Minnesota ~ Multiple Taxes: Legislature Adjourns Without Passing “Click-Through Nexus,” Governor’s Budget Bills

The Minnesota Legislature has adjourned its 2011-2012 regular session without passing a so-called “click-through” nexus bill (TAXDAY, 2011/02/28, S.20) or bills that included Gov. Mark Dayton’s budget recommendations to make changes to corporate and personal income, sales and use, property, and other taxes (TAXDAY, 2011/03/24, S.12). Bills not enacted during this session may be considered in the 2012 regular session, and a 2011 special session is expected.

As previously reported, the so-called “click-through” nexus bill introduced on February 24, 2011, would have provided that a retailer was presumed to have a solicitor in Minnesota if the retailer entered into an agreement with a Minnesota resident under which the resident, for a commission or other consideration, directly or indirectly referred potential customers by a link on an Internet website, or by other means, to the seller. The governor’s budget recommendations also included such a provision.

As previously reported, the bills containing the governor’s budget recommendations, which were introduced on March 21, 2011, included personal income, property, and motor vehicle rental tax rate increases. The bills also would have imposed a sales and use tax on accommodations intermediaries; repealed the foreign royalty subtraction; included sales by members of a unitary business in the sales factor for apportionment purposes, even if there was no nexus with Minnesota; required that business transactions meet an economic substance test to be allowed in determining Minnesota taxable income in conformance with federal law; amended provisions relating to cable television and direct satellite service for sales and use tax purposes; and made other changes.

H.F. 1231, S.F. 458, and S.F. 925, failed to pass in the 2011-2012 Regular Session of the Minnesota Legislature by adjournment on May 23, 2011

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