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A bill that would repeal the June accelerated sales tax remittance, which would reduce state revenues in the current biennium, is introduced today.
(Published Jan 22, 2013)
Today, Senator Rod Skoe (DFL-Clearbrook) will introduce SF 75, a bill that will repeal the sales tax remittance requirement for certain larger vendors that 90 percent June sales tax collections must be remitted before the end of June. The bill repeals this "June accelerated" tax remittance requirement for vendors collecting more than $120,000 in a fiscal year in general sales taxes, cigarette and tobacco products distributor taxes and liquor taxes, which includes municipal liquor operations.
The June accelerated sales tax remittance requirement has been used by the state to balance its budget. Generally, the general sales tax, cigarette and tobacco products distributor tax and liquor tax collections are remitted to the state by the middle of the following month. For example, taxes collected by vendors in January are not required to be remitted to the state until mid-February. Given that the state's fiscal year ends on June 30, the June accelerated requirement allows the state to book 90 percent of June tax collections in the earlier fiscal year.
The bill would repeal these accelerations, which, in state budget terms, will reduce revenues in the current biennium. The bill is drafted to be effective beginning with a vendor's June tax liabilities in 2013.
Another bill, SF 34, introduced by Senator Ann Rest (DFL-New Hope) would repeal the monthly sales tax acceleration requirement that was enacted in the first 2010 special session. That requirement was enacted to help the state avoid short-term cash flow borrowing due to the fact that the state's cash flow account had been depleted.
The June acceleration repeal bill was referred to the Committee on Taxes and will likely be re-referred to the Tax Reform Division for its first hearing.
Questions? Contact Gary N. Carlson at (651) 281-1255 or email@example.com
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