (3) the official books and records of the trust, consisting of the original minutes of trustee
1.15meetings and the original trust instruments, are located in Minnesota.
1.16 (b) A trust, except a grantor type trust, that became irrevocable after December 31, 1995,
1.17or was first administered in Minnesota after December 31, 1995, is a resident trust only if:
1.18 (1) either it:
1.19 (i) was created by a will of a decedent who at death was domiciled in this state; or
1.20 (2) (ii) is an irrevocable trust, the grantor of which was domiciled in this state at the time
1.21the trust became irrevocable.; and
1Section 1.
25-00717 as introduced11/22/24 REVISOR EAP/HL
SENATE
STATE OF MINNESOTA
S.F. No. 6NINETY-FOURTH SESSION
(SENATE AUTHORS: REST, Weber, Drazkowski and Nelson)
OFFICIAL STATUSD-PGDATE
Introduction and first reading01/16/2025
Referred to Taxes 2.1 (2) two or more of the following conditions are satisfied:
2.2 (i) a majority of the discretionary decisions of the trustees relative to the investment of
2.3trust assets are made in Minnesota;
2.4 (ii) a majority of the discretionary decisions of the trustees relative to the distributions
2.5of trust income and principal are made in Minnesota; or
2.6 (iii) the official books and records of the trust, consisting of the original minutes of
2.7trustee meetings and the original trust instruments, are located in Minnesota.
2.8 (c) For the purpose of this subdivision, a trust is considered irrevocable to the extent the
2.9grantor is not treated as the owner thereof under sections 671 to 678 of the Internal Revenue
2.10Code. The term "grantor type trust" means a trust where the income or gains of the trust are
2.11taxable to the grantor or others treated as substantial owners under sections 671 to 678 of
2.12the Internal Revenue Code. This paragraph applies to trusts, except grantor type trusts, that
2.13became irrevocable after December 31, 1995, or are first administered in Minnesota after
2.14December 31, 1995.
2.15 (b) This paragraph applies to trusts, except grantor type trusts, that are not governed
2.16under paragraph (a). A trust, except a grantor type trust, is a resident trust only if two or
2.17more of the following conditions are satisfied:
2.18 (1) a majority of the discretionary decisions of the trustees relative to the investment of
2.19trust assets are made in Minnesota;
2.20 (2) a majority of the discretionary decisions of the trustees relative to the distributions
2.21of trust income and principal are made in Minnesota;
2.22 (3) the official books and records of the trust, consisting of the original minutes of trustee
2.23meetings and the original trust instruments, are located in Minnesota.
2.24 (c) (d) For purposes of paragraph paragraphs (a) and (b), if the trustees delegate decisions
2.25and actions to an agent or custodian, the actions and decisions of the agent or custodian
2.26must not be taken into account in determining whether the trust is administered in Minnesota,
2.27if:
2.28 (1) the delegation was permitted under the trust agreement;
2.29 (2) the trustees retain the power to revoke the delegation on reasonable notice; and
2.30 (3) the trustees monitor and evaluate the performance of the agent or custodian on a
2.31regular basis as is reasonably determined by the trustees.
2.32 EFFECTIVE DATE.This section is effective the day following final enactment.
2Section 1.
25-00717 as introduced11/22/24 REVISOR EAP/HL