HF 2772

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; income; amending provisions of 
  1.3             the Minnesota education credit and education 
  1.4             subtraction; amending Minnesota Statutes 2002, section 
  1.5             290.0674, subdivision 2; Minnesota Statutes 2003 
  1.6             Supplement, sections 290.01, subdivision 19b; 
  1.7             290.0674, subdivision 1. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.10  290.01, subdivision 19b, is amended to read: 
  1.11     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  1.12  individuals, estates, and trusts, there shall be subtracted from 
  1.13  federal taxable income: 
  1.14     (1) interest income on obligations of any authority, 
  1.15  commission, or instrumentality of the United States to the 
  1.16  extent includable in taxable income for federal income tax 
  1.17  purposes but exempt from state income tax under the laws of the 
  1.18  United States; 
  1.19     (2) if included in federal taxable income, the amount of 
  1.20  any overpayment of income tax to Minnesota or to any other 
  1.21  state, for any previous taxable year, whether the amount is 
  1.22  received as a refund or as a credit to another taxable year's 
  1.23  income tax liability; 
  1.24     (3) the amount paid to others, less the amount used to 
  1.25  claim the credit allowed under section 290.0674, not to exceed 
  1.26  $1,625 $2,000 for each qualifying child in grades kindergarten 
  2.1   to 6 and $2,500 $3,000 for each qualifying child in grades 7 to 
  2.2   12, for tuition, fees, textbooks, and transportation of each 
  2.3   qualifying child in attending an elementary or secondary school 
  2.4   situated in Minnesota, North Dakota, South Dakota, Iowa, or 
  2.5   Wisconsin, wherein a resident of this state may legally fulfill 
  2.6   the state's compulsory attendance laws, which is not operated 
  2.7   for profit, and which adheres to the provisions of the Civil 
  2.8   Rights Act of 1964 and chapter 363A.  For the purposes of this 
  2.9   clause, "tuition" includes fees or tuition as defined in section 
  2.10  290.0674, subdivision 1, clause (1).  As used in this 
  2.11  clause, "fees" has the meaning given in section 290.0674, 
  2.12  subdivision 1, clause (3).  For the purposes of this 
  2.13  clause, "textbooks" includes books and other instructional 
  2.14  materials and equipment purchased or leased for use in 
  2.15  elementary and secondary schools in teaching only those subjects 
  2.16  legally and commonly taught in public elementary and secondary 
  2.17  schools in this state.  Equipment expenses qualifying for 
  2.18  deduction includes expenses as defined and limited in section 
  2.19  290.0674, subdivision 1, clause (3) (4).  "Textbooks" does not 
  2.20  include instructional books and materials used in the teaching 
  2.21  of religious tenets, doctrines, or worship, the purpose of which 
  2.22  is to instill such tenets, doctrines, or worship, nor does it 
  2.23  include books or materials for, or transportation to, 
  2.24  extracurricular activities including sporting events, musical or 
  2.25  dramatic events, speech activities, driver's education, or 
  2.26  similar programs.  For purposes of the subtraction provided by 
  2.27  this clause, "qualifying child" has the meaning given in section 
  2.28  32(c)(3) of the Internal Revenue Code; 
  2.29     (4) income as provided under section 290.0802; 
  2.30     (5) to the extent included in federal adjusted gross 
  2.31  income, income realized on disposition of property exempt from 
  2.32  tax under section 290.491; 
  2.33     (6) to the extent included in federal taxable income, 
  2.34  postservice benefits for youth community service under section 
  2.35  124D.42 for volunteer service under United States Code, title 
  2.36  42, sections 12601 to 12604; 
  3.1      (7) to the extent not deducted in determining federal 
  3.2   taxable income by an individual who does not itemize deductions 
  3.3   for federal income tax purposes for the taxable year, an amount 
  3.4   equal to 50 percent of the excess of charitable contributions 
  3.5   allowable as a deduction for the taxable year under section 
  3.6   170(a) of the Internal Revenue Code over $500; 
  3.7      (8) for taxable years beginning before January 1, 2008, the 
  3.8   amount of the federal small ethanol producer credit allowed 
  3.9   under section 40(a)(3) of the Internal Revenue Code which is 
  3.10  included in gross income under section 87 of the Internal 
  3.11  Revenue Code; 
  3.12     (9) for individuals who are allowed a federal foreign tax 
  3.13  credit for taxes that do not qualify for a credit under section 
  3.14  290.06, subdivision 22, an amount equal to the carryover of 
  3.15  subnational foreign taxes for the taxable year, but not to 
  3.16  exceed the total subnational foreign taxes reported in claiming 
  3.17  the foreign tax credit.  For purposes of this clause, "federal 
  3.18  foreign tax credit" means the credit allowed under section 27 of 
  3.19  the Internal Revenue Code, and "carryover of subnational foreign 
  3.20  taxes" equals the carryover allowed under section 904(c) of the 
  3.21  Internal Revenue Code minus national level foreign taxes to the 
  3.22  extent they exceed the federal foreign tax credit; 
  3.23     (10) in each of the five tax years immediately following 
  3.24  the tax year in which an addition is required under subdivision 
  3.25  19a, clause (7), an amount equal to one-fifth of the delayed 
  3.26  depreciation.  For purposes of this clause, "delayed 
  3.27  depreciation" means the amount of the addition made by the 
  3.28  taxpayer under subdivision 19a, clause (7), minus the positive 
  3.29  value of any net operating loss under section 172 of the 
  3.30  Internal Revenue Code generated for the tax year of the 
  3.31  addition.  The resulting delayed depreciation cannot be less 
  3.32  than zero; and 
  3.33     (11) job opportunity building zone income as provided under 
  3.34  section 469.316. 
  3.35     Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  3.36  290.0674, subdivision 1, is amended to read: 
  4.1      Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
  4.2   a credit against the tax imposed by this chapter in an amount 
  4.3   equal to 75 percent of the amount paid for education-related 
  4.4   expenses for a qualifying child in kindergarten through grade 
  4.5   12.  For purposes of this section, "education-related expenses" 
  4.6   means: 
  4.7      (1) fees or tuition for instruction by an instructor under 
  4.8   section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 
  4.9   (5), or a member of the Minnesota Music Teachers Association, 
  4.10  and who is not a lineal ancestor or sibling of the dependent for 
  4.11  instruction outside the regular school day or school year, 
  4.12  including tutoring, driver's education offered as part of school 
  4.13  curriculum, regardless of whether it is taken from a public or 
  4.14  private entity or summer camps, in grade or age appropriate 
  4.15  curricula that supplement curricula and instruction available 
  4.16  during the regular school year, that assists a dependent to 
  4.17  improve knowledge of core curriculum areas or to expand 
  4.18  knowledge and skills under the graduation rule under section 
  4.19  120B.02, paragraph (e), clauses (1) to (7), (9), and (10), and 
  4.20  that do not include the teaching of religious tenets, doctrines, 
  4.21  or worship, the purpose of which is to instill such tenets, 
  4.22  doctrines, or worship; 
  4.23     (2) expenses for textbooks, including books and other 
  4.24  instructional materials and equipment purchased or leased for 
  4.25  use in elementary and secondary schools in teaching only those 
  4.26  subjects legally and commonly taught in public elementary and 
  4.27  secondary schools in this state.  "Textbooks" does not include 
  4.28  instructional books and materials used in the teaching of 
  4.29  religious tenets, doctrines, or worship, the purpose of which is 
  4.30  to instill such tenets, doctrines, or worship, nor does it 
  4.31  include books or materials for extracurricular activities 
  4.32  including sporting events, musical or dramatic events, speech 
  4.33  activities, driver's education, or similar programs; 
  4.34     (3) fees charged for participation in extracurricular 
  4.35  activities, including sporting events, musical or dramatic 
  4.36  events, speech activities, driver's education, or similar 
  5.1   programs that do not include the teaching of religious tenets, 
  5.2   doctrines, or worship, the purpose of which is to instill such 
  5.3   tenets, doctrines, or worship; 
  5.4      (4) a maximum expense of $200 $500 per family for personal 
  5.5   computer hardware, excluding single purpose processors, and 
  5.6   educational software that assists a dependent to improve 
  5.7   knowledge of core curriculum areas or to expand knowledge and 
  5.8   skills under the graduation rule under section 120B.02 purchased 
  5.9   for use in the taxpayer's home and not used in a trade or 
  5.10  business regardless of whether the computer is required by the 
  5.11  dependent's school; and 
  5.12     (4) (5) the amount paid to others for tuition and 
  5.13  transportation of a qualifying child attending an elementary or 
  5.14  secondary school situated in Minnesota, North Dakota, South 
  5.15  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
  5.16  legally fulfill the state's compulsory attendance laws, which is 
  5.17  not operated for profit, and which adheres to the provisions of 
  5.18  the Civil Rights Act of 1964 and chapter 363A. 
  5.19     For purposes of this section, "qualifying child" has the 
  5.20  meaning given in section 32(c)(3) of the Internal Revenue Code. 
  5.21     Sec. 3.  Minnesota Statutes 2002, section 290.0674, 
  5.22  subdivision 2, is amended to read: 
  5.23     Subd. 2.  [LIMITATIONS.] (a) For claimants with income not 
  5.24  greater than $33,500 $40,000, the maximum credit allowed 
  5.25  is $1,000 $1,200 per qualifying child and $2,000 per family.  No 
  5.26  credit is allowed for education-related expenses for claimants 
  5.27  with income greater than $37,500 $45,000.  The maximum credit 
  5.28  per child is reduced by $1 for each $4 of household income 
  5.29  over $33,500, and the maximum credit per family is reduced by $2 
  5.30  for each $4 of household income over $33,500 $40,000, but in no 
  5.31  case is the credit less than zero. 
  5.32     For purposes of this section "income" has the meaning given 
  5.33  in section 290.067, subdivision 2a.  In the case of a married 
  5.34  claimant, a credit is not allowed unless a joint income tax 
  5.35  return is filed. 
  5.36     (b) For a nonresident or part-year resident, the credit 
  6.1   determined under subdivision 1 and the maximum credit amount in 
  6.2   paragraph (a) must be allocated using the percentage calculated 
  6.3   in section 290.06, subdivision 2c, paragraph (e).