SF 5032 Minnesota Senate · 2025-2026 Regular Session

Tax establishment on certain individuals and organizations convicted of and benefiting from fraud and certain data sharing and disclosure provisions

This bill creates a new tax on individuals and organizations convicted of fraud who continue to benefit from those illegal gains. It establishes a penalty of up to 100% of the fraudulent amounts received if no criminal conviction has occurred yet, while also increasing existing penalties for false returns to 50% of the tax involved. To support enforcement, the legislation allows the Department of Revenue to share confidential tax data with the Financial Crimes and Fraud Section to investigate these cases. Additionally, the bill mandates that tax return information be shared with state auditors and the inspector general to facilitate oversight of public funds. These measures are set to take effect for fraud convictions occurring after December 31, 2025.

Bill status in committee 1 of 4 stages cleared

Introduction

Apr 2026

Committee Review

Floor Vote

Governor

Introduced Apr 9, 2026 Last action Apr 27, 2026

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What changed between versions

Introduction → 1st Engrossment · 5 edits · Apr 27, 2026

MODERATE

The bill was updated from its introduction to its first engrossment version, adding numerous new sections and modifying existing ones to expand the scope of a fraud tax. Key changes include establishing a new tax on individuals convicted of fraud, creating a dedicated tax relief account to fund future tax rate reductions, and authorizing extensive data sharing between the Department of Revenue and law enforcement agencies to investigate and enforce the tax.

Scope change

The bill's scope expanded significantly by adding new sections detailing data sharing protocols, defining the tax relief fund, and specifying effective dates, while also modifying the definitions of 'fraud' and 'public program' to rely on existing statutes.

ENFORCEMENT

Added new provisions allowing the Department of Revenue to share criminal investigative data with the Financial Crimes and Fraud Section and vice versa to facilitate fraud investigations.

FISCAL

Created a new 'tax relief account' where fraud tax proceeds are deposited; funds will be used to reduce the first-tier income tax rate once a specific threshold is met.

TIMELINE

Changed the effective date for the fraud tax from retroactive application (post-2019) to only applying to convictions of fraud made after December 31, 2025.

DEFINITION

Updated definitions for 'fraud' and 'public program' to reference meanings in section 13.357 instead of providing a standalone definition.

REQUIREMENT

Added a requirement for the agency administering a public program to certify the amount of fraud to the Department of Revenue after a court conviction.

Floor votes

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Full legislative history

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Total actions

Key actions

Committee

Apr 27, 2026

Upper · Passed

Comm report: To pass as amended

upper

Apr 9, 2026

Committee

Referred to Taxes

upper

Apr 9, 2026

Introduced

Introduction and first reading

upper

1 primary · 4 co-sponsors