HF 3777

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; corporate franchise; adopting 
  1.3             the federal rules for charitable contribution 
  1.4             deductions; amending Minnesota Statutes 1996, section 
  1.5             290.21, subdivision 3. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1996, section 290.21, 
  1.8   subdivision 3, is amended to read: 
  1.9      Subd. 3.  An amount for contribution or gifts made within 
  1.10  the taxable year: 
  1.11     (a) to or for the use of the state of Minnesota, or any of 
  1.12  its political subdivisions for exclusively public purposes, 
  1.13     (b) to or for the use of any community chest, corporation, 
  1.14  organization, trust, fund, association, or foundation located in 
  1.15  and carrying on substantially all of its activities within this 
  1.16  state, organized and operating exclusively for religious, 
  1.17  charitable, public cemetery, scientific, literary, artistic, or 
  1.18  educational purposes, or for the prevention of cruelty to 
  1.19  children or animals, no part of the net earnings of which inures 
  1.20  to the benefit of any private stockholder or individual, 
  1.21     (c) to a fraternal society, order, or association, 
  1.22  operating under the lodge system located in and carrying on 
  1.23  substantially all of their activities within this state if such 
  1.24  contributions or gifts are to be used exclusively for the 
  1.25  purposes specified in clause (b), or for or to posts or 
  2.1   organizations of war veterans or auxiliary units or societies of 
  2.2   such posts or organizations, if they are within the state and no 
  2.3   part of their net income inures to the benefit of any private 
  2.4   shareholder or individual, 
  2.5      (d) to or for the use of the United States of America for 
  2.6   exclusively public purposes if the contribution or gift consists 
  2.7   of real property located in Minnesota, 
  2.8      (e) to or for the use of a foundation if the foundation is 
  2.9   organized and operated exclusively for a purpose in clause (b), 
  2.10  and has no part of its net earnings inuring to the benefit of a 
  2.11  private shareholder or individual, but does not carry on 
  2.12  substantially all of its activities within this state.  The 
  2.13  deduction under this clause equals the amount of the 
  2.14  corporation's contributions or gifts to the foundation within 
  2.15  the taxable year multiplied by a fraction equal to the ratio of 
  2.16  the foundation's total expenditures during the taxable year for 
  2.17  the benefit of organizations described in clause (b) to the 
  2.18  foundation's total expenditures during the taxable year, 
  2.19     (f) the total deduction hereunder shall not exceed 15 
  2.20  percent of the taxpayer's taxable net income less the deductions 
  2.21  allowable under this section other than those for contributions 
  2.22  or gifts, 
  2.23     (g) in the case of a corporation reporting its taxable 
  2.24  income on the accrual basis, if:  (A) the board of directors 
  2.25  authorizes a charitable contribution during any taxable year, 
  2.26  and (B) payment of such contribution is made after the close of 
  2.27  such taxable year and on or before the 15th day of the third 
  2.28  month following the close of such taxable year; then the 
  2.29  taxpayer may elect to treat such contribution as paid during 
  2.30  such taxable year.  The election may be made only at the time of 
  2.31  the filing of the return for such taxable year, and shall be 
  2.32  signified in such manner as the commissioner shall by rules 
  2.33  prescribe. 
  2.34     For a contribution of ordinary income or capital gain 
  2.35  property, the amount allowed as a deduction is limited to the 
  2.36  amount deductible under section 170(e) of the Internal Revenue 
  3.1   Code. 
  3.2      Sec. 2.  [EFFECTIVE DATE.] 
  3.3      Section 1 is effective for taxable years beginning after 
  3.4   December 31, 1997.