2006 Minnesota Statutes

469.339 CREDIT FOR MORE RESEARCH IN ZONE.
    Subdivision 1. Credit allowed. A corporation, other than a corporation treated as an "S"
corporation under section 290.9725, is allowed a credit against the portion of the franchise tax
computed under section 290.06, subdivision 1, for the taxable year equal to:
(1) five percent of the first $2,000,000 of the excess (if any) of (i) the qualified research
expenses for the taxable year, over (ii) the base amount; and
(2) 2.5 percent of all such excess expenses over $2,000,000.
    Subd. 2. Definitions. (a) For purposes of this section, the following terms have the meanings
given.
(b) "Qualified research expenses" means qualified research expenses and basic research
payments as defined in section 41(b) and (e) of the Internal Revenue Code.
(c) "Qualified research" means activities in the fields of biotechnology or health sciences
that are "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 biotechnology and health
sciences industry zone.
(d) "Base amount" means 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 paragraphs (b) and (c) apply.
(e) "Liability for tax" for purposes of this section means the tax imposed under this chapter
for the taxable year reduced by the sum of the nonrefundable credits allowed under this chapter.
    Subd. 3. Refundable credit. If the credit determined under this section and allocated to the
taxpayer under section 469.335 for the taxable year exceeds the taxpayer's liability for tax for the
year, the commissioner shall refund the difference to the taxpayer.
    Subd. 4. Partnerships. For partnerships, the credit is allocated in the same manner provided
by section 41(f)(2) of the Internal Revenue Code.
    Subd. 5. Adjustments; acquisitions and dispositions. If a taxpayer acquires or disposes of
the major portion of a trade or business or the major portion of a separate unit of a trade or business
in a transaction with another taxpayer, the taxpayer's qualified research expenses and base amount
are adjusted in the same manner provided by section 41(f)(3) of the Internal Revenue Code.
    Subd. 6. Interaction; regular research credit. Any amount used to calculate a credit under
this section may not be used to generate a credit under section 290.068.
History: 1Sp2003 c 21 art 2 s 18; 2004 c 228 art 1 s 65