HF 10

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; income; providing a technology credit for small business;
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 [290.0681] TECHNOLOGY CREDIT.
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new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin A taxpayer who operates a business with 100 or
fewer full-time employees is allowed a credit against the tax imposed by this chapter equal
to 25 percent of the first $40,000 of qualified technology expenses for the taxable year.
new text end

new text begin Subd. 2. 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.
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new text begin (b) "Qualified technology expenses" means expenses for the acquisition of computer
or peripheral equipment, as defined in section 168(i)(2)(B) of the Internal Revenue Code.
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new text begin (c) "Full-time employees" of a taxpayer means the sum of the full-time employees,
determined on the last date of the previous taxable year, of:
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new text begin (1) the taxpayer;
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new text begin (2) all the entities in any unitary business of which the taxpayer is a part; and
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new text begin (3) any related party, as defined in section 267(b) or 707(b) of the Internal Revenue
Code.
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new text begin Subd. 3. new text end

new text begin Limitation; carryforward. new text end

new text begin (a) The credit for the taxable year is limited to
the liability for tax. For purposes of this section, "liability for tax" means the tax imposed
under this chapter for the taxable year reduced by the sum of the nonrefundable credits
allowed under this chapter.
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new text begin (b) If the credit under this section for any taxable year exceeds the limitation under
paragraph (a), the excess is a technology credit carryover to each of the five succeeding
taxable years. The entire 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
that may be added under this clause is limited to the taxpayer's liability for tax less the
technology credit for the taxable year.
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new text begin Subd. 4. new text end

new text begin Partnerships. new text end

new text begin (a) For a partner in a partnership, the credit allowed for the
taxable year must not exceed the lesser of:
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new text begin (1) the amount determined under subdivision 3, paragraph (a), for the taxable year; or
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new text begin (2) an amount, separately computed with respect to the taxpayer's interest in the
trade or business or entity, equal to the amount of tax attributable to that portion of
taxable income that is allocable or apportionable to the taxpayer's interest in the trade or
business or entity.
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new text begin (b) For a partnership, the credit must be allocated in the same manner provided by
section 41(f)(2) of the Internal Revenue Code.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2006.
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