This bill, H.F. No. 2270, introduced in the Minnesota House of Representatives, seeks to limit the authority of the commissioner to assess additional taxes on individual income, corporate franchise, and sales and use taxes by amending Minnesota Statutes 2024, section 270C.33.

Key Provisions:

1. Restrictions on Tax Assessments:

   • The commissioner cannot assess additional tax under chapters 290 or 297A if certain conditions are met.

2. Conditions for Protection from Tax Assessment:

   • The taxpayer received erroneous written advice from a department employee acting in an official capacity.
   • The taxpayer reasonably relied on this advice.
   • The advice was included in a tax order or in response to a specific written request.
   • The erroneous advice was not due to the taxpayer providing inaccurate or incomplete information.

3. Additional Considerations:

   • The relevant statutes, administrative rules, or their interpretations must not have materially changed since the period covered by the written advice.
   • There should not have been a court decision-changing interpretation.
   • No federal tax adjustments should have occurred that would affect the reporting.
   • The commissioner must not have issued a revenue notice or directly notified the taxpayer in writing regarding changes in tax treatment.

4. Audit Application:

   • When an audit is conducted for a prior taxable period, the protection applies only to tax issues specifically addressed in the prior audit where erroneous advice was given.
   • If the audit included data sampling, the limitation on tax assessments applies only to the reviewed sampled population.

Impact:

This bill protects taxpayers from additional tax assessments when they have relied in good faith on incorrect written advice from tax officials, as long as laws and regulations have not materially changed. It ensures fairness and accountability in tax administration while providing legal clarity for taxpayers.