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February 16th, 2011, 12:21 PM #1MN Governor's Proposed Budget
Looks like Governor Dayton's proposed budget has some sales tax nexus language in it. Here's a link to a pdf file of the proposed budget:
Page 24 is about Sales and Use tax nexus:
The Governor proposes amending statutes for sales tax nexus to create a rebuttable presumption that a retailer maintains a place of business in the state if they enter into an agreement with a solicitor for the referral of Minnesota customers for a fee and the retailer’s gross receipts are at least $10,000 over a 12-month period. The proposal will result in an additional $10.6 million of sales tax collections in FY 2012-13 on the sale of products that are already subject to the sales and use tax.
The proposed change will promote fairness and compliance with the sales and use tax by clarifying the expectation that remote sellers of taxable products to Minnesota purchasers should collect and remit taxes as do storefront retailers selling the same products.
Under current law, taxable purchases for use and consumption in Minnesota are already subject to sales and use tax. However, it is difficult to collect the tax on purchases made from remote sellers who are not required to collect the tax for Minnesota because they do not have a physical presence in Minnesota. Many of these remote sellers sell their products over the Internet. This change would require remote sellers who sell to Minnesota purchasers that are referred under an agreement by a business that has nexus (physical presence) in Minnesota to collect the sales and use tax on those purchases. This situation typically occurs when a purchaser goes to a Minnesota seller’s web-site and then is directed to a remote seller’s web-site to purchase products.
Several states have taken steps to ensure the collectability of tax by remote sellers in recent years and more states are considering such action in current legislative sessions. The current proposal is similar to the approach adopted by the state of New York a few years ago.
Effective for sales and purchases made after June 30, 2011.
Key Goals and Measures
This change would create fairness by leveling the playing field between brick and mortar businesses located within Minnesota and out-of-state sellers who do not have a physical presence in Minnesota. This change would also reduce the burden on purchasers to file Individual Use Tax returns to remit their use tax on their purchases.
Statutory Change: Minn. Stat. § 297A.66 is amended by adding a subdivision.
Last edited by NiftyGaloot; February 16th, 2011 at 12:26 PM.
February 16th, 2011, 01:16 PM #2
I don't think this will go anywhere. The Republicans control the MN House and MN Senate and are greatly opposed to almost the entire Dayton budget.
It's all hot air without any substance as Dayton doesn't have is party to back-up his proposals.
February 16th, 2011, 03:38 PM #3
- Join Date
- January 18th, 2005
While Republicans generally oppose "new taxes," this is NOT a new tax, but instead it's a "tax enforcement" provision.
Some Republicans may choose to support the bill as a "fairness" measure that small businesses want. From a politician's perspective, it's a great pandering opportunity: stand up for local small businesses by forcing out-of-state companies (who [by definition] employ no voters in the state) to collect sales tax.
Yes, it's a mistake all around, but don't assume that Republicans will automatically oppose this as a new tax.
Last edited by markwelch; February 16th, 2011 at 03:40 PM.
February 16th, 2011, 08:11 PM #4
I do see what you're saying but in MN Republicans have taken a stand against any and all taxes. They view Dayton as a Taxaholic and have recently said that his budget proposal is a joke and bush league.
These are similar people to the Pawlenty era Republicans who opposed event the smallest of taxes.
While it is possible that these folks will strike a deal, they would be going against their word to Minnesota voters who voted them in by huge margins.
Minnesota affiliates I urge you to reach out to your representative and explain why any affiliate tax will hurt Minnesota business people.
If enough of their constituents contact hem, they will hear. It only takes about 10 constituents to make a huge impact on a representative or senator.
February 17th, 2011, 10:43 AM #5
The Chair of the Senate Tax Committee said this morning that there will be a separate hearing in committee, on this provision of the Governor's budget.
I don't see it scheduled yet... Will keep watching for developments.
February 17th, 2011, 05:07 PM #6
Never assume anything. I will be going in with a fight. Time to start doing some more research and gathering data to present to the representatives.
February 22nd, 2011, 01:04 PM #7
The House Tax Committee will be allowing folks with concerns about the Governor's proposed budget to speak tomorrow (February 23.)
To get on the list of people wishing to speak contact Bobby Patrick (651-296-4119; email@example.com)
February 22nd, 2011, 01:50 PM #8
I tried calling and left a message and also sent an email to try to get a chance to speak tomorrow.
February 22nd, 2011, 01:56 PM #9
Good for you. Hope you get a chance to talk some sense into them.
I can't make it. Will be with you in spirit.
BTW - the Senate Tax Committee is still going over the Governor's proposed budget. Not sure when the affiliate nexus will be covered, but the Chair did say it would be discussed.
February 22nd, 2011, 01:57 PM #10
- Join Date
- December 14th, 2010
I am also going to leave a message and email trying to get a chance to speak. I have an afternoon commitment tomorrow, but hopefully this will fit in. But, I also plan to contact my Rep, who is speaker of the House, and let him know what I think about this.
February 22nd, 2011, 02:03 PM #11
I had a full plate of appointments tomorrow that I just cancelled, and I am sick but will be there.
February 22nd, 2011, 07:29 PM #12
Word has it the meeting has been moved to 7pm. I am scheduled to speak around 10:15 so awaiting verification from them.
February 24th, 2011, 02:14 PM #13
Senator Ortman has introduced SF458 (Solicitor definition for federal nexus and Internet sales tax purposes)
This looks like what was in the Governor's proposed budget regarding sales tax nexus.
February 24th, 2011, 02:36 PM #14
SF458 is on the Senate Tax Committee agenda for next week:
Wednesday, March 2, 2011 - 8:30 AM
Committee on Taxes
Chair: Sen. Julianne E. Ortman
Room 15 Capitol
S.F. 458-Ortman: Sales and Use Tax, defining solicitor for nexus
S.F. 267-Dahms: Sales and Use Tax, exempting public safety radio
S.F. 183-Sheran: Sales and Use tax, exempting public safety radio
S.F. 467-Ortman: Local Sales Taxes.
S.F. 371-DeKruif: Eliminating sales and use tax on political
Last edited by NiftyGaloot; February 24th, 2011 at 02:41 PM.
February 24th, 2011, 03:30 PM #15
February 24th, 2011, 04:05 PM #16
If anyone needs any help writing emails or needs to know more info on how they can help, feel free to email me at connie(at)flamingoworld.com
We really need more affiliates!
March 2nd, 2011, 12:32 PM #17
Today's hearing went well.
Interesting information in a Star-Trib article today:
Minnesota GOP's 'no new tax' unity fraying a bit | StarTribune.com
Ortman and Sen. Ann Rest, DFL-New Hope, are co-sponsors on a bill that would tax some online sales, which could boost revenue by $30 million to $50 million. Ortman said she is not sure even she would support the bill but introduced it because she wanted a full discussion of the possibility.
"People are really focused on the spending side right now," said Ortman.
March 4th, 2011, 11:05 PM #18
Great story and video on our local news tonight. Carrie Rocha did a great job speaking last to the house committee 2 weeks ago.
Budget Proposal Could Tax Internet Sales | KSTP TV - Minneapolis and St. Paul
March 4th, 2011, 11:17 PM #19
Thanks rharing that story Connie. They did a great job on it.
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