HF 390

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to financial institutions; eliminating 
  1.3             certain preferential provisions involving credit 
  1.4             unions; amending Minnesota Statutes 1998, section 
  1.5             290.05, subdivisions 1 and 2. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 290.05, 
  1.8   subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [EXEMPT ENTITIES.] The following 
  1.10  corporations, individuals, estates, trusts, and organizations 
  1.11  shall be exempted from taxation under this chapter, provided 
  1.12  that every such person or corporation claiming exemption under 
  1.13  this chapter, in whole or in part, must establish to the 
  1.14  satisfaction of the commissioner the taxable status of any 
  1.15  income or activity: 
  1.16     (a) corporations, individuals, estates, and trusts engaged 
  1.17  in the business of mining or producing iron ore and other ores 
  1.18  the mining or production of which is subject to the occupation 
  1.19  tax imposed by section 298.01; but if any such corporation, 
  1.20  individual, estate, or trust engages in any other business or 
  1.21  activity or has income from any property not used in such 
  1.22  business it shall be subject to this tax computed on the net 
  1.23  income from such property or such other business or activity.  
  1.24  Royalty shall not be considered as income from the business of 
  1.25  mining or producing iron ore within the meaning of this section; 
  2.1      (b) the United States of America, the state of Minnesota or 
  2.2   any political subdivision of either agencies or 
  2.3   instrumentalities, whether engaged in the discharge of 
  2.4   governmental or proprietary functions.  For purposes of this 
  2.5   paragraph, credit unions are not agencies or instrumentalities 
  2.6   of the United States of America or of the state of Minnesota; 
  2.7   with respect to federally-chartered credit unions, this 
  2.8   provision applies to the maximum extent permitted under federal 
  2.9   law; 
  2.10     (c) any insurance company that is domiciled in a state or 
  2.11  country other than Minnesota that imposes retaliatory taxes, 
  2.12  fines, deposits, penalties, licenses, or fees and that does not 
  2.13  grant, on a reciprocal basis, exemption from such retaliatory 
  2.14  taxes to insurance companies or their agents domiciled in 
  2.15  Minnesota.  "Retaliatory taxes" means taxes imposed on insurance 
  2.16  companies organized in another state or country that result from 
  2.17  the fact that an insurance company organized in the taxing 
  2.18  jurisdiction and doing business in the other jurisdiction is 
  2.19  subject to taxes, fines, deposits, penalties, licenses, or fees 
  2.20  in an amount exceeding that imposed by the taxing jurisdiction 
  2.21  upon an insurance company organized in the other state or 
  2.22  country and doing business to the same extent in the taxing 
  2.23  jurisdiction; and 
  2.24     (d) town and farmers' mutual insurance companies and mutual 
  2.25  property and casualty insurance companies, other than those (1) 
  2.26  writing life insurance or (2) whose total assets on December 31, 
  2.27  1989, exceeded $1,600,000,000. 
  2.28     Sec. 2.  Minnesota Statutes 1998, section 290.05, 
  2.29  subdivision 2, is amended to read: 
  2.30     Subd. 2.  [ENTITIES TAXABLE UNLESS EXEMPT UNDER SUBCHAPTER 
  2.31  F OF INTERNAL REVENUE CODE.] Except as provided in subdivisions 
  2.32  1 and 3, organizations, including specifically nonprofit health 
  2.33  service plan corporations, as defined in chapter 62C, are 
  2.34  subject to taxation under this chapter unless they are exempt 
  2.35  from income taxation pursuant to Subchapter F of the Internal 
  2.36  Revenue Code.  State-chartered and federally-chartered credit 
  3.1   unions are subject to taxation under this chapter regardless of 
  3.2   any exemption from federal income taxation pursuant to 
  3.3   Subchapter F; with respect to federally-chartered credit unions, 
  3.4   this sentence applies to the maximum extent permitted under 
  3.5   federal law. 
  3.6      Sec. 3.  [EFFECTIVE DATE.] 
  3.7      Sections 1 and 2 are effective for tax years beginning 
  3.8   after December 31, 1999.