HF 2868

1st Committee Engrossment - 89th Legislature (2015 - 2016) Posted on 04/05/2016 02:06pm

1.1A bill for an act

1.2relating to military veterans; allowing a subtraction for dentists who provide
1.3charity care to veterans; imposing duties on the commissioner of veterans affairs;
1.4amending Minnesota Statutes 2014, sections 197.605, by adding a subdivision;
1.5290.01, subdivision 19b; 290.091, subdivision 2.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7    Section 1. Minnesota Statutes 2014, section 197.605, is amended by adding a
1.8subdivision to read:
1.9    Subd. 5. Dental care. (a) The commissioner of veterans affairs shall identify
1.10dentists, dental therapists, and advanced dental therapists who are willing to provide free
1.11or reduced fee dental services to veterans. The commissioner shall inform eligible dental
1.12care providers of the tax subtraction for the value of dental care provided to veterans under
1.13section 290.01, subdivision 19b, clause (22).
1.14(b) The commissioner shall compile a list of providers identified under paragraph
1.15(a) and distribute the list to each county veteran service officer. The commissioner shall
1.16update and publish the list of providers on an ongoing basis.

1.17    Sec. 2. Minnesota Statutes 2014, section 290.01, subdivision 19b, is amended to read:
1.18    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
1.19and trusts, there shall be subtracted from federal taxable income:
1.20    (1) net interest income on obligations of any authority, commission, or
1.21instrumentality of the United States to the extent includable in taxable income for federal
1.22income tax purposes but exempt from state income tax under the laws of the United States;
2.1    (2) if included in federal taxable income, the amount of any overpayment of income
2.2tax to Minnesota or to any other state, for any previous taxable year, whether the amount
2.3is received as a refund or as a credit to another taxable year's income tax liability;
2.4    (3) the amount paid to others, less the amount used to claim the credit allowed under
2.5section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
2.6to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
2.7transportation of each qualifying child in attending an elementary or secondary school
2.8situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
2.9resident of this state may legally fulfill the state's compulsory attendance laws, which
2.10is not operated for profit, and which adheres to the provisions of the Civil Rights Act
2.11of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
2.12tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
2.13"textbooks" includes books and other instructional materials and equipment purchased
2.14or leased for use in elementary and secondary schools in teaching only those subjects
2.15legally and commonly taught in public elementary and secondary schools in this state.
2.16Equipment expenses qualifying for deduction includes expenses as defined and limited in
2.17section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
2.18books and materials used in the teaching of religious tenets, doctrines, or worship, the
2.19purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
2.20or materials for, or transportation to, extracurricular activities including sporting events,
2.21musical or dramatic events, speech activities, driver's education, or similar programs. No
2.22deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
2.23the qualifying child's vehicle to provide such transportation for a qualifying child. For
2.24purposes of the subtraction provided by this clause, "qualifying child" has the meaning
2.25given in section 32(c)(3) of the Internal Revenue Code;
2.26    (4) income as provided under section 290.0802;
2.27    (5) to the extent included in federal adjusted gross income, income realized on
2.28disposition of property exempt from tax under section 290.491;
2.29    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
2.30of the Internal Revenue Code in determining federal taxable income by an individual
2.31who does not itemize deductions for federal income tax purposes for the taxable year, an
2.32amount equal to 50 percent of the excess of charitable contributions over $500 allowable
2.33as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
2.34under the provisions of Public Law 109-1 and Public Law 111-126;
2.35    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
2.36qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
3.1of subnational foreign taxes for the taxable year, but not to exceed the total subnational
3.2foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
3.3"federal foreign tax credit" means the credit allowed under section 27 of the Internal
3.4Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
3.5under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
3.6the extent they exceed the federal foreign tax credit;
3.7    (8) in each of the five tax years immediately following the tax year in which an
3.8addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a
3.9shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
3.10delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
3.11of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
3.12clause (12), in the case of a shareholder of an S corporation, minus the positive value of
3.13any net operating loss under section 172 of the Internal Revenue Code generated for the
3.14tax year of the addition. The resulting delayed depreciation cannot be less than zero;
3.15    (9) job opportunity building zone income as provided under section 469.316;
3.16    (10) to the extent included in federal taxable income, the amount of compensation
3.17paid to members of the Minnesota National Guard or other reserve components of the
3.18United States military for active service, including compensation for services performed
3.19under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
3.20service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
3.21(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
3.225b , and "active service" includes service performed in accordance with section 190.08,
3.23subdivision 3 ;
3.24    (11) to the extent included in federal taxable income, the amount of compensation
3.25paid to Minnesota residents who are members of the armed forces of the United States
3.26or United Nations for active duty performed under United States Code, title 10; or the
3.27authority of the United Nations;
3.28    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
3.29qualified donor's donation, while living, of one or more of the qualified donor's organs
3.30to another person for human organ transplantation. For purposes of this clause, "organ"
3.31means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
3.32"human organ transplantation" means the medical procedure by which transfer of a human
3.33organ is made from the body of one person to the body of another person; "qualified
3.34expenses" means unreimbursed expenses for both the individual and the qualified donor
3.35for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
3.36may be subtracted under this clause only once; and "qualified donor" means the individual
4.1or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
4.2individual may claim the subtraction in this clause for each instance of organ donation for
4.3transplantation during the taxable year in which the qualified expenses occur;
4.4    (13) in each of the five tax years immediately following the tax year in which an
4.5addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a
4.6shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
4.7addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the
4.8case of a shareholder of a corporation that is an S corporation, minus the positive value of
4.9any net operating loss under section 172 of the Internal Revenue Code generated for the
4.10tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
4.11subtraction is not allowed under this clause;
4.12    (14) to the extent included in the federal taxable income of a nonresident of
4.13Minnesota, compensation paid to a service member as defined in United States Code, title
4.1410, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
4.15Act, Public Law 108-189, section 101(2);
4.16    (15) to the extent included in federal taxable income, the amount of national service
4.17educational awards received from the National Service Trust under United States Code,
4.18title 42, sections 12601 to 12604, for service in an approved Americorps National Service
4.19program;
4.20(16) to the extent included in federal taxable income, discharge of indebtedness
4.21income resulting from reacquisition of business indebtedness included in federal taxable
4.22income under section 108(i) of the Internal Revenue Code. This subtraction applies only
4.23to the extent that the income was included in net income in a prior year as a result of the
4.24addition under subdivision 19a, clause (13);
4.25(17) the amount of the net operating loss allowed under section 290.095, subdivision
4.2611 , paragraph (c);
4.27(18) the amount of expenses not allowed for federal income tax purposes due
4.28to claiming the railroad track maintenance credit under section 45G(a) of the Internal
4.29Revenue Code;
4.30(19) the amount of the limitation on itemized deductions under section 68(b) of the
4.31Internal Revenue Code;
4.32(20) the amount of the phaseout of personal exemptions under section 151(d) of
4.33the Internal Revenue Code; and
4.34(21) to the extent included in federal taxable income, the amount of qualified
4.35transportation fringe benefits described in section 132(f)(1)(A) and (B) of the Internal
4.36Revenue Code. The subtraction is limited to the lesser of the amount of qualified
5.1transportation fringe benefits received in excess of the limitations under section
5.2132(f)(2)(A) of the Internal Revenue Code for the year or the difference between the
5.3maximum qualified parking benefits excludable under section 132(f)(2)(B) of the Internal
5.4Revenue Code minus the amount of transit benefits excludable under section 132(f)(2)(A)
5.5of the Internal Revenue Code.; and
5.6(22) to the extent not deducted in computing federal taxable income, the value of
5.7charity health care services provided to a veteran, as defined in Minnesota Statutes, section
5.8197.447, by a dentist or a dental therapist licensed under chapter 150A, or an advanced
5.9dental therapist certified under chapter 150A, acting within the scope of the individual's
5.10license. For the purposes of this clause, the value of charity health care services must be
5.11calculated at the applicable reimbursement rate provided under section 256B.76 for the
5.12dentist for services for which a federal Medicaid match is available.
5.13EFFECTIVE DATE.This section is effective for taxable years beginning after
5.14December 31, 2015.

5.15    Sec. 3. Minnesota Statutes 2014, section 290.091, subdivision 2, is amended to read:
5.16    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
5.17terms have the meanings given:
5.18    (a) "Alternative minimum taxable income" means the sum of the following for
5.19the taxable year:
5.20    (1) the taxpayer's federal alternative minimum taxable income as defined in section
5.2155(b)(2) of the Internal Revenue Code;
5.22    (2) the taxpayer's itemized deductions allowed in computing federal alternative
5.23minimum taxable income, but excluding:
5.24    (i) the charitable contribution deduction under section 170 of the Internal Revenue
5.25Code;
5.26    (ii) the medical expense deduction;
5.27    (iii) the casualty, theft, and disaster loss deduction; and
5.28    (iv) the impairment-related work expenses of a disabled person;
5.29    (3) for depletion allowances computed under section 613A(c) of the Internal
5.30Revenue Code, with respect to each property (as defined in section 614 of the Internal
5.31Revenue Code), to the extent not included in federal alternative minimum taxable income,
5.32the excess of the deduction for depletion allowable under section 611 of the Internal
5.33Revenue Code for the taxable year over the adjusted basis of the property at the end of the
5.34taxable year (determined without regard to the depletion deduction for the taxable year);
6.1    (4) to the extent not included in federal alternative minimum taxable income, the
6.2amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
6.3Internal Revenue Code determined without regard to subparagraph (E);
6.4    (5) to the extent not included in federal alternative minimum taxable income, the
6.5amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
6.6    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
6.7to (9), and (11) to (14);
6.8    less the sum of the amounts determined under the following:
6.9    (1) interest income as defined in section 290.01, subdivision 19b, clause (1);
6.10    (2) an overpayment of state income tax as provided by section 290.01, subdivision
6.1119b , clause (2), to the extent included in federal alternative minimum taxable income;
6.12    (3) the amount of investment interest paid or accrued within the taxable year on
6.13indebtedness to the extent that the amount does not exceed net investment income, as
6.14defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
6.15amounts deducted in computing federal adjusted gross income;
6.16    (4) amounts subtracted from federal taxable income as provided by section 290.01,
6.17subdivision 19b , clauses (6), (8) to (14), (16), and (21), and (22); and
6.18(5) the amount of the net operating loss allowed under section 290.095, subdivision
6.1911 , paragraph (c).
6.20    In the case of an estate or trust, alternative minimum taxable income must be
6.21computed as provided in section 59(c) of the Internal Revenue Code.
6.22    (b) "Investment interest" means investment interest as defined in section 163(d)(3)
6.23of the Internal Revenue Code.
6.24    (c) "Net minimum tax" means the minimum tax imposed by this section.
6.25    (d) "Regular tax" means the tax that would be imposed under this chapter (without
6.26regard to this section and section 290.032), reduced by the sum of the nonrefundable
6.27credits allowed under this chapter.
6.28    (e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable
6.29income after subtracting the exemption amount determined under subdivision 3.
6.30EFFECTIVE DATE.This section is effective for taxable years beginning after
6.31December 31, 2015.