HF 1197

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

  1.1                          A bill for an act 
  1.2             relating to taxation; extending the credit for 
  1.3             increasing research activities to noncorporate 
  1.4             taxpayers; amending Minnesota Statutes 1998, section 
  1.5             290.068, subdivisions 1, 3, and 4. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 290.068, 
  1.8   subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [CREDIT ALLOWED.] A corporation, other than 
  1.10  a corporation treated as an "S" corporation under section 
  1.11  290.9725, taxpayer is allowed a credit against the portion of 
  1.12  the franchise tax computed under section 290.06, subdivision 1, 
  1.13  for the taxable year equal to: 
  1.14     (a) 5 percent of the first $2,000,000 of the excess (if 
  1.15  any) of 
  1.16     (1) the qualified research expenses for the taxable year, 
  1.17  over 
  1.18     (2) the base amount; and 
  1.19     (b) 2.5 percent on all of such excess expenses over 
  1.20  $2,000,000. 
  1.21     Sec. 2.  Minnesota Statutes 1998, section 290.068, 
  1.22  subdivision 3, is amended to read: 
  1.23     Subd. 3.  [LIMITATION; CARRYOVER.] (a)(1) The credit for 
  1.24  the taxable year shall not exceed the liability for tax.  
  1.25  "Liability for tax" for purposes of this section means the tax 
  2.1   imposed under this chapter for the taxable year reduced by the 
  2.2   sum of the nonrefundable credits allowed under this chapter. 
  2.3      (2) In the case of a corporation taxpayer which is a 
  2.4   partner in a partnership, the credit allowed for the taxable 
  2.5   year shall not exceed the lesser of the amount determined under 
  2.6   clause (1) for the taxable year or an amount (separately 
  2.7   computed with respect to the corporation's taxpayer's interest 
  2.8   in the trade or business or entity) equal to the amount of tax 
  2.9   attributable to that portion of taxable income which is 
  2.10  allocable or apportionable to the corporation's interest in the 
  2.11  trade or business or entity.  
  2.12     (b) If the amount of the credit determined under this 
  2.13  section for any taxable year exceeds the limitation under clause 
  2.14  (a), the excess shall be a research credit carryover to each of 
  2.15  the 15 succeeding taxable years.  The entire amount of the 
  2.16  excess unused credit for the taxable year shall be carried first 
  2.17  to the earliest of the taxable years to which the credit may be 
  2.18  carried and then to each successive year to which the credit may 
  2.19  be carried.  The amount of the unused credit which may be added 
  2.20  under this clause shall not exceed the taxpayer's liability for 
  2.21  tax less the research credit for the taxable year.  
  2.22     Sec. 3.  Minnesota Statutes 1998, section 290.068, 
  2.23  subdivision 4, is amended to read: 
  2.24     Subd. 4.  [PARTNERSHIPS NONCORPORATE TAXPAYERS.] In the 
  2.25  case of partnerships taxpayers other than corporations, the 
  2.26  amount of and allocation of the credit shall be allocated in the 
  2.27  same manner provided by is subject to section 41(f)(2) and 41(g) 
  2.28  of the Internal Revenue Code. 
  2.29     Sec. 4.  [EFFECTIVE DATE.] 
  2.30     Sections 1 to 3 are effective for taxable years beginning 
  2.31  after December 31, 1998.