Sponsored by Representative Bill Hilty, the following bill would impose a tax on the gross receipts (revenue) of retail stores that have more than $20 million annually in sales and either do not provide employee compensation worth at least $22,000 per year (including wages, insurance, vacation, and other benefits) or have more than one-quarter of their employees working less than 40 hours a week. The tax is graduated: 1 percent on sales of $20 to $30 million; 1.5 percent on sales of $30 to $40 million; and 2 percent on sales over $40 million.(A typical 200,000-square-foot Wal-Mart does about $80 million a year in sales.) The revenue generated would go to the general fund.
Abill for an act relating to taxation; imposing a gross receipts tax on certain large retail establishments; proposing coding for new law in Minnesota Statutes, chapter 295.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. [295.61] [LARGE RETAIL ESTABLISHMENT TAX.]
Subdivision1. [IMPOSITION; RATE.] A retail gross receipts tax is imposed on sellers from a single taxable establishment, located in this state, with gross receipts from retail sales of consumer goods that exceed$20,000,000 in a calendar year. This tax is in addition to the tax imposed under chapter 297A. The rate of tax on gross receipts from retail sales of consumer goods for the calendar year is as follows:
(1) over $20,000,000 through $30,000,000, one percent;
(2) over $30,000,000 through $40,000,000, 1.5 percent; and
(3) all over $40,000,000, two percent.
Subd. 2. [DEFINITIONS.]
(a) For purposes of this section, the following terms have the meanings given, unless the context clearly indicates otherwise.
(b)”Consumer goods” means goods that are used or bought for use primarily for personal, family, or household purposes, but excludes:
(1) electricity;
(2) farm machinery;
(3) gasoline; and
(4) motor vehicles.
(c) “Employee compensation package” means the annual total cost to the employer for an employee for:
(1) wages or salary;
(2) leave time, including vacation and sick time;
(3) insurance, including employer contributions for health, life, disability, and dental insurance;
(4) retirement plan contributions or payments, including employer contributions required by the federal Insurance Contributions Act, and employer contributions to employee savings, flexible spending, and similar plans; and
(5) any similar employee benefits identified by the commissioner and published in a revenue notice.
(d) “Farm machinery” means farm machinery exempt from sales tax under section 297A.69, subdivision 4, clause (1).
(e)”Gross receipts” has the meaning given in section 297A.61, subdivision 8, but excludes gross receipts from sales sourced to locations outside of Minnesota under section 297A.668.
(f) “Motor vehicle” has the meaning given in section 297B.01, subdivision 5.
(g) “Retailer” or “seller” has the meaning given in section 297A.61, subdivision 9.
(h) “Retail sale” has the meaning given in section 297A.61, subdivision 4.
(i)”Taxable establishment” means a premises in which retail sales of consumer goods are offered to the general public and the retail sales are conducted by an employer that:
(1) provides each full-time, nonmanagement or nonprofessional, entry-level employee with an employee compensation package equivalent to less than $22,000 a year; or
(2) has more than 25 percent, when annualized, of its employees working less than 40 hours per week.
Subd. 3. [PAYMENT.]
(a)Each retailer subject to tax under this section must make estimated payments of the taxes for the calendar year in quarterly installments to the commissioner by April 15, July 15, October 15, and by January 15 of the following calendar year.
(b) Estimated tax payments are not required if:
(1) the tax for the current calendar year is less than $500; or
(2) the tax for the previous calendar year is less than $500, if the retailer had a tax liability and was doing business the entire year.
(c)Underpayment of estimated installments bear interest at the rate specified in section 270.75, from the due date of the payment until paid or until the due date of the annual return, whichever comes first. An underpayment of an estimated installment is the difference between the amount paid and the lesser of:
(1) 90 percent of one quarter of the tax for the calendar year; or
(2) one quarter of the total tax for the previous calendar year if the retailer had a tax liability and was doing business the entire year.
Subd.4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A retailer with an aggregate tax liability of $120,000 or more during a fiscal year ending June 30 must remit all liabilities by electronic means.
Subd.5. [ANNUAL RETURN.] The retailer must file an annual return reconciling the estimated payments by March 15 of the following calendar year.
Subd.6. [FORM OF RETURNS.] The estimated payments and annual return must contain the information and be in the form prescribed by the commissioner.
Subd. 7. [APPLICATION OF OTHER CHAPTERS.] Unless specifically provided otherwise by this section, the enforcement, interest, appeal, criminal penalties, and refunds provisions in chapter 289A, civil penalty provisions applicable to withholding and sales taxes under section 289A.60, and collection and rulemaking provisions under chapter 270, apply to taxes imposed under this section.
Subd. 8. [INTEREST ON OVERPAYMENTS.]Interest must be paid on an overpayment refunded or credited to the taxpayer from the date of payment of the tax until the date the refund is paid or credited. For purposes of this subdivision, the date of payment is the due date of the return or the date of actual payment of the tax, whichever is later.
Subd. 9. [DEPOSIT OF REVENUES.] The commissioner shall deposit all revenues, including penalties and interest, derived from the tax imposed by this section in the general fund.
[EFFECTIVE DATE.] This section is effective for sales made after June 30, 2005, except for purposes of tax attributable to gross receipts received in calendar year 2005, the dollar amounts of the threshold and brackets under subdivision 1 are one-half of the amounts listed.