HF 253

as introduced - 90th Legislature (2017 - 2018) Posted on 02/01/2017 03:44pm

A bill for an act
relating to taxation; income and corporate franchise; providing for limited
refundability of the research credit; amending Minnesota Statutes 2016, section
290.068, subdivisions 2, 3, 6a.

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

Section 1.

Minnesota Statutes 2016, section 290.068, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of this section, the following terms have the meanings
given.

(a) "Qualified research expenses" means (i) qualified research expenses and basic research
payments as defined in section 41(b) and (e) of the Internal Revenue Code, except it does
not include expenses incurred for qualified research or basic research conducted outside
the state of Minnesota pursuant to section 41(d) and (e) of the Internal Revenue Code; and
(ii) contributions to a nonprofit corporation established and operated pursuant to the
provisions of chapter 317A for the purpose of promoting the establishment and expansion
of business in this state, provided the contributions are invested by the nonprofit corporation
for the purpose of providing funds for small, technologically innovative enterprises in
Minnesota during the early stages of their development.

(b) "Qualified research" means qualified research as defined in section 41(d) of the
Internal Revenue Code, except that the term does not include qualified research conducted
outside the state of Minnesota.

(c) "Base amount" means base amount as defined in section 41(c) of the Internal Revenue
Code, except that the average annual gross receipts must be calculated using Minnesota
sales or receipts under section 290.191 and the definitions contained in clauses (a) and (b)
shall apply.

new text begin (d) "Liability for tax" for purposes of this section means the sum of the tax imposed
under section 290.06, subdivisions 1 and 2c, for the taxable year reduced by the sum of the
nonrefundable credits allowed under this chapter, on all of the entities required to be included
on the combined report of the unitary business.
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, 2016.
new text end

Sec. 2.

Minnesota Statutes 2016, section 290.068, subdivision 3, is amended to read:

Subd. 3.

Limitation; carryover.

(a) new text begin Except as provided in subdivision 6a, paragraph
(b), new text end the credit deleted text begin for a taxable year beginning before January 1, 2010, and after December 31,
2012, deleted text end shall not exceed the liability for tax. deleted text begin "Liability for tax" for purposes of this section
means the sum of the tax imposed under section 290.06, subdivisions 1 and 2c, for the
taxable year reduced by the sum of the nonrefundable credits allowed under this chapter,
on all of the entities required to be included on the combined report of the unitary business. deleted text end
If the amount of the credit allowed exceeds the liability for tax of the taxpayer, but is allowed
as a result of the liability for tax of other members of the unitary group for the taxable year,
the taxpayer must allocate the excess as a research credit to another member of the unitary
group.

(b) In the case of a corporation which is a partner in a partnership, the credit allowed
for the taxable year shall not exceed the lesser of the amount determined under paragraph
(a) for the taxable year or an amount (separately computed with respect to the corporation's
interest in the trade or business or entity) equal to the amount of tax attributable to that
portion of taxable income which is allocable or apportionable to the corporation's interest
in the trade or business or entity.

(c) If the amount of the credit determined under this section for any taxable year exceeds
the limitation under paragraph (a) or (b), including amounts new text begin allowed as a refund under
subdivision 6a, paragraph (b), or new text end allocated to other members of the unitary group, the excess
shall be a research credit carryover to each of the 15 succeeding taxable years. The entire
amount of the excess unused credit for the taxable year shall be carried first to the earliest
of the taxable years to which the credit may be carried and then to each successive year to
which the credit may be carried. The amount of the unused credit which may be added under
this clause shall not exceed the taxpayer's liability for tax less the research credit for the
taxable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2016.
new text end

Sec. 3.

Minnesota Statutes 2016, section 290.068, subdivision 6a, is amended to read:

Subd. 6a.

Credit to be refundable.

new text begin (a) new text end If the amount of credit allowed in this section
for qualified research expenses incurred in taxable years beginning after December 31,
2009, and before January 1, 2013, exceeds the taxpayer's tax liability under this chapter,
the commissioner shall refund the excess amount. The credit allowed for qualified research
expenses incurred in taxable years beginning after December 31, 2009, and before January
1, 2013, must be used before any research credit earned under subdivision 3.

new text begin (b) If the amount of credit allowed in this section for qualified research expenses incurred
in taxable years beginning after December 31, 2014, exceeds the taxpayer's liability for tax
under this chapter by $250,000 or less, the commissioner shall refund the excess amount.
The limit includes any amount of tax under sections 290.0921 and 290.0922. The credit
allowed for qualified research expenses incurred in taxable years beginning before January
1, 2015, must be used before any research credit earned under subdivision 3.
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, 2016.
new text end