Minnesota Legislature
SF 3526
as introduced - 89th Legislature (2015 - 2016) Posted on 04/15/2016 08:52am
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A bill for an act
relating to taxation; income and corporate franchise tax; modifying the research
credit; amending Minnesota Statutes 2014, section 290.068, subdivisions 1, 2, by
adding a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2014, section 290.068, subdivision 1, is amended to read:
Subdivision 1.
Credit allowed.
A corporation, partners in a partnership, or
shareholders in a corporation treated as an "S" corporation under section 290.9725 are
allowed a credit against the tax computed under this chapter for the taxable year equal to:
deleted text begin (a)deleted text end new text begin (1)new text end ten percent of the first $2,000,000 of the excess (if any) of
deleted text begin (1)deleted text end new text begin (i)new text end the qualified research expenses for the taxable year, over
deleted text begin (2)deleted text end new text begin (ii)new text end the base amount; and
deleted text begin (b)deleted text end new text begin (2)new text end 2.5 percent on all of such excess expenses over $2,000,000new text begin ; or
new text end
new text begin (3) for a taxpayer with a valid alternative simplified credit election in effect, six
percent on all qualified research expenses for the taxable year over the base amountnew text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after
December 31, 2015.
new text end
Sec. 2.
Minnesota Statutes 2014, 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" meansnew text begin :
new text end
new text begin (1) for taxpayers not subject to clause (2), thenew text end 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 deleted text begin clausesdeleted text end new text begin paragraphsnew text end (a) and (b) deleted text begin shalldeleted text end applynew text begin ; or
new text end
new text begin (2) for a taxpayer with an alternative simplified credit election in place under
subdivision 2a for the taxable year, 50 percent of the average qualified research expenses for
the three taxable years preceding the taxable year for which the credit is being determinednew text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after
December 31, 2015.
new text end
Sec. 3.
Minnesota Statutes 2014, section 290.068, is amended by adding a subdivision
to read:
new text begin Subd. 2a. new text end
new text begin Alternative simplified credit election. new text end
new text begin
(a) A corporation, partnership, or
other taxpayer qualifying for a credit under this section may elect on an original return,
including all extensions, to calculate its base amount under subdivision 2, paragraph (c),
clause (2), for the taxable year. A taxpayer may revoke the election without approval of
the commissioner, but is precluded from making the election for the five taxable years
immediately following the taxable year to which the revocation applies.
new text end
new text begin
(b) For a partnership, the election must be made by the partnership on the partnership
return or other form, as required by the commissioner, and applies to all of its partners.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after
December 31, 2015.
new text end