HF 3659

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

A bill for an act
relating to taxation; providing an income and corporation franchise tax credit for
qualifying investment in dairy operations; amending Minnesota Statutes 2004,
section 290.06, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2004, section 290.06, is amended by adding a
subdivision to read:

Subd. 33.

Dairy investment credit.

(a) A dairy investment credit is allowed against
the tax due under this chapter equal to ten percent of the amount paid or incurred by the
taxpayer, on the first $500,000 of qualifying expenditures made in the qualifying period.

(b) "Qualifying expenditures" means for purposes of this subdivision the amount
spent for the acquisition, construction, or improvement of buildings or facilities, or the
acquisition of equipment, for dairy animal housing, confinement, animal feeding, milk
production, and waste management, including the following, if related to dairy animals in
this state:

(1) freestall barns;

(2) fences;

(3) watering facilities;

(4) feed storage and handling equipment;

(5) milking parlors;

(6) robotic equipment;

(7) scales;

(8) milk storage and cooling facilities;

(9) bulk tanks;

(10) manure pumping and storage facilities;

(11) digesters; and

(12) equipment used to produce energy.

Qualified expenditures only include amounts that are capitalized and deducted under either
section 167 or 179 of the Internal Revenue Code in computing federal taxable income.

(c) The credit is limited to the liability for tax, as computed under this chapter, for
the taxable year. If the amount of the credit determined under this section for any taxable
year exceeds this limitation, the excess is a dairy investment credit carryover to each of the
15 succeeding taxable years. The entire amount of the excess unused credit for the taxable
year is 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 paragraph must not exceed the taxpayer's
liability for tax less the dairy investment credit for the taxable year.

(d) The qualifying period is that time after December 31, 2005, and before January
1, 2012.

(e) The $50,000 maximum credit applies at the entity level for partnerships, S
corporations, trusts, and estates as well as at the individual level. In the case of married
individuals, the credit is limited to $50,000 for a married couple.

EFFECTIVE DATE.

This section is effective for tax years beginning after
December 31, 2005.