HF 2256

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; income; allowing the education 
  1.3             subtraction and credit for extracurricular activities 
  1.4             and musical instruments; amending Minnesota Statutes 
  1.5             2000, sections 290.01, subdivision 19b; 290.0674, 
  1.6             subdivision 1. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 290.01, 
  1.9   subdivision 19b, is amended to read: 
  1.10     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  1.11  individuals, estates, and trusts, there shall be subtracted from 
  1.12  federal taxable income: 
  1.13     (1) interest income on obligations of any authority, 
  1.14  commission, or instrumentality of the United States to the 
  1.15  extent includable in taxable income for federal income tax 
  1.16  purposes but exempt from state income tax under the laws of the 
  1.17  United States; 
  1.18     (2) if included in federal taxable income, the amount of 
  1.19  any overpayment of income tax to Minnesota or to any other 
  1.20  state, for any previous taxable year, whether the amount is 
  1.21  received as a refund or as a credit to another taxable year's 
  1.22  income tax liability; 
  1.23     (3) the amount paid to others, less the credit allowed 
  1.24  under section 290.0674, not to exceed $1,625 for each qualifying 
  1.25  child in grades kindergarten to 6 and $2,500 for each qualifying 
  1.26  child in grades 7 to 12, for tuition, textbooks, and 
  2.1   transportation of each qualifying child in attending an 
  2.2   elementary or secondary school situated in Minnesota, North 
  2.3   Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of 
  2.4   this state may legally fulfill the state's compulsory attendance 
  2.5   laws, which is not operated for profit, and which adheres to the 
  2.6   provisions of the Civil Rights Act of 1964 and chapter 363.  For 
  2.7   the purposes of this clause, "tuition" includes fees or tuition 
  2.8   as defined in section 290.0674, subdivision 1, clause 
  2.9   clauses (1), (6), and (7).  As used in this clause, "textbooks" 
  2.10  includes books and other instructional materials and equipment 
  2.11  used in elementary and secondary schools in teaching only those 
  2.12  subjects legally and commonly taught in public elementary and 
  2.13  secondary schools in this state.  Equipment expenses qualifying 
  2.14  for deduction includes expenses as defined and limited in 
  2.15  section 290.0674, subdivision 1, clause clauses (3) and (5).  
  2.16  "Textbooks" does not include instructional books and materials 
  2.17  used in the teaching of religious tenets, doctrines, or worship, 
  2.18  the purpose of which is to instill such tenets, doctrines, or 
  2.19  worship, nor does it include books or materials for, or 
  2.20  transportation to, extracurricular activities including sporting 
  2.21  events, musical or dramatic events, speech activities, driver's 
  2.22  education, or similar programs.  For purposes of the subtraction 
  2.23  provided by this clause, "qualifying child" has the meaning 
  2.24  given in section 32(c)(3) of the Internal Revenue Code; 
  2.25     (4) contributions made in taxable years beginning after 
  2.26  December 31, 1981, and before January 1, 1985, to a qualified 
  2.27  governmental pension plan, an individual retirement account, 
  2.28  simplified employee pension, or qualified plan covering a 
  2.29  self-employed person that were included in Minnesota gross 
  2.30  income in the taxable year for which the contributions were made 
  2.31  but were deducted or were not included in the computation of 
  2.32  federal adjusted gross income, less any amount allowed to be 
  2.33  subtracted as a distribution under this subdivision or a 
  2.34  predecessor provision in taxable years that began before January 
  2.35  1, 2000.  This subtraction applies only for taxable years 
  2.36  beginning after December 31, 1999, and before January 1, 2001.  
  3.1   If an individual's subtraction under this clause exceeds the 
  3.2   individual's taxable income, the excess may be carried forward 
  3.3   to taxable years beginning after December 31, 2000, and before 
  3.4   January 1, 2002; 
  3.5      (5) income as provided under section 290.0802; 
  3.6      (6) the amount of unrecovered accelerated cost recovery 
  3.7   system deductions allowed under subdivision 19g; 
  3.8      (7) to the extent included in federal adjusted gross 
  3.9   income, income realized on disposition of property exempt from 
  3.10  tax under section 290.491; 
  3.11     (8) to the extent not deducted in determining federal 
  3.12  taxable income or used to claim the long-term care insurance 
  3.13  credit under section 290.0672, the amount paid for health 
  3.14  insurance of self-employed individuals as determined under 
  3.15  section 162(l) of the Internal Revenue Code, except that the 
  3.16  percent limit does not apply.  If the individual deducted 
  3.17  insurance payments under section 213 of the Internal Revenue 
  3.18  Code of 1986, the subtraction under this clause must be reduced 
  3.19  by the lesser of: 
  3.20     (i) the total itemized deductions allowed under section 
  3.21  63(d) of the Internal Revenue Code, less state, local, and 
  3.22  foreign income taxes deductible under section 164 of the 
  3.23  Internal Revenue Code and the standard deduction under section 
  3.24  63(c) of the Internal Revenue Code; or 
  3.25     (ii) the lesser of (A) the amount of insurance qualifying 
  3.26  as "medical care" under section 213(d) of the Internal Revenue 
  3.27  Code to the extent not deducted under section 162(1) of the 
  3.28  Internal Revenue Code or excluded from income or (B) the total 
  3.29  amount deductible for medical care under section 213(a); 
  3.30     (9) the exemption amount allowed under Laws 1995, chapter 
  3.31  255, article 3, section 2, subdivision 3; 
  3.32     (10) to the extent included in federal taxable income, 
  3.33  postservice benefits for youth community service under section 
  3.34  124D.42 for volunteer service under United States Code, title 
  3.35  42, sections 12601 to 12604; 
  3.36     (11) to the extent not deducted in determining federal 
  4.1   taxable income by an individual who does not itemize deductions 
  4.2   for federal income tax purposes for the taxable year, an amount 
  4.3   equal to 50 percent of the excess of charitable contributions 
  4.4   allowable as a deduction for the taxable year under section 
  4.5   170(a) of the Internal Revenue Code over $500; 
  4.6      (12) to the extent included in federal taxable income, 
  4.7   holocaust victims' settlement payments for any injury incurred 
  4.8   as a result of the holocaust, if received by an individual who 
  4.9   was persecuted for racial or religious reasons by Nazi Germany 
  4.10  or any other Axis regime or an heir of such a person; and 
  4.11     (13) for taxable years beginning before January 1, 2008, 
  4.12  the amount of the federal small ethanol producer credit allowed 
  4.13  under section 40(a)(3) of the Internal Revenue Code which is 
  4.14  included in gross income under section 87 of the Internal 
  4.15  Revenue Code. 
  4.16     [EFFECTIVE DATE.] This section is effective for taxable 
  4.17  years beginning after December 31, 2000. 
  4.18     Sec. 2.  Minnesota Statutes 2000, section 290.0674, 
  4.19  subdivision 1, is amended to read: 
  4.20     Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
  4.21  a credit against the tax imposed by this chapter in an amount 
  4.22  equal to the amount paid for education-related expenses for a 
  4.23  qualifying child in kindergarten through grade 12.  For purposes 
  4.24  of this section, "education-related expenses" means: 
  4.25     (1) fees or tuition for instruction by an instructor under 
  4.26  section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 
  4.27  (5), or by a member of the Minnesota music teachers association, 
  4.28  for instruction outside the regular school day or school year, 
  4.29  including tutoring, driver's education offered as part of school 
  4.30  curriculum, regardless of whether it is taken from a public or 
  4.31  private entity or summer camps, in grade or age appropriate 
  4.32  curricula that supplement curricula and instruction available 
  4.33  during the regular school year, that assists a dependent to 
  4.34  improve knowledge of core curriculum areas or to expand 
  4.35  knowledge and skills under the graduation rule under section 
  4.36  120B.02 and that do not include the teaching of religious 
  5.1   tenets, doctrines, or worship, the purpose of which is to 
  5.2   instill such tenets, doctrines, or worship; 
  5.3      (2) expenses for textbooks, including books and other 
  5.4   instructional materials and equipment used in elementary and 
  5.5   secondary schools in teaching only those subjects legally and 
  5.6   commonly taught in public elementary and secondary schools in 
  5.7   this state.  "Textbooks" does not include instructional books 
  5.8   and materials used in the teaching of religious tenets, 
  5.9   doctrines, or worship, the purpose of which is to instill such 
  5.10  tenets, doctrines, or worship, nor does it include books or 
  5.11  materials for extracurricular activities including sporting 
  5.12  events, musical or dramatic events, speech activities, driver's 
  5.13  education, or similar programs; 
  5.14     (3) a maximum expense of $200 per family for personal 
  5.15  computer hardware, excluding single purpose processors, and 
  5.16  educational software that assists a dependent to improve 
  5.17  knowledge of core curriculum areas or to expand knowledge and 
  5.18  skills under the graduation rule under section 120B.02 purchased 
  5.19  for use in the taxpayer's home and not used in a trade or 
  5.20  business regardless of whether the computer is required by the 
  5.21  dependent's school; and 
  5.22     (4) the amount paid to others for transportation of a 
  5.23  qualifying child attending an elementary or secondary school 
  5.24  situated in Minnesota, North Dakota, South Dakota, Iowa, or 
  5.25  Wisconsin, wherein a resident of this state may legally fulfill 
  5.26  the state's compulsory attendance laws, which is not operated 
  5.27  for profit, and which adheres to the provisions of the Civil 
  5.28  Rights Act of 1964 and chapter 363.; 
  5.29     (5) expenses for the purchase or lease of musical 
  5.30  instruments used in classes offered as part of the school 
  5.31  curriculum; 
  5.32     (6) the amount paid to a public school for participation in 
  5.33  extracurricular activities for which fees are authorized under 
  5.34  section 123B.36, subdivision 1, paragraph (b), clauses (2), (4), 
  5.35  (7), (9), and (10); and 
  5.36     (7) the amount paid to a nonpublic school for participation 
  6.1   in activities listed in section 123B.36, subdivision 1, 
  6.2   paragraph (b), clauses (2), (4), (7), (9), and (10). 
  6.3      For purposes of this section, "qualifying child" has the 
  6.4   meaning given in section 32(c)(3) of the Internal Revenue Code. 
  6.5      [EFFECTIVE DATE.] This section is effective for taxable 
  6.6   years beginning after December 31, 2000.