The bill proposes amendments to Minnesota Statutes regarding sales and use taxation, specifically introducing a small business sales tax allowance. It amends section 297A.77, subdivision 3, to allow retailers to retain a portion of the sales tax collected as compensation for the costs associated with collecting and administering the tax. This allowance is available to qualifying retailers, defined as those with 15 or fewer employees operating from a physical location in the state for the 12 months preceding the reporting period. The bill specifies that use taxes paid on the retailer's own purchases and local sales and use taxes are not eligible for this allowance.

Additionally, the bill outlines the calculation of the allowance, which is set at one-half of one percent of the tax collected during the reporting period, with a maximum cap of $500. It also includes a provision stating that the allowance cannot reduce the tax owed to less than zero. The effective date for these changes is set for sales taxes first due and remitted after June 30, 2025.

Statutes affected:
Introduction: 297A.77