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Minnesota Legislature

Office of the Revisor of Statutes

SF 305

as introduced - 89th Legislature (2015 - 2016) Posted on 01/27/2015 09:34am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; income; increasing the rate of and providing for limited
refundability of the research credit; amending Minnesota Statutes 2014, section
290.068, subdivisions 1, 3, 6a.

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

Section 1.

Minnesota Statutes 2014, section 290.068, subdivision 1, is amended to read:


Subdivision 1.

Credit allowed.

A corporation, partners in a partnership, or
shareholders in a corporation treated as an deleted text begin"deleted text endSdeleted text begin"deleted text end corporation under section 290.9725 are
allowed a credit against the tax computed under this chapter for the taxable year equal to:

(a) ten percent of the first $2,000,000 of the excess (if any) of

(1) the qualified research expenses for the taxable year, over

(2) the base amount; and

(b) deleted text begin2.5deleted text endnew text begin fournew text end percent on all of such excess expenses over $2,000,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 2.

Minnesota Statutes 2014, section 290.068, subdivision 3, is amended to read:


Subd. 3.

Limitation; carryover.

(a) new text beginExcept as provided in subdivision 6a,
paragraph (b),
new text endthe credit deleted text beginfor a taxable year beginning before January 1, 2010, and after
December 31, 2012,
deleted text end shall not exceed the liability for tax. "Liability for tax" for purposes
of this section means the sum of the tax imposed under section 290.06, subdivisions 1 and
2c
, for the taxable year reduced by the sum of the nonrefundable credits allowed under
this chapter, on all of the entities required to be included on the combined report of the
unitary business. If the amount of the credit allowed exceeds the liability for tax of the
taxpayer, but is allowed as a result of the liability for tax of other members of the unitary
group for the taxable year, the taxpayer must allocate the excess as a research credit
to another member of the unitary group.

(b) In the case of a corporation which is a partner in a partnership, the credit allowed
for the taxable year shall not exceed the lesser of the amount determined under paragraph
(a) for the taxable year or an amount (separately computed with respect to the corporation's
interest in the trade or business or entity) equal to the amount of tax attributable to that
portion of taxable income which is allocable or apportionable to the corporation's interest
in the trade or business or entity.

(c) If the amount of the credit determined under this section for any taxable year
exceeds the limitation under paragraph (a) or (b), including amounts new text beginallowed as a refund
under subdivision 6a, paragraph (b), or
new text endallocated to other members of the unitary group,
the excess shall be a research credit carryover to each of the 15 succeeding taxable years.
The entire amount of the excess unused credit for the taxable year shall be 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 clause shall not exceed the taxpayer's liability for tax
less the research credit for the taxable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 3.

Minnesota Statutes 2014, section 290.068, subdivision 6a, is amended to read:


Subd. 6a.

Credit to be refundable.

new text begin(a) new text endIf the amount of credit allowed in this
section for qualified research expenses incurred in taxable years beginning after December
31, 2009, and before January 1, 2013, exceeds the taxpayer's tax liability under this
chapter, the commissioner shall refund the excess amount. The credit allowed for qualified
research expenses incurred in taxable years beginning after December 31, 2009, and before
January 1, 2013, must be used before any research credit earned under subdivision 3.

new text begin (b) If the first $200,000 of the credit allowed in this section for qualified research
expenses incurred in taxable years beginning after December 31, 2014, exceeds the
taxpayer's tax liability under this chapter, the commissioner shall refund the excess amount.
The $200,000 limit must be applied at the corporation, partnership, or other entity level.
The credit allowed for qualified research expenses incurred in taxable years beginning
before January 1, 2015, must be used before any research credit earned under subdivision 3.
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, 2014.
new text end