HF 2022

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; extending the research credit to
the individual income tax; making a portion of the
credit refundable; appropriating money; amending
Minnesota Statutes 2004, section 290.068, subdivisions
1, 3, 4, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2004, section 290.068,
subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

A deleted text begin corporation, other than
a corporation treated as an "S" corporation under section
290.9725, deleted text end new text begin taxpayer new text end is allowed a credit against the deleted text begin portion of
the franchise deleted text end tax computed under section 290.06 deleted text begin , subdivision 1,
deleted text end for the taxable year equal to:

(a) 5 percent of the first $2,000,000 of the excess (if
any) of

(1) the qualified research expenses for the taxable year,
over

(2) the base amount; and

(b) 2.5 percent on all of such excess expenses over
$2,000,000.

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

Sec. 2.

Minnesota Statutes 2004, section 290.068,
subdivision 3, is amended to read:

Subd. 3.

Limitation; carryover.

(a)(1) The credit for
the taxable year shall not exceed the liability for tax.
"Liability for tax" for purposes of this section means the tax
imposed under this chapter for the taxable year reduced by the
sum of the nonrefundable credits allowed under this chapter.

(2) deleted text begin In the case of a corporation which is a partner in deleted text end new text begin For
new text end a partnership, the credit allowed for the taxable year shall not
exceed the lesser of the amount determined under clause (1) for
the taxable year or an amount (separately computed with respect
to the deleted text begin corporation's deleted text end new text begin taxpayer's new text end interest in the trade or
business or entity) equal to the amount of tax attributable to
that portion of taxable income which is allocable or
apportionable to the deleted text begin corporation's deleted text end new text begin taxpayer's new text end interest in the
trade or business or entity.

(b) If the amount of the credit determined under this
section for any taxable year exceeds the limitation under deleted text begin clause
deleted text end new text begin paragraph new text end (a), new text begin the commissioner shall refund .. percent of the
excess up to a maximum of $....... to the taxpayer.
new text end

new text begin (c) new text end The excess deleted text begin shall be deleted text end new text begin over the amount refunded to the
taxpayer under paragraph (b) is new text end a research credit carryover to
each of the 15 succeeding taxable years. The entire amount of
the excess unused credit for the taxable year shall 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 which
may be added under this deleted text begin clause deleted text end new text begin paragraph new text end shall not exceed the
taxpayer's liability for tax less the research credit 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, 2004.
new text end

Sec. 3.

Minnesota Statutes 2004, section 290.068,
subdivision 4, is amended to read:

Subd. 4.

deleted text begin partnerships deleted text end new text begin noncorporate taxpayers new text end .

deleted text begin In the
case of partnerships deleted text end new text begin For taxpayers other than corporations, new text end the
credit shall be allocated in the same manner provided by deleted text begin section
deleted text end new text begin sections new text end 41(f)(2) new text begin and 41(g) new text end of the Internal Revenue Code.

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

Sec. 4.

Minnesota Statutes 2004, section 290.068, is
amended by adding a subdivision to read:

new text begin Subd. 7. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the
refunds required by this section is appropriated to the
commissioner from the general fund.
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