HF 5475

as introduced - 93rd Legislature (2023 - 2024) Posted on 05/16/2024 11:38am

A bill for an act
relating to taxation; individual income; corporate franchise; providing for certain
business exemptions; amending Minnesota Statutes 2022, section 290.05, by adding
a subdivision.

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

Section 1.

Minnesota Statutes 2022, section 290.05, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Business exemptions. new text end

new text begin (a) A corporation as referenced in section 290.02 is
exempt from taxation under this chapter, as provided in this subdivision. For a corporation
that received a paycheck protection program loan, the corporation is exempt beginning with
the taxable year immediately succeeding the taxable year in which the cumulative amount
of tax paid under this chapter equals or exceeds the aggregate amount of paycheck protection
program loans received by the corporation. The cumulative amount of tax paid is calculated
starting with taxable years beginning after December 31, 2023. All other corporations are
exempt for taxable years beginning after December 31, 2023.
new text end

new text begin (b) The trade or business income of a taxpayer subject to tax under section 290.03 is
exempt from taxation under this chapter, as provided in this subdivision. For a taxpayer that
received a paycheck protection program loan, the taxpayer's trade or business income is
exempt beginning with the taxable year immediately succeeding the taxable year in which
the cumulative amount of tax paid on the trade or business income under this chapter equals
or exceeds the aggregate amount of paycheck protection program loans received by the
taxpayer. The cumulative amount of tax paid is calculated starting with taxable years
beginning after December 31, 2023. For the trade or business income of all other taxpayers
subject to tax under section 290.03, the income is exempt for taxable years beginning after
December 31, 2023.
new text end

new text begin (c) For purposes of paragraph (b):
new text end

new text begin (1) "trade or business income" means:
new text end

new text begin (i) income from the sources described in sections 61(a)(2), 61(a)(3), 61(a)(5), 61(a)(6),
and 61(a)(12) of the Internal Revenue Code;
new text end

new text begin (ii) less the deductions described under section 62(a)(1) of the Internal Revenue Code;
new text end

new text begin (iii) increased by the additions provided in section 290.0131, subdivisions 8 to 10, 16,
and 17; and
new text end

new text begin (iv) decreased by the subtractions provided in subdivisions 9, 27, and 28, to the extent
the amount is assignable or allocable to Minnesota under section 290.17, and subdivision
14; and
new text end

new text begin (2) the amount of tax paid on trade or business income is the amount of tax paid by the
taxpayer under this chapter in a taxable year, multiplied by a fraction, the numerator of
which is the taxpayer's trade or business income, and the denominator of which is the
taxpayer's taxable income.
new text end

new text begin (d) For purposes of this subdivision, "paycheck protection program loan" means original
paycheck protection program loans and subsequent paycheck protection program loans
within the meaning of section 276 of the COVID-related Tax Relief Act of 2020 in Public
Law 116-260.
new text end

new text begin (e) The commissioner of revenue may require any documentation the commissioner
deems necessary to administer this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2023.
new text end