Minnesota Legislature
HF 955
as introduced - 90th Legislature (2017 - 2018) Posted on 02/09/2017 01:38pm
Bill Text Versions
| Engrossments | ||
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| Introduction | Posted on 02/09/2017 |
Current Version - as introduced
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A bill for an act
relating to taxation; individual income; modifying rates; amending Minnesota
Statutes 2016, sections 290.06, subdivisions 2c, 2d; 290.091, subdivisions 1, 2, 6.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2016, section 290.06, subdivision 2c, is amended to read:
Subd. 2c.
Schedules of rates for individuals, estates, and trusts.
(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:
(1) On the first deleted text begin $35,480deleted text end new text begin $37,110new text end , 5.35 percent;
(2) On all over deleted text begin $35,480deleted text end new text begin $37,110new text end , but not over deleted text begin $140,960deleted text end new text begin $147,450new text end , 7.05 percent;
(3) On all over deleted text begin $140,960, but not over $250,000deleted text end new text begin $147,450new text end , 7.85 percentdeleted text begin ;deleted text end new text begin .
new text end
deleted text begin
(4) On all over $250,000, 9.85 percent.
deleted text end
Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts.
(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first deleted text begin $24,270deleted text end new text begin $25,390new text end , 5.35 percent;
(2) On all over deleted text begin $24,270deleted text end new text begin $25,390new text end , but not over deleted text begin $79,730deleted text end new text begin $83,400new text end , 7.05 percent;
(3) On all over deleted text begin $79,730, but not over $150,000deleted text end new text begin $83,400new text end , 7.85 percentdeleted text begin ;deleted text end new text begin .
new text end
deleted text begin
(4) On all over $150,000, 9.85 percent.
deleted text end
(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first deleted text begin $29,880deleted text end new text begin $31,260new text end , 5.35 percent;
(2) On all over deleted text begin $29,880deleted text end new text begin $31,260new text end , but not over deleted text begin $120,070deleted text end new text begin $125,600new text end , 7.05 percent;
(3) On all over deleted text begin $120,070, but not over $200,000deleted text end new text begin $125,600new text end , 7.85 percentdeleted text begin ;deleted text end new text begin .
new text end
deleted text begin
(4) On all over $200,000, 9.85 percent.
deleted text end
(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:
(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by the additions required
under section 290.0131, subdivisions 2 and 6 to 11, and reduced by the Minnesota assignable
portion of the subtraction for United States government interest under section 290.0132,
subdivision 2, and the subtractions under section 290.0132, subdivisions 9, 10, 14, 15, 17,
and 18, after applying the allocation and assignability provisions of section 290.081, clause
(a), or 290.17; and
(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by the amounts specified in section 290.0131,
subdivisions 2 and 6 to 11, and reduced by the amounts specified in section 290.0132,
subdivisions 2, 9, 10, 14, 15, 17, and 18.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2016.
new text end
Sec. 2.
Minnesota Statutes 2016, section 290.06, subdivision 2d, is amended to read:
Subd. 2d.
Inflation adjustment of brackets.
(a) For taxable years beginning after
December 31, deleted text begin 2013deleted text end new text begin 2017new text end , the minimum and maximum dollar amounts for each rate bracket
for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage
determined under paragraph (b). For the purpose of making the adjustment as provided in
this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets
as they existed for taxable years beginning after December 31, deleted text begin 2012deleted text end new text begin 2016new text end , and before
January 1, deleted text begin 2014deleted text end new text begin 2018new text end . The rate applicable to any rate bracket must not be changed. The
dollar amounts setting forth the tax shall be adjusted to reflect the changes in the rate brackets.
The rate brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket
ends in $5, it must be rounded up to the nearest $10 amount.
(b) The commissioner shall adjust the rate brackets and by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B) the word deleted text begin "2012"deleted text end new text begin "2016"new text end shall be substituted for the word "1992." For deleted text begin 2014deleted text end new text begin 2018new text end ,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, deleted text begin 2012deleted text end new text begin 2016new text end , to the 12 months ending on August 31, deleted text begin 2013deleted text end new text begin 2017new text end , and in each
subsequent year, from the 12 months ending on August 31, deleted text begin 2012deleted text end new text begin 2016new text end , to the 12 months
ending on August 31 of the year preceding the taxable year. The determination of the
commissioner pursuant to this subdivision shall not be considered a "rule" and shall not be
subject to the Administrative Procedure Act contained in chapter 14.
No later than December 15 of each year, the commissioner shall announce the specific
percentage that will be used to adjust the tax rate brackets.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2016.
new text end
Sec. 3.
Minnesota Statutes 2016, section 290.091, subdivision 1, is amended to read:
Subdivision 1.
Imposition of tax.
In addition to all other taxes imposed by this chapter
a tax is imposed on individuals, estates, and trusts equal to the excess (if any) of
(a) an amount equal to deleted text begin 6.75deleted text end new text begin 6.4new text end percent of alternative minimum taxable income after
subtracting the exemption amount, over
(b) the regular tax for the taxable year.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2016.
new text end
Sec. 4.
Minnesota Statutes 2016, section 290.091, subdivision 2, is amended to read:
Subd. 2.
Definitions.
For purposes of the tax imposed by this section, the following
terms have the meanings given:
(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:
(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;
(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:
(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled person;
(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);
(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);
(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2; and
(6) the amount of addition required by section 290.0131, subdivisions 9 to 11;
less the sum of the amounts determined under the following:
(1) interest income as defined in section 290.0132, subdivision 2;
(2) an overpayment of state income tax as provided by section 290.0132, subdivision 3,
to the extent included in federal alternative minimum taxable income;
(3) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;
(4) amounts subtracted from federal taxable income as provided by section 290.0132,
subdivisions 7, 9 to 15, 17, and 21; and
(5) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c).
In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code.
(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.
(c) "Net minimum tax" means the minimum tax imposed by this section.
(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.
(e) "Tentative minimum tax" equals deleted text begin 6.75deleted text end new text begin 6.4new text end percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2016.
new text end
Sec. 5.
Minnesota Statutes 2016, section 290.091, subdivision 6, is amended to read:
Subd. 6.
Credit for prior years' liability.
(a) A credit is allowed against the tax imposed
by this chapter on individuals, trusts, and estates equal to the minimum tax credit for the
taxable year. The minimum tax credit equals the adjusted net minimum tax for taxable years
beginning after December 31, 1988, reduced by the minimum tax credits allowed in a prior
taxable year. The credit may not exceed the excess (if any) for the taxable year of
(1) the regular tax, over
(2) the greater of (i) the tentative alternative minimum tax, or (ii) zero.
(b) The adjusted net minimum tax for a taxable year equals the lesser of the net minimum
tax or the excess (if any) of
(1) the tentative minimum tax, over
(2) deleted text begin 6.75deleted text end new text begin 6.4new text end percent of the sum of
(i) adjusted gross income as defined in section 62 of the Internal Revenue Code,
(ii) interest income as defined in section 290.0131, subdivision 2,
(iii) interest on specified private activity bonds, as defined in section 57(a)(5) of the
Internal Revenue Code, to the extent not included under clause (ii),
(iv) depletion as defined in section 57(a)(1), determined without regard to the last sentence
of paragraph (1), of the Internal Revenue Code, less
(v) the deductions allowed in computing alternative minimum taxable income provided
in subdivision 2, paragraph (a), clause (2) of the first series of clauses and clauses (1), (2),
and (3) of the second series of clauses, and
(vi) the exemption amount determined under subdivision 3.
In the case of an individual who is not a Minnesota resident for the entire year, adjusted
net minimum tax must be multiplied by the fraction defined in section 290.06, subdivision
2c, paragraph (e). In the case of a trust or estate, adjusted net minimum tax must be multiplied
by the fraction defined under subdivision 4, paragraph (b).
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2016.
new text end