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SF 3397

Gross receipts tax enforcement on various services

2025-2026 Regular Session Introduced by Erin Maye Quade

SF 3397 enforces a gross receipts tax on services in Minnesota, broadening the tax base and increasing compliance for service businesses through new reporting and remittance rules.

Referred to Taxes
#taxation #taxation-corporate
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WeVote Research Nonpartisan
Bill Summary · SF 3397

Summary: SF 3397 – Gross receipts tax enforcement on various services

Snapshot

  • Bill number: SF 3397
  • Title: Gross receipts tax enforcement on various services
  • Status: Referred to Taxes
  • Introduced: April 22, 2025
  • Classification: bill
  • Subject: Taxation, Taxation-Corporate
  • Companion: HF 3190

Purpose and intent

  • The bill is titled to address the enforcement of a gross receipts tax on a range of services. Based on the title and typical legislative drafting, the measure appears designed to expand or formalize the application of a gross receipts tax to service sectors that may not currently be covered under standard business tax regimes.
  • The available material does not include the full text or a formal description of the bill’s objectives, definitions, rates, exemptions, or operational details. The intended outcome presumably includes improving tax administration and broadening the tax base for service providers, but the exact policy aims would be defined in the bill’s text.

Key provisions and changes (as available)

  • Specific provisions (definitions of taxable services, tax rate(s), exemptions, nexus rules, reporting requirements, and enforcement mechanisms) are not provided in the summary. The bill’s title suggests it would address enforcement related to a gross receipts tax on services, which typically would involve:
    • Defining which services are subject to taxation
    • Establishing the tax rate(s) and any caps or thresholds
    • Setting nexus standards for when service providers owe the tax (in-state vs. out-of-state considerations)
    • Detailing who collects and remits the tax, and the timing of remittances
    • Outlining reporting requirements for affected businesses
    • Specifying penalties and remedies for noncompliance
  • The actual provisions, including any exemptions (e.g., for small businesses or particular service sectors) and any transitional rules, would be found in the bill text.

Affected parties and impact

  • Likely affected: Service-based businesses operating in Minnesota or providing taxable services, including those with multi-state operations that perform services in Minnesota.
  • Potential impacts:
    • Administrative and compliance costs for affected businesses (recordkeeping, filing, remittance)
    • Changes in pricing or contract structuring if the tax affects pricing in service sectors
    • Revenue implications for state government if the tax is enacted and implemented

Procedural and timeline aspects

  • Introduction and first reading: April 22, 2025
  • Referral: Referred to the Taxes committee
  • Status: No further actions listed in the provided material
  • Related legislation: Companion HF 3190 (same or similar measure in the House)

Next steps for readers

  • To understand the full scope, definitions, rates, exemptions, and enforcement details, review the actual bill text for SF 3397 and its companion HF 3190.
  • Monitor updates from the Minnesota Legislature for committee hearings, amendments, and potential floor action.

If you’d like, I can pull and summarize the specific bill language once you provide the text or a link to the official bill document.

Compiled from official sources — confirm details with the bill’s official record.

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