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HF 3190

Gross receipts tax imposed on various services including but not limited to legal, accounting, and architectural services.

2025-2026 Regular Session Introduced by Esther Agbaje and 8 co-sponsors

HF 3190 would impose a Minnesota gross receipts tax on professional services (legal, accounting, architecture), raising costs for providers and their customers.

Authors added Agbaje and Rehrauer
#commercedepartment #taxation
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WeVote Research Nonpartisan
Bill Summary · HF 3190

Summary of HF 3190 — Gross Receipts Tax on Service Providers

Overview

HF 3190 proposes imposition of a gross receipts tax on a range of professional services, including but not limited to legal, accounting, and architectural services. The bill’s subject areas are Commerce Department and Taxation. It was introduced on April 21, 2025, and subsequently, authorship was expanded on April 22, 2025 to include Agbaje and Rehrauer. A companion bill exists in the Senate as SF 3397.

Purpose and Intent

  • Create a broad-based gross receipts tax on specified services to generate state revenue and broaden the tax base beyond traditional goods.
  • Align Minnesota’s tax system with service-sector activity, potentially addressing budget needs or fiscal priorities as determined by the authors.

Key Provisions (Known from Public Information)

  • The bill would impose a gross receipts tax on various services, explicitly including professional services such as legal, accounting, and architectural services.
  • Specific operational details are not provided in the available information (e.g., tax rate, calculation method, applicability thresholds, exemptions, or credits).
  • Administrative responsibility is indicated under the scope of the Commerce Department and Taxation, but the exact administrative pathway (e.g., reporting requirements, filing deadlines, and enforcement) is not specified in the summary available.

Note: The bill text itself has not been provided in the information available here, so essential elements like rate, exemptions, effective date, and transition rules remain unspecified in this summary.

Who Would Be Affected

  • Primary: Service-based businesses and professional firms that provide services such as legal, accounting, architectural services, and other listed services.
  • Indirect: Consumers and businesses purchasing these services could face higher prices if providers pass the tax through.
  • Administrative: State agencies (notably the Commerce Department and Taxation) would oversee administration, compliance, and enforcement, subject to the final bill language.

Procedural and Timeline Aspects

  • 2025-04-21: Introduced and first read, referred to Taxes.
  • 2025-04-22: Authors added Agbaje and Rehrauer.
  • Related: SF 3397 is a companion bill in the Senate.
  • Next steps typically include committee hearings (Taxes and related committees), potential amendments, and floor votes in the House, with a companion process in the Senate if advanced.

Potential Implications and Considerations

  • Revenue impact depends on the rate and scope of the tax, as well as any exemptions or transitional rules.
  • Economic impact will hinge on how broadly the tax base is defined and whether service providers adjust pricing or pricing strategies.
  • Administrative burden and compliance costs for businesses could be a consideration, especially for professional service firms.
  • Policy questions to watch include competitiveness, cross-border effects, treatment of bundled services, and interaction with existing Minnesota taxes.

Related Legislation

  • Companion bill: SF 3397 (Senate)

Next Steps for Readers

  • Review the full bill text when available to understand the exact rate, definitions, exemptions, effective dates, and reporting requirements.
  • Monitor committee hearings in the House Taxes committee and any Senate counterpart for updates, amendments, and potential passage.

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

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