HF 4121

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; allowing an 
  1.3             additional credit for taxes paid to another state; 
  1.4             amending Minnesota Statutes 1998, section 290.06, by 
  1.5             adding a subdivision. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 290.06, is 
  1.8   amended by adding a subdivision to read: 
  1.9      Subd. 22a.  [NONRESIDENT'S CREDIT FOR TAXES PAID TO STATE 
  1.10  OF DOMICILE.] (a) Notwithstanding subdivision 22, a nonresident 
  1.11  who is subject to tax in this state on the gain on the sale of a 
  1.12  partnership interest, which is allocable to this state under 
  1.13  section 290.17, subdivision 2, paragraph (c), is allowed a 
  1.14  credit for the tax paid to the state of the individual's 
  1.15  domicile upon the gain in the taxable year or a subsequent 
  1.16  taxable year.  This credit is only allowed if the state of 
  1.17  domicile does not allow a credit for the tax paid to Minnesota 
  1.18  on the gain. 
  1.19     (b) For purposes of this subdivision, the credit equals the 
  1.20  tax paid to the state of domicile multiplied by the ratio 
  1.21  derived by dividing the amount of gain on the sale of the 
  1.22  partnership interest subject to tax in the other state that is 
  1.23  also subject to tax in Minnesota by the taxpayer's federal 
  1.24  adjusted gross income, as defined in section 62 of the Internal 
  1.25  Revenue Code.  The credit allowed may not reduce the taxes paid 
  2.1   under this chapter to an amount less than the tax that would 
  2.2   apply if the gain were excluded from taxable net income. 
  2.3      (c) If a nonresident taxpayer reported the gain to 
  2.4   Minnesota and is assessed tax in the state of domicile on that 
  2.5   same income after the Minnesota statute of limitations has 
  2.6   expired, the taxpayer is allowed a credit for that year, 
  2.7   notwithstanding any statute of limitations to the contrary.  The 
  2.8   claim for the credit must be submitted within one year from the 
  2.9   date the taxes were paid to the state of domicile and the 
  2.10  taxpayer must submit sufficient proof to show entitlement to a 
  2.11  credit. 
  2.12     (d) For the purposes of this paragraph, "another state" 
  2.13  includes the District of Columbia, but does not include Puerto 
  2.14  Rico or the several territories organized by Congress. 
  2.15     Sec. 2.  [EFFECTIVE DATE.] 
  2.16     This section is effective for taxable years beginning after 
  2.17  December 31, 1999.