Minnesota Legislature
SF 3975
as introduced - 90th Legislature (2017 - 2018) Posted on 04/26/2018 09:14am
Current Version - as introduced
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A bill for an act
relating to taxation; individual income and corporate franchise; allowing a credit
for donations to certain youth intervention organizations; appropriating money;
proposing coding for new law in Minnesota Statutes, chapters 290; 299A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[290.0693] YOUTH INTERVENTION DONATION TAX CREDIT.
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new text begin Subdivision 1. new text end
new text begin Definitions. new text end
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For purposes of this section, the definitions in section
299A.281, subdivision 1, apply.
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new text begin Subd. 2. new text end
new text begin Credit allowed. new text end
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(a) A taxpayer is allowed a credit against the tax under this
chapter, other than the tax imposed under section 290.0922, for donations made to a qualified
youth intervention organization for the taxable year. The credit equals the lesser of 50
percent of the amount of the donation or the amount on the certificate provided to the
taxpayer, but the maximum credit in any taxable year is limited to the amount of the liability
for tax.
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(b) A taxpayer must provide a copy of the receipt provided by the qualified organization
when claiming the credit for the donation if requested by the commissioner.
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new text begin Subd. 3. new text end
new text begin Carryover. new text end
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If the amount of the credit under this section for any taxable year
exceeds the liability of tax for the taxable year, the excess is a credit carryover to each of
the five succeeding taxable years. The entire amount of the excess unused credit for the
taxable year must be carried first to the earliest of the taxable years to which the credit may
be carried. The amount of the unused credit allowed under this paragraph may not exceed
the taxpayer's liability for tax, less the credit for the taxable year. No credit may be carried
to a taxable year more than five years after the taxable year in which the credit was earned.
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new text begin Subd. 4. new text end
new text begin Proportional credits. new text end
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A pass-through entity must provide each shareholder,
partner, or member a statement indicating the individual's share of the credit amount certified
to the entity based on its share of the pass-through entity's income for the taxable year.
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new text begin Subd. 5. new text end
new text begin Audit powers. new text end
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Notwithstanding the certification eligibility issued by the
commissioner of public safety under section 299A.281, the commissioner may utilize any
audit and examination powers under chapter 270C or 289A to the extent necessary to verify
that the taxpayer is eligible for the credit and to assess for the amount of any improperly
claimed credit.
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new text begin EFFECTIVE DATE. new text end
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This section is effective for taxable years beginning after December
31, 2018.
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Sec. 2.
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[299A.281] YOUTH INTERVENTION DONATION TAX CREDIT.
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new text begin Subdivision 1. new text end
new text begin Definitions. new text end
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(a) For purposes of this section, the following terms have
the meanings given.
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(b) "Donation" means a contribution to a qualified youth intervention organization that
is a charitable contribution for the taxable year within the meaning of section 170 of the
Internal Revenue Code.
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(c) "Pass-through entity" means a corporation that for the applicable taxable year is
treated as an S corporation or a general partnership, limited partnership, limited liability
partnership, trust, or limited liability company and which for the applicable taxable year is
not taxed as a corporation under chapter 290.
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(d) "Qualified youth intervention organization" or "qualified organization" means an
entity that:
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(1) has been granted an exemption from the federal income tax as an organization
described in section 501(c)(3) of the Internal Revenue Code;
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(2) is primarily engaged in providing youth intervention services; and
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(3) has an approved application under subdivision 5 and has not been subsequently
barred from participating in the program.
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(e) "Youth intervention services" means providing community-based services intended
and designed to help at-risk youth develop into productive and contributing adults. "At-risk
youth" means an individual, ages six to 21, who is subject to one or more of the following
risk factors:
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(1) the youth has been subject to sexual, physical, emotional, or verbal abuse;
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(2) the youth has been neglected, including not receiving adequate food or emotional
support;
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(3) the youth, a parent, or caregiver is addicted to or abuses alcohol or drugs;
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(4) the family is subject to serious stress or conflict, including single parent families,
marital conflict, or divorce;
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(5) has family income low enough to qualify for the free and reduced-price school lunch
program, as used in section 126C.05, subdivision 16;
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(6) the youth, a parent, or caregiver has been involved in the criminal justice system;
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(7) the youth or a parent is or recently has been homeless; or
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(8) the youth or parent has chronic health or mental health issues.
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new text begin Subd. 2. new text end
new text begin Credit allowed. new text end
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A taxpayer who has been issued a credit certificate under
subdivision 3 is allowed a youth intervention donation tax credit against the taxes due under
chapter 290, but excluding the tax under section 290.0922, equal to 50 percent of the amount
donated during the taxable year to the qualified organization designated on the taxpayer's
credit certificate. No credit is allowed for a donation made before the taxpayer was issued
a credit certificate under subdivision 3 or in an amount exceeding that specified by the credit
certificate.
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new text begin Subd. 3. new text end
new text begin Application for credit certificate. new text end
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(a) The commissioner must make applications
for tax credits available on the department's Web site by January 1 of the taxable year.
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(b) To be allowed a credit under this section, a taxpayer must apply to the commissioner
for a youth intervention tax credit certificate. The application must be in the form and manner
specified by the commissioner and must designate the qualified organization to which the
taxpayer intends to make a donation and indicate the amount of credit applied for. The
commissioner must begin accepting applications for a taxable year on January 1. The
commissioner must issue tax credit certificates under this section on a first-come, first-served
basis until the maximum statewide credit amount has been reached. The certificate must
list the qualified organization the taxpayer designated on the application and the maximum
dollar amount of the credit allowed. The maximum statewide credit amount is $5,000,000
per taxable year for taxable years beginning after December 31, 2018.
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(c) The commissioner must not issue a tax credit certificate:
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(1) for an amount greater than the limits that apply under paragraph (d);
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(2) for contributions to an organization that is no longer a qualified organization; or
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(3) that would result in issuance of a total amount of certificates for the taxable year
greater than the annual maximum set in paragraph (b).
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(d) The maximum amount of tax credit certificates that may be issued to an applicant
for donations to each qualified organization for a calendar year is limited to:
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(1) $10,000 for a married joint filer;
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(2) $5,000 for any other individual filer; or
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(3) $50,000 for a corporation subject to tax under section 290.06, subdivision 1.
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For an application by a pass-through entity, the maximum amount equals the limit (for
single individuals) multiplied by the total number of members, partners, or shareholders of
the entity.
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new text begin Subd. 4. new text end
new text begin Responsibilities of qualified organization. new text end
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(a) An entity that is eligible to be
a qualified organization must apply to the commissioner by September 15 of the year
preceding the year in which it will first receive donations for which credits may be claimed.
The application must be in the form and manner prescribed by the commissioner. The
application must:
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(1) demonstrate to the commissioner that the organization is exempt from the federal
income tax under section 501(c)(3) of the Internal Revenue Code; and
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(2) attests that the organization provides youth intervention services.
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(b) A qualified organization must provide to taxpayers who make donations a receipt
on a form approved by the commissioner and must make the documentation available to
the commissioner on request.
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(c) A qualified organization must, by June 1 of each year following a year in which it
receives donations, provide the following information to the commissioner:
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(1) financial information that demonstrates the financial viability of the qualified
organization, if it received donations of $150,000 or more during the year;
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(2) documentation that it has used amounts received as donations to provide youth
intervention services; and
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(3) the total number and total dollar amount of donations received from taxpayers for
which credit certificates were provided.
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new text begin Subd. 5. new text end
new text begin Responsibilities of commissioner. new text end
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(a) The commissioner must make
applications for an entity to be approved as a qualified organization for a taxable year
available on the department's Web site by August 1 of the year preceding the taxable year.
The commissioner must approve an application that provides the documentation required
in subdivision 4, paragraph (a), within 60 days of receiving the application. The commissioner
must notify an organization that provides incomplete documentation and the organization
may resubmit its application within 30 days.
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(b) By November 15 of each year, the commissioner must post on the department's Web
site the names and addresses of qualified organizations for the next taxable year. The
commissioner must regularly update the names and addresses of any qualified organizations
that have been barred from participating in the program. The commissioner must prescribe
a standardized format for:
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(1) a receipt to be issued by a qualified organization to a taxpayer to indicate the value
of a donation received; and
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(2) qualified organizations to report the information required under subdivision 4,
paragraph (c).
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(c) The commissioner may conduct either a financial review or audit of a qualified
organization upon finding evidence of fraud or intentional misreporting. If the commissioner
determines that the qualified organization committed fraud or intentionally misreported
information, the qualified organization is barred from further program participation.
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(d) The commissioner may contract with a private entity to carry out some or all of the
commissioner's responsibilities under paragraphs (a) and (b). The contracting entity must
be an entity that is exempt from federal income taxation under section 501(c)(3) of the
Internal Revenue Code and that has experience in providing or evaluating the provision of
youth intervention services. If the commissioner contracts with a private entity to certify
qualified organizations, the entity may charge a fee of up to $250 per application for
certifications to offset its costs.
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new text begin EFFECTIVE DATE. new text end
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This section is effective the day following final enactment for
donations made and credits allowed in taxable years beginning after December 31, 2018.
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Sec. 3. new text begin APPROPRIATION FOR ADMINISTRATIVE COSTS.
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$100,000 in fiscal year 2019 is appropriated from the general fund to the commissioner
of public safety for the cost of implementing and administering the youth intervention
donation tax credit; this amount is a onetime appropriation that is not added to the base
budget.
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