SF 244

as introduced - 89th Legislature (2015 - 2016) Posted on 01/23/2015 08:19am

A bill for an act
relating to taxation; income and corporate franchise; establishing a tax credit for
certain qualified child care expenses; appropriating money; proposing coding for
new law in Minnesota Statutes, chapter 290.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [290.0693] SCHOOL READINESS TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed for payments to a qualifying child care facility. new text end

new text begin (a)
In addition to the credit allowed under section 290.067, an individual taxpayer is allowed
a credit against the tax due in this chapter for a percentage of amounts paid to a child care
facility on behalf of a child at the following rates, subject to the limitations in paragraph (b):
new text end

new text begin (1) for a child care facility with a quality rating of four stars as of December 31 of
the calendar year in which the amounts are paid, 150 percent;
new text end

new text begin (2) for a child care facility with a quality rating of three stars as of December 31 of
the calendar year in which the amounts are paid, 100 percent; and
new text end

new text begin (3) for a child care facility with a quality rating of two stars as of December 31 of
the calendar year in which the amounts are paid, 50 percent.
new text end

new text begin (b) The credit allowed under paragraph (a) must not exceed $1,050 for payments
made on behalf of one child and must not exceed $2,100 for payments made on behalf
of two or more children.
new text end

new text begin (c) Taxpayers who make payments on behalf of multiple children must calculate the
credit allowed under this subdivision for each child separately.
new text end

new text begin Subd. 2. new text end

new text begin Credits allowed for business-supported provider services. new text end

new text begin (a) To
the extent not deducted as a business expense, an individual taxpayer or corporation is
allowed a credit against the tax due in this chapter for a percentage of eligible business
child care expenses to a child care facility, or for a child care facility to which the expenses
are related, at the following rates:
new text end

new text begin (1) to or for a child care facility with a quality rating of four stars as of December 31
of the calendar year in which the amounts are paid, 15 percent;
new text end

new text begin (2) to or for a child care facility with a quality rating of three stars as of December
31 of the calendar year in which the amounts are paid, ten percent; and
new text end

new text begin (3) to or for a child care facility with a quality rating of two stars as of December 31
of the calendar year in which the amounts are paid, five percent.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following definitions apply:
new text end

new text begin (a) "Child" or "children" means individuals up to and including five years of age.
new text end

new text begin (b) "Child care facility" means any entity with a quality rating of at least two stars
during the calendar year for which the credit under this section is claimed.
new text end

new text begin (c) "Eligible business child care expenses" means the total of the following expenses,
for the year in which the expenses are incurred:
new text end

new text begin (1) payments for the construction, renovation, expansion, or major repair of a child
care facility, the purchase of equipment for a child care facility, or for the maintenance and
operation of a child care facility, not to exceed $50,000;
new text end

new text begin (2) payments made to an eligible child care facility on behalf of the taxpayer's
employees, not to exceed $5,000 per child; and
new text end

new text begin (3) payments for the purchase of child care slots at eligible child care facilities actually
provided or reserved for children of the taxpayer's employees, not to exceed $50,000.
new text end

new text begin (d) "Quality rating" means the rating awarded to a child care facility by the
Department of Human Services pursuant to section 124D.142.
new text end

new text begin Subd. 4. new text end

new text begin Required documentation. new text end

new text begin A taxpayer claiming the credit under this section
must provide documentation of eligibility for the credit in a form and manner prescribed
by the commissioner of revenue, in consultation with the commissioner of human services.
new text end

new text begin Subd. 5. new text end

new text begin Allocation for nonresidents and part-year residents. new text end

new text begin For a nonresident
or part-year resident, the credit determined under this section must be allocated based on
the percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 6. new text end

new text begin Credit refundable; carryforward provisions. new text end

new text begin For taxpayers with income,
as defined under section 290.067, subdivision 2a, of $25,750 or less, if the amount of total
credits that the claimant is eligible to receive under this section exceeds the claimant's tax
liability under this chapter, the commissioner of revenue must refund the excess to the
claimant. For all other taxpayers claiming a credit under this section, if the amount of total
credits that the claimant is eligible to receive under this section exceeds the claimant's tax
liability under this chapter, the excess may be carried forward for up to five years.
new text end

new text begin Subd. 7. new text end

new text begin Inflation adjustment. new text end

new text begin The commissioner shall adjust the $25,750 in
subdivision 7 by the percentage determined pursuant to the provisions of section 1(f) of
the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2014" shall be
substituted for the word "1992." For 2016, the commissioner shall then determine the
percent change from the 12 months ending on August 31, 2014, to the 12 months ending on
August 31, 2015, and in each subsequent year, from the 12 months ending on August 31,
2014, to the 12 months ending on August 31 of the year preceding the taxable year. The
determination of the commissioner pursuant to this subdivision shall not be considered a
"rule" and shall not be subject to the Administrative Procedure Act contained in chapter 14.
new text end

new text begin Subd. 8. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds authorized under
this section is appropriated to the commissioner of revenue from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end