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HF 4292

as introduced - 90th Legislature (2017 - 2018) Posted on 03/29/2018 02:29pm

KEY: stricken = removed, old language.
underscored = added, new language.
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Current Version - as introduced

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A bill for an act
 relating to taxation; individual income and corporate franchise; providing for
federal conformity to section 179 expensing; modifying state treatment of section
179 expensing; amending Minnesota Statutes 2017 Supplement, sections 289A.02,
subdivision 7; 290.01, subdivisions 19, 31; 290.0131, subdivision 10; 290.0133,
subdivision 12.

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

Section 1.

Minnesota Statutes 2017 Supplement, section 289A.02, subdivision 7, is
amended to read:


Subd. 7.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
16, 2016new text begin , except that for purposes of expensing under section 179 of the Internal Revenue
Code, "Internal Revenue Code" means the Internal Revenue Code as amended through
December 23, 2017new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
 new text end

Sec. 2.

Minnesota Statutes 2017 Supplement, section 290.01, subdivision 19, is amended
to read:


Subd. 19.

Net income.

The term "net income" means the federal taxable income, as
defined in section 63 of the Internal Revenue Code of 1986, as amended through the date
named in this subdivision, incorporating the federal effective dates of changes to the Internal
Revenue Code and any elections made by the taxpayer in accordance with the Internal
Revenue Code in determining federal taxable income for federal income tax purposes, and
with the modifications provided in sections 290.0131 to 290.0136.

In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
and

(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.

The net income of a real estate investment trust as defined and limited by section 856(a),
(b), and (c) of the Internal Revenue Code means the real estate investment trust taxable
income as defined in section 857(b)(2) of the Internal Revenue Code.

The net income of a designated settlement fund as defined in section 468B(d) of the
Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
Revenue Code.

The Internal Revenue Code of 1986, as amended through December 16, 2016, shall be
in effect for taxable years beginning after December 31, 1996new text begin , except that for purposes of
expensing under section 179 of the Internal Revenue Code, "Internal Revenue Code" means
the Internal Revenue Code as amended through December 23, 2017new text end .

Except as otherwise provided, references to the Internal Revenue Code in this subdivision
and sections 290.0131 to 290.0136 mean the code in effect for purposes of determining net
income for the applicable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
 new text end

Sec. 3.

Minnesota Statutes 2017 Supplement, section 290.01, subdivision 31, is amended
to read:


Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
16, 2016new text begin , except that for purposes of expensing under section 179 of the Internal Revenue
Code, "Internal Revenue Code" means the Internal Revenue Code as amended through
December 23, 2017new text end . Internal Revenue Code also includes any uncodified provision in federal
law that relates to provisions of the Internal Revenue Code that are incorporated into
Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1, subchapter
N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as amended through
March 18, 2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
 new text end

Sec. 4.

Minnesota Statutes 2017 Supplement, section 290.0131, subdivision 10, is amended
to read:


Subd. 10.

Section 179 expensing.

new text begin For taxable years beginning before January 1, 2018,
new text end 80 percent of the amount by which the deduction allowed under the dollar limits of section
179 of the Internal Revenue Code exceeds the deduction allowable by section 179 of the
Internal Revenue Codedeleted text begin , as amended through December 31, 2003,deleted text end is an addition.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2017.
 new text end

Sec. 5.

Minnesota Statutes 2017 Supplement, section 290.0133, subdivision 12, is amended
to read:


Subd. 12.

Section 179 expensing.

new text begin For taxable years beginning before January 1, 2018,
new text end 80 percent of the amount by which the deduction allowed under the dollar limits of section
179 of the Internal Revenue Code exceeds the deduction allowable by section 179 of the
Internal Revenue Codedeleted text begin , as amended through December 31, 2003,deleted text end is an addition.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2017.
 new text end