1.1 	A bill for an act
1.2 	relating to taxation; income and corporate franchise; conforming to the federal 
1.3 	treatment of section 179 allowances; amending Minnesota Statutes 2008, 
1.4 	sections 289A.08, subdivision 7; 290.01, subdivisions 19, 19a, 19c, 31; 290.06, 
1.5 	subdivision 2c; 290.091, subdivision 2.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2008, section 289A.08, subdivision 7, is amended to 
1.8 	read:
1.9 		Subd. 7. Composite income tax returns for nonresident partners, shareholders, 
1.10 	and beneficiaries. (a) The commissioner may allow a partnership with nonresident 
1.11 	partners to file a composite return and to pay the tax on behalf of nonresident partners who 
1.12 	have no other Minnesota source income. This composite return must include the names, 
1.13 	addresses, Social Security numbers, income allocation, and tax liability for the nonresident 
1.14 	partners electing to be covered by the composite return. 
1.15 	(b) The computation of a partner's tax liability must be determined by multiplying 
1.16 	the income allocated to that partner by the highest rate used to determine the tax liability 
1.17 	for individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard 
1.18 	deductions, or personal exemptions are not allowed. 
1.19 	(c) The partnership must submit a request to use this composite return filing method 
1.20 	for nonresident partners. The requesting partnership must file a composite return in the 
1.21 	form prescribed by the commissioner of revenue. The filing of a composite return is 
1.22 	considered a request to use the composite return filing method. 
1.23 	(d) The electing partner must not have any Minnesota source income other than 
1.24 	the income from the partnership and other electing partnerships. If it is determined that 
1.25 	the electing partner has other Minnesota source income, the inclusion of the income 
2.1 	and tax liability for that partner under this provision will not constitute a return to 
2.2 	satisfy the requirements of subdivision 1. The tax paid for the individual as part of the 
2.3 	composite return is allowed as a payment of the tax by the individual on the date on 
2.4 	which the composite return payment was made. If the electing nonresident partner has no 
2.5 	other Minnesota source income, filing of the composite return is a return for purposes of 
2.6 	subdivision 1. 
2.7 	(e) This subdivision does not negate the requirement that an individual pay estimated 
2.8 	tax if the individual's liability would exceed the requirements set forth in section 289A.25. 
2.9 	A composite estimate may, however, be filed in a manner similar to and containing the 
2.10 	information required under paragraph (a). 
2.11 	(f) If an electing partner's share of the partnership's gross income from Minnesota 
2.12 	sources is less than the filing requirements for a nonresident under this subdivision, the tax 
2.13 	liability is zero. However, a statement showing the partner's share of gross income must 
2.14 	be included as part of the composite return. 
2.15 	(g) The election provided in this subdivision is only available to a partner who has 
2.16 	no other Minnesota source income and who is either (1) a full-year nonresident individual 
2.17 	or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of 
2.18 	the Internal Revenue Code. 
2.19 	(h) A corporation defined in section 290.9725 and its nonresident shareholders may 
2.20 	make an election under this paragraph. The provisions covering the partnership apply to 
2.21 	the corporation and the provisions applying to the partner apply to the shareholder. 
2.22 	(i) Estates and trusts distributing current income only and the nonresident individual 
2.23 	beneficiaries of the estates or trusts may make an election under this paragraph. The 
2.24 	provisions covering the partnership apply to the estate or trust. The provisions applying to 
2.25 	the partner apply to the beneficiary. 
2.26 	(j) For the purposes of this subdivision, "income" means the partner's share of 
2.27 	federal adjusted gross income from the partnership modified by the additions provided in 
2.28 	section 290.01, subdivision 19a, clauses (6) to (10) (9), and the subtractions provided in: 
2.29 	(i) section 290.01, subdivision 19b, clause (9), to the extent the amount is assignable or 
2.30 	allocable to Minnesota under section 290.17; and (ii) section 290.01, subdivision 19b, 
2.31 	clause (14). The subtraction allowed under section 290.01, subdivision 19b, clause (9), is 
2.32 	only allowed on the composite tax computation to the extent the electing partner would 
2.33 	have been allowed the subtraction. 

2.34 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.35 	December 31, 2008.

3.1 	Sec. 2. Minnesota Statutes 2008, section 290.01, subdivision 19, is amended to read:
3.2 		Subd. 19. Net income. The term "net income" means the federal taxable income, 
3.3 	as defined in section 63 of the Internal Revenue Code of 1986, as amended through the 
3.4 	date named in this subdivision, incorporating the federal effective dates of changes to the 
3.5 	Internal Revenue Code and any elections made by the taxpayer in accordance with the 
3.6 	Internal Revenue Code in determining federal taxable income for federal income tax 
3.7 	purposes, and with the modifications provided in subdivisions 19a to 19f. 
3.8 	In the case of a regulated investment company or a fund thereof, as defined in section 
3.9 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
3.10 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
3.11 	except that: 
3.12 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
3.13 	Revenue Code does not apply; 
3.14 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal 
3.15 	Revenue Code must be applied by allowing a deduction for capital gain dividends and 
3.16 	exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal 
3.17 	Revenue Code; and 
3.18 	(3) the deduction for dividends paid must also be applied in the amount of any 
3.19 	undistributed capital gains which the regulated investment company elects to have treated 
3.20 	as provided in section 852(b)(3)(D) of the Internal Revenue Code. 
3.21 	The net income of a real estate investment trust as defined and limited by section 
3.22 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
3.23 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code. 
3.24 	The net income of a designated settlement fund as defined in section 468B(d) of 
3.25 	the Internal Revenue Code means the gross income as defined in section 468B(b) of the 
3.26 	Internal Revenue Code. 
3.27 	The Internal Revenue Code of 1986, as amended through February 13, 2008, and as 
3.28 	amended by Public Law 110-343, Division C, title VII, section 711(a), shall be in effect 
3.29 	for taxable years beginning after December 31, 1996. 
3.30 	Except as otherwise provided, references to the Internal Revenue Code in 
3.31 	subdivisions 19 to 19f mean the code in effect for purposes of determining net income for 
3.32 	the applicable year. 

3.33 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
3.34 	December 31, 2008.

3.35 	Sec. 3. Minnesota Statutes 2008, section 290.01, subdivision 19a, is amended to read:
4.1 		Subd. 19a. Additions to federal taxable income. For individuals, estates, and 
4.2 	trusts, there shall be added to federal taxable income: 
4.3 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
4.4 	or governmental subdivision, municipality, or governmental agency or instrumentality 
4.5 	of any state other than Minnesota exempt from federal income taxes under the Internal 
4.6 	Revenue Code or any other federal statute; and 
4.7 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
4.8 	Code, except the portion of the exempt-interest dividends derived from interest income 
4.9 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
4.10 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
4.11 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
4.12 	95 percent or more of the exempt-interest dividends that are paid by the regulated 
4.13 	investment company as defined in section 851(a) of the Internal Revenue Code, or the 
4.14 	fund of the regulated investment company as defined in section 851(g) of the Internal 
4.15 	Revenue Code, making the payment; and 
4.16 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
4.17 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
4.18 	interest income on obligations of the state in which the tribe is located; 
4.19 	(2) the amount of income or sales and use taxes paid or accrued within the taxable 
4.20 	year under this chapter and the amount of taxes based on net income paid or sales and use 
4.21 	taxes paid to any other state or to any province or territory of Canada, to the extent allowed 
4.22 	as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not 
4.23 	be more than the amount by which the itemized deductions as allowed under section 63(d) 
4.24 	of the Internal Revenue Code exceeds the amount of the standard deduction as defined 
4.25 	in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the 
4.26 	disallowance of itemized deductions under section 68 of the Internal Revenue Code of 
4.27 	1986, income or sales and use tax is the last itemized deduction disallowed; 
4.28 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
4.29 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies; 
4.30 	(4) the amount of income taxes paid or accrued within the taxable year under this 
4.31 	chapter and taxes based on net income paid to any other state or any province or territory 
4.32 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
4.33 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
4.34 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
5.1 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
5.2 	other than expenses or interest used in computing net interest income for the subtraction 
5.3 	allowed under subdivision 19b, clause (1); 
5.4 	(6) the amount of a partner's pro rata share of net income which does not flow 
5.5 	through to the partner because the partnership elected to pay the tax on the income under 
5.6 	section 6242(a)(2) of the Internal Revenue Code; 
5.7 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
5.8 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
5.9 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
5.10 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
5.11 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
5.12 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
5.13 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
5.14 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
5.15 	under section 168(k) is allowed; 
5.16 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
5.17 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
5.18 	Revenue Code of 1986, as amended through December 31, 2003;
5.19 	(9) to the extent deducted in computing federal taxable income, the amount of the 
5.20 	deduction allowable under section 199 of the Internal Revenue Code; 
5.21 	(10) (9) the exclusion allowed under section 139A of the Internal Revenue Code for 
5.22 	federal subsidies for prescription drug plans; 
5.23 	(11) (10) the amount of expenses disallowed under section 290.10, subdivision 2;
5.24 	(12) (11) for taxable years beginning after December 31, 2006, and before January 
5.25 	1, 2008, the amount deducted for qualified tuition and related expenses under section 222 
5.26 	of the Internal Revenue Code, to the extent deducted from gross income; and 
5.27 	(13) (12) for taxable years beginning after December 31, 2006, and before January 
5.28 	1, 2008, the amount deducted for certain expenses of elementary and secondary school 
5.29 	teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted 
5.30 	from gross income. 

5.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
5.32 	December 31, 2008.

5.33 	Sec. 4. Minnesota Statutes 2008, section 290.01, subdivision 19c, is amended to read:
5.34 		Subd. 19c. Corporations; additions to federal taxable income. For corporations, 
5.35 	there shall be added to federal taxable income: 
6.1 	(1) the amount of any deduction taken for federal income tax purposes for income, 
6.2 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
6.3 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
6.4 	another state, a political subdivision of another state, the District of Columbia, or any 
6.5 	foreign country or possession of the United States; 
6.6 	(2) interest not subject to federal tax upon obligations of: the United States, its 
6.7 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
6.8 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
6.9 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
6.10 	tribal governments; 
6.11 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
6.12 	Revenue Code; 
6.13 	(4) the amount of any net operating loss deduction taken for federal income tax 
6.14 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
6.15 	deduction under section 810 of the Internal Revenue Code; 
6.16 	(5) the amount of any special deductions taken for federal income tax purposes 
6.17 	under sections 241 to 247 and 965 of the Internal Revenue Code; 
6.18 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
6.19 	clause (a), that are not subject to Minnesota income tax; 
6.20 	(7) the amount of any capital losses deducted for federal income tax purposes under 
6.21 	sections 1211 and 1212 of the Internal Revenue Code; 
6.22 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
6.23 	921(a) and 291 of the Internal Revenue Code; 
6.24 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
6.25 	291 of the Internal Revenue Code; 
6.26 	(10) for certified pollution control facilities placed in service in a taxable year 
6.27 	beginning before December 31, 1986, and for which amortization deductions were elected 
6.28 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
6.29 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
6.30 	income for those facilities; 
6.31 	(11) the amount of any deemed dividend from a foreign operating corporation 
6.32 	determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 
6.33 	shall be reduced by the amount of the addition to income required by clauses (19), (20), 
6.34 	(21), and (22), and (23); 
7.1 	(12) the amount of a partner's pro rata share of net income which does not flow 
7.2 	through to the partner because the partnership elected to pay the tax on the income under 
7.3 	section 6242(a)(2) of the Internal Revenue Code; 
7.4 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
7.5 	Code; 
7.6 	(14) any increase in subpart F income, as defined in section 952(a) of the Internal 
7.7 	Revenue Code, for the taxable year when subpart F income is calculated without regard 
7.8 	to the provisions of section 103 of Public Law 109-222; 
7.9 	(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 
7.10 	and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 
7.11 	has an activity that in the taxable year generates a deduction for depreciation under 
7.12 	section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 
7.13 	that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 
7.14 	under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 
7.15 	depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
7.16 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
7.17 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
7.18 	under section 168(k)(1)(A) and (k)(4)(A) is allowed; 
7.19 	(16) 80 percent of the amount by which the deduction allowed by section 179 of the 
7.20 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
7.21 	Revenue Code of 1986, as amended through December 31, 2003; 
7.22 	(17) to the extent deducted in computing federal taxable income, the amount of the 
7.23 	deduction allowable under section 199 of the Internal Revenue Code; 
7.24 	(18) (17) the exclusion allowed under section 139A of the Internal Revenue Code 
7.25 	for federal subsidies for prescription drug plans; 
7.26 	(19) (18) the amount of expenses disallowed under section 290.10, subdivision 2;
7.27 	(20) (19) an amount equal to the interest and intangible expenses, losses, and 
7.28 	costs paid, accrued, or incurred by any member of the taxpayer's unitary group to or for 
7.29 	the benefit of a corporation that is a member of the taxpayer's unitary business group 
7.30 	that qualifies as a foreign operating corporation. For purposes of this clause, intangible 
7.31 	expenses and costs include:
7.32 	(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 
7.33 	use, maintenance or management, ownership, sale, exchange, or any other disposition of 
7.34 	intangible property;
7.35 	(ii) losses incurred, directly or indirectly, from factoring transactions or discounting 
7.36 	transactions;
8.1 	(iii) royalty, patent, technical, and copyright fees;
8.2 	(iv) licensing fees; and
8.3 	(v) other similar expenses and costs. 
8.4 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
8.5 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
8.6 	secrets, and similar types of intangible assets.
8.7 	This clause does not apply to any item of interest or intangible expenses or costs paid, 
8.8 	accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 
8.9 	to such item of income to the extent that the income to the foreign operating corporation 
8.10 	is income from sources without the United States as defined in subtitle A, chapter 1, 
8.11 	subchapter N, part 1, of the Internal Revenue Code;
8.12 	(21) (20) except as already included in the taxpayer's taxable income pursuant to 
8.13 	clause (20) (19), any interest income and income generated from intangible property 
8.14 	received or accrued by a foreign operating corporation that is a member of the taxpayer's 
8.15 	unitary group. For purposes of this clause, income generated from intangible property 
8.16 	includes:
8.17 	(i) income related to the direct or indirect acquisition, use, maintenance or 
8.18 	management, ownership, sale, exchange, or any other disposition of intangible property;
8.19 	(ii) income from factoring transactions or discounting transactions;
8.20 	(iii) royalty, patent, technical, and copyright fees;
8.21 	(iv) licensing fees; and
8.22 	(v) other similar income.
8.23 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
8.24 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
8.25 	secrets, and similar types of intangible assets. 
8.26 	This clause does not apply to any item of interest or intangible income received or accrued 
8.27 	by a foreign operating corporation with respect to such item of income to the extent that 
8.28 	the income is income from sources without the United States as defined in subtitle A, 
8.29 	chapter 1, subchapter N, part 1, of the Internal Revenue Code;
8.30 	(22) (21)  the dividends attributable to the income of a foreign operating corporation 
8.31 	that is a member of the taxpayer's unitary group in an amount that is equal to the dividends 
8.32 	paid deduction of a real estate investment trust under section 561(a) of the Internal 
8.33 	Revenue Code for amounts paid or accrued by the real estate investment trust to the 
8.34 	foreign operating corporation; 
9.1 	(23) (22)  the income of a foreign operating corporation that is a member of the 
9.2 	taxpayer's unitary group in an amount that is equal to gains derived from the sale of real or 
9.3 	personal property located in the United States; and
9.4 	(24) (23)  for taxable years beginning after December 31, 2006, and before January 1, 
9.5 	2008, the additional amount allowed as a deduction for donation of computer technology 
9.6 	and equipment under section 170(e)(6) of the Internal Revenue Code, to the extent 
9.7 	deducted from taxable income. 

9.8 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
9.9 	December 31, 2008.

9.10 	Sec. 5. Minnesota Statutes 2008, section 290.01, subdivision 31, is amended to read:
9.11 		Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal 
9.12 	Revenue Code" means the Internal Revenue Code of 1986, as amended through February 
9.13 	13, 2008, and as amended by Public Law 110-343, Division C, title VII, section 711(a). 

9.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
9.15 	December 31, 2008.

9.16 	Sec. 6. Minnesota Statutes 2008, section 290.06, subdivision 2c, is amended to read:
9.17 		Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income 
9.18 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
9.19 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
9.20 	applying to their taxable net income the following schedule of rates: 
9.21 	(1) On the first $25,680, 5.35 percent; 
9.22 	(2) On all over $25,680, but not over $102,030, 7.05 percent; 
9.23 	(3) On all over $102,030, 7.85 percent. 
9.24 	Married individuals filing separate returns, estates, and trusts must compute their 
9.25 	income tax by applying the above rates to their taxable income, except that the income 
9.26 	brackets will be one-half of the above amounts. 
9.27 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
9.28 	computed by applying to taxable net income the following schedule of rates: 
9.29 	(1) On the first $17,570, 5.35 percent; 
9.30 	(2) On all over $17,570, but not over $57,710, 7.05 percent; 
9.31 	(3) On all over $57,710, 7.85 percent. 
10.1 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
10.2 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
10.3 	computed by applying to taxable net income the following schedule of rates: 
10.4 	(1) On the first $21,630, 5.35 percent; 
10.5 	(2) On all over $21,630, but not over $86,910, 7.05 percent; 
10.6 	(3) On all over $86,910, 7.85 percent. 
10.7 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
10.8 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
10.9 	an amount determined by the commissioner must be computed in accordance with tables 
10.10 	prepared and issued by the commissioner of revenue based on income brackets of not 
10.11 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
10.12 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
10.13 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1. 
10.14 	(e) An individual who is not a Minnesota resident for the entire year must compute 
10.15 	the individual's Minnesota income tax as provided in this subdivision. After the 
10.16 	application of the nonrefundable credits provided in this chapter, the tax liability must 
10.17 	then be multiplied by a fraction in which: 
10.18 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
10.19 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
10.20 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12)
10.21 	(11), and (13) (12) and reduced by the Minnesota assignable portion of the subtraction 
10.22 	for United States government interest under section 290.01, subdivision 19b, clause (1), 
10.23 	and the subtractions under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), 
10.24 	and (16), after applying the allocation and assignability provisions of section 290.081, 
10.25 	clause (a), or 290.17; and 
10.26 	(2) the denominator is the individual's federal adjusted gross income as defined in 
10.27 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
10.28 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12) (11), and (13) (12)
10.29 	and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), (9), 
10.30 	(10), (14), (15), and (16). 

10.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
10.32 	December 31, 2008.

10.33 	Sec. 7. Minnesota Statutes 2008, section 290.091, subdivision 2, is amended to read:
10.34 		Subd. 2. Definitions. For purposes of the tax imposed by this section, the following 
10.35 	terms have the meanings given: 
11.1 	(a) "Alternative minimum taxable income" means the sum of the following for 
11.2 	the taxable year: 
11.3 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
11.4 	55(b)(2) of the Internal Revenue Code; 
11.5 	(2) the taxpayer's itemized deductions allowed in computing federal alternative 
11.6 	minimum taxable income, but excluding: 
11.7 	(i) the charitable contribution deduction under section 170 of the Internal Revenue 
11.8 	Code;
11.9 	(ii) the medical expense deduction; 
11.10 	(iii) the casualty, theft, and disaster loss deduction; and 
11.11 	(iv) the impairment-related work expenses of a disabled person; 
11.12 	(3) for depletion allowances computed under section 613A(c) of the Internal 
11.13 	Revenue Code, with respect to each property (as defined in section 614 of the Internal 
11.14 	Revenue Code), to the extent not included in federal alternative minimum taxable income, 
11.15 	the excess of the deduction for depletion allowable under section 611 of the Internal 
11.16 	Revenue Code for the taxable year over the adjusted basis of the property at the end of the 
11.17 	taxable year (determined without regard to the depletion deduction for the taxable year); 
11.18 	(4) to the extent not included in federal alternative minimum taxable income, the 
11.19 	amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 
11.20 	Internal Revenue Code determined without regard to subparagraph (E); 
11.21 	(5) to the extent not included in federal alternative minimum taxable income, the 
11.22 	amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and 
11.23 	(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) 
11.24 	to (9), (8), (12) (11), and (13) (12); 
11.25 	less the sum of the amounts determined under the following: 
11.26 	(1) interest income as defined in section 290.01, subdivision 19b, clause (1); 
11.27 	(2) an overpayment of state income tax as provided by section 290.01, subdivision 
11.28 	19b, clause (2), to the extent included in federal alternative minimum taxable income; 
11.29 	(3) the amount of investment interest paid or accrued within the taxable year on 
11.30 	indebtedness to the extent that the amount does not exceed net investment income, as 
11.31 	defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 
11.32 	amounts deducted in computing federal adjusted gross income; and 
11.33 	(4) amounts subtracted from federal taxable income as provided by section 290.01, 
11.34 	subdivision 19b, clauses (6) and (9) to (16). 
11.35 	In the case of an estate or trust, alternative minimum taxable income must be 
11.36 	computed as provided in section 59(c) of the Internal Revenue Code. 
12.1 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) 
12.2 	of the Internal Revenue Code. 
12.3 	(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 
12.4 	income after subtracting the exemption amount determined under subdivision 3. 
12.5 	(d) "Regular tax" means the tax that would be imposed under this chapter (without 
12.6 	regard to this section and section 290.032), reduced by the sum of the nonrefundable 
12.7 	credits allowed under this chapter. 
12.8 	(e) "Net minimum tax" means the minimum tax imposed by this section. 

12.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
12.10 	December 31, 2008.