HF 1138

as introduced - 84th Legislature (2005 - 2006) 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.
new text end

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.
new text end

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.
new text end

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:
new text end

new text begin (1) the taxpayer;
new text end

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.
new text end

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.
new text end

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.
new text end

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.
new text end

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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable
years beginning after December 31, 2004.
new text end