Minnesota Legislature
SF 3162
as introduced - 90th Legislature (2017 - 2018) Posted on 03/13/2018 08:59am
Current Version - as introduced
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A bill for an act
relating to taxation; individual income and corporate franchise; providing for
federal conformity for certain tax provisions; reducing individual income tax rates;
modifying treatment of certain expensing; amending Minnesota Statutes 2016,
section 290.06, subdivision 2c; Minnesota Statutes 2017 Supplement, sections
289A.02, subdivision 7; 290.01, subdivisions 19, 31; 290.0131, subdivision 10;
290.0133, subdivision 12; 290A.03, subdivision 15.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2017 Supplement, section 289A.02, subdivision 7, is
amended to read:
Subd. 7.
Internal Revenue Code.
Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
deleted text begin 16, 2016deleted text end new text begin 23, 2017, except that for corporate filers, "Internal Revenue Code" means the
Internal Revenue Code of 1986, as amended through December 16, 2016new text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 2.
Minnesota Statutes 2017 Supplement, section 290.01, subdivision 19, is amended
to read:
Subd. 19.
Net income.
The term "net income" means the federal taxable income, as
defined in section 63 of the Internal Revenue Code of 1986, as amended through the date
named in this subdivision, incorporating the federal effective dates of changes to the Internal
Revenue Code and any elections made by the taxpayer in accordance with the Internal
Revenue Code in determining federal taxable income for federal income tax purposes, and
with the modifications provided in sections 290.0131 to 290.0136.
In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:
(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;
(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
and
(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.
The net income of a real estate investment trust as defined and limited by section 856(a),
(b), and (c) of the Internal Revenue Code means the real estate investment trust taxable
income as defined in section 857(b)(2) of the Internal Revenue Code.
The net income of a designated settlement fund as defined in section 468B(d) of the
Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
Revenue Code.
The Internal Revenue Code of 1986, as amended through December deleted text begin 16, 2016deleted text end new text begin 23, 2017new text end ,
shall be in effect for taxable years beginning after December 31, 1996new text begin , except that for
corporate filers, "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended through December 16, 2016new text end .
Except as otherwise provided, references to the Internal Revenue Code in this subdivision
and sections 290.0131 to 290.0136 mean the code in effect for purposes of determining net
income for the applicable year.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
new text end
Sec. 3.
Minnesota Statutes 2017 Supplement, section 290.01, subdivision 31, is amended
to read:
Subd. 31.
Internal Revenue Code.
Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
deleted text begin 16, 2016deleted text end new text begin 23, 2017, except that for corporate filers, "Internal Revenue Code" means the
Internal Revenue Code of 1986, as amended through December 16, 2016new text end . Internal Revenue
Code also includes any uncodified provision in federal law that relates to provisions of the
Internal Revenue Code that are incorporated into Minnesota law. When used in this chapter,
the reference to "subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code"
is to the Internal Revenue Code as amended through March 18, 2010.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time as
the changes were effective for federal purposes.
new text end
Sec. 4.
Minnesota Statutes 2017 Supplement, section 290.0131, subdivision 10, is amended
to read:
Subd. 10.
Section 179 expensing.
new text begin For taxable years beginning before January 1, 2018,
new text end 80 percent of the amount by which the deduction allowed under the dollar limits of section
179 of the Internal Revenue Code exceeds the deduction allowable by section 179 of the
Internal Revenue Code, as amended through December 31, 2003, is an addition.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Sec. 5.
Minnesota Statutes 2017 Supplement, section 290.0133, subdivision 12, is amended
to read:
Subd. 12.
Section 179 expensing.
new text begin For taxable years beginning before January 1, 2018,
new text end 80 percent of the amount by which the deduction allowed under the dollar limits of section
179 of the Internal Revenue Code exceeds the deduction allowable by section 179 of the
Internal Revenue Code, as amended through December 31, 2003, is an addition.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Sec. 6.
Minnesota Statutes 2016, section 290.06, subdivision 2c, is amended to read:
Subd. 2c.
Schedules of rates for individuals, estates, and trusts.
(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:
(1) On the first $35,480, deleted text begin 5.35deleted text end new text begin ...new text end percent;
(2) On all over $35,480, but not over $140,960, deleted text begin 7.05deleted text end new text begin ...new text end percent;
(3) On all over $140,960, but not over $250,000, deleted text begin 7.85deleted text end new text begin ...new text end percent;
(4) On all over $250,000, deleted text begin 9.85deleted text end new text begin ...new text end percent.
Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts.
(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first $24,270, deleted text begin 5.35deleted text end new text begin ...new text end percent;
(2) On all over $24,270, but not over $79,730, deleted text begin 7.05deleted text end new text begin ...new text end percent;
(3) On all over $79,730, but not over $150,000, deleted text begin 7.85deleted text end new text begin ...new text end percent;
(4) On all over $150,000, deleted text begin 9.85deleted text end new text begin ...new text end percent.
(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first $29,880, deleted text begin 5.35deleted text end new text begin ...new text end percent;
(2) On all over $29,880, but not over $120,070, deleted text begin 7.05deleted text end new text begin ...new text end percent;
(3) On all over $120,070, but not over $200,000, deleted text begin 7.85deleted text end new text begin ...new text end percent;
(4) On all over $200,000, deleted text begin 9.85deleted text end new text begin ...new text end percent.
(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:
(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by the additions required
under section 290.0131, subdivisions 2 and 6 to 11, and reduced by the Minnesota assignable
portion of the subtraction for United States government interest under section 290.0132,
subdivision 2, and the subtractions under section 290.0132, subdivisions 9, 10, 14, 15, 17,
and 18, after applying the allocation and assignability provisions of section 290.081, clause
(a), or 290.17; and
(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by the amounts specified in section 290.0131,
subdivisions 2 and 6 to 11, and reduced by the amounts specified in section 290.0132,
subdivisions 2, 9, 10, 14, 15, 17, and 18.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2017.
new text end
Sec. 7.
Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 15, is amended
to read:
Subd. 15.
Internal Revenue Code.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended through December deleted text begin 16, 2016deleted text end new text begin 23, 2017new text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for property tax refunds based on property
taxes payable after December 31, 2017, and rent paid after December 31, 2016.
new text end