Minnesota Tax Changes - November 2024
Week Of 11.04.2024
The Minnesota Supreme Court has ruled that rebate amounts paid to customers by a wholesale drug distributor are not included in the distributor's "gross revenues" for the purposes of the Wholesale Drug Distributor Tax.
The court determined that the plain meaning of "gross revenues" is the total amount a taxpayer receives, either in money or through non-monetary benefits and goods. The court also found that for an amount to be included in a taxpayer's "gross revenues," the taxpayer must have come into possession of the amount from a third party. In this case, the taxpayer was contractually obligated to pay the rebate amounts to customers, and therefore could not reasonably be considered to have come into possession of the rebate amounts.
Week Of 11.21.2024
Minnesota Cigarette, Alcohol & Miscellaneous Taxes—Minnesota amends regulation on petroleum tax refunds for power take-off units or auxiliary engines.
On November 18, 2024, the Minnesota Department of Revenue adopted permanent amendments to the Minnesota Rules, Part 8125.1301, regarding petroleum tax refunds for power take-off units or auxiliary engines. The amendments align the rule with current terminology and current industry and Department practices. The rule as amended: allows refund claims to be made only on monthly returns, and to make a number of minor clarifications regarding monthly claim filings; what information must be on each sales ticket or invoice, and how some of that information must be printed or numbered; and makes changes to the optional means of calculating refund and information needed for refund claim.
Minnesota Personal Income Tax—Minnesota launches e-Services pilot for individual taxpayers.
The Minnesota Department of Revenue announced that on November 14, 2024, it launched an e-Services pilot that allows a limited number of personal income taxpayers to make payments and access their account balance and payment history in e-Services. The Department will include an insert with its initial bill letters inviting some taxpayers to register for the new program through the end of the year. Registration is expected to open to more taxpayers in early 2025. Each new enrollment will be verified. Third-party access to a client's account is currently not available. (Our e-Services Pilot Launched November 14, Minn. Dept. Rev., 11/15/2024.)
Week Of 11.04.2024
Minnesota Cigarette, Alcohol & Miscellaneous Taxes—Minnesota court finds rebates not gross receipts under wholesale drug distributor tax.
The Michigan Supreme Court has held that amounts that were invoiced to a wholesales drug distributor's customers for the purchase of wholesale legend drugs—but were either credited to the customer's account or returned via check pursuant to a rebate agreement—are not included in its "gross revenues" for purposes of the Wholesale Drug Distributor Tax. The court held that the plain meaning of "gross revenues," defined as "total amounts received in money or otherwise," is the entire amount that a taxpayer comes into possession of either through money or non-monetary benefits and goods. Furthermore, for something to be included in a taxpayer's "gross revenues," the taxpayer must have come into possession of an amount from a third-party. In this case, the taxpayer does not have discretion in paying the rebate amounts to customers once earned, and so the taxpayer cannot reasonably come into possession of or get from some outside source the rebate amounts that it is contractually obligated to pay out to customers. Therefore the rebate amounts that the taxpayer is contractually obligated to pay cannot constitute part of the "total amounts received in money or otherwise." (Dakota Drug, Inc. v. Commissioner of Revenue, Minn. S. Ct., Dkt. No. A23-1973, 11/06/2024.)
Week Of 11.21.2024
Minnesota Cigarette, Alcohol & Miscellaneous Taxes—Minnesota amends regulation on petroleum tax refunds for power take-off units or auxiliary engines.
On November 18, 2024, the Minnesota Department of Revenue adopted permanent amendments to the Minnesota Rules, Part 8125.1301, regarding petroleum tax refunds for power take-off units or auxiliary engines. The amendments align the rule with current terminology and current industry and Department practices. The rule as amended: allows refund claims to be made only on monthly returns, and to make a number of minor clarifications regarding monthly claim filings; what information must be on each sales ticket or invoice, and how some of that information must be printed or numbered; and makes changes to the optional means of calculating refund and information needed for refund claim.
Minnesota Personal Income Tax—Minnesota launches e-Services pilot for individual taxpayers.
The Minnesota Department of Revenue announced that on November 14, 2024, it launched an e-Services pilot that allows a limited number of personal income taxpayers to make payments and access their account balance and payment history in e-Services. The Department will include an insert with its initial bill letters inviting some taxpayers to register for the new program through the end of the year. Registration is expected to open to more taxpayers in early 2025. Each new enrollment will be verified. Third-party access to a client's account is currently not available. (Our e-Services Pilot Launched November 14, Minn. Dept. Rev., 11/15/2024.)
Week Of 11.04.2024
Minnesota Cigarette, Alcohol & Miscellaneous Taxes—Minnesota court finds rebates not gross receipts under wholesale drug distributor tax.
The Michigan Supreme Court has held that amounts that were invoiced to a wholesales drug distributor's customers for the purchase of wholesale legend drugs—but were either credited to the customer's account or returned via check pursuant to a rebate agreement—are not included in its "gross revenues" for purposes of the Wholesale Drug Distributor Tax. The court held that the plain meaning of "gross revenues," defined as "total amounts received in money or otherwise," is the entire amount that a taxpayer comes into possession of either through money or non-monetary benefits and goods. Furthermore, for something to be included in a taxpayer's "gross revenues," the taxpayer must have come into possession of an amount from a third-party. In this case, the taxpayer does not have discretion in paying the rebate amounts to customers once earned, and so the taxpayer cannot reasonably come into possession of or get from some outside source the rebate amounts that it is contractually obligated to pay out to customers. Therefore the rebate amounts that the taxpayer is contractually obligated to pay cannot constitute part of the "total amounts received in money or otherwise." (Dakota Drug, Inc. v. Commissioner of Revenue, Minn. S. Ct., Dkt. No. A23-1973, 11/06/2024.)