Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

SF 1498

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

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

Current Version - as introduced

  1.1                          A bill for an act
  1.2             relating to taxation; income; requiring mortgage 
  1.3             interest to be included in taxable income; providing a 
  1.4             credit for mortgage interest; amending Minnesota 
  1.5             Statutes 1994, section 290.01, subdivision 19a; 
  1.6             proposing coding for new law in Minnesota Statutes, 
  1.7             chapter 290. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1994, section 290.01, 
  1.10  subdivision 19a, is amended to read: 
  1.11     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
  1.12  individuals, estates, and trusts, there shall be added to 
  1.13  federal taxable income: 
  1.14     (1)(i) interest income on obligations of any state other 
  1.15  than Minnesota or a political or governmental subdivision, 
  1.16  municipality, or governmental agency or instrumentality of any 
  1.17  state other than Minnesota exempt from federal income taxes 
  1.18  under the Internal Revenue Code or any other federal statute, 
  1.19  and 
  1.20     (ii) exempt-interest dividends as defined in section 
  1.21  852(b)(5) of the Internal Revenue Code, except the portion of 
  1.22  the exempt-interest dividends derived from interest income on 
  1.23  obligations of the state of Minnesota or its political or 
  1.24  governmental subdivisions, municipalities, governmental agencies 
  1.25  or instrumentalities, but only if the portion of the 
  1.26  exempt-interest dividends from such Minnesota sources paid to 
  2.1   all shareholders represents 95 percent or more of the 
  2.2   exempt-interest dividends that are paid by the regulated 
  2.3   investment company as defined in section 851(a) of the Internal 
  2.4   Revenue Code, or the fund of the regulated investment company as 
  2.5   defined in section 851(h) of the Internal Revenue Code, making 
  2.6   the payment; and 
  2.7      (iii) for the purposes of items (i) and (ii), interest on 
  2.8   obligations of an Indian tribal government described in section 
  2.9   7871(c) of the Internal Revenue Code shall be treated as 
  2.10  interest income on obligations of the state in which the tribe 
  2.11  is located; 
  2.12     (2)(i) the amount of income taxes paid or accrued within 
  2.13  the taxable year under this chapter and income taxes paid to any 
  2.14  other state or to any province or territory of Canada, to the 
  2.15  extent allowed as a deduction under section 63(d) of the 
  2.16  Internal Revenue Code, but the addition; 
  2.17     (ii) qualified residence interest, as defined in section 
  2.18  163(h) of the Internal Revenue Code, to the extent allowed as a 
  2.19  deduction under section 63(d) of the Internal Revenue Code; and 
  2.20     (iii) the sum of the additions made under items (i) and 
  2.21  (ii) may not be more than the amount by which the itemized 
  2.22  deductions as allowed under section 63(d) of the Internal 
  2.23  Revenue Code exceeds the amount of the standard deduction as 
  2.24  defined in section 63(c) of the Internal Revenue Code.  For the 
  2.25  purpose of this paragraph, the disallowance of itemized 
  2.26  deductions under section 68 of the Internal Revenue Code of 
  2.27  1986, income tax is and qualified residence interest are the 
  2.28  last itemized deduction deductions disallowed; 
  2.29     (3) the capital gain amount of a lump sum distribution to 
  2.30  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
  2.31  Reform Act of 1986, Public Law Number 99-514, applies; and 
  2.32     (4) the amount of income taxes paid or accrued within the 
  2.33  taxable year under this chapter and income taxes paid to any 
  2.34  other state or any province or territory of Canada, to the 
  2.35  extent allowed as a deduction in determining federal adjusted 
  2.36  gross income.  For the purpose of this paragraph, income taxes 
  3.1   do not include the taxes imposed by sections 290.0922, 
  3.2   subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729. 
  3.3      Sec. 2.  [290.0672] [MORTGAGE INTEREST CREDIT.] 
  3.4      Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
  3.5   a credit against the tax imposed by this chapter equal to the 
  3.6   lesser of $500 or ten percent of the qualified residence 
  3.7   interest deduction for which the individual is eligible under 
  3.8   section 63(d) of the Internal Revenue Code.  The credit is 
  3.9   reduced by $8 for each $1,000 or portion thereof of adjusted 
  3.10  gross income above $50,000, but in no case may the credit be 
  3.11  reduced to less than the lesser of $100 or ten percent of the 
  3.12  qualified residence interest deduction for which the individual 
  3.13  is eligible under section 63(d) of the Internal Revenue Code. 
  3.14     For a nonresident or part-year resident, the credit must be 
  3.15  allocated based on the percentage calculated under section 
  3.16  290.06, subdivision 2c, paragraph (e). 
  3.17     Sec. 3.  [EFFECTIVE DATE.] 
  3.18     Sections 1 and 2 are effective for tax years beginning 
  3.19  after December 31, 1994.