SF 1159

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; defining business and 
  1.3             nonbusiness income; providing for an election with 
  1.4             respect to the treatment of income; authorizing an 
  1.5             amnesty for taxpayers who reported certain business 
  1.6             income; amending Minnesota Statutes 1998, section 
  1.7             290.17, subdivision 6. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1998, section 290.17, 
  1.10  subdivision 6, is amended to read: 
  1.11     Subd. 6.  [BUSINESS OR NONBUSINESS INCOME; ELECTION.] For a 
  1.12  trade or business for which allocation of income within and 
  1.13  without this state is required, if the taxpayer has any income 
  1.14  not connected with the trade or business carried on partly 
  1.15  within and partly without this state that income must be 
  1.16  allocated under subdivision 2.  Intangible property is employed 
  1.17  in a trade or business if the owner of the property holds it as 
  1.18  a means of furthering the trade or business. (a) As used in this 
  1.19  chapter, unless the context indicates otherwise, "business 
  1.20  income" is income arising from transactions and activity in the 
  1.21  regular course of the taxpayer's trade or business and includes 
  1.22  income from tangible and intangible property if the acquisition, 
  1.23  management, and disposition of the property constitute integral 
  1.24  parts of the taxpayer's regular trade or business operations.  
  1.25     (b) "Nonbusiness income" is all income other than business 
  1.26  income. 
  2.1      (c) Notwithstanding paragraph (a), for taxable years 
  2.2   beginning after December 31, 1998, a taxpayer may elect that all 
  2.3   income derived from the acquisition, management, use, or 
  2.4   disposition of tangible or intangible property constitutes 
  2.5   business income.  The election is effective and irrevocable for 
  2.6   the taxable year of the election and the following nine taxable 
  2.7   years.  The election is binding on all members of a unitary 
  2.8   business. 
  2.9      Sec. 2.  [NONBUSINESS INCOME; PRE-1999 TAX YEARS.] 
  2.10     If any item of income, gain, or loss is reported by a 
  2.11  taxpayer as business income or loss on a return for a tax year 
  2.12  to which this section applies, the commissioner of revenue shall 
  2.13  not adjust the return, assess additional tax, or reduce a refund 
  2.14  for that or any other affected year by treating the item as 
  2.15  nonbusiness income or loss under Minnesota Statutes, section 
  2.16  290.17, subdivision 6, and any such adjustment, assessment, or 
  2.17  reduction ordered by the commissioner before the effective date 
  2.18  of this section is void if the order is subject to 
  2.19  administrative or judicial challenge on the effective date. 
  2.20     Sec. 3.  [EFFECTIVE DATE.] 
  2.21     Section 2 is effective the day following final enactment 
  2.22  and applies to tax years beginning before January 1, 1999.