Engrossments
Introduction		Posted on 03/02/2022
1st Engrossment		Posted on 04/06/2022

ARTICLE 1

FEDERAL UPDATE

Section 1.

Minnesota Statutes 2020, 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 deleted text begin December
31, 2018deleted text end new text begin November 15, 2021new text end .

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 the
changes were effective for federal purposes, but are subject to the application of Minnesota
Statutes, section 290.993, subdivision 2.
new text end

Sec. 2.

Minnesota Statutes 2021 Supplement, section 289A.08, subdivision 7, is amended
to read:

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.

(a) The commissioner may allow a partnership with nonresident partners to
file a composite return and to pay the tax on behalf of nonresident partners who have no
other Minnesota source income. This composite return must include the names, addresses,
Social Security numbers, income allocation, and tax liability for the nonresident partners
electing to be covered by the composite return.

(b) The computation of a partner's tax liability must be determined by multiplying the
income allocated to that partner by the highest rate used to determine the tax liability for
individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
deductions, or personal exemptions are not allowed.

(c) The partnership must submit a request to use this composite return filing method for
nonresident partners. The requesting partnership must file a composite return in the form
prescribed by the commissioner of revenue. The filing of a composite return is considered
a request to use the composite return filing method.

(d) The electing partner must not have any Minnesota source income other than the
income from the partnership, other electing partnerships, and other qualifying entities
electing to file and pay the pass-through entity tax under subdivision 7a. If it is determined
that the electing partner has other Minnesota source income, the inclusion of the income
and tax liability for that partner under this provision will not constitute a return to satisfy
the requirements of subdivision 1. The tax paid for the individual as part of the composite
return is allowed as a payment of the tax by the individual on the date on which the composite
return payment was made. If the electing nonresident partner has no other Minnesota source
income, filing of the composite return is a return for purposes of subdivision 1.

(e) This subdivision does not negate the requirement that an individual pay estimated
tax if the individual's liability would exceed the requirements set forth in section 289A.25.
The individual's liability to pay estimated tax is, however, satisfied when the partnership
pays composite estimated tax in the manner prescribed in section 289A.25.

(f) If an electing partner's share of the partnership's gross income from Minnesota sources
is less than the filing requirements for a nonresident under this subdivision, the tax liability
is zero. However, a statement showing the partner's share of gross income must be included
as part of the composite return.

(g) The election provided in this subdivision is only available to a partner who has no
other Minnesota source income and who is either (1) a full-year nonresident individual or
(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the
Internal Revenue Code.

(h) A corporation defined in section 290.9725 and its nonresident shareholders may
make an election under this paragraph. The provisions covering the partnership apply to
the corporation and the provisions applying to the partner apply to the shareholder.

(i) Estates and trusts distributing current income only and the nonresident individual
beneficiaries of the estates or trusts may make an election under this paragraph. The
provisions covering the partnership apply to the estate or trust. The provisions applying to
the partner apply to the beneficiary.

(j) For the purposes of this subdivision, "income" means the partner's share of federal
adjusted gross income from the partnership modified by the additions provided in section
290.0131, subdivisions 8 to 10, 16, deleted text begin anddeleted text end 17,new text begin 19, and 20,new text end and the subtractions provided in:
(1) section 290.0132, subdivisions 9, 27, and 28, to the extent the amount is assignable or
allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14new text begin , 31,
and 32new text end . The subtraction allowed under section 290.0132, subdivision 9, is only allowed on
the composite tax computation to the extent the electing partner would have been allowed
the subtraction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 3.

Minnesota Statutes 2021 Supplement, section 290.01, subdivision 19, is amended
to read:

Subd. 19.

Net income.

(a) For a trust or estate taxable under section 290.03, and a
corporation taxable under section 290.02, 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.

(b) For an individual, the term "net income" means federal adjusted gross income with
the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

(c) 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.

(d) 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.

(e) 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.

(f) The Internal Revenue Code of 1986, as amended through deleted text begin December 31, 2018deleted text end new text begin
November 15, 2021new text end , applies for taxable years beginning after December 31, 1996deleted text begin , except
the sections of federal law in section 290.0111 shall also applydeleted text end .

(g) 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

Sec. 4.

Minnesota Statutes 2021 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 deleted text begin December
31, 2018, except the sections of federal law in section 290.0111 shall also applydeleted text end new text begin November
15, 2021new 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.

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Minnesota Statutes 2020, section 290.0123, subdivision 3, is amended to read:

Subd. 3.

Amount for dependents.

For an individual who is a dependent, as defined in
sections 151 and 152 of the Internal Revenue Code, of another taxpayer for a taxable year
beginning in the calendar year in which the individual's taxable year begins, the standard
deduction for that individual is limited to the greater of:

(1) $1,100; or

(2) the lesser of (i) the sum of $350 and that individual's earned income, as defined in
section 32(c) of the Internal Revenue Codenew text begin , except that a taxpayer must use earned income
from the current taxable yearnew text end ; or (ii) the standard deduction amount allowed under subdivision
1, clause (3).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017.
new text end

Sec. 6.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 19. new text end

new text begin Meal expenses. new text end

new text begin The amount of meal expenses in excess of the 50 percent
limitation under section 274(n)(1) of the Internal Revenue Code allowed under subsection
(n), paragraph (2), subparagraph (D), of that section is an addition.
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, 2021.
new text end

Sec. 7.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 20. new text end

new text begin Special limited adjustment. new text end

new text begin (a) For taxable years beginning after December
31, 2021, and before January 1, 2023, the amount calculated under section 290.993,
subdivision 2, paragraph (c), that increases net income for the taxable year is an addition.
new text end

new text begin (b) Partners, shareholders, or beneficiaries who file their returns on a calendar year basis,
and who received an addition from a pass-through entity filing their return on a fiscal year
basis, must make the addition in the taxable year it is received as required for federal income
tax purposes.
new text end

new text begin (c) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 8.

Minnesota Statutes 2020, section 290.0132, subdivision 18, is amended to read:

Subd. 18.

Net operating losses.

new text begin (a) new text end The amount of the net operating loss allowed under
section 290.095, subdivision 11, paragraph (c), is a subtraction.

new text begin (b) The unused portion of a net operating loss carryover under section 290.095,
subdivision 11, paragraph (d), is a subtraction. The subtraction is the lesser of:
new text end

new text begin (1) the amount carried into the taxable year minus any subtraction made under this
section for prior taxable years; or
new text end

new text begin (2) 80 percent of Minnesota taxable net income in a single taxable year and determined
without regard to this subtraction.
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, 2021.
new text end

Sec. 9.

Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 31. new text end

new text begin Special Limited Adjustment. new text end

new text begin (a) For taxable years beginning after December
31, 2021, and before January 1, 2023, the amount calculated under section 290.993,
subdivision 2, paragraph (c), that decreases net income for the taxable year is a subtraction.
new text end

new text begin (b) Partners, shareholders, or beneficiaries who file their returns on a calendar year basis,
and who received a subtraction from a pass-through entity filing their return on a fiscal year
basis, must make the subtraction in the taxable year it is received as required for federal
income tax purposes.
new text end

new text begin (c) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 10.

Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 32. new text end

new text begin Delayed business interest. new text end

new text begin For each of the five taxable years beginning after
December 31, 2021, there is allowed a subtraction equal to one-fifth of the adjustment
amount, to the extent not already deducted, for the exclusion under section 290.993,
subdivision 2, paragraph (c), clause (11), due to the Coronavirus Aid, Relief and Economic
Security Act, Public Law 116-136, section 2306.
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, 2021.
new text end

Sec. 11.

Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Meal expenses. new text end

new text begin The amount of meal expenses in excess of the 50 percent
limitation under section 274(n)(1) of the Internal Revenue Code allowed under section
274(n)(2)(D) of the Internal Revenue Code is an addition.
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, 2021.
new text end

Sec. 12.

Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Special Limited Adjustment. new text end

new text begin (c) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 13.

Minnesota Statutes 2020, section 290.0134, is amended by adding a subdivision
to read:

new text begin Subd. 20. new text end

new text begin Special Limited Adjustment. new text end

new text begin (a) For taxable years beginning after December
31, 2021, and before January 1, 2023, the amount calculated under section 290.993,
subdivision 2, paragraph (c), that decreases net income for the taxable year is a subtraction.
new text end

new text begin (c) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 14.

Minnesota Statutes 2020, section 290.0134, is amended by adding a subdivision
to read:

new text begin Subd. 21. new text end

new text begin Delayed business interest. 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, 2021.
new text end

Sec. 15.

Minnesota Statutes 2021 Supplement, 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 $38,770, 5.35 percent;

(2) On all over $38,770, but not over $154,020, 6.8 percent;

(3) On all over $154,020, but not over $269,010, 7.85 percent;

(4) On all over $269,010, 9.85 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 after the adjustment required in subdivision 2d.

(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 $26,520, 5.35 percent;

(2) On all over $26,520, but not over $87,110, 6.8 percent;

(3) On all over $87,110, but not over $161,720, 7.85 percent;

(4) On all over $161,720, 9.85 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 $32,650, 5.35 percent;

(2) On all over $32,650, but not over $131,190, 6.8 percent;

(3) On all over $131,190, but not over $214,980, 7.85 percent;

(4) On all over $214,980, 9.85 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:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text begin anddeleted text end
17, new text begin 19, and 20, new text end and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9, 10, 14, 15, 17, 18, deleted text begin anddeleted text end 27,new text begin 31, and 32,new text end and 290.0137, paragraph (c), 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:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text begin anddeleted text end
17,new text begin 19, and 20,new text end and 290.0137, paragraph (a); and reduced by

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, deleted text begin anddeleted text end
27,new text begin 31, and 32,new text end and 290.0137, paragraph (c).

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying
owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
7a, paragraph (b), the individual must compute the individual's Minnesota income tax as
provided in paragraph (e), and also must include, to the extent attributed to the electing
qualifying entity:

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
addition under section 290.0131, subdivision 5; and

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
subtraction under section 290.0132, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 16.

Minnesota Statutes 2020, section 290.0671, subdivision 1a, is amended to read:

Subd. 1a.

Definitions.

For purposes of this section, thenew text begin followingnew text end terms deleted text begin "qualifying
child," and "earned income,"deleted text end have the meanings given deleted text begin in section 32(c) of the Internal
Revenue Code, and the term "adjusted gross income" has the meaning given in section 62
of the Internal Revenue Code.deleted text end new text begin :
new text end

deleted text begin "Earned income of the lesser-earning spouse" has the meaning given in section 290.0675,
subdivision 1, paragraph (d).
deleted text end

new text begin (1) "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue
Code;
new text end

new text begin (2) "earned income" has the meaning given in section 32(c)(2) of the Internal Revenue
Code, except that a taxpayer must use earned income from the current taxable year;
new text end

new text begin (3) "adjusted gross income" has the meaning given in section 62 of the Internal Revenue
Code; and
new text end

new text begin (4) "earned income of the lesser earning spouse" has the meaning given in section
290.0675, subdivision 1, paragraph (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017.
new text end

Sec. 17.

Minnesota Statutes 2020, section 290.0675, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section the following terms have
the meanings given.

(b) "Earned income" means the sum of the following, to the extent included in Minnesota
taxable income:

(1) earned income as defined in section 32(c)(2) of the Internal Revenue Codenew text begin , except
that a taxpayer must use earned income from the current taxable yearnew text end ;

(2) income received from a retirement pension, profit-sharing, stock bonus, or annuity
plan; and

(3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue Code.

(d) "Earned income of lesser-earning spouse" means the earned income of the spouse
with the lesser amount of earned income as defined in paragraph (b) for the taxable year
minus one-half the amount of the standard deduction under section 290.0123, subdivision
1, clause (1).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017.
new text end

Sec. 18.

Minnesota Statutes 2020, section 290.091, subdivision 2, is amended to read:

Subd. 2.

Definitions.

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

(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a person with a disability;

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2;

(6) the amount of addition required by section 290.0131, subdivisions 9, 10, deleted text begin anddeleted text end 16new text begin , and
20new text end ;

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
not included in the addition required under clause (6); and

(8) to the extent not included in federal alternative minimum taxable income, the amount
of foreign-derived intangible income deducted under section 250 of the Internal Revenue
Code;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;

(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by
section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to deleted text begin 29deleted text end new text begin 31new text end ;

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
deleted text begin paragraphdeleted text end new text begin paragraphsnew text end (c)new text begin and (d)new text end ; and

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
subdivision 7.

In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
taxable income must be increased by the addition in section 290.0131, subdivision 16.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined 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, 2021.
new text end

Sec. 19.

Minnesota Statutes 2020, section 290.095, subdivision 11, is amended to read:

Subd. 11.

Carryback or carryover adjustments.

(a) Except as provided in paragraph
(c), for individuals, estates, and trusts the amount of a net operating loss that may be carried
back or carried over shall be the same dollar amount allowable in the determination of
federal taxable income, provided that, notwithstanding any other provision, estates and
trusts must apply the following adjustments to the amount of the net operating loss that may
be carried back or carried over:

(1) Nonassignable income or losses as required by section 290.17.

(2) Deductions not allocable to Minnesota under section 290.17.

(b) The net operating loss carryback or carryover applied as a deduction in the taxable
year to which the net operating loss is carried back or carried over shall be equal to the net
operating loss carryback or carryover applied in the taxable year in arriving at federal taxable
income provided that trusts and estates must apply the following modifications:

(1) Increase the amount of carryback or carryover applied in the taxable year by the
amount of losses and interest, taxes and other expenses not assignable or allowable to
Minnesota incurred in the taxable year.

(2) Decrease the amount of carryback or carryover applied in the taxable year by the
amount of income not assignable to Minnesota earned in the taxable year. For estates and
trusts, the net operating loss carryback or carryover to the next consecutive taxable year
shall be the net operating loss carryback or carryover as calculated in clause (b) less the
amount applied in the earlier taxable year(s). No additional net operating loss carryback or
carryover shall be allowed to estates and trusts if the entire amount has been used to offset
Minnesota income in a year earlier than was possible on the federal return. However, if a
net operating loss carryback or carryover was allowed to offset federal income in a year
earlier than was possible on the Minnesota return, an estate or trust shall still be allowed to
offset Minnesota income but only if the loss was assignable to Minnesota in the year the
loss occurred.

(c) This paragraph does not apply to eligible small businesses that make a valid election
to carry back their losses for federal purposes under section 172(b)(1)(H) of the Internal
Revenue Code as amended through March 31, 2009.

(1) A net operating loss of an individual, estate, or trust that is allowed under this
subdivision and for which the taxpayer elects to carry back for more than two years under
section 172(b)(1)(H) of the Internal Revenue Code is a net operating loss carryback to each
of the two taxable years preceding the loss, and unused portions may be carried forward for
20 taxable years after the loss.

(2) The entire amount of the net operating loss for any taxable year must be carried to
the earliest of the taxable years to which the loss may be carried. The portion of the loss
which may be carried to each of the other taxable years is the excess, if any, of the amount
of the loss over the greater of the taxable net income or alternative minimum taxable income
for each of the taxable years to which the loss may be carried.

new text begin (d) For net operating loss carryovers or carrybacks arising in taxable years beginning
after December 31, 2017, and before December 31, 2020, a net operating loss carryover or
carryback is allowed as provided in the Internal Revenue Code as amended through December
31, 2018, as follows:
new text end

new text begin (1) the entire amount of the net operating loss, to the extent not already deducted, must
be carried to the earliest taxable year and any unused portion may be carried forward for
20 taxable years after the loss; and
new text end

new text begin (2) the portion of the loss which may be carried to each of the other taxable years is the
excess, if any, of the amount of the loss over the greater of the taxable net income or
alternative minimum taxable income for each of the taxable years to which the loss may be
carried.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for losses arising in taxable
years beginning after December 31, 2017, and before December 31, 2020.
new text end

Sec. 20.

Minnesota Statutes 2021 Supplement, section 290.993, is amended to read:

290.993 SPECIAL LIMITED ADJUSTMENT.

new text begin Subdivision 1. new text end

new text begin Tax year 2018. new text end

(a) For an individual, estate, or trust, or a partnership
that elects to file a composite return under section 289A.08, subdivision 7, for taxable years
beginning after December 31, 2017, and before January 1, 2019, the following special rules
apply:

(1) an individual income taxpayer may: (i) take the standard deduction; or (ii) make an
election under section 63(e) of the Internal Revenue Code to itemize, for Minnesota individual
income tax purposes, regardless of the choice made on their federal return; and

(2) there is an adjustment to tax equal to the difference between the tax calculated under
this chapter using the Internal Revenue Code as amended through December 16, 2016, and
the tax calculated under this chapter using the Internal Revenue Code amended through
December 31, 2018, before the application of credits. The end result must be zero additional
tax due or refund.

(b) The adjustment in deleted text begin paragraph (a), clause (2)deleted text end new text begin this subdivisionnew text end , does not apply to any
changes due to sections 11012, 13101, 13201, 13202, 13203, 13204, 13205, 13207, 13301,
13302, 13303, 13313, 13502, 13503, 13801, 14101, 14102, 14211 through 14215, and
14501 of Public Law 115-97; and section 40411 of Public Law 115-123.

new text begin Subd. 2. new text end

new text begin Tax years 2017 to 2021. new text end

new text begin (a) For all taxpayers, including an entity that elects
to file a composite return under section 289A.08, subdivision 7, and an entity that elects to
pay the pass-through entity tax under section 289A.08, subdivision 7a; for taxable years
beginning after December 31, 2016, and before January 1, 2022, the following rules apply.
new text end

new text begin (b) There is an adjustment to net income equal to the difference between the amount
calculated and reported under this chapter incorporating the Internal Revenue Code as
amended through Minnesota Laws 2021, First Special Session chapter 14, and the amount
calculated under this chapter incorporating the Internal Revenue Code as amended through
November 15, 2021. This adjustment is only allowed as provided in paragraph (c) and to
the extent the taxpayer reported a related nonconformity adjustment on their return for
taxable years beginning after December 31, 2016, and before January 1, 2022. This
adjustment does not include the changes due to the:
new text end

new text begin (1) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
114, exclusion of gross income of discharge of qualified principal residence indebtedness;
new text end

new text begin (2) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
304(b), special rules for disaster-related personal casualty losses; and
new text end

new text begin (3) American Rescue Plan Act, Public Law 117-2, section 9675, modification of treatment
of student loan forgiveness.
new text end

new text begin (c) For purposes of this subdivision, the term "nonconformity adjustment" means the
difference between adjusted gross income as defined under section 62 of the Internal Revenue
Code for individuals, and federal taxable income as defined under section 63 of the Internal
Revenue Code for all other taxpayers incorporating the Internal Revenue Code as amended
through Minnesota Laws 2021, First Special Session chapter 14, and the amount calculated
under this chapter incorporating the Internal Revenue Code as amended through November
15, 2021, but does not include impacts to state tax credits. The nonconformity adjustment
is an addition or subtraction to net income but does not include the following federal law
changes:
new text end

new text begin (1) Taxpayer Certainty and Disaster Relief Act of 2019, Public Law 116-94, section
104, deduction of qualified tuition and related expenses;
new text end

new text begin (2) Taxpayer Certainty and Disaster Relief Act of 2019, Public Law 116-94, section
203, employee retention credit for employers affected by qualified disasters;
new text end

new text begin (3) Families First Coronavirus Response Act, Public Law 116-127, section 7001, payroll
credit for required paid sick leave;
new text end

new text begin (4) Families First Coronavirus Response Act, Public Law 116-127, section 7003, payroll
credit for required paid family leave;
new text end

new text begin (5) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2204, allowance of partial above the line deduction for charitable contributions;
new text end

new text begin (6) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2205, excluding subsection (a), paragraph (B), temporary modification of limitations on
charitable contributions as it applies to individual taxpayers only and including carryovers;
new text end

new text begin (7) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2206, exclusion of certain employer payment of student loans;
new text end

new text begin (8) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2301, employee retention credit for employers subject to closure due to COVID-19;
new text end

new text begin (9) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2303, modifications for net operating losses;
new text end

new text begin (10) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2304, modification of limitation on losses for taxpayers other than corporations;
new text end

new text begin (11) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2306, limitation on business interest;
new text end

new text begin (12) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
207, extension and modification of employee retention and rehiring credit;
new text end

new text begin (13) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
210, temporary allowance of full deduction for business meals;
new text end

new text begin (14) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
303, employee retention credit for employers affected by qualified disasters;
new text end

new text begin (15) American Rescue Plan Act, Public Law 117-2, section 9501(b), preserving health
benefits for workers;
new text end

new text begin (16) American Rescue Plan Act, Public Law 117-2, section 9631, refundability and
enhancement of child and dependent care tax credit;
new text end

new text begin (17) American Rescue Plan Act, Public Law 117-2, section 9641, payroll sick and family
leave credits; and
new text end

new text begin (18) American Rescue Plan Act, Public Law, 117-2, section 9651, extension of employee
retention credit.
new text end

new text begin The addition or subtraction required must only be made in taxable years beginning after
December 31, 2021, and before January 1, 2023. Except partners, shareholders, or
beneficiaries who file their returns on a calendar year basis, and who received an addition
or subtraction from a pass-through entity filing their return on a fiscal year basis, must make
the addition or subtraction in the taxable year it is received as required for federal income
tax purposes. For purposes of this subdivision, a pass-through entity is defined as an entity
that is not subject to the tax imposed under section 290.02, including but not limited to S
corporations, partnerships, estates, and trusts other than grantor trusts.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2016, and before January 1, 2024.
new text end

Sec. 21.

Minnesota Statutes 2020, 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 deleted text begin December 31, 2018deleted text end new text begin November 15, 2021new 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 in 2022 and rent paid in 2021 and thereafter.
new text end

Sec. 22.

Minnesota Statutes 2020, section 291.005, subdivision 1, is amended to read:

Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following terms
used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
increased by the value of any property in which the decedent had a qualifying income interest
for life and for which an election was made under section 291.03, subdivision 1d, for
Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,
as amended through deleted text begin December 31, 2018deleted text end new text begin November 15, 2021new text end .

(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included in the estate which has its situs outside Minnesota,
and (b) including any property omitted from the federal gross estate which is includable in
the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of death
was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person appointed
by the court to administer and dispose of the property of the decedent. If there is no executor,
administrator or other person appointed, qualified, and acting within this state, then any
person in actual or constructive possession of any property having a situs in this state which
is included in the federal gross estate of the decedent shall be deemed to be a personal
representative to the extent of the property and the Minnesota estate tax due with respect
to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death was
in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply
to determinations of domicile under this chapter.

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept or
located at the time of the decedent's death or for a gift of tangible personal property within
three years of death, the state or country in which it was normally kept or located when the
gift was executed;

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was domiciled
at death or for a gift of intangible personal property within three years of death, the state or
country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent. If
the pass-through entity is owned by a person or persons in addition to the decedent, ownership
of the property is attributed to the decedent in proportion to the decedent's capital ownership
share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of whether
it is taxed as an association or is disregarded for federal income tax purposes under Code
of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includable in the decedent's federal gross estate;
but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under section
6 of the Securities Exchange Act, United States Code, title 15, section 78f.

new text begin EFFECTIVE DATE. new text end

ARTICLE 2

INCOME AND ESTATE TAXES

Section 1.

Minnesota Statutes 2020, section 289A.10, subdivision 1, is amended to read:

Subdivision 1.

Return required.

In the case of a decedent who has an interest in property
with a situs in Minnesota, the personal representative must submit a Minnesota estate tax
return to the commissioner, on a form prescribed by the commissioner, if:

(1) a federal estate tax return is required to be filed; or

(2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in
section 2001(b) of the Internal Revenue Code, made within three years of the date of the
decedent's death exceeds deleted text begin $1,200,000 for estates of decedents dying in 2014; $1,400,000 for
estates of decedents dying in 2015; $1,600,000 for estates of decedents dying in 2016;
$2,100,000 for estates of decedents dying in 2017; $2,400,000 for estates of decedents dying
in 2018; $2,700,000 for estates of decedents dying in 2019; anddeleted text end $3,000,000 deleted text begin for estates of
decedents dying in 2020 and thereafterdeleted text end .

The return must contain a computation of the Minnesota estate tax due. The return must
be signed by the personal representative.

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 2020, section 289A.10, is amended by adding a subdivision to
read:

new text begin Subd. 1b. new text end

new text begin Election of portability of deceased spousal unused exclusion amounts;
election irrevocable; deemed elections. new text end

new text begin (a) A personal representative of a decedent's estate
may elect, on a return required under subdivision 1, to allow a decedent's surviving spouse
to take into account the decedent's deceased spousal unused exclusion amount, as provided
in section 291.016, subdivision 3, paragraph (b).
new text end

new text begin (b) The election under paragraph (a) is irrevocable. By filing a return under subdivision
1, the personal representative is deemed to have elected portability unless the personal
representative states affirmatively on the return that the decedent's estate is not electing
portability. The commissioner may prescribe the form of the election on the return.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after June
30, 2022.
new text end

Sec. 3.

Minnesota Statutes 2020, section 289A.12, is amended by adding a subdivision to
read:

new text begin Subd. 19. new text end

new text begin Election of portability of deceased spousal unused exclusion amounts
when estate tax return not required. new text end

new text begin A personal representative of a decedent's estate that
is not required to file a return under section 289A.10, subdivision 1, may file a return to
allow a decedent's surviving spouse to take into account the decedent's deceased spousal
unused exclusion amount, as provided in section 291.016, subdivision 3, paragraph (b). The
return is subject to the same provisions as a return required under section 289A.10,
subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after June
30, 2022.
new text end

Sec. 4.

Minnesota Statutes 2020, section 290.0132, subdivision 26, is amended to read:

Subd. 26.

Social Security benefits.

deleted text begin (a) A portiondeleted text end new text begin The amountnew text end of deleted text begin taxabledeleted text end Social Security
benefitsnew text begin received by a taxpayer in the taxable yearnew text end is allowed as a subtraction. deleted text begin The subtraction
equals the lesser of taxable Social Security benefits or a maximum subtraction subject to
the limits under paragraphs (b), (c), and (d).
deleted text end

deleted text begin (b) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction equals $5,150. The maximum subtraction is reduced by 20 percent of provisional
income over $78,180. In no case is the subtraction less than zero.
deleted text end

deleted text begin (c) For single or head-of-household taxpayers, the maximum subtraction equals $4,020.
The maximum subtraction is reduced by 20 percent of provisional income over $61,080.
In no case is the subtraction less than zero.
deleted text end

deleted text begin (d) For married taxpayers filing separate returns, the maximum subtraction equals
one-half the maximum subtraction for joint returns under paragraph (b). The maximum
subtraction is reduced by 20 percent of provisional income over one-half the threshold
amount specified in paragraph (b). In no case is the subtraction less than zero.
deleted text end

deleted text begin (e) For purposes of this subdivision, "provisional income" means modified adjusted
gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
the taxable Social Security benefits received during the taxable year, and "Social Security
benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
deleted text end

deleted text begin (f) The commissioner shall adjust the maximum subtraction and threshold amounts in
paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year
2019. The maximum subtraction and threshold amounts as adjusted must be rounded to the
nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
amount.
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, 2021.
new text end

Sec. 5.

Minnesota Statutes 2021 Supplement, section 290.06, subdivision 2c, is amended
to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(1) On the first deleted text begin $38,770deleted text end new text begin $41,050new text end , deleted text begin 5.35deleted text end new text begin 2.8new text end percent;

(2) On all over deleted text begin $38,770deleted text end new text begin $41,050new text end , but not over deleted text begin $154,020deleted text end new text begin $163,060new text end , 6.8 percent;

(3) On all over deleted text begin $154,020deleted text end new text begin $163,060new text end , but not over deleted text begin $269,010deleted text end new text begin $284,810new text end , 7.85 percent;

(4) On all over deleted text begin $269,010deleted text end new text begin $284,810new text end , 9.85 percent.

(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 deleted text begin $26,520deleted text end new text begin $28,080new text end , deleted text begin 5.35deleted text end new text begin 2.8new text end percent;

(2) On all over deleted text begin $26,520deleted text end new text begin $28,080new text end , but not over deleted text begin $87,110deleted text end new text begin $92,230new text end , 6.8 percent;

(3) On all over deleted text begin $87,110deleted text end new text begin $92,230new text end , but not over deleted text begin $161,720deleted text end new text begin $171,220new text end , 7.85 percent;

(4) On all over deleted text begin $161,720deleted text end new text begin $171,220new text end , 9.85 percent.

(1) On the first deleted text begin $32,650deleted text end new text begin $34,570new text end , deleted text begin 5.35deleted text end new text begin 2.8new text end percent;

(2) On all over deleted text begin $32,650deleted text end new text begin $34,570new text end , but not over deleted text begin $131,190deleted text end new text begin $138,890new text end , 6.8 percent;

(3) On all over deleted text begin $131,190deleted text end new text begin $138,890new text end , but not over deleted text begin $214,980deleted text end new text begin $227,600new text end , 7.85 percent;

(4) On all over deleted text begin $214,980deleted text end new text begin $227,600new text end , 9.85 percent.

(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:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
17, and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9, 10, 14, 15, 17, 18, and 27, and 290.0137, paragraph (c), 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:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
17, and 290.0137, paragraph (a); and reduced by

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and
27, and 290.0137, paragraph (c).

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
addition under section 290.0131, subdivision 5; and

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
subtraction under section 290.0132, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 6.

Minnesota Statutes 2020, section 290.06, subdivision 2d, is amended to read:

Subd. 2d.

Inflation adjustment of brackets.

The commissioner shall annually adjust
the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
in subdivision 2c as provided in section 270C.22. The statutory year is taxable year deleted text begin 2019deleted text end new text begin
2022new text end . The rate applicable to any rate bracket must not be changed. The dollar amounts
setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the
rate bracket for married filing separate returns after this adjustment is done. The rate bracket
for married filing separate must be one-half of the rate bracket for married filing joint.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 7.

Minnesota Statutes 2020, section 291.016, subdivision 3, is amended to read:

Subd. 3.

Subtraction.

(a) deleted text begin For estates of decedents dying after December 31, 2016,deleted text end A
subtraction is allowed in computing the Minnesota taxable estate, equal to the sum of:

(1) deleted text begin thedeleted text end new text begin annew text end exclusion amount deleted text begin for the year of death under paragraph (b)deleted text end new text begin of $3,000,000new text end ;
and

deleted text begin (2) the lesser of:
deleted text end

deleted text begin (i)deleted text end new text begin (2)new text end the value of qualified small business property under section 291.03, subdivision
9, and the value of qualified farm property under section 291.03, subdivision 10deleted text begin ; ordeleted text end new text begin , up to
$2,000,000.
new text end

deleted text begin (ii) $5,000,000 minus the exclusion amount for the year of death under paragraph (b).
deleted text end

deleted text begin (b) The following exclusion amounts apply for the year of death:
deleted text end

deleted text begin (1) $2,100,000 for decedents dying in 2017;
deleted text end

deleted text begin (2) $2,400,000 for decedents dying in 2018;
deleted text end

deleted text begin (3) $2,700,000 for decedents dying in 2019; and
deleted text end

deleted text begin (4) $3,000,000 for decedents dying in 2020 and thereafter.
deleted text end

new text begin (b) In the case of a decedent that is a surviving spouse there is an additional subtraction
allowed in computing the Minnesota taxable estate, a deceased spousal unused exclusion
amount, which is equal to the lesser of:
new text end

new text begin (1) $3,000,000; or
new text end

new text begin (2) the excess of $3,000,000 over the amount of the Minnesota taxable estate of the last
deceased spouse of the decedent, but not including in the taxable estate property described
in section 291.03, subdivisions 9 and 10, and computed without regard to the subtractions
in this subdivision, but in no case less than zero.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after June
30, 2022.
new text end

Sec. 8.

Minnesota Statutes 2020, section 291.03, subdivision 1, is amended to read:

Subdivision 1.

Tax amount.

The tax imposed must be computed by applying to the
Minnesota taxable estate the following schedule of rates and then new text begin multiplying new text end the resulting
amount deleted text begin multiplieddeleted text end by a fraction, not greater than one, the numerator of which is the value
of the Minnesota gross estate plus the value of gifts under section 291.016, subdivision 2,
clause (3), with a Minnesota situs, and the denominator of which is the federal gross estate
plus the value of gifts under section 291.016, subdivision 2, clause (3):

deleted text begin (a) For estates of decedents dying in 2017:
deleted text end

deleted text begin Amount of Minnesota Taxable Estate deleted text end	deleted text begin Rate of Tax deleted text end
deleted text begin Not over $5,100,000 deleted text end	deleted text begin 12 percent deleted text end
deleted text begin Over $5,100,000 but not over $7,100,000 deleted text end	deleted text begin $612,000 plus 12.8 percent of the excess over $5,100,000 deleted text end
deleted text begin Over $7,100,000 but not over $8,100,000 deleted text end	deleted text begin $868,000 plus 13.6 percent of the excess over $7,100,000 deleted text end
deleted text begin Over $8,100,000 but not over $9,100,000 deleted text end	deleted text begin $1,004,000 plus 14.4 percent of the excess over $8,100,000 deleted text end
deleted text begin Over $9,100,000 but not over $10,100,000 deleted text end	deleted text begin $1,148,000 plus 15.2 percent of the excess over $9,100,000 deleted text end
deleted text begin Over $10,100,000 deleted text end	deleted text begin $1,300,000 plus 16 percent of the excess over $10,100,000 deleted text end

deleted text begin (b) For estates of decedents dying in 2018 and thereafter:
deleted text end

Amount of Minnesota Taxable Estate	Rate of Tax
Not over $7,100,000	13 percent
Over $7,100,000 but not over $8,100,000	$923,000 plus 13.6 percent of the excess over $7,100,000
Over $8,100,000 but not over $9,100,000	$1,059,000 plus 14.4 percent of the excess over $8,100,000
Over $9,100,000 but not over $10,100,000	$1,203,000 plus 15.2 percent of the excess over $9,100,000
Over $10,100,000	$1,355,000 plus 16 percent of the excess over $10,100,000

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

SF 3692

Bill Text Versions

Current Version - 1st Engrossment

ARTICLE 1

FEDERAL UPDATE

Section 1.

Subd. 7.

Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and beneficiaries.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

Subd. 19.

Net income.

new text begin EFFECTIVE DATE. new text end

Sec. 4.

Subd. 31.

Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Subd. 3.

Amount for dependents.

new text begin EFFECTIVE DATE. new text end

Sec. 6.

new text begin Subd. 19. new text end

new text begin Meal expenses. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 7.

new text begin Subd. 20. new text end

new text begin Special limited adjustment. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 8.

Subd. 18.

Net operating losses.

new text begin EFFECTIVE DATE. new text end

Sec. 9.

new text begin Subd. 31. new text end

new text begin Special Limited Adjustment. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 10.

new text begin Subd. 32. new text end

new text begin Delayed business interest. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 11.

new text begin Subd. 15. new text end

new text begin Meal expenses. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 12.

new text begin Subd. 16. new text end

new text begin Special Limited Adjustment. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 13.

new text begin Subd. 20. new text end

new text begin Special Limited Adjustment. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 14.

new text begin Subd. 21. new text end

new text begin Delayed business interest. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 15.

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

new text begin EFFECTIVE DATE. new text end

Sec. 16.

Subd. 1a.

Definitions.

new text begin EFFECTIVE DATE. new text end

Sec. 17.

Subdivision 1.

Definitions.

new text begin EFFECTIVE DATE. new text end

Sec. 18.

Subd. 2.

Definitions.

new text begin EFFECTIVE DATE. new text end

Sec. 19.

Subd. 11.

Carryback or carryover adjustments.

Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.

new text begin Election of portability of deceased spousal unused exclusion amounts;
election irrevocable; deemed elections. new text end

new text begin Election of portability of deceased spousal unused exclusion amounts
when estate tax return not required. new text end