Loss in Trust Account tax Case Could Cost Minnesota Millions
The State Will Have to Repay About $67 Million in Rebates
ST. PAUL, Minn. (AP) – A court defeat in a case over the way Minnesota taxed trust accounts in other states could end up costing about $130 million this budget cycle.
The Minnesota Department of Revenue estimated it will have to repay about $67 million, plus interest, in rebates over the next two years for overtaxing some trust accounts. It also expects to collect about $34 million less per year in trust-related taxes.
Courts found the state’s attempt to tax accounts in other states as “resident trusts” was unconstitutional, and the outcome became final this summer after the U.S. Supreme Court declined to hear the case. Minnesota Public Radio News first reported about the exposure, which was revealed in recent bond-sale documents.
The Star Tribune reports the amount is a fraction of the state’s two-year, $48 billion budget.