Minnesota Legislature
HF 37
as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:33am
Current Version - as introduced
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A bill for an act
relating to taxation; extending research credit to individual income tax; making
portion of credit refundable; appropriating money; amending Minnesota Statutes
2008, section 290.068, subdivisions 1, 2, 3, 4, by adding a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2008, section 290.068, subdivision 1, is amended to read:
Subdivision 1.
Credit allowed.
A deleted text begin corporation, other than a corporation treated as an
"S" corporation under section 290.9725,deleted text end new text begin taxpayernew text end is allowed a credit against the deleted text begin portion
of the franchisedeleted text end tax computed under section 290.06deleted text begin , subdivision 1,deleted text end for the taxable year
equal to:
deleted text begin (a)deleted text end new text begin (1)new text end 5 percent of the first $2,000,000 of the excess (if any) ofnew text begin :
new text end
deleted text begin (1)deleted text end new text begin (i)new text end the qualified research expenses for the taxable year, over
deleted text begin (2)deleted text end new text begin (ii)new text end the base amount; and
deleted text begin (b)deleted text end new text begin (2)new text end 2.5 percent on all of such excess expenses over $2,000,000.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after
December 31, 2008.
new text end
Sec. 2.
Minnesota Statutes 2008, 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 deleted text begin clausesdeleted text end new text begin
paragraphsnew text end (a) and (b) shall apply.
Sec. 3.
Minnesota Statutes 2008, section 290.068, subdivision 3, is amended to read:
Subd. 3.
Limitation; carryover.
(a)(1) The credit for the taxable year shall not
exceed the liability for tax. "Liability for tax" for purposes of this section means the tax
imposed under section 290.06, subdivision 1, for the taxable year reduced by the sum of
the nonrefundable credits allowed under this chapter.
(2) deleted text begin In the case of a corporation which is a partner indeleted text end new text begin Fornew text end a partnership, the credit
allowed for the taxable year shall not exceed the lesser of the amount determined under
clause (1) for the taxable year or an amount (separately computed with respect to the
deleted text begin corporation'sdeleted text end new text begin taxpayer'snew text end 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
deleted text begin corporation'sdeleted text end new text begin taxpayer'snew text end interest in the trade or business or entity.
(b) If the amount of the credit determined under this section for any taxable year
exceeds the limitation under deleted text begin clausedeleted text end new text begin paragraphnew text end (a), thenew text begin commissioner shall refund ...
percent of the excess up to a maximum of $....... to the taxpayer.
new text end
new text begin (c) Thenew text end excess deleted text begin shall bedeleted text end new text begin over the amount refunded to the taxpayer under paragraph
(b) isnew text end 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 deleted text begin clausedeleted text end new text begin paragraphnew text end 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, 2008.
new text end
Sec. 4.
Minnesota Statutes 2008, section 290.068, subdivision 4, is amended to read:
Subd. 4.
deleted text begin Partnershipsdeleted text end new text begin Noncorporate taxpayersnew text end .
deleted text begin In the case of partnershipsdeleted text end new text begin
For taxpayers other than corporations,new text end the credit shall be allocated in the same manner
provided by deleted text begin sectiondeleted text end new text begin sectionsnew text end 41(f)(2) new text begin and 41(g) new text end of the Internal Revenue Code.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after
December 31, 2008.
new text end
Sec. 5.
Minnesota Statutes 2008, section 290.068, is amended by adding a subdivision
to read:
new text begin Subd. 7. new text end
new text begin Appropriation. new text end
new text begin
An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner 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, 2008.
new text end