Bill Text: MN HF1229 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Unemployment insurance and taxation penalties provided, and additions to taxable income modified.
Spectrum: Moderate Partisan Bill (Democrat 5-1)
Status: (Introduced - Dead) 2011-03-21 - Introduction and first reading, referred to Jobs and Economic Development Finance [HF1229 Detail]
Download: Minnesota-2011-HF1229-Introduced.html
1.2relating to unemployment insurance and taxation; providing penalties; modifying
1.3additions to taxable income;amending Minnesota Statutes 2010, sections
1.4268.184, subdivisions 1, 2; 290.01, subdivisions 19a, 19c.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 268.184, subdivision 1, is amended to read:
1.7 Subdivision 1. Administrative penalties. (a) The commissioner must penalize
1.8an employer if that employer or any employee, officer, or agent of that employer, is
1.9in collusion with any applicant for the purpose of assisting the applicant to receive
1.10unemployment benefits fraudulently. The penalty is $500 or the amount of unemployment
1.11benefits determined to be overpaid, whichever is greater.
1.12 (b) The commissioner must penalize an employer if that employer or any employee,
1.13officer, or agent of that employer (1) made a false statement or representation knowing it
1.14to be false, (2) made a false statement or representation without a good faith belief as to
1.15correctness of the statement or representation, (3) knowingly failed to disclose a material
1.16fact, or (4) made an offer of employment to an applicant when, in fact, the employer had
1.17no employment available, but only if the employer's action:
1.18 (i) was taken to prevent or reduce the payment of unemployment benefits to any
1.19applicant;
1.20 (ii) was taken to reduce or avoid any payment required from an employer under
1.21this chapter or section116L.20 ; or
1.22 (iii) caused an overpayment of unemployment benefits to an applicant.
1.23 The penalty is $500, or 50 percent of the overpaid or reduced unemployment benefits
1.24or payment required, whichever is greater.
2.1(c) The commissioner must penalize an employer if that employer or any employee,
2.2officer, or agent of that employer raises an issue of ineligibility or files an appeal of the
2.3determination or amended determination of benefit account without a good faith belief
2.4that the employee is ineligible for benefits. The penalty is $1,000 or the amount of
2.5unemployment benefits or payment required, whichever is greater.
2.6(c) (d) The commissioner must penalize an employer if that employer failed or
2.7refused to honor a subpoena issued under section268.105, subdivision 4 , or section
2.8268.188
. The penalty is $500 and any costs of enforcing the subpoena, including attorney
2.9fees.
2.10(d) (e) Penalties under this subdivision are in addition to any other penalties and
2.11subject to the same collection procedures that apply to past due taxes. Penalties must be
2.12paid within 30 calendar days of assessment and credited to the contingent account.
2.13(e) (f) The assessment of the penalty is final unless the employer files an appeal
2.14within 20 calendar days after the sending of notice of the penalty to the employer by
2.15mail or electronic transmission. Proceedings on the appeal are conducted in accordance
2.16with section268.105 .
2.17EFFECTIVE DATE.This section is effective the day following final enactment.
2.18 Sec. 2. Minnesota Statutes 2010, section 268.184, subdivision 2, is amended to read:
2.19 Subd. 2. Criminal penalties. Any employer or any officer or agent of an employer
2.20or any other individual who:
2.21(1) makes a false statement or representation knowing it to be false;
2.22(2) knowingly fails to disclose a material fact, including notification required under
2.23section268.051, subdivision 4 ; or
2.24(3) raises an issue of ineligibility or files an appeal of the determination or amended
2.25determination of benefit account without a good faith belief that the employee is ineligible
2.26for benefits; or
2.27(3) (4) knowingly advises or assists an employer in violating clause (1) or, (2), or
2.28(3), to avoid or reduce any payment required from an employer under this chapter or
2.29section116L.20 , or to prevent or reduce the payment of unemployment benefits to any
2.30applicant, is guilty of a gross misdemeanor unless the underpayment exceeds $500, in that
2.31case the individual is guilty of a felony.
2.32EFFECTIVE DATE.This section is effective the day following final enactment.
2.33 Sec. 3. Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to read:
3.1 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
3.2trusts, there shall be added to federal taxable income:
3.3 (1)(i) interest income on obligations of any state other than Minnesota or a political
3.4or governmental subdivision, municipality, or governmental agency or instrumentality
3.5of any state other than Minnesota exempt from federal income taxes under the Internal
3.6Revenue Code or any other federal statute; and
3.7 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
3.8Code, except:
3.9(A) the portion of the exempt-interest dividends exempt from state taxation under
3.10the laws of the United States; and
3.11(B) the portion of the exempt-interest dividends derived from interest income
3.12on obligations of the state of Minnesota or its political or governmental subdivisions,
3.13municipalities, governmental agencies or instrumentalities, but only if the portion of the
3.14exempt-interest dividends from such Minnesota sources paid to all shareholders represents
3.1595 percent or more of the exempt-interest dividends, including any dividends exempt
3.16under subitem (A), that are paid by the regulated investment company as defined in section
3.17851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
3.18defined in section 851(g) of the Internal Revenue Code, making the payment; and
3.19 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
3.20government described in section 7871(c) of the Internal Revenue Code shall be treated as
3.21interest income on obligations of the state in which the tribe is located;
3.22 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
3.23or accrued within the taxable year under this chapter and the amount of taxes based on
3.24net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
3.25state or to any province or territory of Canada, to the extent allowed as a deduction
3.26under section 63(d) of the Internal Revenue Code, but the addition may not be more
3.27than the amount by which the itemized deductions as allowed under section 63(d) of
3.28the Internal Revenue Code exceeds the amount of the standard deduction as defined in
3.29section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
3.30sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
3.31this paragraph, the disallowance of itemized deductions under section 68 of the Internal
3.32Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
3.33the last itemized deductions disallowed;
3.34 (3) the capital gain amount of a lump-sum distribution to which the special tax under
3.35section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
4.1 (4) the amount of income taxes paid or accrued within the taxable year under this
4.2chapter and taxes based on net income paid to any other state or any province or territory
4.3of Canada, to the extent allowed as a deduction in determining federal adjusted gross
4.4income. For the purpose of this paragraph, income taxes do not include the taxes imposed
4.5by sections290.0922, subdivision 1 , paragraph (b),
290.9727 ,
290.9728 , and
290.9729 ;
4.6 (5) the amount of expense, interest, or taxes disallowed pursuant to section290.10
4.7other than expenses or interest used in computing net interest income for the subtraction
4.8allowed under subdivision 19b, clause (1);
4.9 (6) the amount of a partner's pro rata share of net income which does not flow
4.10through to the partner because the partnership elected to pay the tax on the income under
4.11section 6242(a)(2) of the Internal Revenue Code;
4.12 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
4.13Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
4.14in the taxable year generates a deduction for depreciation under section 168(k) and the
4.15activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
4.16the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
4.17limited to excess of the depreciation claimed by the activity under section 168(k) over the
4.18amount of the loss from the activity that is not allowed in the taxable year. In succeeding
4.19taxable years when the losses not allowed in the taxable year are allowed, the depreciation
4.20under section 168(k) is allowed;
4.21 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
4.22Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
4.23Revenue Code of 1986, as amended through December 31, 2003;
4.24 (9) to the extent deducted in computing federal taxable income, the amount of the
4.25deduction allowable under section 199 of the Internal Revenue Code;
4.26 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
4.27federal subsidies for prescription drug plans;
4.28(11) the amount of expenses disallowed under section 290.10, subdivision 2;
4.29 (12) the amount deducted for qualified tuition and related expenses under section
4.30222 of the Internal Revenue Code, to the extent deducted from gross income;
4.31 (13) the amount deducted for certain expenses of elementary and secondary school
4.32teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
4.33from gross income;
4.34(14) the additional standard deduction for property taxes payable that is allowable
4.35under section 63(c)(1)(C) of the Internal Revenue Code;
5.1(15) the additional standard deduction for qualified motor vehicle sales taxes
5.2allowable under section 63(c)(1)(E) of the Internal Revenue Code;
5.3(16) discharge of indebtedness income resulting from reacquisition of business
5.4indebtedness and deferred under section 108(i) of the Internal Revenue Code;and
5.5(17) the amount of unemployment compensation exempt from tax under section
5.685(c) of the Internal Revenue Code.; and
5.7(18) to the extent deducted in computing federal taxable income, any amounts paid
5.8or incurred during the taxable year for the cost of raising the ineligibility or contesting
5.9or appealing the eligibility of a former employee of the taxpayer for unemployment
5.10benefits, including, but not limited to, any amounts for attorney fees and compensation of
5.11employees appropriately allocated to their time spent on the matter, filing fees, witness
5.12fees, research, copying, and similar costs paid or incurred on the matter.
5.13EFFECTIVE DATE.This section is effective for taxable years beginning after
5.14December 31, 2010.
5.15 Sec. 4. Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:
5.16 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
5.17there shall be added to federal taxable income:
5.18 (1) the amount of any deduction taken for federal income tax purposes for income,
5.19excise, or franchise taxes based on net income or related minimum taxes, including but not
5.20limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
5.21another state, a political subdivision of another state, the District of Columbia, or any
5.22foreign country or possession of the United States;
5.23 (2) interest not subject to federal tax upon obligations of: the United States, its
5.24possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
5.25state, any of its political or governmental subdivisions, any of its municipalities, or any
5.26of its governmental agencies or instrumentalities; the District of Columbia; or Indian
5.27tribal governments;
5.28 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
5.29Revenue Code;
5.30 (4) the amount of any net operating loss deduction taken for federal income tax
5.31purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
5.32deduction under section 810 of the Internal Revenue Code;
5.33 (5) the amount of any special deductions taken for federal income tax purposes
5.34under sections 241 to 247 and 965 of the Internal Revenue Code;
6.1 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
6.2clause (a), that are not subject to Minnesota income tax;
6.3 (7) the amount of any capital losses deducted for federal income tax purposes under
6.4sections 1211 and 1212 of the Internal Revenue Code;
6.5 (8) the exempt foreign trade income of a foreign sales corporation under sections
6.6921(a) and 291 of the Internal Revenue Code;
6.7 (9) the amount of percentage depletion deducted under sections 611 through 614 and
6.8291 of the Internal Revenue Code;
6.9 (10) for certified pollution control facilities placed in service in a taxable year
6.10beginning before December 31, 1986, and for which amortization deductions were elected
6.11under section 169 of the Internal Revenue Code of 1954, as amended through December
6.1231, 1985, the amount of the amortization deduction allowed in computing federal taxable
6.13income for those facilities;
6.14 (11) the amount of any deemed dividend from a foreign operating corporation
6.15determined pursuant to section290.17, subdivision 4 , paragraph (g). The deemed dividend
6.16shall be reduced by the amount of the addition to income required by clauses (20), (21),
6.17(22), and (23);
6.18 (12) the amount of a partner's pro rata share of net income which does not flow
6.19through to the partner because the partnership elected to pay the tax on the income under
6.20section 6242(a)(2) of the Internal Revenue Code;
6.21 (13) the amount of net income excluded under section 114 of the Internal Revenue
6.22Code;
6.23 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
6.24Revenue Code, for the taxable year when subpart F income is calculated without regard to
6.25the provisions of Division C, title III, section 303(b) of Public Law 110-343;
6.26 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
6.27and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
6.28has an activity that in the taxable year generates a deduction for depreciation under
6.29section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
6.30that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
6.31under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
6.32depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
6.33amount of the loss from the activity that is not allowed in the taxable year. In succeeding
6.34taxable years when the losses not allowed in the taxable year are allowed, the depreciation
6.35under section 168(k)(1)(A) and (k)(4)(A) is allowed;
7.1 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
7.2Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
7.3Revenue Code of 1986, as amended through December 31, 2003;
7.4 (17) to the extent deducted in computing federal taxable income, the amount of the
7.5deduction allowable under section 199 of the Internal Revenue Code;
7.6 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
7.7federal subsidies for prescription drug plans;
7.8 (19) the amount of expenses disallowed under section290.10, subdivision 2 ;
7.9 (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
7.10accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
7.11of a corporation that is a member of the taxpayer's unitary business group that qualifies
7.12as a foreign operating corporation. For purposes of this clause, intangible expenses and
7.13costs include:
7.14 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
7.15use, maintenance or management, ownership, sale, exchange, or any other disposition of
7.16intangible property;
7.17 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
7.18transactions;
7.19 (iii) royalty, patent, technical, and copyright fees;
7.20 (iv) licensing fees; and
7.21 (v) other similar expenses and costs.
7.22For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
7.23applications, trade names, trademarks, service marks, copyrights, mask works, trade
7.24secrets, and similar types of intangible assets.
7.25This clause does not apply to any item of interest or intangible expenses or costs paid,
7.26accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
7.27to such item of income to the extent that the income to the foreign operating corporation
7.28is income from sources without the United States as defined in subtitle A, chapter 1,
7.29subchapter N, part 1, of the Internal Revenue Code;
7.30 (21) except as already included in the taxpayer's taxable income pursuant to clause
7.31(20), any interest income and income generated from intangible property received or
7.32accrued by a foreign operating corporation that is a member of the taxpayer's unitary
7.33group. For purposes of this clause, income generated from intangible property includes:
7.34 (i) income related to the direct or indirect acquisition, use, maintenance or
7.35management, ownership, sale, exchange, or any other disposition of intangible property;
7.36 (ii) income from factoring transactions or discounting transactions;
8.1 (iii) royalty, patent, technical, and copyright fees;
8.2 (iv) licensing fees; and
8.3 (v) other similar income.
8.4For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
8.5applications, trade names, trademarks, service marks, copyrights, mask works, trade
8.6secrets, and similar types of intangible assets.
8.7This clause does not apply to any item of interest or intangible income received or accrued
8.8by a foreign operating corporation with respect to such item of income to the extent that
8.9the income is income from sources without the United States as defined in subtitle A,
8.10chapter 1, subchapter N, part 1, of the Internal Revenue Code;
8.11 (22) the dividends attributable to the income of a foreign operating corporation that
8.12is a member of the taxpayer's unitary group in an amount that is equal to the dividends
8.13paid deduction of a real estate investment trust under section 561(a) of the Internal
8.14Revenue Code for amounts paid or accrued by the real estate investment trust to the
8.15foreign operating corporation;
8.16 (23) the income of a foreign operating corporation that is a member of the taxpayer's
8.17unitary group in an amount that is equal to gains derived from the sale of real or personal
8.18property located in the United States;
8.19 (24) the additional amount allowed as a deduction for donation of computer
8.20technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
8.21extent deducted from taxable income;and
8.22(25) discharge of indebtedness income resulting from reacquisition of business
8.23indebtedness and deferred under section 108(i) of the Internal Revenue Code.; and
8.24(26) to the extent deducted in computing federal taxable income, any amounts paid
8.25or incurred during the taxable year for the cost of raising the ineligibility or contesting
8.26or appealing the eligibility of a former employee of the taxpayer for unemployment
8.27benefits, including, but not limited to, any amounts for attorney fees and compensation of
8.28employees appropriately allocated to their time spent on the matter, filing fees, witness
8.29fees, research, copying, and similar costs paid or incurred on the matter.
8.30EFFECTIVE DATE.This section is effective for taxable years beginning after
8.31December 31, 2010.
1.3additions to taxable income;amending Minnesota Statutes 2010, sections
1.4268.184, subdivisions 1, 2; 290.01, subdivisions 19a, 19c.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 268.184, subdivision 1, is amended to read:
1.7 Subdivision 1. Administrative penalties. (a) The commissioner must penalize
1.8an employer if that employer or any employee, officer, or agent of that employer, is
1.9in collusion with any applicant for the purpose of assisting the applicant to receive
1.10unemployment benefits fraudulently. The penalty is $500 or the amount of unemployment
1.11benefits determined to be overpaid, whichever is greater.
1.12 (b) The commissioner must penalize an employer if that employer or any employee,
1.13officer, or agent of that employer (1) made a false statement or representation knowing it
1.14to be false, (2) made a false statement or representation without a good faith belief as to
1.15correctness of the statement or representation, (3) knowingly failed to disclose a material
1.16fact, or (4) made an offer of employment to an applicant when, in fact, the employer had
1.17no employment available, but only if the employer's action:
1.18 (i) was taken to prevent or reduce the payment of unemployment benefits to any
1.19applicant;
1.20 (ii) was taken to reduce or avoid any payment required from an employer under
1.21this chapter or section
1.22 (iii) caused an overpayment of unemployment benefits to an applicant.
1.23 The penalty is $500, or 50 percent of the overpaid or reduced unemployment benefits
1.24or payment required, whichever is greater.
2.1(c) The commissioner must penalize an employer if that employer or any employee,
2.2officer, or agent of that employer raises an issue of ineligibility or files an appeal of the
2.3determination or amended determination of benefit account without a good faith belief
2.4that the employee is ineligible for benefits. The penalty is $1,000 or the amount of
2.5unemployment benefits or payment required, whichever is greater.
2.6
2.7refused to honor a subpoena issued under section
2.9fees.
2.10
2.11subject to the same collection procedures that apply to past due taxes. Penalties must be
2.12paid within 30 calendar days of assessment and credited to the contingent account.
2.13
2.14within 20 calendar days after the sending of notice of the penalty to the employer by
2.15mail or electronic transmission. Proceedings on the appeal are conducted in accordance
2.16with section
2.17EFFECTIVE DATE.This section is effective the day following final enactment.
2.18 Sec. 2. Minnesota Statutes 2010, section 268.184, subdivision 2, is amended to read:
2.19 Subd. 2. Criminal penalties. Any employer or any officer or agent of an employer
2.20or any other individual who:
2.21(1) makes a false statement or representation knowing it to be false;
2.22(2) knowingly fails to disclose a material fact, including notification required under
2.23section
2.24(3) raises an issue of ineligibility or files an appeal of the determination or amended
2.25determination of benefit account without a good faith belief that the employee is ineligible
2.26for benefits; or
2.27
2.28(3), to avoid or reduce any payment required from an employer under this chapter or
2.29section
2.30applicant, is guilty of a gross misdemeanor unless the underpayment exceeds $500, in that
2.31case the individual is guilty of a felony.
2.32EFFECTIVE DATE.This section is effective the day following final enactment.
2.33 Sec. 3. Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to read:
3.1 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
3.2trusts, there shall be added to federal taxable income:
3.3 (1)(i) interest income on obligations of any state other than Minnesota or a political
3.4or governmental subdivision, municipality, or governmental agency or instrumentality
3.5of any state other than Minnesota exempt from federal income taxes under the Internal
3.6Revenue Code or any other federal statute; and
3.7 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
3.8Code, except:
3.9(A) the portion of the exempt-interest dividends exempt from state taxation under
3.10the laws of the United States; and
3.11(B) the portion of the exempt-interest dividends derived from interest income
3.12on obligations of the state of Minnesota or its political or governmental subdivisions,
3.13municipalities, governmental agencies or instrumentalities, but only if the portion of the
3.14exempt-interest dividends from such Minnesota sources paid to all shareholders represents
3.1595 percent or more of the exempt-interest dividends, including any dividends exempt
3.16under subitem (A), that are paid by the regulated investment company as defined in section
3.17851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
3.18defined in section 851(g) of the Internal Revenue Code, making the payment; and
3.19 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
3.20government described in section 7871(c) of the Internal Revenue Code shall be treated as
3.21interest income on obligations of the state in which the tribe is located;
3.22 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
3.23or accrued within the taxable year under this chapter and the amount of taxes based on
3.24net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
3.25state or to any province or territory of Canada, to the extent allowed as a deduction
3.26under section 63(d) of the Internal Revenue Code, but the addition may not be more
3.27than the amount by which the itemized deductions as allowed under section 63(d) of
3.28the Internal Revenue Code exceeds the amount of the standard deduction as defined in
3.29section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
3.30sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
3.31this paragraph, the disallowance of itemized deductions under section 68 of the Internal
3.32Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
3.33the last itemized deductions disallowed;
3.34 (3) the capital gain amount of a lump-sum distribution to which the special tax under
3.35section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
4.1 (4) the amount of income taxes paid or accrued within the taxable year under this
4.2chapter and taxes based on net income paid to any other state or any province or territory
4.3of Canada, to the extent allowed as a deduction in determining federal adjusted gross
4.4income. For the purpose of this paragraph, income taxes do not include the taxes imposed
4.5by sections
4.6 (5) the amount of expense, interest, or taxes disallowed pursuant to section
4.8allowed under subdivision 19b, clause (1);
4.9 (6) the amount of a partner's pro rata share of net income which does not flow
4.10through to the partner because the partnership elected to pay the tax on the income under
4.11section 6242(a)(2) of the Internal Revenue Code;
4.12 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
4.13Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
4.14in the taxable year generates a deduction for depreciation under section 168(k) and the
4.15activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
4.16the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
4.17limited to excess of the depreciation claimed by the activity under section 168(k) over the
4.18amount of the loss from the activity that is not allowed in the taxable year. In succeeding
4.19taxable years when the losses not allowed in the taxable year are allowed, the depreciation
4.20under section 168(k) is allowed;
4.21 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
4.22Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
4.23Revenue Code of 1986, as amended through December 31, 2003;
4.24 (9) to the extent deducted in computing federal taxable income, the amount of the
4.25deduction allowable under section 199 of the Internal Revenue Code;
4.26 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
4.27federal subsidies for prescription drug plans;
4.28(11) the amount of expenses disallowed under section 290.10, subdivision 2;
4.29 (12) the amount deducted for qualified tuition and related expenses under section
4.30222 of the Internal Revenue Code, to the extent deducted from gross income;
4.31 (13) the amount deducted for certain expenses of elementary and secondary school
4.32teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
4.33from gross income;
4.34(14) the additional standard deduction for property taxes payable that is allowable
4.35under section 63(c)(1)(C) of the Internal Revenue Code;
5.1(15) the additional standard deduction for qualified motor vehicle sales taxes
5.2allowable under section 63(c)(1)(E) of the Internal Revenue Code;
5.3(16) discharge of indebtedness income resulting from reacquisition of business
5.4indebtedness and deferred under section 108(i) of the Internal Revenue Code;
5.5(17) the amount of unemployment compensation exempt from tax under section
5.685(c) of the Internal Revenue Code
5.7(18) to the extent deducted in computing federal taxable income, any amounts paid
5.8or incurred during the taxable year for the cost of raising the ineligibility or contesting
5.9or appealing the eligibility of a former employee of the taxpayer for unemployment
5.10benefits, including, but not limited to, any amounts for attorney fees and compensation of
5.11employees appropriately allocated to their time spent on the matter, filing fees, witness
5.12fees, research, copying, and similar costs paid or incurred on the matter.
5.13EFFECTIVE DATE.This section is effective for taxable years beginning after
5.14December 31, 2010.
5.15 Sec. 4. Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:
5.16 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
5.17there shall be added to federal taxable income:
5.18 (1) the amount of any deduction taken for federal income tax purposes for income,
5.19excise, or franchise taxes based on net income or related minimum taxes, including but not
5.20limited to the tax imposed under section
5.21another state, a political subdivision of another state, the District of Columbia, or any
5.22foreign country or possession of the United States;
5.23 (2) interest not subject to federal tax upon obligations of: the United States, its
5.24possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
5.25state, any of its political or governmental subdivisions, any of its municipalities, or any
5.26of its governmental agencies or instrumentalities; the District of Columbia; or Indian
5.27tribal governments;
5.28 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
5.29Revenue Code;
5.30 (4) the amount of any net operating loss deduction taken for federal income tax
5.31purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
5.32deduction under section 810 of the Internal Revenue Code;
5.33 (5) the amount of any special deductions taken for federal income tax purposes
5.34under sections 241 to 247 and 965 of the Internal Revenue Code;
6.1 (6) losses from the business of mining, as defined in section
6.2clause (a), that are not subject to Minnesota income tax;
6.3 (7) the amount of any capital losses deducted for federal income tax purposes under
6.4sections 1211 and 1212 of the Internal Revenue Code;
6.5 (8) the exempt foreign trade income of a foreign sales corporation under sections
6.6921(a) and 291 of the Internal Revenue Code;
6.7 (9) the amount of percentage depletion deducted under sections 611 through 614 and
6.8291 of the Internal Revenue Code;
6.9 (10) for certified pollution control facilities placed in service in a taxable year
6.10beginning before December 31, 1986, and for which amortization deductions were elected
6.11under section 169 of the Internal Revenue Code of 1954, as amended through December
6.1231, 1985, the amount of the amortization deduction allowed in computing federal taxable
6.13income for those facilities;
6.14 (11) the amount of any deemed dividend from a foreign operating corporation
6.15determined pursuant to section
6.16shall be reduced by the amount of the addition to income required by clauses (20), (21),
6.17(22), and (23);
6.18 (12) the amount of a partner's pro rata share of net income which does not flow
6.19through to the partner because the partnership elected to pay the tax on the income under
6.20section 6242(a)(2) of the Internal Revenue Code;
6.21 (13) the amount of net income excluded under section 114 of the Internal Revenue
6.22Code;
6.23 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
6.24Revenue Code, for the taxable year when subpart F income is calculated without regard to
6.25the provisions of Division C, title III, section 303(b) of Public Law 110-343;
6.26 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
6.27and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
6.28has an activity that in the taxable year generates a deduction for depreciation under
6.29section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
6.30that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
6.31under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
6.32depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
6.33amount of the loss from the activity that is not allowed in the taxable year. In succeeding
6.34taxable years when the losses not allowed in the taxable year are allowed, the depreciation
6.35under section 168(k)(1)(A) and (k)(4)(A) is allowed;
7.1 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
7.2Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
7.3Revenue Code of 1986, as amended through December 31, 2003;
7.4 (17) to the extent deducted in computing federal taxable income, the amount of the
7.5deduction allowable under section 199 of the Internal Revenue Code;
7.6 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
7.7federal subsidies for prescription drug plans;
7.8 (19) the amount of expenses disallowed under section
7.9 (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
7.10accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
7.11of a corporation that is a member of the taxpayer's unitary business group that qualifies
7.12as a foreign operating corporation. For purposes of this clause, intangible expenses and
7.13costs include:
7.14 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
7.15use, maintenance or management, ownership, sale, exchange, or any other disposition of
7.16intangible property;
7.17 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
7.18transactions;
7.19 (iii) royalty, patent, technical, and copyright fees;
7.20 (iv) licensing fees; and
7.21 (v) other similar expenses and costs.
7.22For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
7.23applications, trade names, trademarks, service marks, copyrights, mask works, trade
7.24secrets, and similar types of intangible assets.
7.25This clause does not apply to any item of interest or intangible expenses or costs paid,
7.26accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
7.27to such item of income to the extent that the income to the foreign operating corporation
7.28is income from sources without the United States as defined in subtitle A, chapter 1,
7.29subchapter N, part 1, of the Internal Revenue Code;
7.30 (21) except as already included in the taxpayer's taxable income pursuant to clause
7.31(20), any interest income and income generated from intangible property received or
7.32accrued by a foreign operating corporation that is a member of the taxpayer's unitary
7.33group. For purposes of this clause, income generated from intangible property includes:
7.34 (i) income related to the direct or indirect acquisition, use, maintenance or
7.35management, ownership, sale, exchange, or any other disposition of intangible property;
7.36 (ii) income from factoring transactions or discounting transactions;
8.1 (iii) royalty, patent, technical, and copyright fees;
8.2 (iv) licensing fees; and
8.3 (v) other similar income.
8.4For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
8.5applications, trade names, trademarks, service marks, copyrights, mask works, trade
8.6secrets, and similar types of intangible assets.
8.7This clause does not apply to any item of interest or intangible income received or accrued
8.8by a foreign operating corporation with respect to such item of income to the extent that
8.9the income is income from sources without the United States as defined in subtitle A,
8.10chapter 1, subchapter N, part 1, of the Internal Revenue Code;
8.11 (22) the dividends attributable to the income of a foreign operating corporation that
8.12is a member of the taxpayer's unitary group in an amount that is equal to the dividends
8.13paid deduction of a real estate investment trust under section 561(a) of the Internal
8.14Revenue Code for amounts paid or accrued by the real estate investment trust to the
8.15foreign operating corporation;
8.16 (23) the income of a foreign operating corporation that is a member of the taxpayer's
8.17unitary group in an amount that is equal to gains derived from the sale of real or personal
8.18property located in the United States;
8.19 (24) the additional amount allowed as a deduction for donation of computer
8.20technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
8.21extent deducted from taxable income;
8.22(25) discharge of indebtedness income resulting from reacquisition of business
8.23indebtedness and deferred under section 108(i) of the Internal Revenue Code
8.24(26) to the extent deducted in computing federal taxable income, any amounts paid
8.25or incurred during the taxable year for the cost of raising the ineligibility or contesting
8.26or appealing the eligibility of a former employee of the taxpayer for unemployment
8.27benefits, including, but not limited to, any amounts for attorney fees and compensation of
8.28employees appropriately allocated to their time spent on the matter, filing fees, witness
8.29fees, research, copying, and similar costs paid or incurred on the matter.
8.30EFFECTIVE DATE.This section is effective for taxable years beginning after
8.31December 31, 2010.
