Minnesota House Bill HF4950

Minnesota 2025-2026 Regular Session

• Introduced: 4/13/26
• Refer: 4/13/26

Caption

Tax on certain individuals and organizations convicted of and benefiting from fraud established.

Summary

HF4950 would create a new Minnesota tax on amounts obtained through fraud. The bill defines fraud as the intentional use of deceit or dishonest means to obtain state money from a state program or appropriation, excluding tax overpayment refunds, and imposes a tax equal to 100 percent of the fraudulently obtained amount. The tax would apply not only to individuals or organizations convicted of fraud, but also to those the commissioner of revenue determines obtained money by fraud, and in some cases to persons or entities compensated for participating in the fraudulent activity. The bill directs the commissioner of revenue, in consultation with law enforcement or other agencies as needed, to investigate suspected fraud, set payment schedules, and enforce the tax. Appeals would proceed under existing tax appeal procedures. Revenue collected would be deposited into a newly created tax relief account in the special revenue fund and used only for income or property tax relief. The measure would apply retroactively to fraud determinations made after December 31, 2019.

Impact

If enacted, the bill would add a new section to Minnesota Statutes chapter 295 and expand the state’s tax enforcement tools against fraud involving state funds. It would create a separate 100 percent tax liability on fraud proceeds, independent of restitution or criminal penalties, and would authorize the commissioner of revenue to make fraud determinations and collect the tax. The bill also establishes a new tax relief account and dedicates the proceeds to income and property tax relief, affecting both taxpayers and entities that receive state program funds or participate in fraudulent schemes.

Sentiment

Based on the bill text and available context, the measure appears to be framed as an anti-fraud and taxpayer-relief proposal, with a punitive approach toward those who unlawfully obtain state money. There is no recorded committee transcript or vote history in the provided materials, so no formal support or opposition can be measured from hearings or floor action. The bill’s introduction and referral to the House Taxes Committee suggest it was treated as a tax policy and enforcement measure.

Contention

The main points of potential contention are the breadth of the tax and the commissioner’s authority. The bill reaches beyond people actually convicted of fraud to include those the commissioner determines obtained money by fraud, raising due-process and administrative concerns. It also applies to people compensated for participating in the activity, even if they are not the primary recipient of the funds, and it applies retroactively to post-2019 fraud determinations. Supporters would likely emphasize deterrence, recovery of stolen public funds, and tax relief funding, while critics may question fairness, evidentiary standards, and overlap with existing restitution and criminal penalties.