HF 719

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; providing an individual income
and corporate franchise tax credit for qualifying
investments in dairy operations; amending Minnesota
Statutes 2004, section 290.06, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 290.06, is
amended by adding a subdivision to read:

Subd. 32.

Dairy investment credit.

(a) A dairy
investment credit is allowed against the tax computed under this
section equal to the credit amount in the table, based on the
amount paid or incurred by an eligible taxpayer, during the
taxable year, or a reduced amount as determined by the
commissioner under paragraphs (e) to (g), for qualifying
expenditures:

Amount of
qualifying expenditures Credit amount

up to $500,000 ten percent of
qualifying expenditures

over $500,000, but not $50,000, plus nine percent
more than $600,000 of the amount of qualified
expenditures in excess of
$500,000

over $600,000, but not $59,000, plus seven percent
more than $700,000 of the amount of qualified
expenditures in excess of
$600,000

over $700,000, but not $66,000, plus five percent
more than $800,000 of the amount of qualified
expenditures in excess of
$700,000

over $800,000, but not $71,000, plus three percent
more than $900,000 of the amount of qualified
expenditures in excess of
$800,000

over $900,000, but not $74,000, plus one percent
more than $1,000,000 of the amount of qualified
expenditures in excess of
$900,000

$1,000,000 or more $75,000

(b) "Qualifying expenditures," for purposes of this
subdivision, means the expenses incurred for dairy animals for
the acquisition, construction, or improvement of buildings or
facilities, or the acquisition of equipment, for dairy animal
housing, confinement, animal feeding, milk production, and waste
management, including, but not limited to, the following:

(1) freestall barns;

(2) fences;

(3) watering facilities;

(4) feed storage and handling equipment;

(5) milking parlors;

(6) robotic equipment;

(7) scales;

(8) milk storage and cooling facilities;

(9) bulk tanks;

(10) manure handling equipment and storage facilities;

(11) digesters;

(12) equipment used to produce energy;

(13) pastures; and

(14) on-farm processing.

Qualified expenditures do not include any amounts deducted under
section 162 of the Internal Revenue Code in computing federal
taxable income.

(c) The credit is limited to the liability for tax, as
computed under this section for the taxable year. If the amount
of the credit determined under this section for any taxable year
exceeds this limitation, the excess is a dairy investment credit
carryover to each of the 15 succeeding taxable years. The
entire amount of the excess unused credit for the taxable year
is 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 which may be added under this paragraph shall not exceed
the taxpayer's liability for tax less the dairy investment
credit for the taxable year.

(d) For a partnership or S corporation, the maximum amount
of the credit applies to the entity, not the individual partner
or shareholder.

(e) To be eligible for the dairy investment credit in this
subdivision, a taxpayer must, not later than January 31 of the
year following the taxable year, provide to the commissioner on
forms provided by the commissioner a statement of the qualifying
expenditures that the taxpayer intends to claim for the taxable
year.

(f) The commissioner shall determine if the credit intended
to be claimed by all taxpayers under paragraph (e) exceeds the
maximum amount available for dairy investment credits in that
tax year as determined in paragraph (g). If the intended claims
are less than the maximum amount available for credits, the
commissioner shall notify eligible taxpayers that they may file
returns using the full credit calculated under the table in
paragraph (a). If intended claims exceed the maximum amount
available for credits, the commissioner shall determine for each
taxpayer a prorated credit amount and, not later than February
15, inform the taxpayer of that amount.

(g) The following amounts are available for dairy
investment credit claims in the fiscal years indicated:

(1) fiscal year 2006, $2,900,000;

(2) fiscal year 2007, $3,500,000; and

(3) fiscal year 2008 and thereafter, $4,000,000.

EFFECTIVE DATE.

This section is effective for taxable
years beginning after December 31, 2004.