Bill Text: MN HF1237 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Education subtraction and credit expanded to broadband subscription expenses, and sales tax exemption provided for education-related broadband subscriptions.
Sponsorship: Slight Partisan Bill (Republican 3-1)
Status: (Introduced - Dead) 2012-03-26 - Author added Westrom [HF1237 Detail]
Download: Minnesota-2011-HF1237-Introduced.html
1.2relating to taxation; expanding education subtraction and credit to broadband
1.3subscription expenses; providing a sales tax exemption for education-related
1.4broadband subscriptions;amending Minnesota Statutes 2010, sections 290.01,
1.5subdivision 19b; 290.0674, subdivision 1; 297A.67, subdivision 14.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19b, is amended to
1.8read:
1.9 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
1.10and trusts, there shall be subtracted from federal taxable income:
1.11 (1) net interest income on obligations of any authority, commission, or
1.12instrumentality of the United States to the extent includable in taxable income for federal
1.13income tax purposes but exempt from state income tax under the laws of the United States;
1.14 (2) if included in federal taxable income, the amount of any overpayment of income
1.15tax to Minnesota or to any other state, for any previous taxable year, whether the amount
1.16is received as a refund or as a credit to another taxable year's income tax liability;
1.17 (3) the amount paid to others, less the amount used to claim the credit allowed under
1.18section290.0674 , not to exceed $1,625 for each qualifying child in grades kindergarten to
1.196 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, broadband
1.20subscription expenses, and transportation of each qualifying child in attending an
1.21elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
1.22or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
1.23attendance laws, which is not operated for profit, and which adheres to the provisions of
1.24the Civil Rights Act of 1964 and chapter 363A. For the purposes of this clause, "tuition"
1.25includes fees or tuition as defined in section290.0674, subdivision 1 , clause (1). As used
2.1in this clause, "textbooks" includes books and other instructional materials and equipment
2.2purchased or leased for use in elementary and secondary schools in teaching only those
2.3subjects legally and commonly taught in public elementary and secondary schools in this
2.4state. Equipment expenses qualifying for deduction includes expenses as defined and
2.5limited in section290.0674, subdivision 1 , clause (3). "Textbooks" does not include
2.6instructional books and materials used in the teaching of religious tenets, doctrines, or
2.7worship, the purpose of which is to instill such tenets, doctrines, or worship, nor does it
2.8include books or materials for, or transportation to, extracurricular activities including
2.9sporting events, musical or dramatic events, speech activities, driver's education, or similar
2.10programs. No deduction is permitted for any expense the taxpayer incurred in using the
2.11taxpayer's or the qualifying child's vehicle to provide such transportation for a qualifying
2.12child. For purposes of the subtraction provided by this clause, "qualifying child" has the
2.13meaning given in section 32(c)(3) of the Internal Revenue Code;
2.14 (4) income as provided under section290.0802 ;
2.15 (5) to the extent included in federal adjusted gross income, income realized on
2.16disposition of property exempt from tax under section290.491 ;
2.17 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
2.18of the Internal Revenue Code in determining federal taxable income by an individual
2.19who does not itemize deductions for federal income tax purposes for the taxable year, an
2.20amount equal to 50 percent of the excess of charitable contributions over $500 allowable
2.21as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
2.22under the provisions of Public Law 109-1 and Public Law 111-126;
2.23 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
2.24qualify for a credit under section290.06, subdivision 22 , an amount equal to the carryover
2.25of subnational foreign taxes for the taxable year, but not to exceed the total subnational
2.26foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
2.27"federal foreign tax credit" means the credit allowed under section 27 of the Internal
2.28Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
2.29under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
2.30the extent they exceed the federal foreign tax credit;
2.31 (8) in each of the five tax years immediately following the tax year in which an
2.32addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
2.33of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
2.34of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
2.35the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
2.36subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
3.1positive value of any net operating loss under section 172 of the Internal Revenue Code
3.2generated for the tax year of the addition. The resulting delayed depreciation cannot be
3.3less than zero;
3.4 (9) job opportunity building zone income as provided under section469.316 ;
3.5 (10) to the extent included in federal taxable income, the amount of compensation
3.6paid to members of the Minnesota National Guard or other reserve components of the
3.7United States military for active service performed in Minnesota, excluding compensation
3.8for services performed under the Active Guard Reserve (AGR) program. For purposes of
3.9this clause, "active service" means (i) state active service as defined in section190.05,
3.10subdivision 5a , clause (1); (ii) federally funded state active service as defined in section
3.11190.05, subdivision 5b
; or (iii) federal active service as defined in section
190.05,
3.12subdivision 5c , but "active service" excludes service performed in accordance with section
3.13190.08, subdivision 3
;
3.14 (11) to the extent included in federal taxable income, the amount of compensation
3.15paid to Minnesota residents who are members of the armed forces of the United States or
3.16United Nations for active duty performed outside Minnesota under United States Code,
3.17title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of
3.18the United Nations;
3.19 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
3.20qualified donor's donation, while living, of one or more of the qualified donor's organs
3.21to another person for human organ transplantation. For purposes of this clause, "organ"
3.22means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
3.23"human organ transplantation" means the medical procedure by which transfer of a human
3.24organ is made from the body of one person to the body of another person; "qualified
3.25expenses" means unreimbursed expenses for both the individual and the qualified donor
3.26for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
3.27may be subtracted under this clause only once; and "qualified donor" means the individual
3.28or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
3.29individual may claim the subtraction in this clause for each instance of organ donation for
3.30transplantation during the taxable year in which the qualified expenses occur;
3.31 (13) in each of the five tax years immediately following the tax year in which an
3.32addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
3.33shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
3.34addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
3.35case of a shareholder of a corporation that is an S corporation, minus the positive value of
3.36any net operating loss under section 172 of the Internal Revenue Code generated for the
4.1tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
4.2subtraction is not allowed under this clause;
4.3 (14) to the extent included in federal taxable income, compensation paid to a service
4.4member as defined in United States Code, title 10, section 101(a)(5), for military service
4.5as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2);
4.6 (15) international economic development zone income as provided under section
4.7469.325
;
4.8 (16) to the extent included in federal taxable income, the amount of national service
4.9educational awards received from the National Service Trust under United States Code,
4.10title 42, sections 12601 to 12604, for service in an approved Americorps National Service
4.11program; and
4.12(17) to the extent included in federal taxable income, discharge of indebtedness
4.13income resulting from reacquisition of business indebtedness included in federal taxable
4.14income under section 108(i) of the Internal Revenue Code. This subtraction applies only
4.15to the extent that the income was included in net income in a prior year as a result of the
4.16addition under section290.01, subdivision 19a , clause (16).
4.17EFFECTIVE DATE.This section is effective for taxable years beginning after
4.18December 31, 2010.
4.19 Sec. 2. Minnesota Statutes 2010, section 290.0674, subdivision 1, is amended to read:
4.20 Subdivision 1. Credit allowed. An individual is allowed a credit against the
4.21tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
4.22education-related expenses for a qualifying child in kindergarten through grade 12. For
4.23purposes of this section, "education-related expenses" means:
4.24(1) fees or tuition for instruction by an instructor under section120A.22, subdivision
4.2510 , clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers
4.26Association, and who is not a lineal ancestor or sibling of the dependent for instruction
4.27outside the regular school day or school year, including tutoring, driver's education
4.28offered as part of school curriculum, regardless of whether it is taken from a public or
4.29private entity or summer camps, in grade or age appropriate curricula that supplement
4.30curricula and instruction available during the regular school year, that assists a dependent
4.31to improve knowledge of core curriculum areas or to expand knowledge and skills under
4.32the required academic standards under section120B.021, subdivision 1 , and the elective
4.33standard under section120B.022, subdivision 1 , clause (2), and that do not include the
4.34teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
4.35tenets, doctrines, or worship;
5.1(2) expenses for textbooks, including books and other instructional materials and
5.2equipment purchased or leased for use in elementary and secondary schools in teaching
5.3only those subjects legally and commonly taught in public elementary and secondary
5.4schools in this state. "Textbooks" does not include instructional books and materials
5.5used in the teaching of religious tenets, doctrines, or worship, the purpose of which is
5.6to instill such tenets, doctrines, or worship, nor does it include books or materials for
5.7extracurricular activities including sporting events, musical or dramatic events, speech
5.8activities, driver's education, or similar programs;
5.9(3)a maximum expense of $200 per family expenses for personal computer
5.10hardware, excluding single purpose processors, and educational software and related
5.11broadband subscription services thatassists assist a dependent to improve knowledge of
5.12core curriculum areas or to expand knowledge and skills under the required academic
5.13standards under section120B.021, subdivision 1 , and the elective standard under section
5.14120B.022, subdivision 1
, clause (2), purchased for use in the taxpayer's home and not used
5.15in a trade or business regardless of whether the computer is required by the dependent's
5.16school; and
5.17(4) the amount paid to others for transportation of a qualifying child attending an
5.18elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
5.19or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
5.20attendance laws, which is not operated for profit, and which adheres to the provisions of
5.21the Civil Rights Act of 1964 and chapter 363A.
5.22For purposes of this section, "qualifying child" has the meaning given in section
5.2332(c)(3) of the Internal Revenue Code.
5.24EFFECTIVE DATE.This section is effective for taxable years beginning after
5.25December 31, 2010.
5.26 Sec. 3. Minnesota Statutes 2010, section 297A.67, subdivision 14, is amended to read:
5.27 Subd. 14. Computers and broadband subscription services prescribed for use
5.28by school. Computers and related computer software sold by a school, college, university,
5.29or private career school to students who are enrolled at the institutions or broadband
5.30subscription services are exempt if:
5.31(1) the use of the Internet, a computer, orof a substantially similar model of
5.32computer,and the or related computer software is prescribed by the institution in
5.33conjunction with a course of study; and
6.1(2) each student of the institution, or of a unit of the institution in which the student
6.2is enrolled, is required by the institution to havesuch a computer and, the Internet, or
6.3related software as a condition of enrollment.
6.4For the purposes of this subdivision, "school" and "private career school" have the
6.5meanings given in subdivision 13.
6.6EFFECTIVE DATE.This section is effective for sales and purchases made after
6.7June 30, 2011.
1.3subscription expenses; providing a sales tax exemption for education-related
1.4broadband subscriptions;amending Minnesota Statutes 2010, sections 290.01,
1.5subdivision 19b; 290.0674, subdivision 1; 297A.67, subdivision 14.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19b, is amended to
1.8read:
1.9 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
1.10and trusts, there shall be subtracted from federal taxable income:
1.11 (1) net interest income on obligations of any authority, commission, or
1.12instrumentality of the United States to the extent includable in taxable income for federal
1.13income tax purposes but exempt from state income tax under the laws of the United States;
1.14 (2) if included in federal taxable income, the amount of any overpayment of income
1.15tax to Minnesota or to any other state, for any previous taxable year, whether the amount
1.16is received as a refund or as a credit to another taxable year's income tax liability;
1.17 (3) the amount paid to others, less the amount used to claim the credit allowed under
1.18section
1.196 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, broadband
1.20subscription expenses, and transportation of each qualifying child in attending an
1.21elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
1.22or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
1.23attendance laws, which is not operated for profit, and which adheres to the provisions of
1.24the Civil Rights Act of 1964 and chapter 363A. For the purposes of this clause, "tuition"
1.25includes fees or tuition as defined in section
2.1in this clause, "textbooks" includes books and other instructional materials and equipment
2.2purchased or leased for use in elementary and secondary schools in teaching only those
2.3subjects legally and commonly taught in public elementary and secondary schools in this
2.4state. Equipment expenses qualifying for deduction includes expenses as defined and
2.5limited in section
2.6instructional books and materials used in the teaching of religious tenets, doctrines, or
2.7worship, the purpose of which is to instill such tenets, doctrines, or worship, nor does it
2.8include books or materials for, or transportation to, extracurricular activities including
2.9sporting events, musical or dramatic events, speech activities, driver's education, or similar
2.10programs. No deduction is permitted for any expense the taxpayer incurred in using the
2.11taxpayer's or the qualifying child's vehicle to provide such transportation for a qualifying
2.12child. For purposes of the subtraction provided by this clause, "qualifying child" has the
2.13meaning given in section 32(c)(3) of the Internal Revenue Code;
2.14 (4) income as provided under section
2.15 (5) to the extent included in federal adjusted gross income, income realized on
2.16disposition of property exempt from tax under section
2.17 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
2.18of the Internal Revenue Code in determining federal taxable income by an individual
2.19who does not itemize deductions for federal income tax purposes for the taxable year, an
2.20amount equal to 50 percent of the excess of charitable contributions over $500 allowable
2.21as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
2.22under the provisions of Public Law 109-1 and Public Law 111-126;
2.23 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
2.24qualify for a credit under section
2.25of subnational foreign taxes for the taxable year, but not to exceed the total subnational
2.26foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
2.27"federal foreign tax credit" means the credit allowed under section 27 of the Internal
2.28Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
2.29under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
2.30the extent they exceed the federal foreign tax credit;
2.31 (8) in each of the five tax years immediately following the tax year in which an
2.32addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
2.33of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
2.34of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
2.35the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
2.36subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
3.1positive value of any net operating loss under section 172 of the Internal Revenue Code
3.2generated for the tax year of the addition. The resulting delayed depreciation cannot be
3.3less than zero;
3.4 (9) job opportunity building zone income as provided under section
3.5 (10) to the extent included in federal taxable income, the amount of compensation
3.6paid to members of the Minnesota National Guard or other reserve components of the
3.7United States military for active service performed in Minnesota, excluding compensation
3.8for services performed under the Active Guard Reserve (AGR) program. For purposes of
3.9this clause, "active service" means (i) state active service as defined in section
3.10subdivision 5a
3.12subdivision 5c
3.14 (11) to the extent included in federal taxable income, the amount of compensation
3.15paid to Minnesota residents who are members of the armed forces of the United States or
3.16United Nations for active duty performed outside Minnesota under United States Code,
3.17title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of
3.18the United Nations;
3.19 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
3.20qualified donor's donation, while living, of one or more of the qualified donor's organs
3.21to another person for human organ transplantation. For purposes of this clause, "organ"
3.22means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
3.23"human organ transplantation" means the medical procedure by which transfer of a human
3.24organ is made from the body of one person to the body of another person; "qualified
3.25expenses" means unreimbursed expenses for both the individual and the qualified donor
3.26for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
3.27may be subtracted under this clause only once; and "qualified donor" means the individual
3.28or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
3.29individual may claim the subtraction in this clause for each instance of organ donation for
3.30transplantation during the taxable year in which the qualified expenses occur;
3.31 (13) in each of the five tax years immediately following the tax year in which an
3.32addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
3.33shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
3.34addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
3.35case of a shareholder of a corporation that is an S corporation, minus the positive value of
3.36any net operating loss under section 172 of the Internal Revenue Code generated for the
4.1tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
4.2subtraction is not allowed under this clause;
4.3 (14) to the extent included in federal taxable income, compensation paid to a service
4.4member as defined in United States Code, title 10, section 101(a)(5), for military service
4.5as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2);
4.6 (15) international economic development zone income as provided under section
4.8 (16) to the extent included in federal taxable income, the amount of national service
4.9educational awards received from the National Service Trust under United States Code,
4.10title 42, sections 12601 to 12604, for service in an approved Americorps National Service
4.11program; and
4.12(17) to the extent included in federal taxable income, discharge of indebtedness
4.13income resulting from reacquisition of business indebtedness included in federal taxable
4.14income under section 108(i) of the Internal Revenue Code. This subtraction applies only
4.15to the extent that the income was included in net income in a prior year as a result of the
4.16addition under section
4.17EFFECTIVE DATE.This section is effective for taxable years beginning after
4.18December 31, 2010.
4.19 Sec. 2. Minnesota Statutes 2010, section 290.0674, subdivision 1, is amended to read:
4.20 Subdivision 1. Credit allowed. An individual is allowed a credit against the
4.21tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
4.22education-related expenses for a qualifying child in kindergarten through grade 12. For
4.23purposes of this section, "education-related expenses" means:
4.24(1) fees or tuition for instruction by an instructor under section
4.2510
4.26Association, and who is not a lineal ancestor or sibling of the dependent for instruction
4.27outside the regular school day or school year, including tutoring, driver's education
4.28offered as part of school curriculum, regardless of whether it is taken from a public or
4.29private entity or summer camps, in grade or age appropriate curricula that supplement
4.30curricula and instruction available during the regular school year, that assists a dependent
4.31to improve knowledge of core curriculum areas or to expand knowledge and skills under
4.32the required academic standards under section
4.33standard under section
4.34teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
4.35tenets, doctrines, or worship;
5.1(2) expenses for textbooks, including books and other instructional materials and
5.2equipment purchased or leased for use in elementary and secondary schools in teaching
5.3only those subjects legally and commonly taught in public elementary and secondary
5.4schools in this state. "Textbooks" does not include instructional books and materials
5.5used in the teaching of religious tenets, doctrines, or worship, the purpose of which is
5.6to instill such tenets, doctrines, or worship, nor does it include books or materials for
5.7extracurricular activities including sporting events, musical or dramatic events, speech
5.8activities, driver's education, or similar programs;
5.9(3)
5.10hardware, excluding single purpose processors, and educational software and related
5.11broadband subscription services that
5.12core curriculum areas or to expand knowledge and skills under the required academic
5.13standards under section
5.15in a trade or business regardless of whether the computer is required by the dependent's
5.16school; and
5.17(4) the amount paid to others for transportation of a qualifying child attending an
5.18elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
5.19or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
5.20attendance laws, which is not operated for profit, and which adheres to the provisions of
5.21the Civil Rights Act of 1964 and chapter 363A.
5.22For purposes of this section, "qualifying child" has the meaning given in section
5.2332(c)(3) of the Internal Revenue Code.
5.24EFFECTIVE DATE.This section is effective for taxable years beginning after
5.25December 31, 2010.
5.26 Sec. 3. Minnesota Statutes 2010, section 297A.67, subdivision 14, is amended to read:
5.27 Subd. 14. Computers and broadband subscription services prescribed for use
5.28by school. Computers and related computer software sold by a school, college, university,
5.29or private career school to students who are enrolled at the institutions or broadband
5.30subscription services are exempt if:
5.31(1) the use of the Internet, a computer, or
5.32computer,
5.33conjunction with a course of study; and
6.1(2) each student of the institution, or of a unit of the institution in which the student
6.2is enrolled, is required by the institution to have
6.3related software as a condition of enrollment.
6.4For the purposes of this subdivision, "school" and "private career school" have the
6.5meanings given in subdivision 13.
6.6EFFECTIVE DATE.This section is effective for sales and purchases made after
6.7June 30, 2011.
