Bill Text: MN HF2277 | 2011-2012 | 87th Legislature | Introduced
Bill Title: New jobs tax credit established, corporate franchise and sales and use taxes changes made, and money appropriated.
Sponsorship: Partisan Bill (Democrat 7)
Status: (Introduced - Dead) 2012-04-16 - Author added Allen [HF2277 Detail]
Download: Minnesota-2011-HF2277-Introduced.html
1.2relating to taxation; establishing a new jobs now tax credit; appropriating money;
1.3making changes to corporate franchise and sales and use taxes;amending
1.4Minnesota Statutes 2010, sections 290.01, subdivision 19d; 290.17, subdivision
1.54; 290.21, subdivision 4; 297A.66, by adding a subdivision; proposing coding
1.6for new law in Minnesota Statutes, chapter 290.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.10 Section 1. [290.0693] JOBS NOW TAX CREDIT.
1.11 Subdivision 1. Credit for new full-time employees. (a) A qualified employer who
1.12is required to file a return under section 289A.08, subdivision 1, 2, or 3, is allowed a
1.13credit against the tax imposed by this chapter for the net increase in qualified full-time
1.14employees.
1.15(b)(1) For hiring qualified full-time employees after March 30, 2012, but before
1.16January 1, 2013, the credit is equal to $3,000 times the net increase in full-time employees.
1.17The net increase in full-time employees is the difference between:
1.18(i) the total number of full-time employees employed by the employer on December
1.1931, 2011; and
1.20(ii) the number of full-time employees employed by the employer on December
1.2131, 2012.
1.22The net increase in full-time employees cannot exceed the number of qualified full-time
1.23employees hired after March 31, 2012, but before January 1, 2013.
2.1(2) For hiring qualified full-time employees after December 31, 2012, but before
2.2July 1, 2013, the credit is equal to $1,500 times the net increase in full-time employees.
2.3The net increase in full-time employees is the difference between:
2.4(i) the total number of full-time employees employed by the taxpayer on December
2.531, 2011; and
2.6(ii) the number of full-time employees employed by the taxpayer on December
2.731, 2013.
2.8The net increase in full-time employees cannot exceed the number of qualified full-time
2.9employees hired after December 31, 2012, but before July 1, 2013.
2.10(c) The credit may be claimed in the taxable year in which the qualified full-time
2.11employee completes 12 consecutive months of continuous service as a full-time employee
2.12of the qualified employer.
2.13(d) The maximum aggregate credits allowed to a qualified employer under this
2.14section for all taxable years is $50,000.
2.15(e) For members of a unitary business whose income and factors are included on a
2.16combined income report under section 289A.08, subdivision 3, the number of full-time
2.17employees and the maximum allowable credit are not determined at the individual
2.18member level but are instead determined at the group level.
2.19 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
2.20the meanings given.
2.21(b)(1) "Full-time employee" means an employee as defined in section 290.92,
2.22subdivision 1 who meets the following criteria:
2.23(i) the employee is paid wages as defined in section 290.92, subdivision 1, for at
2.24least 1,820 hours during the 12-month period that starts on the date of hire;
2.25(ii) the employee's wages are attributable to Minnesota under section 290.191,
2.26subdivision 12;
2.27(iii) the employee performs services for the employer in at least 50 weeks during the
2.2812-month period that starts on the date of hire; and
2.29(iv) the employee's total compensation, including benefits not mandated by law, is at
2.30least $25,000 for the 12-month period that starts on the date of hire.
2.31(2) "Full-time employee" does not include:
2.32(i) any employee who bears any of the relationships described in subparagraphs (A)
2.33to (G) of section 152(d)(2) of the Internal Revenue Code to the employer;
2.34(ii) if the employer is a corporation, any employee who owns, directly or indirectly,
2.35more than 50 percent in value of the outstanding stock of the corporation, or if the
2.36employer is an entity other than a corporation, an employee who owns, directly or
3.1indirectly, more than 50 percent of the capital and profits interests in the entity, as
3.2determined with the application of section 267(c) of the Internal Revenue Code; or
3.3(iii) if the employer is an estate or trust, any employee who is a fiduciary of the estate
3.4or trust, or is an individual who bears any of the relationships described in subparagraphs
3.5(A) to (G) of section 152(d)(2) of the Internal Revenue Code to a grantor, beneficiary,
3.6or fiduciary of the estate or trust.
3.7(c) "Qualified employer" means an employer that:
3.8(1) employed a total of five or more full-time employees on December 31, 2011; and
3.9(2) hired one or more qualified full-time employees after March 31, 2012.
3.10(d) "Qualified full-time employee" means a full-time employee who:
3.11(1) has completed 12 consecutive months of service as a full-time employee for a
3.12qualified employer;
3.13(2) is a:
3.14(i) qualified unemployed veteran;
3.15(ii) qualified unemployed recent graduate; or
3.16(iii) qualified unemployed job seeker; and
3.17(3) is a resident of Minnesota on the date of hire.
3.18(e) "Qualified unemployed veteran" is a person who:
3.19(1) was in active military service in a designated area after September 11, 2001,
3.20as defined in section 290.0677;
3.21(2) was discharged or released from active duty at any time during the five-year
3.22period prior to the date of hire;
3.23(3) received unemployment compensation under state or federal law for not less than
3.24four weeks during the one-year period prior to the date of hire; and
3.25(4) was unemployed on the date of hire.
3.26(f) "Qualified unemployed graduate" is a person who:
3.27(1) in 2011 was awarded a diploma, degree, or certificate of completion for
3.28graduating from high school, or a certificate, associate, or baccalaureate undergraduate
3.29degree from an institution that meets the eligibility requirements under section 136A.155;
3.30and
3.31(2) had not had a full-time job after receiving or being awarded the degree or
3.32certificate until the date of hire.
3.33(g) "Qualified unemployed job seeker" means a person who on the date of hire:
3.34(1) has been receiving unemployment compensation for at least three months; or
3.35(2) had exhausted eligibility for unemployment compensation benefits and had not
3.36had an intervening full-time job.
4.1(h) "Date of hire" means the day that the qualified full-time employee begins
4.2performing services as an employee for the qualified employer.
4.3(i) "Construction trades employer" means a person carrying on a trade or business
4.4described in industry code numbers 23 through 238990 of the North American Industry
4.5Classification System.
4.6 Subd. 3. Allocation of credits. (a) By July 1, 2012, the commissioner shall develop
4.7an Internet application that allows employers to apply for tentative credits. The application
4.8must include the employer's name, tax identification number, and North American
4.9Industry Classification System industry code, the name and date of hire of the employee,
4.10and whether the employee is a veteran, recent graduate, or long-term unemployed person.
4.11(b) The credit is available only to employers who apply for a tentative credit using
4.12the application in paragraph (a) and who receive notice that their application has been
4.13approved for a tentative credit.
4.14(c) Employers may apply for a tentative credit no earlier than the date of hire of
4.15each qualified full-time employee. Any employer may file more than one tentative credit
4.16application, but no employer may apply for tentative credits for more than a total of 16
4.17employees hired in 2012 or 33 employees hired in 2013.
4.18(d) The commissioner shall approve applications seeking tentative credits for the
4.19first 14,000 full-time employees based on the order in which the applications are received.
4.20(e) The commissioner must promptly notify employers if they are eligible for a
4.21tentative credit. The notice must state that the employer is eligible for a credit only after
4.22the employee named in the application has worked for 12 consecutive months and all other
4.23conditions of eligibility are met.
4.24(f) The commissioner shall promptly publish public notice when all 14,000 tentative
4.25credits have been applied for.
4.26 Subd. 4. Tentative credits for construction trades employers. (a) Any
4.27construction trades employer may apply for a tentative credit.
4.28(b) To remain eligible for a credit, a construction trades employer who has received
4.29a tentative credit must renew the tentative credit by filing an application with the
4.30commissioner no earlier than 180 days after date of hire and no more than 210 days after
4.31date of hire. The renewal notice must state that the employee for whom the tentative credit
4.32was originally granted is still an employee and that the employer reasonably believes that
4.33all qualifications of eligibility for a credit will be met.
4.34(c) Any tentative credit issued to a construction trades employer that is not renewed
4.35within the time required for renewal is canceled. Any canceled tentative credits are
4.36available to be reissued by the commissioner to employers under subdivision 3.
5.1 Subd. 5. Flow-through entities. Credits granted to a partnership, limited liability
5.2company taxed as a partnership, S corporation, or multiple owners of a business are passed
5.3through to the partners, members, shareholders, or owners, respectively, pro rata to each
5.4partner, member, shareholder, or owner based on their share of the entity's assets or as
5.5specially allocated in their organizational documents, as of the last day of the taxable year.
5.6 Subd. 6. Refundable. If the amount of the credit allowed under this section exceeds
5.7the liability for tax under this chapter, the commissioner shall refund the excess to the
5.8taxpayer.
5.9 Subd. 7. Appropriation. An amount sufficient to pay the refunds authorized by this
5.10section is appropriated to the commissioner from the general fund.
5.11EFFECTIVE DATE.This section is effective the day following final enactment.
5.14 Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19d, is amended to
5.15read:
5.16 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
5.17corporations, there shall be subtracted from federal taxable income after the increases
5.18provided in subdivision 19c:
5.19 (1) the amount of foreign dividend gross-up added to gross income for federal
5.20income tax purposes under section 78 of the Internal Revenue Code;
5.21 (2) the amount of salary expense not allowed for federal income tax purposes due to
5.22claiming the work opportunity credit under section 51 of the Internal Revenue Code;
5.23 (3) any dividend (not including any distribution in liquidation) paid within the
5.24taxable year by a national or state bank to the United States, or to any instrumentality of
5.25the United States exempt from federal income taxes, on the preferred stock of the bank
5.26owned by the United States or the instrumentality;
5.27 (4) amounts disallowed for intangible drilling costs due to differences between
5.28this chapter and the Internal Revenue Code in taxable years beginning before January
5.291, 1987, as follows:
5.30 (i) to the extent the disallowed costs are represented by physical property, an amount
5.31equal to the allowance for depreciation under Minnesota Statutes 1986, section290.09,
5.32subdivision 7 , subject to the modifications contained in subdivision 19e; and
6.1 (ii) to the extent the disallowed costs are not represented by physical property, an
6.2amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
6.3290.09, subdivision 8
;
6.4 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
6.5Internal Revenue Code, except that:
6.6 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
6.7capital loss carrybacks shall not be allowed;
6.8 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
6.9a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
6.10allowed;
6.11 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
6.12capital loss carryback to each of the three taxable years preceding the loss year, subject to
6.13the provisions of Minnesota Statutes 1986, section290.16 , shall be allowed; and
6.14 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
6.15a capital loss carryover to each of the five taxable years succeeding the loss year to the
6.16extent such loss was not used in a prior taxable year and subject to the provisions of
6.17Minnesota Statutes 1986, section290.16 , shall be allowed;
6.18 (6) an amount for interest and expenses relating to income not taxable for federal
6.19income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
6.20expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
6.21291 of the Internal Revenue Code in computing federal taxable income;
6.22 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
6.23which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
6.24reasonable allowance for depletion based on actual cost. In the case of leases the deduction
6.25must be apportioned between the lessor and lessee in accordance with rules prescribed
6.26by the commissioner. In the case of property held in trust, the allowable deduction must
6.27be apportioned between the income beneficiaries and the trustee in accordance with the
6.28pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
6.29of the trust's income allocable to each;
6.30 (8) for certified pollution control facilities placed in service in a taxable year
6.31beginning before December 31, 1986, and for which amortization deductions were elected
6.32under section 169 of the Internal Revenue Code of 1954, as amended through December
6.3331, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
6.341986, section290.09, subdivision 7 ;
6.35 (9) amounts included in federal taxable income that are due to refunds of income,
6.36excise, or franchise taxes based on net income or related minimum taxes paid by the
7.1corporation to Minnesota, another state, a political subdivision of another state, the
7.2District of Columbia, or a foreign country or possession of the United States to the extent
7.3that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
7.4clause (1), in a prior taxable year;
7.5 (10)80 70 percent of royalties, fees, or other like income accrued or received from a
7.6foreign operating corporation or a foreign corporation which is part of the same unitary
7.7business as the receiving corporation, unless the income resulting from such payments or
7.8accruals is income from sources within the United States as defined in subtitle A, chapter
7.91, subchapter N, part 1, of the Internal Revenue Code;
7.10 (11) income or gains from the business of mining as defined in section290.05,
7.11subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
7.12 (12) the amount of disability access expenditures in the taxable year which are not
7.13allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
7.14 (13) the amount of qualified research expenses not allowed for federal income tax
7.15purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
7.16the amount exceeds the amount of the credit allowed under section290.068 ;
7.17 (14) the amount of salary expenses not allowed for federal income tax purposes due
7.18to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
7.19Code;
7.20 (15) for a corporation whose foreign sales corporation, as defined in section 922
7.21of the Internal Revenue Code, constituted a foreign operating corporation during any
7.22taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
7.23claiming the deduction under section290.21, subdivision 4 , paragraph (c), for income
7.24received from the foreign operating corporation, an amount equal to1.23 multiplied by the
7.25amount of income excluded under section 114 of the Internal Revenue Code, provided
7.26the income is not income of a foreign operating company;
7.27 (16) any decrease in subpart F income, as defined in section 952(a) of the Internal
7.28Revenue Code, for the taxable year when subpart F income is calculated without regard to
7.29the provisions of Division C, title III, section 303(b) of Public Law 110-343;
7.30 (17) in each of the five tax years immediately following the tax year in which an
7.31addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
7.32the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
7.33amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
7.34resulting delayed depreciation cannot be less than zero;
8.1 (18) in each of the five tax years immediately following the tax year in which an
8.2addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
8.3the amount of the addition; and
8.4(19) to the extent included in federal taxable income, discharge of indebtedness
8.5income resulting from reacquisition of business indebtedness included in federal taxable
8.6income under section 108(i) of the Internal Revenue Code. This subtraction applies only
8.7to the extent that the income was included in net income in a prior year as a result of the
8.8addition under section 290.01, subdivision 19c, clause (25).
8.9EFFECTIVE DATE.This section is effective for taxable years beginning after
8.10December 31, 2011.
8.11 Sec. 2. Minnesota Statutes 2010, section 290.17, subdivision 4, is amended to read:
8.12 Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
8.13within this state or partly within and partly without this state is part of a unitary business,
8.14the entire income of the unitary business is subject to apportionment pursuant to section
8.15290.191
. Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
8.16business is considered to be derived from any particular source and none may be allocated
8.17to a particular place except as provided by the applicable apportionment formula. The
8.18provisions of this subdivision do not apply to business income subject to subdivision 5,
8.19income of an insurance company, or income of an investment company determined under
8.20section290.36 .
8.21(b) The term "unitary business" means business activities or operations which
8.22result in a flow of value between them. The term may be applied within a single legal
8.23entity or between multiple entities and without regard to whether each entity is a sole
8.24proprietorship, a corporation, a partnership or a trust.
8.25(c) Unity is presumed whenever there is unity of ownership, operation, and use,
8.26evidenced by centralized management or executive force, centralized purchasing,
8.27advertising, accounting, or other controlled interaction, but the absence of these
8.28centralized activities will not necessarily evidence a nonunitary business. Unity is also
8.29presumed when business activities or operations are of mutual benefit, dependent upon or
8.30contributory to one another, either individually or as a group.
8.31(d) Where a business operation conducted in Minnesota is owned by a business
8.32entity that carries on business activity outside the state different in kind from that
8.33conducted within this state, and the other business is conducted entirely outside the state, it
8.34is presumed that the two business operations are unitary in nature, interrelated, connected,
8.35and interdependent unless it can be shown to the contrary.
9.1(e) Unity of ownership is not deemed to exist when a corporation is involved unless
9.2that corporation is a member of a group of two or more business entities and more than 50
9.3percent of the voting stock of each member of the group is directly or indirectly owned
9.4by a common owner or by common owners, either corporate or noncorporate, or by one
9.5or more of the member corporations of the group. For this purpose, the term "voting
9.6stock" shall include membership interests of mutual insurance holding companies formed
9.7under section66A.40 .
9.8(f) The net income and apportionment factors under section290.191 or
290.20 of
9.9foreign corporations and other foreign entities which are part of a unitary business shall
9.10not be included in the net income or the apportionment factors of the unitary business.
9.11A foreign corporation or other foreign entity which is required to file a return under this
9.12chapter shall file on a separate return basis. The net income and apportionment factors
9.13under section290.191 or
290.20 of foreign operating corporations shall not be included in
9.14the net income or the apportionment factors of the unitary business except as provided in
9.15paragraph (g).
9.16(g) The adjusted net income of a foreign operating corporation shall be deemed to
9.17be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
9.18proportion to each shareholder's ownership, with which such corporation is engaged in
9.19a unitary business. Such deemed dividend shall be treated as a dividend under section
9.20290.21, subdivision 4, paragraph (c)
.
9.21Dividends actually paid by a foreign operating corporation to a corporate shareholder
9.22which is a member of the same unitary business as the foreign operating corporation shall
9.23be eliminated from the net income of the unitary business in preparing a combined report
9.24for the unitary business. The adjusted net income of a foreign operating corporation
9.25shall be its net income adjusted as follows:
9.26(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
9.27Rico, or a United States possession or political subdivision of any of the foregoing shall
9.28be a deduction; and
9.29(2) the subtraction from federal taxable income for payments received from foreign
9.30corporations or foreign operating corporations under section290.01, subdivision 19d ,
9.31clause (10), shall not be allowed.
9.32If a foreign operating corporation incurs a net loss, neither income nor deduction
9.33from that corporation shall be included in determining the net income of the unitary
9.34business.
9.35(h) For purposes of determining the net income of a unitary business and the factors
9.36to be used in the apportionment of net income pursuant to section290.191 or
290.20 , there
10.1must be included only the income and apportionment factors of domestic corporations or
10.2other domestic entities other than foreign operating corporations that are determined to
10.3be part of the unitary business pursuant to this subdivision, notwithstanding that foreign
10.4corporations or other foreign entities might be included in the unitary business.
10.5(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter
10.6that are connected with or allocable against dividends, deemed dividends described
10.7in paragraph (g), or royalties, fees, or other like income described in section290.01,
10.8subdivision 19d , clause (10), shall not be disallowed.
10.9(j) Each corporation or other entity, except a sole proprietorship, that is part of a
10.10unitary business must file combined reports as the commissioner determines. On the
10.11reports, all intercompany transactions between entities included pursuant to paragraph
10.12(h) must be eliminated and the entire net income of the unitary business determined in
10.13accordance with this subdivision is apportioned among the entities by using each entity's
10.14Minnesota factors for apportionment purposes in the numerators of the apportionment
10.15formula and the total factors for apportionment purposes of all entities included pursuant
10.16to paragraph (h) in the denominators of the apportionment formula.
10.17(k) If a corporation has been divested from a unitary business and is included in a
10.18combined report for a fractional part of the common accounting period of the combined
10.19report:
10.20(1) its income includable in the combined report is its income incurred for that part
10.21of the year determined by proration or separate accounting; and
10.22(2) its sales, property, and payroll included in the apportionment formula must
10.23be prorated or accounted for separately.
10.24EFFECTIVE DATE.This section is effective for taxable years beginning after
10.25December 31, 2011.
10.26 Sec. 3. Minnesota Statutes 2010, section 290.21, subdivision 4, is amended to read:
10.27 Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
10.28of dividends received by a corporation during the taxable year from another corporation,
10.29in which the recipient owns 20 percent or more of the stock, by vote and value, not
10.30including stock described in section 1504(a)(4) of the Internal Revenue Code when the
10.31corporate stock with respect to which dividends are paid does not constitute the stock in
10.32trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
10.33constitute property held by the taxpayer primarily for sale to customers in the ordinary
10.34course of the taxpayer's trade or business, or when the trade or business of the taxpayer
11.1does not consist principally of the holding of the stocks and the collection of the income
11.2and gains therefrom; and
11.3 (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
11.4an affiliated company transferred in an overall plan of reorganization and the dividend
11.5is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
11.6amended through December 31, 1989;
11.7 (ii) the remaining 20 percent of dividends if the dividends are received from a
11.8corporation which is subject to tax under section290.36 and which is a member of an
11.9affiliated group of corporations as defined by the Internal Revenue Code and the dividend
11.10is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
11.11amended through December 31, 1989, or is deducted under an election under section
11.12243(b) of the Internal Revenue Code; or
11.13 (iii) the remaining 20 percent of the dividends if the dividends are received from a
11.14property and casualty insurer as defined under section60A.60, subdivision 8 , which is a
11.15member of an affiliated group of corporations as defined by the Internal Revenue Code
11.16and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
11.171.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
11.18under an election under section 243(b) of the Internal Revenue Code.
11.19 (b) Seventy percent of dividends received by a corporation during the taxable year
11.20from another corporation in which the recipient owns less than 20 percent of the stock,
11.21by vote or value, not including stock described in section 1504(a)(4) of the Internal
11.22Revenue Code when the corporate stock with respect to which dividends are paid does not
11.23constitute the stock in trade of the taxpayer, or does not constitute property held by the
11.24taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
11.25business, or when the trade or business of the taxpayer does not consist principally of the
11.26holding of the stocks and the collection of income and gain therefrom.
11.27(c) 70 percent of dividends deemed to be paid from a foreign operating corporation
11.28under section 290.17, subdivision 4, paragraph (g).
11.29(c) (d) The dividend deduction provided in this subdivision shall be allowed only
11.30with respect to dividends that are included in a corporation's Minnesota taxable net
11.31income for the taxable year.
11.32 The dividend deduction provided in this subdivision does not apply to a dividend
11.33from a corporation which, for the taxable year of the corporation in which the distribution
11.34is made or for the next preceding taxable year of the corporation, is a corporation exempt
11.35from tax under section 501 of the Internal Revenue Code.
12.1 The dividend deduction provided in this subdivision applies to the amount of
12.2regulated investment company dividends only to the extent determined under section
12.3854(b) of the Internal Revenue Code.
12.4 The dividend deduction provided in this subdivision shall not be allowed with
12.5respect to any dividend for which a deduction is not allowed under the provisions of
12.6section 246(c) of the Internal Revenue Code.
12.7(d) (e) If dividends received by a corporation that does not have nexus with
12.8Minnesota under the provisions of Public Law 86-272 are included as income on the return
12.9of an affiliated corporation permitted or required to file a combined report under section
12.10290.17, subdivision 4
, or
290.34, subdivision 2 , then for purposes of this subdivision the
12.11determination as to whether the trade or business of the corporation consists principally
12.12of the holding of stocks and the collection of income and gains therefrom shall be made
12.13with reference to the trade or business of the affiliated corporation having a nexus with
12.14Minnesota.
12.15(e) (f) The deduction provided by this subdivision does not apply if the dividends are
12.16paid by a FSC as defined in section 922 of the Internal Revenue Code.
12.17(f) (g) If one or more of the members of the unitary group whose income is included
12.18on the combined report received a dividend, the deduction under this subdivision for
12.19each member of the unitary business required to file a return under this chapter is the
12.20product of: (1) 100 percent of the dividends received by members of the group; (2) the
12.21percentage allowed pursuant to paragraph (a)or, (b), or (c); and (3) the percentage of the
12.22taxpayer's business income apportionable to this state for the taxable year under section
12.23290.191
or
290.20 .
12.24EFFECTIVE DATE.This section is effective for taxable years beginning after
12.25December 31, 2011.
12.28 Section 1. Minnesota Statutes 2010, section 297A.66, is amended by adding a
12.29subdivision to read:
12.30 Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
12.31means a person, whether an independent contractor or other representative, who directly
12.32or indirectly solicits business for the retailer.
12.33(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
12.34with a resident under which the resident, for a commission or other consideration, directly
13.1or indirectly refers potential customers, whether by a link on an Internet Web site, or
13.2otherwise, to the seller. This paragraph only applies if the total gross receipts from
13.3sales to customers located in this state who were referred to the retailer by all residents
13.4with this type of agreement with the retailer are at least $10,000 in the 12-month period
13.5ending on the last day of the most recent calendar quarter before the calendar quarter in
13.6which the sale is made.
13.7(c) The presumption under paragraph (a) may be rebutted by proof that the resident
13.8with whom the retailer has an agreement did not engage in any solicitation in this state
13.9on behalf of the retailer that would satisfy the nexus requirements of the United States
13.10Constitution during the 12-month period in question. Nothing in this section shall be
13.11construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
13.12representative for purposes of subdivision 1, paragraph (a).
13.13(d) For purposes of this paragraph, "resident" includes an individual who is a
13.14resident of this state, as defined in section 290.01, or a business that owns tangible
13.15personal property located in this state or has one or more employees providing services
13.16for it in this state.
13.17EFFECTIVE DATE.This section is effective for sales and purchases made after
13.18June 30, 2012.
1.3making changes to corporate franchise and sales and use taxes;amending
1.4Minnesota Statutes 2010, sections 290.01, subdivision 19d; 290.17, subdivision
1.54; 290.21, subdivision 4; 297A.66, by adding a subdivision; proposing coding
1.6for new law in Minnesota Statutes, chapter 290.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.10 Section 1. [290.0693] JOBS NOW TAX CREDIT.
1.11 Subdivision 1. Credit for new full-time employees. (a) A qualified employer who
1.12is required to file a return under section 289A.08, subdivision 1, 2, or 3, is allowed a
1.13credit against the tax imposed by this chapter for the net increase in qualified full-time
1.14employees.
1.15(b)(1) For hiring qualified full-time employees after March 30, 2012, but before
1.16January 1, 2013, the credit is equal to $3,000 times the net increase in full-time employees.
1.17The net increase in full-time employees is the difference between:
1.18(i) the total number of full-time employees employed by the employer on December
1.1931, 2011; and
1.20(ii) the number of full-time employees employed by the employer on December
1.2131, 2012.
1.22The net increase in full-time employees cannot exceed the number of qualified full-time
1.23employees hired after March 31, 2012, but before January 1, 2013.
2.1(2) For hiring qualified full-time employees after December 31, 2012, but before
2.2July 1, 2013, the credit is equal to $1,500 times the net increase in full-time employees.
2.3The net increase in full-time employees is the difference between:
2.4(i) the total number of full-time employees employed by the taxpayer on December
2.531, 2011; and
2.6(ii) the number of full-time employees employed by the taxpayer on December
2.731, 2013.
2.8The net increase in full-time employees cannot exceed the number of qualified full-time
2.9employees hired after December 31, 2012, but before July 1, 2013.
2.10(c) The credit may be claimed in the taxable year in which the qualified full-time
2.11employee completes 12 consecutive months of continuous service as a full-time employee
2.12of the qualified employer.
2.13(d) The maximum aggregate credits allowed to a qualified employer under this
2.14section for all taxable years is $50,000.
2.15(e) For members of a unitary business whose income and factors are included on a
2.16combined income report under section 289A.08, subdivision 3, the number of full-time
2.17employees and the maximum allowable credit are not determined at the individual
2.18member level but are instead determined at the group level.
2.19 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
2.20the meanings given.
2.21(b)(1) "Full-time employee" means an employee as defined in section 290.92,
2.22subdivision 1 who meets the following criteria:
2.23(i) the employee is paid wages as defined in section 290.92, subdivision 1, for at
2.24least 1,820 hours during the 12-month period that starts on the date of hire;
2.25(ii) the employee's wages are attributable to Minnesota under section 290.191,
2.26subdivision 12;
2.27(iii) the employee performs services for the employer in at least 50 weeks during the
2.2812-month period that starts on the date of hire; and
2.29(iv) the employee's total compensation, including benefits not mandated by law, is at
2.30least $25,000 for the 12-month period that starts on the date of hire.
2.31(2) "Full-time employee" does not include:
2.32(i) any employee who bears any of the relationships described in subparagraphs (A)
2.33to (G) of section 152(d)(2) of the Internal Revenue Code to the employer;
2.34(ii) if the employer is a corporation, any employee who owns, directly or indirectly,
2.35more than 50 percent in value of the outstanding stock of the corporation, or if the
2.36employer is an entity other than a corporation, an employee who owns, directly or
3.1indirectly, more than 50 percent of the capital and profits interests in the entity, as
3.2determined with the application of section 267(c) of the Internal Revenue Code; or
3.3(iii) if the employer is an estate or trust, any employee who is a fiduciary of the estate
3.4or trust, or is an individual who bears any of the relationships described in subparagraphs
3.5(A) to (G) of section 152(d)(2) of the Internal Revenue Code to a grantor, beneficiary,
3.6or fiduciary of the estate or trust.
3.7(c) "Qualified employer" means an employer that:
3.8(1) employed a total of five or more full-time employees on December 31, 2011; and
3.9(2) hired one or more qualified full-time employees after March 31, 2012.
3.10(d) "Qualified full-time employee" means a full-time employee who:
3.11(1) has completed 12 consecutive months of service as a full-time employee for a
3.12qualified employer;
3.13(2) is a:
3.14(i) qualified unemployed veteran;
3.15(ii) qualified unemployed recent graduate; or
3.16(iii) qualified unemployed job seeker; and
3.17(3) is a resident of Minnesota on the date of hire.
3.18(e) "Qualified unemployed veteran" is a person who:
3.19(1) was in active military service in a designated area after September 11, 2001,
3.20as defined in section 290.0677;
3.21(2) was discharged or released from active duty at any time during the five-year
3.22period prior to the date of hire;
3.23(3) received unemployment compensation under state or federal law for not less than
3.24four weeks during the one-year period prior to the date of hire; and
3.25(4) was unemployed on the date of hire.
3.26(f) "Qualified unemployed graduate" is a person who:
3.27(1) in 2011 was awarded a diploma, degree, or certificate of completion for
3.28graduating from high school, or a certificate, associate, or baccalaureate undergraduate
3.29degree from an institution that meets the eligibility requirements under section 136A.155;
3.30and
3.31(2) had not had a full-time job after receiving or being awarded the degree or
3.32certificate until the date of hire.
3.33(g) "Qualified unemployed job seeker" means a person who on the date of hire:
3.34(1) has been receiving unemployment compensation for at least three months; or
3.35(2) had exhausted eligibility for unemployment compensation benefits and had not
3.36had an intervening full-time job.
4.1(h) "Date of hire" means the day that the qualified full-time employee begins
4.2performing services as an employee for the qualified employer.
4.3(i) "Construction trades employer" means a person carrying on a trade or business
4.4described in industry code numbers 23 through 238990 of the North American Industry
4.5Classification System.
4.6 Subd. 3. Allocation of credits. (a) By July 1, 2012, the commissioner shall develop
4.7an Internet application that allows employers to apply for tentative credits. The application
4.8must include the employer's name, tax identification number, and North American
4.9Industry Classification System industry code, the name and date of hire of the employee,
4.10and whether the employee is a veteran, recent graduate, or long-term unemployed person.
4.11(b) The credit is available only to employers who apply for a tentative credit using
4.12the application in paragraph (a) and who receive notice that their application has been
4.13approved for a tentative credit.
4.14(c) Employers may apply for a tentative credit no earlier than the date of hire of
4.15each qualified full-time employee. Any employer may file more than one tentative credit
4.16application, but no employer may apply for tentative credits for more than a total of 16
4.17employees hired in 2012 or 33 employees hired in 2013.
4.18(d) The commissioner shall approve applications seeking tentative credits for the
4.19first 14,000 full-time employees based on the order in which the applications are received.
4.20(e) The commissioner must promptly notify employers if they are eligible for a
4.21tentative credit. The notice must state that the employer is eligible for a credit only after
4.22the employee named in the application has worked for 12 consecutive months and all other
4.23conditions of eligibility are met.
4.24(f) The commissioner shall promptly publish public notice when all 14,000 tentative
4.25credits have been applied for.
4.26 Subd. 4. Tentative credits for construction trades employers. (a) Any
4.27construction trades employer may apply for a tentative credit.
4.28(b) To remain eligible for a credit, a construction trades employer who has received
4.29a tentative credit must renew the tentative credit by filing an application with the
4.30commissioner no earlier than 180 days after date of hire and no more than 210 days after
4.31date of hire. The renewal notice must state that the employee for whom the tentative credit
4.32was originally granted is still an employee and that the employer reasonably believes that
4.33all qualifications of eligibility for a credit will be met.
4.34(c) Any tentative credit issued to a construction trades employer that is not renewed
4.35within the time required for renewal is canceled. Any canceled tentative credits are
4.36available to be reissued by the commissioner to employers under subdivision 3.
5.1 Subd. 5. Flow-through entities. Credits granted to a partnership, limited liability
5.2company taxed as a partnership, S corporation, or multiple owners of a business are passed
5.3through to the partners, members, shareholders, or owners, respectively, pro rata to each
5.4partner, member, shareholder, or owner based on their share of the entity's assets or as
5.5specially allocated in their organizational documents, as of the last day of the taxable year.
5.6 Subd. 6. Refundable. If the amount of the credit allowed under this section exceeds
5.7the liability for tax under this chapter, the commissioner shall refund the excess to the
5.8taxpayer.
5.9 Subd. 7. Appropriation. An amount sufficient to pay the refunds authorized by this
5.10section is appropriated to the commissioner from the general fund.
5.11EFFECTIVE DATE.This section is effective the day following final enactment.
5.14 Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19d, is amended to
5.15read:
5.16 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
5.17corporations, there shall be subtracted from federal taxable income after the increases
5.18provided in subdivision 19c:
5.19 (1) the amount of foreign dividend gross-up added to gross income for federal
5.20income tax purposes under section 78 of the Internal Revenue Code;
5.21 (2) the amount of salary expense not allowed for federal income tax purposes due to
5.22claiming the work opportunity credit under section 51 of the Internal Revenue Code;
5.23 (3) any dividend (not including any distribution in liquidation) paid within the
5.24taxable year by a national or state bank to the United States, or to any instrumentality of
5.25the United States exempt from federal income taxes, on the preferred stock of the bank
5.26owned by the United States or the instrumentality;
5.27 (4) amounts disallowed for intangible drilling costs due to differences between
5.28this chapter and the Internal Revenue Code in taxable years beginning before January
5.291, 1987, as follows:
5.30 (i) to the extent the disallowed costs are represented by physical property, an amount
5.31equal to the allowance for depreciation under Minnesota Statutes 1986, section
5.32subdivision 7
6.1 (ii) to the extent the disallowed costs are not represented by physical property, an
6.2amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
6.4 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
6.5Internal Revenue Code, except that:
6.6 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
6.7capital loss carrybacks shall not be allowed;
6.8 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
6.9a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
6.10allowed;
6.11 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
6.12capital loss carryback to each of the three taxable years preceding the loss year, subject to
6.13the provisions of Minnesota Statutes 1986, section
6.14 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
6.15a capital loss carryover to each of the five taxable years succeeding the loss year to the
6.16extent such loss was not used in a prior taxable year and subject to the provisions of
6.17Minnesota Statutes 1986, section
6.18 (6) an amount for interest and expenses relating to income not taxable for federal
6.19income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
6.20expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
6.21291 of the Internal Revenue Code in computing federal taxable income;
6.22 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
6.23which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
6.24reasonable allowance for depletion based on actual cost. In the case of leases the deduction
6.25must be apportioned between the lessor and lessee in accordance with rules prescribed
6.26by the commissioner. In the case of property held in trust, the allowable deduction must
6.27be apportioned between the income beneficiaries and the trustee in accordance with the
6.28pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
6.29of the trust's income allocable to each;
6.30 (8) for certified pollution control facilities placed in service in a taxable year
6.31beginning before December 31, 1986, and for which amortization deductions were elected
6.32under section 169 of the Internal Revenue Code of 1954, as amended through December
6.3331, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
6.341986, section
6.35 (9) amounts included in federal taxable income that are due to refunds of income,
6.36excise, or franchise taxes based on net income or related minimum taxes paid by the
7.1corporation to Minnesota, another state, a political subdivision of another state, the
7.2District of Columbia, or a foreign country or possession of the United States to the extent
7.3that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
7.4clause (1), in a prior taxable year;
7.5 (10)
7.6foreign operating corporation or a foreign corporation which is part of the same unitary
7.7business as the receiving corporation, unless the income resulting from such payments or
7.8accruals is income from sources within the United States as defined in subtitle A, chapter
7.91, subchapter N, part 1, of the Internal Revenue Code;
7.10 (11) income or gains from the business of mining as defined in section
7.11subdivision 1
7.12 (12) the amount of disability access expenditures in the taxable year which are not
7.13allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
7.14 (13) the amount of qualified research expenses not allowed for federal income tax
7.15purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
7.16the amount exceeds the amount of the credit allowed under section
7.17 (14) the amount of salary expenses not allowed for federal income tax purposes due
7.18to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
7.19Code;
7.20 (15) for a corporation whose foreign sales corporation, as defined in section 922
7.21of the Internal Revenue Code, constituted a foreign operating corporation during any
7.22taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
7.23claiming the deduction under section
7.24received from the foreign operating corporation, an amount equal to
7.25amount of income excluded under section 114 of the Internal Revenue Code, provided
7.26the income is not income of a foreign operating company;
7.27 (16) any decrease in subpart F income, as defined in section 952(a) of the Internal
7.28Revenue Code, for the taxable year when subpart F income is calculated without regard to
7.29the provisions of Division C, title III, section 303(b) of Public Law 110-343;
7.30 (17) in each of the five tax years immediately following the tax year in which an
7.31addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
7.32the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
7.33amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
7.34resulting delayed depreciation cannot be less than zero;
8.1 (18) in each of the five tax years immediately following the tax year in which an
8.2addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
8.3the amount of the addition; and
8.4(19) to the extent included in federal taxable income, discharge of indebtedness
8.5income resulting from reacquisition of business indebtedness included in federal taxable
8.6income under section 108(i) of the Internal Revenue Code. This subtraction applies only
8.7to the extent that the income was included in net income in a prior year as a result of the
8.8addition under section 290.01, subdivision 19c, clause (25).
8.9EFFECTIVE DATE.This section is effective for taxable years beginning after
8.10December 31, 2011.
8.11 Sec. 2. Minnesota Statutes 2010, section 290.17, subdivision 4, is amended to read:
8.12 Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
8.13within this state or partly within and partly without this state is part of a unitary business,
8.14the entire income of the unitary business is subject to apportionment pursuant to section
8.16business is considered to be derived from any particular source and none may be allocated
8.17to a particular place except as provided by the applicable apportionment formula. The
8.18provisions of this subdivision do not apply to business income subject to subdivision 5,
8.19income of an insurance company, or income of an investment company determined under
8.20section
8.21(b) The term "unitary business" means business activities or operations which
8.22result in a flow of value between them. The term may be applied within a single legal
8.23entity or between multiple entities and without regard to whether each entity is a sole
8.24proprietorship, a corporation, a partnership or a trust.
8.25(c) Unity is presumed whenever there is unity of ownership, operation, and use,
8.26evidenced by centralized management or executive force, centralized purchasing,
8.27advertising, accounting, or other controlled interaction, but the absence of these
8.28centralized activities will not necessarily evidence a nonunitary business. Unity is also
8.29presumed when business activities or operations are of mutual benefit, dependent upon or
8.30contributory to one another, either individually or as a group.
8.31(d) Where a business operation conducted in Minnesota is owned by a business
8.32entity that carries on business activity outside the state different in kind from that
8.33conducted within this state, and the other business is conducted entirely outside the state, it
8.34is presumed that the two business operations are unitary in nature, interrelated, connected,
8.35and interdependent unless it can be shown to the contrary.
9.1(e) Unity of ownership is not deemed to exist when a corporation is involved unless
9.2that corporation is a member of a group of two or more business entities and more than 50
9.3percent of the voting stock of each member of the group is directly or indirectly owned
9.4by a common owner or by common owners, either corporate or noncorporate, or by one
9.5or more of the member corporations of the group. For this purpose, the term "voting
9.6stock" shall include membership interests of mutual insurance holding companies formed
9.7under section
9.8(f) The net income and apportionment factors under section
9.9foreign corporations and other foreign entities which are part of a unitary business shall
9.10not be included in the net income or the apportionment factors of the unitary business.
9.11A foreign corporation or other foreign entity which is required to file a return under this
9.12chapter shall file on a separate return basis. The net income and apportionment factors
9.13under section
9.14the net income or the apportionment factors of the unitary business except as provided in
9.15paragraph (g).
9.16(g) The adjusted net income of a foreign operating corporation shall be deemed to
9.17be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
9.18proportion to each shareholder's ownership, with which such corporation is engaged in
9.19a unitary business. Such deemed dividend shall be treated as a dividend under section
9.21Dividends actually paid by a foreign operating corporation to a corporate shareholder
9.22which is a member of the same unitary business as the foreign operating corporation shall
9.23be eliminated from the net income of the unitary business in preparing a combined report
9.24for the unitary business. The adjusted net income of a foreign operating corporation
9.25shall be its net income adjusted as follows:
9.26(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
9.27Rico, or a United States possession or political subdivision of any of the foregoing shall
9.28be a deduction; and
9.29(2) the subtraction from federal taxable income for payments received from foreign
9.30corporations or foreign operating corporations under section
9.31clause (10), shall not be allowed.
9.32If a foreign operating corporation incurs a net loss, neither income nor deduction
9.33from that corporation shall be included in determining the net income of the unitary
9.34business.
9.35(h) For purposes of determining the net income of a unitary business and the factors
9.36to be used in the apportionment of net income pursuant to section
10.1must be included only the income and apportionment factors of domestic corporations or
10.2other domestic entities other than foreign operating corporations that are determined to
10.3be part of the unitary business pursuant to this subdivision, notwithstanding that foreign
10.4corporations or other foreign entities might be included in the unitary business.
10.5(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter
10.6that are connected with or allocable against dividends, deemed dividends described
10.7in paragraph (g), or royalties, fees, or other like income described in section
10.8subdivision 19d
10.9(j) Each corporation or other entity, except a sole proprietorship, that is part of a
10.10unitary business must file combined reports as the commissioner determines. On the
10.11reports, all intercompany transactions between entities included pursuant to paragraph
10.12(h) must be eliminated and the entire net income of the unitary business determined in
10.13accordance with this subdivision is apportioned among the entities by using each entity's
10.14Minnesota factors for apportionment purposes in the numerators of the apportionment
10.15formula and the total factors for apportionment purposes of all entities included pursuant
10.16to paragraph (h) in the denominators of the apportionment formula.
10.17(k) If a corporation has been divested from a unitary business and is included in a
10.18combined report for a fractional part of the common accounting period of the combined
10.19report:
10.20(1) its income includable in the combined report is its income incurred for that part
10.21of the year determined by proration or separate accounting; and
10.22(2) its sales, property, and payroll included in the apportionment formula must
10.23be prorated or accounted for separately.
10.24EFFECTIVE DATE.This section is effective for taxable years beginning after
10.25December 31, 2011.
10.26 Sec. 3. Minnesota Statutes 2010, section 290.21, subdivision 4, is amended to read:
10.27 Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
10.28of dividends received by a corporation during the taxable year from another corporation,
10.29in which the recipient owns 20 percent or more of the stock, by vote and value, not
10.30including stock described in section 1504(a)(4) of the Internal Revenue Code when the
10.31corporate stock with respect to which dividends are paid does not constitute the stock in
10.32trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
10.33constitute property held by the taxpayer primarily for sale to customers in the ordinary
10.34course of the taxpayer's trade or business, or when the trade or business of the taxpayer
11.1does not consist principally of the holding of the stocks and the collection of the income
11.2and gains therefrom; and
11.3 (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
11.4an affiliated company transferred in an overall plan of reorganization and the dividend
11.5is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
11.6amended through December 31, 1989;
11.7 (ii) the remaining 20 percent of dividends if the dividends are received from a
11.8corporation which is subject to tax under section
11.9affiliated group of corporations as defined by the Internal Revenue Code and the dividend
11.10is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
11.11amended through December 31, 1989, or is deducted under an election under section
11.12243(b) of the Internal Revenue Code; or
11.13 (iii) the remaining 20 percent of the dividends if the dividends are received from a
11.14property and casualty insurer as defined under section
11.15member of an affiliated group of corporations as defined by the Internal Revenue Code
11.16and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
11.171.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
11.18under an election under section 243(b) of the Internal Revenue Code.
11.19 (b) Seventy percent of dividends received by a corporation during the taxable year
11.20from another corporation in which the recipient owns less than 20 percent of the stock,
11.21by vote or value, not including stock described in section 1504(a)(4) of the Internal
11.22Revenue Code when the corporate stock with respect to which dividends are paid does not
11.23constitute the stock in trade of the taxpayer, or does not constitute property held by the
11.24taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
11.25business, or when the trade or business of the taxpayer does not consist principally of the
11.26holding of the stocks and the collection of income and gain therefrom.
11.27(c) 70 percent of dividends deemed to be paid from a foreign operating corporation
11.28under section 290.17, subdivision 4, paragraph (g).
11.29
11.30with respect to dividends that are included in a corporation's Minnesota taxable net
11.31income for the taxable year.
11.32 The dividend deduction provided in this subdivision does not apply to a dividend
11.33from a corporation which, for the taxable year of the corporation in which the distribution
11.34is made or for the next preceding taxable year of the corporation, is a corporation exempt
11.35from tax under section 501 of the Internal Revenue Code.
12.1 The dividend deduction provided in this subdivision applies to the amount of
12.2regulated investment company dividends only to the extent determined under section
12.3854(b) of the Internal Revenue Code.
12.4 The dividend deduction provided in this subdivision shall not be allowed with
12.5respect to any dividend for which a deduction is not allowed under the provisions of
12.6section 246(c) of the Internal Revenue Code.
12.7
12.8Minnesota under the provisions of Public Law 86-272 are included as income on the return
12.9of an affiliated corporation permitted or required to file a combined report under section
12.11determination as to whether the trade or business of the corporation consists principally
12.12of the holding of stocks and the collection of income and gains therefrom shall be made
12.13with reference to the trade or business of the affiliated corporation having a nexus with
12.14Minnesota.
12.15
12.16paid by a FSC as defined in section 922 of the Internal Revenue Code.
12.17
12.18on the combined report received a dividend, the deduction under this subdivision for
12.19each member of the unitary business required to file a return under this chapter is the
12.20product of: (1) 100 percent of the dividends received by members of the group; (2) the
12.21percentage allowed pursuant to paragraph (a)
12.22taxpayer's business income apportionable to this state for the taxable year under section
12.24EFFECTIVE DATE.This section is effective for taxable years beginning after
12.25December 31, 2011.
12.28 Section 1. Minnesota Statutes 2010, section 297A.66, is amended by adding a
12.29subdivision to read:
12.30 Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
12.31means a person, whether an independent contractor or other representative, who directly
12.32or indirectly solicits business for the retailer.
12.33(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
12.34with a resident under which the resident, for a commission or other consideration, directly
13.1or indirectly refers potential customers, whether by a link on an Internet Web site, or
13.2otherwise, to the seller. This paragraph only applies if the total gross receipts from
13.3sales to customers located in this state who were referred to the retailer by all residents
13.4with this type of agreement with the retailer are at least $10,000 in the 12-month period
13.5ending on the last day of the most recent calendar quarter before the calendar quarter in
13.6which the sale is made.
13.7(c) The presumption under paragraph (a) may be rebutted by proof that the resident
13.8with whom the retailer has an agreement did not engage in any solicitation in this state
13.9on behalf of the retailer that would satisfy the nexus requirements of the United States
13.10Constitution during the 12-month period in question. Nothing in this section shall be
13.11construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
13.12representative for purposes of subdivision 1, paragraph (a).
13.13(d) For purposes of this paragraph, "resident" includes an individual who is a
13.14resident of this state, as defined in section 290.01, or a business that owns tangible
13.15personal property located in this state or has one or more employees providing services
13.16for it in this state.
13.17EFFECTIVE DATE.This section is effective for sales and purchases made after
13.18June 30, 2012.
