HF 2001

as introduced - 90th Legislature (2017 - 2018) Posted on 03/02/2017 01:24pm

A bill for an act
relating to taxation; income; allowing individual and corporate credits for
employer-provided child care; 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] CREDIT FOR EMPLOYER-PROVIDED CHILD CARE.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following terms have
the meanings given.
new text end

new text begin (b) "Child care facility" means a facility licensed by the Department of Human Services
as a child care center and located at the employer's place of business.
new text end

new text begin (c) "Employee" means individuals employed by an employer.
new text end

new text begin (d) "Employer" means one or more taxpayers who operate a business and either:
new text end

new text begin (1) jointly or severally own a child care facility for use by their employees; or
new text end

new text begin (2) pay for child care on behalf of their employees.
new text end

new text begin (e) "Employer-provided child care" means child care provided at a location convenient
to employees, including but not limited to the employer's place of business, whether offered
directly by the employer or through a contract with a licensed child care provider.
new text end

new text begin Subd. 2. new text end

new text begin Employer credit for child care facility start-up costs. new text end

new text begin (a) To the extent not
deducted as a business expense, an employer is allowed a credit against the tax due under
this chapter equal to ten percent of the cost of placing a child care facility in service. The
employer may claim the credit in the taxable year in which the facility is placed in service
and in each of the nine succeeding taxable years.
new text end

new text begin (b) The cost of placing a child care facility in service is limited to amounts the employer
pays for land acquisition, improvements, buildings, building improvements, and construction,
and the purchase of furniture, fixtures, and equipment for the child care facility.
new text end

new text begin (c) If an employer qualifies for a credit under this subdivision and the child care facility
ceases operations within five years of being placed in service, the taxpayer must repay an
amount equal to:
new text end

new text begin (1) the dollar amount of credits claimed for the facility; multiplied by
new text end

new text begin (2)(i) one; minus
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new text begin (ii) the number of months the facility was in operation divided by 60.
new text end

new text begin (d) The credit repayment required under paragraph (c) does not apply if the employer
ceases operations in the same taxable year in which the child care facility ceases operations.
new text end

new text begin Subd. 3. new text end

new text begin Employer credit for child care facility operational costs. new text end

new text begin To the extent not
deducted as a business expense, an employer is allowed a credit against the tax due under
this chapter equal to 75 percent of the cost of operating a child care facility, reduced by
amounts employees and others pay for using the facility.
new text end

new text begin Subd. 4. new text end

new text begin Employer credit for child care paid on behalf of employees. new text end

new text begin To the extent
not deducted as a business expense, an employer is allowed a credit against the tax due
under this chapter equal to 50 percent of the payments made to one or more licensed child
care providers for care provided to children of employees.
new text end

new text begin Subd. 5. new text end

new text begin Limitations and apportionment of credits. new text end

new text begin (a) The credits in subdivisions 2
and 3 are not allowed in any taxable year in which fewer than 50 percent of the children
enrolled at the child care facility are children of employees.
new text end

new text begin (b) If the amount of credit determined under this section exceeds liability for tax under
this chapter, the excess is a credit for carryover to each of the five succeeding taxable years.
The entire amount of the excess unused credit for the taxable year must 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 paragraph must not exceed the taxpayer's liability for tax less the credit
under this subdivision for the taxable year.
new text end

new text begin (c) Credits granted to a partnership, a limited liability company taxed as a partnership,
an S corporation, or multiple owners of property are passed through to the partners, members,
shareholders, or owners, respectively, pro rata to each partner, member, shareholder, or
owner based on their share of the entity's assets or as specially allocated in their
organizational documents or any other executed agreement, as of the last day of the taxable
year.
new text end

new text begin (d) 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 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. new text begin PURPOSE STATEMENT; TAX EXPENDITURES.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin This section is intended to fulfill the requirement under
Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax
expenditure provide a purpose for the tax expenditure and a standard or goal against which
its effectiveness may be measured.
new text end

new text begin Subd. 2. new text end

new text begin Credits for employer-provided child care. new text end

new text begin The provisions of section 1 are
intended to provide incentives to employers to assist their employees in securing quality
and affordable child care for their children. The effectiveness of the credit is to be measured
by the number of employer-owned child care facilities for employees that are started or
expanded using the credit in section 1, subdivision 2, the number of children provided child
care by the facilities that are built by employers who claim the credits in section 1,
subdivisions 2 and 3, and the number of employers who claim the credit in section 1,
subdivision 4, and begin offering their employees subsidies for child care costs.
new text end