HF 9

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; providing income and corporate franchise tax credits for
qualifying investments in dairy operations and livestock; amending Minnesota
Statutes 2006, section 290.06, by adding subdivisions.

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

Section 1.

Minnesota Statutes 2006, section 290.06, is amended by adding a
subdivision to read:

new text begin Subd. 34. new text end

new text begin Dairy investment credit. new text end

new text begin (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 by
a person who raises dairy animals in this state.
new text end

new text begin (b) For purposes of this subdivision, "qualifying expenditures" means the amount
spent for:
new text end

new text begin (1) the acquisition, construction, or improvement of buildings or facilities, if related
to dairy animals;
new text end

new text begin (2) the development of pasture owned or rented by the taxpayer for the use of dairy
animals; or
new text end

new text begin (3) the acquisition of equipment for dairy animal housing, for confinement, for
animal feeding, for production and delivery of milk and other dairy products, and for
waste management, including the following, if related to dairy animals in this state:
new text end

new text begin (i) freestall barns;
new text end

new text begin (ii) fences;
new text end

new text begin (iii) watering facilities;
new text end

new text begin (iv) feed storage and handling equipment;
new text end

new text begin (v) milking parlors;
new text end

new text begin (vi) robotic equipment;
new text end

new text begin (vii) scales;
new text end

new text begin (viii) milk storage and cooling facilities;
new text end

new text begin (ix) bulk tanks;
new text end

new text begin (x) manure pumping and storage facilities;
new text end

new text begin (xi) digesters;
new text end

new text begin (xii) equipment used to produce energy; and
new text end

new text begin (xiii) on-farm processing and refrigerated trucks for delivery of milk and other
dairy products.
new text end

new text begin Qualifying expenditures, other than expenditures for development of pasture, only
include amounts that are capitalized and deducted under either section 167 or 179 of the
Internal Revenue Code in computing federal taxable income. Qualifying expenditures
for development of pasture must not include land acquisition and are limited to soil
preparation expenses, seed costs, planting costs, and weed control, which are allowed once
for each acre owned or rented by the taxpayer for the use of dairy animals and developed
into pasture during the qualifying period.
new text end

new text begin (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 shall not exceed the taxpayer's
liability for tax less the dairy investment credit for the taxable year.
new text end

new text begin (d) The qualifying period is that time after December 31, 2006, and before January
1, 2013.
new text end

new text begin (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.
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, 2006.
new text end

Sec. 2.

Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 35. new text end

new text begin Livestock investment credit. new text end

new text begin (a) A livestock 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 $100,000 of qualifying expenditures made in the qualifying
period by a person who raises livestock in this state.
new text end

new text begin (b) For purposes of this subdivision, "livestock" has the meaning given in section
31.59, subdivision 3, and "qualifying expenditures" means the amount spent for:
new text end

new text begin (1) the acquisition, construction, or improvement of buildings or facilities, if related
to livestock;
new text end

new text begin (2) the development of pasture owned or rented by the taxpayer for use by livestock;
or
new text end

new text begin (3) the acquisition of equipment for livestock housing, confinement, animal feeding,
production and delivery of livestock products, and waste management, including the
following, if related to livestock in this state:
new text end

new text begin (i) birthing, rearing, and feedlot structures;
new text end

new text begin (ii) feed storage and handling equipment;
new text end

new text begin (iii) fences;
new text end

new text begin (iv) watering facilities;
new text end

new text begin (v) scales;
new text end

new text begin (vi) manure pumping and storage facilities;
new text end

new text begin (vii) digesters; and
new text end

new text begin (viii) equipment used to produce energy.
new text end

new text begin (c) Qualifying expenditures, other than expenditures for development of pasture,
only include amounts that are capitalized and deducted under either section 167 or 179 of
the Internal Revenue Code in computing federal taxable income. Qualifying expenditures
for development of pasture must not include land acquisition and are limited to soil
preparation expenses, seed costs, planting costs, and weed control, which are allowed
once for each acre owned or rented by the taxpayer for the use by livestock and developed
into pasture during the qualifying period.
new text end

new text begin (d) 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 livestock 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 shall not exceed the taxpayer's
liability for tax less the livestock investment credit for the taxable year.
new text end

new text begin (e) The qualifying period is that time after December 31, 2006, and before January
1, 2008.
new text end

new text begin (f) The $10,000 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 $10,000 for a married couple.
new text end

new text begin (g) To be eligible for the livestock investment credit in this subdivision, a taxpayer
must apply to the commissioner of agriculture for a tax credit certificate. The application
must be made on forms prescribed by the commissioner of agriculture and must include a
statement of the qualifying expenditures made during the qualifying period.
new text end

new text begin (h) The livestock investment credit for all taxpayers combined during the qualifying
period is $1,000,000. The commissioner of agriculture shall certify credits in the order
the forms required under paragraph (g) are received and approved by the commissioner
of agriculture, until the maximum credit for all taxpayers has been reached. The
commissioner of agriculture shall notify in writing any taxpayer who applies for a
tax credit certificate and is ineligible under the provisions of this subdivision and any
taxpayer whose application is received or reviewed after the $1,000,000 credit limit has
been reached.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the taxable year beginning
January 1, 2007.
new text end