1.1 	A bill for an act
1.2 	relating to taxation; creating a teleworking credit; providing a sales tax 
1.3 	exemption for telework expenses;amending Minnesota Statutes 2008, section 
1.4 	297A.67, by adding a subdivision; proposing coding for new law in Minnesota 
1.5 	Statutes, chapter 290.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. [290.0692] TELEWORKING CREDIT.
1.8 		Subdivision 1.Definitions. (a) The terms in this section have the meanings given 
1.9 	them.
1.10 	(b) "Eligible telework expenses" means expenses incurred during the calendar 
1.11 	year pursuant to a telework agreement, up to a limit of $1,200 for each participating 
1.12 	employee, to enable a participating employee to begin to telework, which expenses are not 
1.13 	otherwise the subject of a subtraction from income claimed by the employer in any tax 
1.14 	year. Eligible expenses:
1.15 	(1) shall include, but not be limited to, expenses paid or incurred to purchase 
1.16 	computers; computer-related hardware and software; modems; data processing equipment; 
1.17 	telecommunications equipment; high-speed Internet connectivity equipment; computer 
1.18 	security software and devices; and all related delivery, installation, and maintenance fees;
1.19 	(2) shall not include:
1.20 	(i) replacement costs for computers, computer-related hardware and software, 
1.21 	modems, data processing equipment, telecommunications equipment, or computer 
1.22 	security software and devices at the principal place of business when that equipment is 
1.23 	relocated to the telework site; and
1.24 	(ii) expenses for which a credit is claimed under any other provision of this chapter;
1.25 	(3) may be incurred only once per employee; and
2.1 	(4) may be incurred directly by the employer on behalf of the participating employee 
2.2 	or directly by the participating employee and subsequently reimbursed by the employer.
2.3 	(c) "Employer" means any employer upon whom an income tax is imposed by 
2.4 	this chapter.
2.5 	(d) "Participating employee" means an employee who has entered into a telework 
2.6 	agreement with the employee's employer on or after July 1, 2009. Participating employee 
2.7 	shall not include an individual who is self-employed or an individual who ordinarily 
2.8 	spends a majority of the workday at a location other than the employer's principal place of 
2.9 	business.
2.10 	(e) "Telework" means to perform normal and regular work functions on a workday 
2.11 	that ordinarily would be performed at the employer's principal place of business at a 
2.12 	different location, thereby eliminating or substantially reducing the physical commute 
2.13 	to and from that employer's principal place of business. Telework shall not include 
2.14 	home-based businesses, extensions of the workday, or work performed on a weekend 
2.15 	or holiday.
2.16 	(f) "Telework agreement" means an agreement signed by the employer and the 
2.17 	participating employee, on or after July 1, 2009, that defines the terms of a telework 
2.18 	arrangement, including the number of days per year the participating employee will 
2.19 	telework, as provided in subdivision 2 in order to qualify for the credit, and any restrictions 
2.20 	on the place from which the participating employee will telework.
2.21 	(g) "Telework assessment" means an optional assessment leading to the development 
2.22 	of policies and procedures necessary to implement a formal telework program that would 
2.23 	qualify the employer for the credit provided in subdivision 2, including but not limited 
2.24 	to a workforce profile; a telework program business case and plan; a detailed accounting 
2.25 	of the purpose, goals, and operating procedures of the telework program; methodologies 
2.26 	for measuring telework program activities and success; and a deployment schedule for 
2.27 	increasing telework activity.
2.28 		Subd. 2.Credit allowed. An employer shall be allowed a tax credit against the tax 
2.29 	imposed by this chapter for a percentage of eligible telework expenses incurred. The 
2.30 	amount of the credit shall be calculated as follows:
2.31 	(1) the credit shall be equal to 100 percent of the eligible telework expenses incurred 
2.32 	under a telework agreement requiring the participating employee to telework at least 
2.33 	15 days per month;
2.34 	(2) the credit shall be equal to 75 percent of the eligible telework expenses incurred 
2.35 	under a telework agreement requiring the participating employee to telework at least ten 
2.36 	days per month; or
3.1 	(3) the credit shall be equal to 25 percent of the eligible telework expenses incurred 
3.2 	under a telework agreement requiring the participating employee to telework at least 
3.3 	five days per month.
3.4 		Subd. 3.Telework assessment credit. (a) In addition to the credit provided by 
3.5 	subdivision 2, an employer conducting a telework assessment on or after July 1, 2009, 
3.6 	shall be allowed a credit in the calendar year of implementation of the employer's formal 
3.7 	telework program against the tax imposed by this chapter for 100 percent of the cost of 
3.8 	preparing the assessment, up to a maximum credit of $20,000 per employer. The costs 
3.9 	shall not be eligible for the credit if they are otherwise the subject of a subtraction from 
3.10 	income claimed by the employer in any tax year. The credit provided by this subdivision 
3.11 	is intended to include program planning expenses, including direct program development 
3.12 	and training costs, raw labor costs, and professional consulting fees. The credit shall not 
3.13 	include expenses for which a credit is claimed under any other provision of this chapter. 
3.14 	The credit shall be allowed only once per employer.
3.15 	(b) All telework assessments eligible for a tax credit under this subdivision shall 
3.16 	meet standards for eligibility adopted by the commissioner.
3.17 		Subd. 4.Limitations. In no event shall the total amount of any tax credit under 
3.18 	this section for a taxable year exceed the employer's income tax liability. Any unused tax 
3.19 	credit may not be carried forward to apply to the employer's succeeding years' tax liability. 
3.20 	The tax credit may not be used against the employer's prior years' tax liability.
3.21 		Subd. 5.Application. (a) An employer seeking to claim a tax credit provided for 
3.22 	under subdivisions 2 and 3 must submit an application to the commissioner for tentative 
3.23 	approval of the tax credit provided for in subdivisions 2 and 3 between September 1 
3.24 	and October 31 of the year preceding the calendar year for which the tax credit is to 
3.25 	be earned. The commissioner shall adopt the rules and forms on which the application 
3.26 	is to be submitted. Amounts specified on the application shall not be changed by the 
3.27 	employer after the application is approved by the commissioner. Applications must certify 
3.28 	that the employer would not have incurred the eligible telework expenses, defined in 
3.29 	subdivision 1, but for the availability of the tax credit. The commissioner shall review the 
3.30 	application and shall tentatively approve the application upon determining that it meets 
3.31 	the requirements of this section.
3.32 	(b)(1) The commissioner shall provide tentative approval of the applications by the 
3.33 	date provided in paragraph (c).
3.34 	(2) The total amount of both the tax credits approved by the commissioner under 
3.35 	this section and the exemption under section 297A.67, subdivision 33, shall not exceed 
3.36 	$....... in any calendar year.
4.1 	(c) The commissioner shall notify each employer of the tax credits tentatively 
4.2 	approved and allocated to the employer by December 31 of the year in which the 
4.3 	application was submitted. Once the tax credit application has been approved and the 
4.4 	amount approved has been communicated to the applicant, the employer may make 
4.5 	purchases approved for the tax credit at any time during the calendar year following the 
4.6 	approval of the application. The employer may then apply the amount of the approved 
4.7 	tax credit to its tax liability for the tax year or years for which the approved application 
4.8 	applies. If the employer has a tax year other than a calendar year and the calendar year 
4.9 	expenses are incurred in more than one taxable year, the credit shall be applied to each 
4.10 	taxable year based on when the expenses were incurred.
4.11 		Subd. 6.Public report. The commissioner shall make available a public report 
4.12 	disclosing the employer names claiming the credit under this section and the amounts 
4.13 	of the credits.

4.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
4.15 	December 31, 2009.

4.16 	Sec. 2. Minnesota Statutes 2008, section 297A.67, is amended by adding a subdivision 
4.17 	to read:
4.18 		Subd. 33.Telework expenses. Telework expenses, as defined in section 290.0692, 
4.19 	subdivision 1, paragraph (b), clause (1), are exempt. The exemption for telework expenses 
4.20 	must not exceed the limitations set forth in section 290.0692, subdivision 5, paragraph 
4.21 	(b), clause (2).

4.22 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
4.23 	June 30, 2009.