SF 2489

as introduced - 88th Legislature (2013 - 2014) Posted on 03/11/2014 09:47am

A bill for an act
relating to taxation; income and franchise; modifying the research credit to be
refundable; amending Minnesota Statutes 2012, section 290.068, subdivision 2;
Minnesota Statutes 2013 Supplement, section 290.068, subdivisions 3, 6a.

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

Section 1.

Minnesota Statutes 2012, section 290.068, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of this section, the following terms have the
meanings given.

(a) "Qualified research expenses" means (i) qualified research expenses and basic
research payments as defined in section 41(b) and (e) of the Internal Revenue Code, except
it does not include expenses incurred for qualified research or basic research conducted
outside the state of Minnesota pursuant to section 41(d) and (e) of the Internal Revenue
Code; and (ii) contributions to a nonprofit corporation established and operated pursuant
to the provisions of chapter 317A for the purpose of promoting the establishment and
expansion of business in this state, provided the contributions are invested by the nonprofit
corporation for the purpose of providing funds for small, technologically innovative
enterprises in Minnesota during the early stages of their development.

(b) "Qualified research" means qualified research as defined in section 41(d) of the
Internal Revenue Code, except that the term does not include qualified research conducted
outside the state of Minnesota.

(c) "Base amount" means base amount as defined in section 41(c) of the Internal
Revenue Code, except that the average annual gross receipts must be calculated using
Minnesota sales or receipts under section 290.191 and the definitions contained in clauses
(a) and (b) shall apply.

new text begin (d) "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.
new text end

Sec. 2.

Minnesota Statutes 2013 Supplement, section 290.068, subdivision 3, is
amended to read:

Subd. 3.

Limitation; carryover.

deleted text begin (a)(1) deleted text end The credit for a taxable year beginning
before January 1, 2010, and after December 31, 2012 new text begin , and before January 1, 2014 new text end , shall not
exceed the liability for tax. deleted text begin "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. deleted text end deleted text begin 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.
deleted text end

deleted text begin (2) 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 clause (1)
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.
deleted text end

deleted text begin (b) If the amount of the credit determined under this section for any taxable year
exceeds the limitation under clause (a) including amounts allocated to other deleted text end deleted text begin 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.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 3.

Minnesota Statutes 2013 Supplement, section 290.068, subdivision 6a, is
amended to read:

Subd. 6a.

Credit to be refundable.

If 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, new text begin or after December 31, 2013, new text end exceeds the taxpayer's
deleted text begin tax deleted text end liability new text begin for tax new text end 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 EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end