SF 3375

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; individual income and corporate 
  1.3             franchise; allowing subtractions for the federal 
  1.4             alcohol fuel credit; amending Minnesota Statutes 1998, 
  1.5             section 290.01, subdivision 19d; Minnesota Statutes 
  1.6             1999 Supplement, section 290.01, subdivision 19b. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.9   290.01, subdivision 19b, is amended to read: 
  1.10     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  1.11  individuals, estates, and trusts, there shall be subtracted from 
  1.12  federal taxable income: 
  1.13     (1) interest income on obligations of any authority, 
  1.14  commission, or instrumentality of the United States to the 
  1.15  extent includable in taxable income for federal income tax 
  1.16  purposes but exempt from state income tax under the laws of the 
  1.17  United States; 
  1.18     (2) if included in federal taxable income, the amount of 
  1.19  any overpayment of income tax to Minnesota or to any other 
  1.20  state, for any previous taxable year, whether the amount is 
  1.21  received as a refund or as a credit to another taxable year's 
  1.22  income tax liability; 
  1.23     (3) the amount paid to others, less the credit allowed 
  1.24  under section 290.0674, not to exceed $1,625 for each qualifying 
  1.25  child in grades kindergarten to 6 and $2,500 for each qualifying 
  1.26  child in grades 7 to 12, for tuition, textbooks, and 
  2.1   transportation of each qualifying child in attending an 
  2.2   elementary or secondary school situated in Minnesota, North 
  2.3   Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of 
  2.4   this state may legally fulfill the state's compulsory attendance 
  2.5   laws, which is not operated for profit, and which adheres to the 
  2.6   provisions of the Civil Rights Act of 1964 and chapter 363.  For 
  2.7   the purposes of this clause, "tuition" includes fees or tuition 
  2.8   as defined in section 290.0674, subdivision 1, clause (1).  As 
  2.9   used in this clause, "textbooks" includes books and other 
  2.10  instructional materials and equipment used in elementary and 
  2.11  secondary schools in teaching only those subjects legally and 
  2.12  commonly taught in public elementary and secondary schools in 
  2.13  this state.  Equipment expenses qualifying for deduction 
  2.14  includes expenses as defined and limited in section 290.0674, 
  2.15  subdivision 1, clause (3).  "Textbooks" does not include 
  2.16  instructional books and materials used in the teaching of 
  2.17  religious tenets, doctrines, or worship, the purpose of which is 
  2.18  to instill such tenets, doctrines, or worship, nor does it 
  2.19  include books or materials for, or transportation to, 
  2.20  extracurricular activities including sporting events, musical or 
  2.21  dramatic events, speech activities, driver's education, or 
  2.22  similar programs.  For purposes of the subtraction provided by 
  2.23  this clause, "qualifying child" has the meaning given in section 
  2.24  32(c)(3) of the Internal Revenue Code; 
  2.25     (4) contributions made in taxable years beginning after 
  2.26  December 31, 1981, and before January 1, 1985, to a qualified 
  2.27  governmental pension plan, an individual retirement account, 
  2.28  simplified employee pension, or qualified plan covering a 
  2.29  self-employed person that were included in Minnesota gross 
  2.30  income in the taxable year for which the contributions were made 
  2.31  but were deducted or were not included in the computation of 
  2.32  federal adjusted gross income, less any amount allowed to be 
  2.33  subtracted as a distribution under this subdivision or a 
  2.34  predecessor provision in taxable years that began before January 
  2.35  1, 2000.  This subtraction applies only for taxable years 
  2.36  beginning after December 31, 1999, and before January 1, 2001; 
  3.1      (5) income as provided under section 290.0802; 
  3.2      (6) the amount of unrecovered accelerated cost recovery 
  3.3   system deductions allowed under subdivision 19g; 
  3.4      (7) to the extent included in federal adjusted gross 
  3.5   income, income realized on disposition of property exempt from 
  3.6   tax under section 290.491; 
  3.7      (8) to the extent not deducted in determining federal 
  3.8   taxable income, the amount paid for health insurance of 
  3.9   self-employed individuals as determined under section 162(l) of 
  3.10  the Internal Revenue Code, except that the percent limit does 
  3.11  not apply.  If the taxpayer deducted insurance payments under 
  3.12  section 213 of the Internal Revenue Code of 1986, the 
  3.13  subtraction under this clause must be reduced by the lesser of: 
  3.14     (i) the total itemized deductions allowed under section 
  3.15  63(d) of the Internal Revenue Code, less state, local, and 
  3.16  foreign income taxes deductible under section 164 of the 
  3.17  Internal Revenue Code and the standard deduction under section 
  3.18  63(c) of the Internal Revenue Code; or 
  3.19     (ii) the lesser of (A) the amount of insurance qualifying 
  3.20  as "medical care" under section 213(d) of the Internal Revenue 
  3.21  Code to the extent not deducted under section 162(1) of the 
  3.22  Internal Revenue Code or excluded from income or (B) the total 
  3.23  amount deductible for medical care under section 213(a); 
  3.24     (9) the exemption amount allowed under Laws 1995, chapter 
  3.25  255, article 3, section 2, subdivision 3; 
  3.26     (10) to the extent included in federal taxable income, 
  3.27  postservice benefits for youth community service under section 
  3.28  124D.42 for volunteer service under United States Code, title 
  3.29  42, section 5011(d), as amended; 
  3.30     (11) to the extent not deducted in determining federal 
  3.31  taxable income by an individual who does not itemize deductions 
  3.32  for federal income tax purposes for the taxable year, an amount 
  3.33  equal to 50 percent of the excess of charitable contributions 
  3.34  allowable as a deduction for the taxable year under section 
  3.35  170(a) of the Internal Revenue Code over $500; and 
  3.36     (12) to the extent included in federal taxable income, 
  4.1   holocaust victims' settlement payments for any injury incurred 
  4.2   as a result of the holocaust, if received by an individual who 
  4.3   was persecuted for racial or religious reasons by Nazi Germany 
  4.4   or any other Axis regime or an heir of such a person; and 
  4.5      (13) the amount of the federal alcohol fuel credit included 
  4.6   in gross income under section 87 of the Internal Revenue Code. 
  4.7      Sec. 2.  Minnesota Statutes 1998, section 290.01, 
  4.8   subdivision 19d, is amended to read: 
  4.9      Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
  4.10  TAXABLE INCOME.] For corporations, there shall be subtracted 
  4.11  from federal taxable income after the increases provided in 
  4.12  subdivision 19c:  
  4.13     (1) the amount of foreign dividend gross-up added to gross 
  4.14  income for federal income tax purposes under section 78 of the 
  4.15  Internal Revenue Code; 
  4.16     (2) the amount of salary expense not allowed for federal 
  4.17  income tax purposes due to claiming the federal jobs credit 
  4.18  under section 51 of the Internal Revenue Code; 
  4.19     (3) any dividend (not including any distribution in 
  4.20  liquidation) paid within the taxable year by a national or state 
  4.21  bank to the United States, or to any instrumentality of the 
  4.22  United States exempt from federal income taxes, on the preferred 
  4.23  stock of the bank owned by the United States or the 
  4.24  instrumentality; 
  4.25     (4) amounts disallowed for intangible drilling costs due to 
  4.26  differences between this chapter and the Internal Revenue Code 
  4.27  in taxable years beginning before January 1, 1987, as follows: 
  4.28     (i) to the extent the disallowed costs are represented by 
  4.29  physical property, an amount equal to the allowance for 
  4.30  depreciation under Minnesota Statutes 1986, section 290.09, 
  4.31  subdivision 7, subject to the modifications contained in 
  4.32  subdivision 19e; and 
  4.33     (ii) to the extent the disallowed costs are not represented 
  4.34  by physical property, an amount equal to the allowance for cost 
  4.35  depletion under Minnesota Statutes 1986, section 290.09, 
  4.36  subdivision 8; 
  5.1      (5) the deduction for capital losses pursuant to sections 
  5.2   1211 and 1212 of the Internal Revenue Code, except that: 
  5.3      (i) for capital losses incurred in taxable years beginning 
  5.4   after December 31, 1986, capital loss carrybacks shall not be 
  5.5   allowed; 
  5.6      (ii) for capital losses incurred in taxable years beginning 
  5.7   after December 31, 1986, a capital loss carryover to each of the 
  5.8   15 taxable years succeeding the loss year shall be allowed; 
  5.9      (iii) for capital losses incurred in taxable years 
  5.10  beginning before January 1, 1987, a capital loss carryback to 
  5.11  each of the three taxable years preceding the loss year, subject 
  5.12  to the provisions of Minnesota Statutes 1986, section 290.16, 
  5.13  shall be allowed; and 
  5.14     (iv) for capital losses incurred in taxable years beginning 
  5.15  before January 1, 1987, a capital loss carryover to each of the 
  5.16  five taxable years succeeding the loss year to the extent such 
  5.17  loss was not used in a prior taxable year and subject to the 
  5.18  provisions of Minnesota Statutes 1986, section 290.16, shall be 
  5.19  allowed; 
  5.20     (6) an amount for interest and expenses relating to income 
  5.21  not taxable for federal income tax purposes, if (i) the income 
  5.22  is taxable under this chapter and (ii) the interest and expenses 
  5.23  were disallowed as deductions under the provisions of section 
  5.24  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
  5.25  federal taxable income; 
  5.26     (7) in the case of mines, oil and gas wells, other natural 
  5.27  deposits, and timber for which percentage depletion was 
  5.28  disallowed pursuant to subdivision 19c, clause (11), a 
  5.29  reasonable allowance for depletion based on actual cost.  In the 
  5.30  case of leases the deduction must be apportioned between the 
  5.31  lessor and lessee in accordance with rules prescribed by the 
  5.32  commissioner.  In the case of property held in trust, the 
  5.33  allowable deduction must be apportioned between the income 
  5.34  beneficiaries and the trustee in accordance with the pertinent 
  5.35  provisions of the trust, or if there is no provision in the 
  5.36  instrument, on the basis of the trust's income allocable to 
  6.1   each; 
  6.2      (8) for certified pollution control facilities placed in 
  6.3   service in a taxable year beginning before December 31, 1986, 
  6.4   and for which amortization deductions were elected under section 
  6.5   169 of the Internal Revenue Code of 1954, as amended through 
  6.6   December 31, 1985, an amount equal to the allowance for 
  6.7   depreciation under Minnesota Statutes 1986, section 290.09, 
  6.8   subdivision 7; 
  6.9      (9) the amount included in federal taxable income 
  6.10  attributable to the credits provided in Minnesota Statutes 1986, 
  6.11  section 273.1314, subdivision 9, or Minnesota Statutes, section 
  6.12  469.171, subdivision 6; 
  6.13     (10) amounts included in federal taxable income that are 
  6.14  due to refunds of income, excise, or franchise taxes based on 
  6.15  net income or related minimum taxes paid by the corporation to 
  6.16  Minnesota, another state, a political subdivision of another 
  6.17  state, the District of Columbia, or a foreign country or 
  6.18  possession of the United States to the extent that the taxes 
  6.19  were added to federal taxable income under section 290.01, 
  6.20  subdivision 19c, clause (1), in a prior taxable year; 
  6.21     (11) 80 percent of royalties, fees, or other like income 
  6.22  accrued or received from a foreign operating corporation or a 
  6.23  foreign corporation which is part of the same unitary business 
  6.24  as the receiving corporation; 
  6.25     (12) income or gains from the business of mining as defined 
  6.26  in section 290.05, subdivision 1, clause (a), that are not 
  6.27  subject to Minnesota franchise tax; 
  6.28     (13) the amount of handicap access expenditures in the 
  6.29  taxable year which are not allowed to be deducted or capitalized 
  6.30  under section 44(d)(7) of the Internal Revenue Code; 
  6.31     (14) the amount of qualified research expenses not allowed 
  6.32  for federal income tax purposes under section 280C(c) of the 
  6.33  Internal Revenue Code, but only to the extent that the amount 
  6.34  exceeds the amount of the credit allowed under section 290.068; 
  6.35     (15) the amount of salary expenses not allowed for federal 
  6.36  income tax purposes due to claiming the Indian employment credit 
  7.1   under section 45A(a) of the Internal Revenue Code; and 
  7.2      (16) the amount of any refund of environmental taxes paid 
  7.3   under section 59A of the Internal Revenue Code; and 
  7.4      (17) the amount of the federal alcohol fuel credit included 
  7.5   in gross income under section 87 of the Internal Revenue Code. 
  7.6      Sec. 3.  [EFFECTIVE DATE.] 
  7.7      Sections 1 and 2 are effective for taxable years beginning 
  7.8   after December 31, 1998.