2004 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. 

    HIST: 1Sp2003 c 21 art 2 s 18; 2004 c 228 art 1 s 65