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HF 2318

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:01am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; allowing the research credit against the individual income
tax; increasing the credit rate; amending Minnesota Statutes 2008, section
290.068, subdivisions 1, 3, 4.

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

Section 1.

Minnesota Statutes 2008, section 290.068, subdivision 1, is amended to read:


Subdivision 1.

Credit allowed.

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

(a) deleted text begin5deleted text endnew text begin tennew text end 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, 2008.
new text end

Sec. 2.

Minnesota Statutes 2008, 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 section 290.06, subdivision 1, for the taxable year reduced by the sum of
the nonrefundable credits allowed under this chapter.

(2) deleted text beginIn the case of a corporation which isdeleted text endnew text begin Fornew text end a partner in a partnershipnew text begin and for a
shareholder in an S corporation
new text end, 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 begincorporation'sdeleted text endnew text begin taxpayer'snew 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 begincorporation'sdeleted text endnew text begin taxpayer'snew 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 clause (a), the excess shall be 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 clause 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, 2008.
new text end

Sec. 3.

Minnesota Statutes 2008, section 290.068, subdivision 4, is amended to read:


Subd. 4.

Partnershipsnew text begin and S corporationsnew text end.

In the case of partnershipsnew text begin and S
corporations
new text end the credit shall be allocated in the same manner provided by section 41(f)(2)
new text begin and 41(g) new text endof 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, 2008.
new text end