HF 4095

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; individual income; providing for 
  1.3             calculation of the add-back for state income taxes; 
  1.4             amending Minnesota Statutes 1999 Supplement, section 
  1.5             290.01, subdivision 19a. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.8   290.01, subdivision 19a, is amended to read: 
  1.9      Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
  1.10  individuals, estates, and trusts, there shall be added to 
  1.11  federal taxable income: 
  1.12     (1)(i) interest income on obligations of any state other 
  1.13  than Minnesota or a political or governmental subdivision, 
  1.14  municipality, or governmental agency or instrumentality of any 
  1.15  state other than Minnesota exempt from federal income taxes 
  1.16  under the Internal Revenue Code or any other federal statute, 
  1.17  and 
  1.18     (ii) exempt-interest dividends as defined in section 
  1.19  852(b)(5) of the Internal Revenue Code, except the portion of 
  1.20  the exempt-interest dividends derived from interest income on 
  1.21  obligations of the state of Minnesota or its political or 
  1.22  governmental subdivisions, municipalities, governmental agencies 
  1.23  or instrumentalities, but only if the portion of the 
  1.24  exempt-interest dividends from such Minnesota sources paid to 
  1.25  all shareholders represents 95 percent or more of the 
  2.1   exempt-interest dividends that are paid by the regulated 
  2.2   investment company as defined in section 851(a) of the Internal 
  2.3   Revenue Code, or the fund of the regulated investment company as 
  2.4   defined in section 851(g) of the Internal Revenue Code, making 
  2.5   the payment; and 
  2.6      (iii) for the purposes of items (i) and (ii), interest on 
  2.7   obligations of an Indian tribal government described in section 
  2.8   7871(c) of the Internal Revenue Code shall be treated as 
  2.9   interest income on obligations of the state in which the tribe 
  2.10  is located; 
  2.11     (2) the amount of income taxes paid or accrued within the 
  2.12  taxable year under this chapter and income taxes paid to any 
  2.13  other state or to any province or territory of Canada, to the 
  2.14  extent allowed as a deduction under section 63(d) of the 
  2.15  Internal Revenue Code, but the addition may not be more than the 
  2.16  amount by which the itemized deductions as allowed under section 
  2.17  63(d) of the Internal Revenue Code exceeds the amount of the 
  2.18  standard deduction as defined in section 63(c) of the Internal 
  2.19  Revenue Code.  For the purpose of this paragraph, the 
  2.20  disallowance of itemized deductions under section 68 of the 
  2.21  Internal Revenue Code of 1986, income tax is the last itemized 
  2.22  deduction treated as being disallowed in proportion to total 
  2.23  itemized deductions; 
  2.24     (3) the capital gain amount of a lump sum distribution to 
  2.25  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
  2.26  Reform Act of 1986, Public Law Number 99-514, applies; 
  2.27     (4) the amount of income taxes paid or accrued within the 
  2.28  taxable year under this chapter and income taxes paid to any 
  2.29  other state or any province or territory of Canada, to the 
  2.30  extent allowed as a deduction in determining federal adjusted 
  2.31  gross income.  For the purpose of this paragraph, income taxes 
  2.32  do not include the taxes imposed by sections 290.0922, 
  2.33  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
  2.34     (5) the amount of expense, interest, or taxes disallowed 
  2.35  pursuant to section 290.10; and 
  2.36     (6) the amount of a partner's pro rata share of net income 
  3.1   which does not flow through to the partner because the 
  3.2   partnership elected to pay the tax on the income under section 
  3.3   6242(a)(2) of the Internal Revenue Code. 
  3.4      Sec. 2.  [EFFECTIVE DATE.] 
  3.5      Section 1 is effective for taxable years beginning after 
  3.6   December 31, 1999.