Minnesota Updates Municipal Bond Withholding Law

Minnesota recently made changes to the municipal bond reporting requirements through Minnesota Statute 289A.12, subdivision 14. The updated statute makes it mandatory for filers to report both exempt interest and exempt-interest dividends. Regulated investment companies paying $10 or more in exempt-interest dividends to a Minnesota resident, or anyone receiving $10 or more in exempt-interest or exempt-interest dividends and paying as nominee to a Minnesota resident, are required to file information returns with the Minnesota Department of Revenue. The new requirement is effective for all reports filed after December 31, 2017, and must be reported on the Form 1099-B “Hybrid Document” as laid out in Fact Sheet 19.

 

Fact Sheet 19 was also updated recently with minor changes to some parts of the specifications for the 1099-B “Hybrid Document” transmittal schema. Specifically, filers are instructed not to use semi-colons when completing their files.

 

To review the legislative updates that govern municipal bond reporting, click here. To review Fact Sheet 19 in full, please click here.

Author

Paul Ogawa

Paul Ogawa is a Junior Regulatory Counsel at Sovos Compliance. As part of the Regulatory Analysis team, his main areas of focus are state and federal tax withholding, the Affordable Care Act (ACA), and Canadian tax information reporting. Prior to Sovos, Paul worked as a litigation attorney in Boston area law firms, representing clients in insurance subrogation claims, family law matters, and employment disputes. Paul is a member of the Massachusetts Bar, earned his B.A. from Brandeis University and his J.D. from the Suffolk University Law School.
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