The Department of Taxation was created in 1939 as part of a general reorganization of state government (Laws 1939 c431). The General Administrative and Income Tax divisions assumed all the powers of the Minnesota Tax Commission. These included administering the laws governing occupation taxes on the mining industry; royalty, gross earnings, income and chain store taxes; and jurisdiction over county assessors, and town, village, city, and county boards of equalization and review with respect to property taxes. These two divisions of the department also assumed activities related to the licensing and sale of cigarettes, transferred from the Department of Agriculture. The Petroleum Division took over the inspection and taxation of oil and gasoline from the Department of Agriculture and the office of chief oil inspector in that department was abolished. Administration of the inheritance and gift tax laws was transferred to the department from the Attorney General.
The department is responsible for the overall supervision of local property tax administrators and agencies. It also provides enforcement services in the areas of tax collection and assessment. It administers taxes due the state by collecting individual income and corporation taxes, sales and use taxes, estate taxes, motor fuel taxes, excise taxes on liquor and tobacco, and mortgage registration and deed transfer taxes. The department also collects the telephone gross earnings tax, and taxes paid by the iron ore and taconite mining companies.
In 1973 the Department of Taxation became the Department of Revenue and the commissioner's term of appointment was reduced to four years to coincide with the governor's term (Laws 1973 c582). (Sources: laws and statutes, legislative journals, Minnesota guidebook to state agency services, Revenue Department biennial reports, and Taxation Department administrative history background file.)