Bill Text: MN SF1193 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Technology corporate franchise tax benefit certificate transfer program creation
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2013-03-07 - Referred to Taxes [SF1193 Detail]
Download: Minnesota-2013-SF1193-Introduced.html
1.2relating to taxation; corporate franchise tax; allowing a technology transfer
1.3program for new or expanding biotechnology companies; amending Minnesota
1.4Statutes 2012, sections 290.01, subdivisions 19d, 29; 290.06, by adding
1.5a subdivision; 290.0921, subdivision 3; proposing coding for new law in
1.6Minnesota Statutes, chapter 116J.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. [116J.8738] TECHNOLOGY CORPORATE FRANCHISE TAX
1.9CERTIFICATE TRANSFER PROGRAM.
1.10 Subdivision 1. Program established. The commissioner shall establish a corporate
1.11franchise tax benefit certificate transfer program to allow new or expanding biotechnology
1.12companies in this state with unused net operating loss carryovers under section 290.095
1.13to surrender those tax benefits for use by other corporate franchise taxpayers. The tax
1.14benefits may be used on the corporate franchise tax returns to be filed by those taxpayers
1.15in exchange for private financial assistance to be provided by the corporate franchise
1.16taxpayer that is the recipient of the tax benefit certificate to assist in the funding of costs
1.17incurred by the new or expanding biotechnology company.
1.18 Subd. 2. Definitions. (a) For purposes of this section, the following terms have the
1.19meanings given, unless the context clearly requires otherwise.
1.20(b) "Biotechnology" means the continually expanding body of fundamental
1.21knowledge about the functioning of biological systems from the macro level to the
1.22molecular and subatomic levels, as well as novel products, services, technologies, and
1.23subtechnologies developed as a result of insights gained from research advances that add
1.24to that body of fundamental knowledge.
1.25(c) "Biotechnology company" means a corporation that:
2.1(1) has its headquarters or base of operations and at least one-half of its full-time
2.2employees in this state;
2.3(2) owns, has filed for, or has a valid license to use protected, proprietary intellectual
2.4property;
2.5(3) is engaged in the research, development, production, or provision of
2.6biotechnology to develop or provide products or processes for specific commercial or
2.7public purposes, including, but not limited to, medical, medical device, pharmaceutical,
2.8nutritional, and other health-related purposes, agricultural purposes, and environmental
2.9purposes; and
2.10(4) has received, at least, $2,500,000 of private investments, whether in the form of
2.11equity or debt.
2.12(d) "Full-time employee" means a person who is:
2.13(1) employed by a new or expanding biotechnology company for consideration for
2.14at least 35 hours a week, or who renders any other standard of service generally accepted
2.15by custom or practice as full-time employment and whose wages paid by the company are
2.16subject to withholding as provided in section 290.92; or
2.17(2) a partner of a new or expanding biotechnology company who works for the
2.18partnership for at least 35 hours a week, or who renders any other standard of service
2.19generally accepted by custom or practice as full-time employment, and whose distributive
2.20share of income, gain, loss, or deduction, or whose guaranteed payments, or any
2.21combination thereof, is subject to the payment of estimated taxes, as provided in section
2.22289A.25.
2.23To qualify as a full-time employee, an employee must also receive from the new or
2.24expanding biotechnology company group health benefits under a health plan as defined
2.25under section 62A.011, subdivision 3, or under a self-insured employee welfare benefit
2.26plan as defined in United States Code, title 29, section 1002. Full-time employee excludes
2.27any person who works as an independent contractor or on a consulting basis for the new or
2.28expanding biotechnology company.
2.29(e) "Maximum annual credit limit" means the following amount of tax benefits for
2.30the specified fiscal years:
2.31(1) for fiscal year 2014, $10,000,000;
2.32(2) for fiscal year 2015, $15,000,000;
2.33(3) for fiscal years 2016 and 2017, $30,000,000; and
2.34(4) for fiscal years 2018 and 2019, $60,000,000.
2.35(f) "New or expanding" refers to a biotechnology company that satisfies the
2.36following conditions:
3.1(1) the corporation has fewer than 250 employees in the United States:
3.2(i) on June 30 of the year in which the corporation files an application for surrender
3.3of unused but otherwise allowable tax benefits under this section; and
3.4(ii) on the date of the exchange of the corporate franchise tax benefit certificate;
3.5(2) on the later of the dates in clause (1), the business, whether as part of the
3.6corporation or another entity, has not been in operation for more than ten years;
3.7(3) on June 30 of the year in which the corporation files the application, the
3.8corporation has at least:
3.9(i) one full-time employee working in this state if the company has been incorporated
3.10for less than three years;
3.11(ii) five full-time employees working in this state if the company has been
3.12incorporated for more than three years but less than five years; or
3.13(iii) ten full-time employees working in this state if the company has been
3.14incorporated for more than five years; and
3.15(4) on the date of the exchange of the corporate franchise tax benefit certificate, the
3.16corporation has the number of full-time employees in this state required by clause (3).
3.17 Subd. 3. Allocation of tax benefits; annual limit. (a) The commissioner, in
3.18cooperation with the commissioner of revenue, shall review and approve applications
3.19by new or expanding biotechnology companies in this state with unused but otherwise
3.20allowable net operating loss carryovers under section 290.095 to surrender those tax
3.21benefits in exchange for private financial assistance to be made by the corporate franchise
3.22taxpayer that is the recipient of the corporate franchise tax benefit certificate in an amount
3.23equal to at least 75 percent of the amount of the surrendered tax benefit. The amount of
3.24the surrendered tax benefit is the amount of the net operating loss carryover apportioned to
3.25Minnesota under the provisions of section 290.095, subdivision 3, paragraph (c), and then
3.26multiplied by the corporate franchise tax rate under section 290.06, subdivision 1.
3.27(b) The commissioner must approve the transfer of no more than the maximum
3.28annual credit limit in each fiscal year. If the total amount of transferable tax benefits
3.29requested to be surrendered by approved applicants exceeds the maximum annual credit
3.30limit for a fiscal year, the commissioner, in cooperation with the commissioner of revenue,
3.31must not approve the transfer of more than the maximum annual credit limit for that fiscal
3.32year and shall allocate the transfer of tax benefits by approved corporations using the
3.33following method:
3.34(1) an eligible applicant with $250,000 or less of transferable tax benefits may
3.35surrender the entire amount of its transferable tax benefits;
4.1(2) an eligible applicant with more than $250,000 of transferable tax benefits may
4.2surrender a minimum of $250,000 of its transferable tax benefits; and
4.3(3) an eligible applicant with more than $250,000 of transferable tax benefits may
4.4surrender additional transferable tax benefits determined by multiplying the applicant's
4.5transferable tax benefits less the minimum transferable tax benefits that corporation is
4.6authorized to surrender under clause (2) by a fraction, the numerator of which is the total
4.7amount of transferable tax benefits that the commissioner is authorized to approve less
4.8the total amount of transferable tax benefits approved under clauses (1) and (2), and the
4.9denominator of which is the total amount of transferable tax benefits requested to be
4.10surrendered by all eligible applicants less the total amount of transferable tax benefits
4.11approved under clauses (1) and (2).
4.12(c) If the total amount of transferable tax benefits that would be authorized using the
4.13method under paragraph (b) exceeds the maximum annual credit limit for a fiscal year,
4.14then the commissioner, in cooperation with the commissioner of revenue, shall limit the
4.15total amount of tax benefits authorized to be transferred to the maximum annual credit
4.16limit by applying the above method on an apportioned basis.
4.17 Subd. 4. Qualifying tax benefits and corporations. (a) For purposes of this
4.18section, transferable tax benefits include an eligible applicant's unused but otherwise
4.19allowable carryover of net operating losses apportioned to Minnesota under the provisions
4.20of section 290.095, subdivision 3, paragraph (c), and then multiplied by the corporate
4.21franchise tax rate under section 290.06, subdivision 1. An eligible applicant's transferable
4.22tax benefits are limited to net operating losses that the applicant requests to surrender in its
4.23application to the authority and must not, in total, exceed the maximum amount of tax
4.24benefits that the applicant is eligible to surrender.
4.25(b) The commissioner must not approve any application for a corporate franchise tax
4.26benefit transfer certificate in which the new or expanding biotechnology company:
4.27(1) has demonstrated positive net operating income in any of the two previous full
4.28years of ongoing operations as determined on its financial statements issued according to
4.29generally accepted accounting standards endorsed by the Financial Accounting Standards
4.30Board; or
4.31(2) is at least 50 percent owned or controlled, directly or indirectly, by another
4.32corporation that has demonstrated positive net operating income in any of the two previous
4.33full years of ongoing operations as determined on its financial statements issued according
4.34to generally accepted accounting standards endorsed by the Financial Accounting
4.35Standards Board, or is part of a consolidated group of affiliated corporations, as filed for
4.36federal income tax purposes, that in the aggregate has demonstrated positive net operating
5.1income in any of the two previous full years of ongoing operations as determined on
5.2its combined financial statements issued according to generally accepted accounting
5.3standards endorsed by the Financial Accounting Standards Board.
5.4 (c) The maximum lifetime value of surrendered tax benefits that a corporation is
5.5permitted to surrender under the program is $15,000,000.
5.6 Subd. 5. Recapture of tax benefits. The commissioner, in consultation with
5.7the commissioner of revenue, shall develop a standard form agreement that each new
5.8or expanding biotechnology company must enter into as a condition of qualifying to
5.9surrender tax benefits under this section. The agreement must provide for the recapture of
5.10all, or a portion of, the amount of a grant of a corporate franchise tax benefit certificate
5.11from the new or expanding biotechnology company under this section if the taxpayer
5.12fails to use the private financial assistance received for the surrender of tax benefits as
5.13required by this section or fails to maintain a headquarters or a base of operation in this
5.14state during the five years following receipt of the private financial assistance, except if
5.15the failure to maintain a headquarters or a base of operation in this state is due to the
5.16liquidation of the new or expanding biotechnology company, other than as a result of
5.17a merger or acquisition of the company.
5.18 Subd. 6. Approval of acquisition of tax benefits; purposes; required agreement.
5.19(a) The commissioner, in cooperation with the commissioner of revenue, shall review and
5.20approve applications by taxpayers under the corporate franchise tax in chapter 290 to
5.21acquire surrendered tax benefits approved under subdivision 3, which must be issued in
5.22the form of corporate franchise tax benefit transfer certificates, in exchange for private
5.23financial assistance to be made by the taxpayer in an amount equal to at least 75 percent of
5.24the amount of the surrendered tax benefit. The commissioner must not issue a corporate
5.25franchise tax benefit transfer certificate unless the applicant certifies that, as of the date of
5.26the exchange of the corporate franchise tax benefit certificate, it is operating as a new or
5.27expanding biotechnology company and has no intention to cease operating in this state.
5.28(b) The private financial assistance must be used for expenses incurred in connection
5.29with the operation of the new or expanding biotechnology company in this state, including,
5.30but not limited to, the expenses of fixed assets, such as the construction and acquisition
5.31and development of real estate, materials, start-up, tenant fit-out, working capital, salaries,
5.32research and development expenditures, and any other expenses determined by the
5.33commissioner to be necessary to carry out biotechnology company operations in this state.
5.34(c) The commissioner shall require a corporate franchise taxpayer that acquires
5.35a corporate franchise tax benefit certificate to enter into a written agreement with the
5.36new or expanding biotechnology company concerning the terms and conditions of the
6.1private financial assistance made in exchange for the certificate. The written agreement
6.2may contain terms concerning the maintenance by the new or expanding biotechnology
6.3company of a headquarters or a base of operation in this state.
6.4 Subd. 7. Program evaluation. (a) No later than December 31, 2016, the
6.5commissioner of revenue, after consultation with the commissioners of management and
6.6budget and employment and economic development, shall contract with a qualified outside
6.7entity or individual to evaluate the effects of the program on the Minnesota economy.
6.8The contractor must not be associated with, employed by, or have contracts with the
6.9entities involved in or associated with the biotechnology industry that benefits from the
6.10program. The program evaluation must be completed by January 2018, and provided to
6.11the chairs and ranking minority members of the legislative committees having jurisdiction
6.12over taxes and economic development in the senate and the house of representatives, in
6.13compliance with sections 3.195 and 3.197. The program evaluation must include, in
6.14addition to any other matters the commissioner of revenue considers relevant to evaluating
6.15the effectiveness of the tax benefit, analysis of:
6.16(1) the amount of economic activity, including the number of jobs and the wages of
6.17those jobs, generated by emerging biotechnology companies that received investments
6.18that qualified for the tax benefit;
6.19(2) the incremental change in Minnesota state and local taxes paid as a result of
6.20the tax benefit; and
6.21(3) the net benefit to the Minnesota economy of the tax benefit relative to alternative
6.22uses of the resources, such as increasing the research and development credit or reducing
6.23the corporate franchise tax rate.
6.24(b) To the extent necessary to complete the program evaluation, the consultant
6.25or consultants may request from the commissioner of revenue tax return information
6.26of taxpayers who surrender tax benefits under the program. To the extent necessary to
6.27complete the program evaluation, the consultant or consultants may request from the
6.28commissioner of employment and economic development applications for certification
6.29and annual reports made by qualified small businesses, qualified investors, and qualified
6.30funds. The consultant or consultants may not disclose or release any data received under
6.31this section except as permitted for a government entity under chapter 13. The consultant
6.32or consultants are subject to the penalties and remedies provided in law for violation
6.33of that chapter.
6.34 Subd. 8. Sunset. This section expires effective following the allocation for fiscal
6.35year 2019.
7.1EFFECTIVE DATE.This section is effective the day following final enactment
7.2and applies to taxable years beginning after December 31, 2012.
7.3 Sec. 2. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
7.4 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
7.5corporations, there shall be subtracted from federal taxable income after the increases
7.6provided in subdivision 19c:
7.7 (1) the amount of foreign dividend gross-up added to gross income for federal
7.8income tax purposes under section 78 of the Internal Revenue Code;
7.9 (2) the amount of salary expense not allowed for federal income tax purposes due to
7.10claiming the work opportunity credit under section 51 of the Internal Revenue Code;
7.11 (3) any dividend (not including any distribution in liquidation) paid within the
7.12taxable year by a national or state bank to the United States, or to any instrumentality of
7.13the United States exempt from federal income taxes, on the preferred stock of the bank
7.14owned by the United States or the instrumentality;
7.15 (4) amounts disallowed for intangible drilling costs due to differences between
7.16this chapter and the Internal Revenue Code in taxable years beginning before January
7.171, 1987, as follows:
7.18 (i) to the extent the disallowed costs are represented by physical property, an amount
7.19equal to the allowance for depreciation under Minnesota Statutes 1986, section290.09,
7.20subdivision 7 , subject to the modifications contained in subdivision 19e; and
7.21 (ii) to the extent the disallowed costs are not represented by physical property, an
7.22amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
7.23290.09, subdivision 8
;
7.24 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
7.25Internal Revenue Code, except that:
7.26 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
7.27capital loss carrybacks shall not be allowed;
7.28 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
7.29a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
7.30allowed;
7.31 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
7.32capital loss carryback to each of the three taxable years preceding the loss year, subject to
7.33the provisions of Minnesota Statutes 1986, section290.16 , shall be allowed; and
7.34 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
7.35a capital loss carryover to each of the five taxable years succeeding the loss year to the
8.1extent such loss was not used in a prior taxable year and subject to the provisions of
8.2Minnesota Statutes 1986, section290.16 , shall be allowed;
8.3 (6) an amount for interest and expenses relating to income not taxable for federal
8.4income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
8.5expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
8.6291 of the Internal Revenue Code in computing federal taxable income;
8.7 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
8.8which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
8.9reasonable allowance for depletion based on actual cost. In the case of leases the deduction
8.10must be apportioned between the lessor and lessee in accordance with rules prescribed
8.11by the commissioner. In the case of property held in trust, the allowable deduction must
8.12be apportioned between the income beneficiaries and the trustee in accordance with the
8.13pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
8.14of the trust's income allocable to each;
8.15 (8) for certified pollution control facilities placed in service in a taxable year
8.16beginning before December 31, 1986, and for which amortization deductions were elected
8.17under section 169 of the Internal Revenue Code of 1954, as amended through December
8.1831, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
8.191986, section290.09, subdivision 7 ;
8.20 (9) amounts included in federal taxable income that are due to refunds of income,
8.21excise, or franchise taxes based on net income or related minimum taxes paid by the
8.22corporation to Minnesota, another state, a political subdivision of another state, the
8.23District of Columbia, or a foreign country or possession of the United States to the extent
8.24that the taxes were added to federal taxable income under section290.01, subdivision 19c ,
8.25clause (1), in a prior taxable year;
8.26 (10) 80 percent of royalties, fees, or other like income accrued or received from a
8.27foreign operating corporation or a foreign corporation which is part of the same unitary
8.28business as the receiving corporation, unless the income resulting from such payments or
8.29accruals is income from sources within the United States as defined in subtitle A, chapter
8.301, subchapter N, part 1, of the Internal Revenue Code;
8.31 (11) income or gains from the business of mining as defined in section290.05,
8.32subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
8.33 (12) the amount of disability access expenditures in the taxable year which are not
8.34allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
9.1 (13) the amount of qualified research expenses not allowed for federal income tax
9.2purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
9.3the amount exceeds the amount of the credit allowed under section290.068 ;
9.4 (14) the amount of salary expenses not allowed for federal income tax purposes due to
9.5claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;
9.6 (15) for a corporation whose foreign sales corporation, as defined in section 922
9.7of the Internal Revenue Code, constituted a foreign operating corporation during any
9.8taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
9.9claiming the deduction under section290.21, subdivision 4 , for income received from
9.10the foreign operating corporation, an amount equal to1.23 multiplied by the amount of
9.11income excluded under section 114 of the Internal Revenue Code, provided the income is
9.12not income of a foreign operating company;
9.13 (16) any decrease in subpart F income, as defined in section 952(a) of the Internal
9.14Revenue Code, for the taxable year when subpart F income is calculated without regard to
9.15the provisions of Division C, title III, section 303(b) of Public Law 110-343;
9.16 (17) in each of the five tax years immediately following the tax year in which an
9.17addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
9.18the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
9.19amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
9.20resulting delayed depreciation cannot be less than zero;
9.21 (18) in each of the five tax years immediately following the tax year in which an
9.22addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
9.23the amount of the addition;and
9.24(19) to the extent included in federal taxable income, discharge of indebtedness
9.25income resulting from reacquisition of business indebtedness included in federal taxable
9.26income under section 108(i) of the Internal Revenue Code. This subtraction applies only
9.27to the extent that the income was included in net income in a prior year as a result of the
9.28addition under section290.01, subdivision 19c , clause (25); and
9.29(20) to the extent included in federal taxable income, amounts received in return for
9.30surrendering tax benefits under section 116J.8738.
9.31EFFECTIVE DATE.This section is effective for taxable years beginning after
9.32December 31, 2012.
9.33 Sec. 3. Minnesota Statutes 2012, section 290.01, subdivision 29, is amended to read:
9.34 Subd. 29. Taxable income. The term "taxable income" means:
9.35(1) for individuals, estates, and trusts, the same as taxable net income;
10.1(2) for corporations, the taxable net income less
10.2(i) the net operating loss deduction under section290.095 , excluding any amount
10.3surrendered under section 116J.8738;
10.4(ii) the dividends received deduction under section290.21, subdivision 4 ;
10.5(iii) the exemption for operating in a job opportunity building zone under section
10.6469.317
; and
10.7(iv) the exemption for operating in a biotechnology and health sciences industry
10.8zone under section469.337 .
10.9EFFECTIVE DATE.This section is effective for taxable years beginning after
10.10December 31, 2012.
10.11 Sec. 4. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
10.12to read:
10.13 Subd. 37. Credit; technology corporate franchise tax certificate transfer.
10.14A taxpayer may take a credit against the tax imposed under subdivision 1 or section
10.15290.0921 equal to the amount of the transferable tax benefits certified to the taxpayer for
10.16the taxable year by the commissioner of employment and economic development under
10.17section 116J.8738. This credit is allowed against the liability for tax of any member of the
10.18unitary business that is included in the combined report of the taxpayer.
10.19EFFECTIVE DATE.This section is effective for taxable years beginning after
10.20December 31, 2012.
10.21 Sec. 5. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
10.22 Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
10.23income" is Minnesota net income as defined in section290.01, subdivision 19 , and
10.24includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
10.25(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
10.26Minnesota tax return, the minimum tax must be computed on a separate company basis.
10.27If a corporation is part of a tax group filing a unitary return, the minimum tax must be
10.28computed on a unitary basis. The following adjustments must be made.
10.29(1) For purposes of the depreciation adjustments under section 56(a)(1) and
10.3056(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
10.31service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
10.32income tax purposes, including any modification made in a taxable year under section
11.1290.01, subdivision 19e
, or Minnesota Statutes 1986, section
290.09, subdivision 7 ,
11.2paragraph (c).
11.3For taxable years beginning after December 31, 2000, the amount of any remaining
11.4modification made under section290.01, subdivision 19e , or Minnesota Statutes 1986,
11.5section290.09, subdivision 7 , paragraph (c), not previously deducted is a depreciation
11.6allowance in the first taxable year after December 31, 2000.
11.7(2) The portion of the depreciation deduction allowed for federal income tax
11.8purposes under section 168(k) of the Internal Revenue Code that is required as an
11.9addition under section290.01, subdivision 19c , clause (15), is disallowed in determining
11.10alternative minimum taxable income.
11.11(3) The subtraction for depreciation allowed under section290.01, subdivision 19d ,
11.12clause (17), is allowed as a depreciation deduction in determining alternative minimum
11.13taxable income.
11.14(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
11.15of the Internal Revenue Code does not apply.
11.16(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
11.17Revenue Code does not apply.
11.18(6) The special rule for dividends from section 936 companies under section
11.1956(g)(4)(C)(iii) does not apply.
11.20(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
11.21Code does not apply.
11.22(8) The tax preference for intangible drilling costs under section 57(a)(2) of the
11.23Internal Revenue Code must be calculated without regard to subparagraph (E) and the
11.24subtraction under section290.01, subdivision 19d , clause (4).
11.25(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
11.26Revenue Code does not apply.
11.27(10) The tax preference for charitable contributions of appreciated property under
11.28section 57(a)(6) of the Internal Revenue Code does not apply.
11.29(11) For purposes of calculating the tax preference for accelerated depreciation or
11.30amortization on certain property placed in service before January 1, 1987, under section
11.3157(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
11.32deduction allowed under section290.01, subdivision 19e .
11.33For taxable years beginning after December 31, 2000, the amount of any remaining
11.34modification made under section290.01, subdivision 19e , not previously deducted is a
11.35depreciation or amortization allowance in the first taxable year after December 31, 2004.
12.1(12) For purposes of calculating the adjustment for adjusted current earnings in
12.2section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
12.3income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
12.4minimum taxable income as defined in this subdivision, determined without regard to the
12.5adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
12.6(13) For purposes of determining the amount of adjusted current earnings under
12.7section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
12.856(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
12.9gross-up subtracted as provided in section290.01, subdivision 19d , clause (1), (ii) the
12.10amount of refunds of income, excise, or franchise taxes subtracted as provided in section
12.11290.01, subdivision 19d
, clause (9), or (iii) the amount of royalties, fees or other like
12.12income subtracted as provided in section290.01, subdivision 19d , clause (10).
12.13(14) Alternative minimum taxable income excludes the income from operating in a
12.14job opportunity building zone as provided under section469.317 .
12.15(15) Alternative minimum taxable income excludes the income from operating in a
12.16biotechnology and health sciences industry zone as provided under section469.337 .
12.17(16) The subtraction under section 290.01, subdivision 19d, paragraph (20), for
12.18amounts received in return for surrendering tax benefits, is allowed in determining
12.19alternative minimum taxable income.
12.20Items of tax preference must not be reduced below zero as a result of the
12.21modifications in this subdivision.
12.22EFFECTIVE DATE.This section is effective for taxable years beginning after
12.23December 31, 2012.
1.3program for new or expanding biotechnology companies; amending Minnesota
1.4Statutes 2012, sections 290.01, subdivisions 19d, 29; 290.06, by adding
1.5a subdivision; 290.0921, subdivision 3; proposing coding for new law in
1.6Minnesota Statutes, chapter 116J.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. [116J.8738] TECHNOLOGY CORPORATE FRANCHISE TAX
1.9CERTIFICATE TRANSFER PROGRAM.
1.10 Subdivision 1. Program established. The commissioner shall establish a corporate
1.11franchise tax benefit certificate transfer program to allow new or expanding biotechnology
1.12companies in this state with unused net operating loss carryovers under section 290.095
1.13to surrender those tax benefits for use by other corporate franchise taxpayers. The tax
1.14benefits may be used on the corporate franchise tax returns to be filed by those taxpayers
1.15in exchange for private financial assistance to be provided by the corporate franchise
1.16taxpayer that is the recipient of the tax benefit certificate to assist in the funding of costs
1.17incurred by the new or expanding biotechnology company.
1.18 Subd. 2. Definitions. (a) For purposes of this section, the following terms have the
1.19meanings given, unless the context clearly requires otherwise.
1.20(b) "Biotechnology" means the continually expanding body of fundamental
1.21knowledge about the functioning of biological systems from the macro level to the
1.22molecular and subatomic levels, as well as novel products, services, technologies, and
1.23subtechnologies developed as a result of insights gained from research advances that add
1.24to that body of fundamental knowledge.
1.25(c) "Biotechnology company" means a corporation that:
2.1(1) has its headquarters or base of operations and at least one-half of its full-time
2.2employees in this state;
2.3(2) owns, has filed for, or has a valid license to use protected, proprietary intellectual
2.4property;
2.5(3) is engaged in the research, development, production, or provision of
2.6biotechnology to develop or provide products or processes for specific commercial or
2.7public purposes, including, but not limited to, medical, medical device, pharmaceutical,
2.8nutritional, and other health-related purposes, agricultural purposes, and environmental
2.9purposes; and
2.10(4) has received, at least, $2,500,000 of private investments, whether in the form of
2.11equity or debt.
2.12(d) "Full-time employee" means a person who is:
2.13(1) employed by a new or expanding biotechnology company for consideration for
2.14at least 35 hours a week, or who renders any other standard of service generally accepted
2.15by custom or practice as full-time employment and whose wages paid by the company are
2.16subject to withholding as provided in section 290.92; or
2.17(2) a partner of a new or expanding biotechnology company who works for the
2.18partnership for at least 35 hours a week, or who renders any other standard of service
2.19generally accepted by custom or practice as full-time employment, and whose distributive
2.20share of income, gain, loss, or deduction, or whose guaranteed payments, or any
2.21combination thereof, is subject to the payment of estimated taxes, as provided in section
2.22289A.25.
2.23To qualify as a full-time employee, an employee must also receive from the new or
2.24expanding biotechnology company group health benefits under a health plan as defined
2.25under section 62A.011, subdivision 3, or under a self-insured employee welfare benefit
2.26plan as defined in United States Code, title 29, section 1002. Full-time employee excludes
2.27any person who works as an independent contractor or on a consulting basis for the new or
2.28expanding biotechnology company.
2.29(e) "Maximum annual credit limit" means the following amount of tax benefits for
2.30the specified fiscal years:
2.31(1) for fiscal year 2014, $10,000,000;
2.32(2) for fiscal year 2015, $15,000,000;
2.33(3) for fiscal years 2016 and 2017, $30,000,000; and
2.34(4) for fiscal years 2018 and 2019, $60,000,000.
2.35(f) "New or expanding" refers to a biotechnology company that satisfies the
2.36following conditions:
3.1(1) the corporation has fewer than 250 employees in the United States:
3.2(i) on June 30 of the year in which the corporation files an application for surrender
3.3of unused but otherwise allowable tax benefits under this section; and
3.4(ii) on the date of the exchange of the corporate franchise tax benefit certificate;
3.5(2) on the later of the dates in clause (1), the business, whether as part of the
3.6corporation or another entity, has not been in operation for more than ten years;
3.7(3) on June 30 of the year in which the corporation files the application, the
3.8corporation has at least:
3.9(i) one full-time employee working in this state if the company has been incorporated
3.10for less than three years;
3.11(ii) five full-time employees working in this state if the company has been
3.12incorporated for more than three years but less than five years; or
3.13(iii) ten full-time employees working in this state if the company has been
3.14incorporated for more than five years; and
3.15(4) on the date of the exchange of the corporate franchise tax benefit certificate, the
3.16corporation has the number of full-time employees in this state required by clause (3).
3.17 Subd. 3. Allocation of tax benefits; annual limit. (a) The commissioner, in
3.18cooperation with the commissioner of revenue, shall review and approve applications
3.19by new or expanding biotechnology companies in this state with unused but otherwise
3.20allowable net operating loss carryovers under section 290.095 to surrender those tax
3.21benefits in exchange for private financial assistance to be made by the corporate franchise
3.22taxpayer that is the recipient of the corporate franchise tax benefit certificate in an amount
3.23equal to at least 75 percent of the amount of the surrendered tax benefit. The amount of
3.24the surrendered tax benefit is the amount of the net operating loss carryover apportioned to
3.25Minnesota under the provisions of section 290.095, subdivision 3, paragraph (c), and then
3.26multiplied by the corporate franchise tax rate under section 290.06, subdivision 1.
3.27(b) The commissioner must approve the transfer of no more than the maximum
3.28annual credit limit in each fiscal year. If the total amount of transferable tax benefits
3.29requested to be surrendered by approved applicants exceeds the maximum annual credit
3.30limit for a fiscal year, the commissioner, in cooperation with the commissioner of revenue,
3.31must not approve the transfer of more than the maximum annual credit limit for that fiscal
3.32year and shall allocate the transfer of tax benefits by approved corporations using the
3.33following method:
3.34(1) an eligible applicant with $250,000 or less of transferable tax benefits may
3.35surrender the entire amount of its transferable tax benefits;
4.1(2) an eligible applicant with more than $250,000 of transferable tax benefits may
4.2surrender a minimum of $250,000 of its transferable tax benefits; and
4.3(3) an eligible applicant with more than $250,000 of transferable tax benefits may
4.4surrender additional transferable tax benefits determined by multiplying the applicant's
4.5transferable tax benefits less the minimum transferable tax benefits that corporation is
4.6authorized to surrender under clause (2) by a fraction, the numerator of which is the total
4.7amount of transferable tax benefits that the commissioner is authorized to approve less
4.8the total amount of transferable tax benefits approved under clauses (1) and (2), and the
4.9denominator of which is the total amount of transferable tax benefits requested to be
4.10surrendered by all eligible applicants less the total amount of transferable tax benefits
4.11approved under clauses (1) and (2).
4.12(c) If the total amount of transferable tax benefits that would be authorized using the
4.13method under paragraph (b) exceeds the maximum annual credit limit for a fiscal year,
4.14then the commissioner, in cooperation with the commissioner of revenue, shall limit the
4.15total amount of tax benefits authorized to be transferred to the maximum annual credit
4.16limit by applying the above method on an apportioned basis.
4.17 Subd. 4. Qualifying tax benefits and corporations. (a) For purposes of this
4.18section, transferable tax benefits include an eligible applicant's unused but otherwise
4.19allowable carryover of net operating losses apportioned to Minnesota under the provisions
4.20of section 290.095, subdivision 3, paragraph (c), and then multiplied by the corporate
4.21franchise tax rate under section 290.06, subdivision 1. An eligible applicant's transferable
4.22tax benefits are limited to net operating losses that the applicant requests to surrender in its
4.23application to the authority and must not, in total, exceed the maximum amount of tax
4.24benefits that the applicant is eligible to surrender.
4.25(b) The commissioner must not approve any application for a corporate franchise tax
4.26benefit transfer certificate in which the new or expanding biotechnology company:
4.27(1) has demonstrated positive net operating income in any of the two previous full
4.28years of ongoing operations as determined on its financial statements issued according to
4.29generally accepted accounting standards endorsed by the Financial Accounting Standards
4.30Board; or
4.31(2) is at least 50 percent owned or controlled, directly or indirectly, by another
4.32corporation that has demonstrated positive net operating income in any of the two previous
4.33full years of ongoing operations as determined on its financial statements issued according
4.34to generally accepted accounting standards endorsed by the Financial Accounting
4.35Standards Board, or is part of a consolidated group of affiliated corporations, as filed for
4.36federal income tax purposes, that in the aggregate has demonstrated positive net operating
5.1income in any of the two previous full years of ongoing operations as determined on
5.2its combined financial statements issued according to generally accepted accounting
5.3standards endorsed by the Financial Accounting Standards Board.
5.4 (c) The maximum lifetime value of surrendered tax benefits that a corporation is
5.5permitted to surrender under the program is $15,000,000.
5.6 Subd. 5. Recapture of tax benefits. The commissioner, in consultation with
5.7the commissioner of revenue, shall develop a standard form agreement that each new
5.8or expanding biotechnology company must enter into as a condition of qualifying to
5.9surrender tax benefits under this section. The agreement must provide for the recapture of
5.10all, or a portion of, the amount of a grant of a corporate franchise tax benefit certificate
5.11from the new or expanding biotechnology company under this section if the taxpayer
5.12fails to use the private financial assistance received for the surrender of tax benefits as
5.13required by this section or fails to maintain a headquarters or a base of operation in this
5.14state during the five years following receipt of the private financial assistance, except if
5.15the failure to maintain a headquarters or a base of operation in this state is due to the
5.16liquidation of the new or expanding biotechnology company, other than as a result of
5.17a merger or acquisition of the company.
5.18 Subd. 6. Approval of acquisition of tax benefits; purposes; required agreement.
5.19(a) The commissioner, in cooperation with the commissioner of revenue, shall review and
5.20approve applications by taxpayers under the corporate franchise tax in chapter 290 to
5.21acquire surrendered tax benefits approved under subdivision 3, which must be issued in
5.22the form of corporate franchise tax benefit transfer certificates, in exchange for private
5.23financial assistance to be made by the taxpayer in an amount equal to at least 75 percent of
5.24the amount of the surrendered tax benefit. The commissioner must not issue a corporate
5.25franchise tax benefit transfer certificate unless the applicant certifies that, as of the date of
5.26the exchange of the corporate franchise tax benefit certificate, it is operating as a new or
5.27expanding biotechnology company and has no intention to cease operating in this state.
5.28(b) The private financial assistance must be used for expenses incurred in connection
5.29with the operation of the new or expanding biotechnology company in this state, including,
5.30but not limited to, the expenses of fixed assets, such as the construction and acquisition
5.31and development of real estate, materials, start-up, tenant fit-out, working capital, salaries,
5.32research and development expenditures, and any other expenses determined by the
5.33commissioner to be necessary to carry out biotechnology company operations in this state.
5.34(c) The commissioner shall require a corporate franchise taxpayer that acquires
5.35a corporate franchise tax benefit certificate to enter into a written agreement with the
5.36new or expanding biotechnology company concerning the terms and conditions of the
6.1private financial assistance made in exchange for the certificate. The written agreement
6.2may contain terms concerning the maintenance by the new or expanding biotechnology
6.3company of a headquarters or a base of operation in this state.
6.4 Subd. 7. Program evaluation. (a) No later than December 31, 2016, the
6.5commissioner of revenue, after consultation with the commissioners of management and
6.6budget and employment and economic development, shall contract with a qualified outside
6.7entity or individual to evaluate the effects of the program on the Minnesota economy.
6.8The contractor must not be associated with, employed by, or have contracts with the
6.9entities involved in or associated with the biotechnology industry that benefits from the
6.10program. The program evaluation must be completed by January 2018, and provided to
6.11the chairs and ranking minority members of the legislative committees having jurisdiction
6.12over taxes and economic development in the senate and the house of representatives, in
6.13compliance with sections 3.195 and 3.197. The program evaluation must include, in
6.14addition to any other matters the commissioner of revenue considers relevant to evaluating
6.15the effectiveness of the tax benefit, analysis of:
6.16(1) the amount of economic activity, including the number of jobs and the wages of
6.17those jobs, generated by emerging biotechnology companies that received investments
6.18that qualified for the tax benefit;
6.19(2) the incremental change in Minnesota state and local taxes paid as a result of
6.20the tax benefit; and
6.21(3) the net benefit to the Minnesota economy of the tax benefit relative to alternative
6.22uses of the resources, such as increasing the research and development credit or reducing
6.23the corporate franchise tax rate.
6.24(b) To the extent necessary to complete the program evaluation, the consultant
6.25or consultants may request from the commissioner of revenue tax return information
6.26of taxpayers who surrender tax benefits under the program. To the extent necessary to
6.27complete the program evaluation, the consultant or consultants may request from the
6.28commissioner of employment and economic development applications for certification
6.29and annual reports made by qualified small businesses, qualified investors, and qualified
6.30funds. The consultant or consultants may not disclose or release any data received under
6.31this section except as permitted for a government entity under chapter 13. The consultant
6.32or consultants are subject to the penalties and remedies provided in law for violation
6.33of that chapter.
6.34 Subd. 8. Sunset. This section expires effective following the allocation for fiscal
6.35year 2019.
7.1EFFECTIVE DATE.This section is effective the day following final enactment
7.2and applies to taxable years beginning after December 31, 2012.
7.3 Sec. 2. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
7.4 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
7.5corporations, there shall be subtracted from federal taxable income after the increases
7.6provided in subdivision 19c:
7.7 (1) the amount of foreign dividend gross-up added to gross income for federal
7.8income tax purposes under section 78 of the Internal Revenue Code;
7.9 (2) the amount of salary expense not allowed for federal income tax purposes due to
7.10claiming the work opportunity credit under section 51 of the Internal Revenue Code;
7.11 (3) any dividend (not including any distribution in liquidation) paid within the
7.12taxable year by a national or state bank to the United States, or to any instrumentality of
7.13the United States exempt from federal income taxes, on the preferred stock of the bank
7.14owned by the United States or the instrumentality;
7.15 (4) amounts disallowed for intangible drilling costs due to differences between
7.16this chapter and the Internal Revenue Code in taxable years beginning before January
7.171, 1987, as follows:
7.18 (i) to the extent the disallowed costs are represented by physical property, an amount
7.19equal to the allowance for depreciation under Minnesota Statutes 1986, section
7.20subdivision 7
7.21 (ii) to the extent the disallowed costs are not represented by physical property, an
7.22amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
7.24 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
7.25Internal Revenue Code, except that:
7.26 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
7.27capital loss carrybacks shall not be allowed;
7.28 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
7.29a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
7.30allowed;
7.31 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
7.32capital loss carryback to each of the three taxable years preceding the loss year, subject to
7.33the provisions of Minnesota Statutes 1986, section
7.34 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
7.35a capital loss carryover to each of the five taxable years succeeding the loss year to the
8.1extent such loss was not used in a prior taxable year and subject to the provisions of
8.2Minnesota Statutes 1986, section
8.3 (6) an amount for interest and expenses relating to income not taxable for federal
8.4income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
8.5expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
8.6291 of the Internal Revenue Code in computing federal taxable income;
8.7 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
8.8which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
8.9reasonable allowance for depletion based on actual cost. In the case of leases the deduction
8.10must be apportioned between the lessor and lessee in accordance with rules prescribed
8.11by the commissioner. In the case of property held in trust, the allowable deduction must
8.12be apportioned between the income beneficiaries and the trustee in accordance with the
8.13pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
8.14of the trust's income allocable to each;
8.15 (8) for certified pollution control facilities placed in service in a taxable year
8.16beginning before December 31, 1986, and for which amortization deductions were elected
8.17under section 169 of the Internal Revenue Code of 1954, as amended through December
8.1831, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
8.191986, section
8.20 (9) amounts included in federal taxable income that are due to refunds of income,
8.21excise, or franchise taxes based on net income or related minimum taxes paid by the
8.22corporation to Minnesota, another state, a political subdivision of another state, the
8.23District of Columbia, or a foreign country or possession of the United States to the extent
8.24that the taxes were added to federal taxable income under section
8.25clause (1), in a prior taxable year;
8.26 (10) 80 percent of royalties, fees, or other like income accrued or received from a
8.27foreign operating corporation or a foreign corporation which is part of the same unitary
8.28business as the receiving corporation, unless the income resulting from such payments or
8.29accruals is income from sources within the United States as defined in subtitle A, chapter
8.301, subchapter N, part 1, of the Internal Revenue Code;
8.31 (11) income or gains from the business of mining as defined in section
8.32subdivision 1
8.33 (12) the amount of disability access expenditures in the taxable year which are not
8.34allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
9.1 (13) the amount of qualified research expenses not allowed for federal income tax
9.2purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
9.3the amount exceeds the amount of the credit allowed under section
9.4 (14) the amount of salary expenses not allowed for federal income tax purposes due to
9.5claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;
9.6 (15) for a corporation whose foreign sales corporation, as defined in section 922
9.7of the Internal Revenue Code, constituted a foreign operating corporation during any
9.8taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
9.9claiming the deduction under section
9.10the foreign operating corporation, an amount equal to
9.11income excluded under section 114 of the Internal Revenue Code, provided the income is
9.12not income of a foreign operating company;
9.13 (16) any decrease in subpart F income, as defined in section 952(a) of the Internal
9.14Revenue Code, for the taxable year when subpart F income is calculated without regard to
9.15the provisions of Division C, title III, section 303(b) of Public Law 110-343;
9.16 (17) in each of the five tax years immediately following the tax year in which an
9.17addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
9.18the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
9.19amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
9.20resulting delayed depreciation cannot be less than zero;
9.21 (18) in each of the five tax years immediately following the tax year in which an
9.22addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
9.23the amount of the addition;
9.24(19) to the extent included in federal taxable income, discharge of indebtedness
9.25income resulting from reacquisition of business indebtedness included in federal taxable
9.26income under section 108(i) of the Internal Revenue Code. This subtraction applies only
9.27to the extent that the income was included in net income in a prior year as a result of the
9.28addition under section
9.29(20) to the extent included in federal taxable income, amounts received in return for
9.30surrendering tax benefits under section 116J.8738.
9.31EFFECTIVE DATE.This section is effective for taxable years beginning after
9.32December 31, 2012.
9.33 Sec. 3. Minnesota Statutes 2012, section 290.01, subdivision 29, is amended to read:
9.34 Subd. 29. Taxable income. The term "taxable income" means:
9.35(1) for individuals, estates, and trusts, the same as taxable net income;
10.1(2) for corporations, the taxable net income less
10.2(i) the net operating loss deduction under section
10.3surrendered under section 116J.8738;
10.4(ii) the dividends received deduction under section
10.5(iii) the exemption for operating in a job opportunity building zone under section
10.7(iv) the exemption for operating in a biotechnology and health sciences industry
10.8zone under section
10.9EFFECTIVE DATE.This section is effective for taxable years beginning after
10.10December 31, 2012.
10.11 Sec. 4. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
10.12to read:
10.13 Subd. 37. Credit; technology corporate franchise tax certificate transfer.
10.14A taxpayer may take a credit against the tax imposed under subdivision 1 or section
10.15290.0921 equal to the amount of the transferable tax benefits certified to the taxpayer for
10.16the taxable year by the commissioner of employment and economic development under
10.17section 116J.8738. This credit is allowed against the liability for tax of any member of the
10.18unitary business that is included in the combined report of the taxpayer.
10.19EFFECTIVE DATE.This section is effective for taxable years beginning after
10.20December 31, 2012.
10.21 Sec. 5. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
10.22 Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
10.23income" is Minnesota net income as defined in section
10.24includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
10.25(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
10.26Minnesota tax return, the minimum tax must be computed on a separate company basis.
10.27If a corporation is part of a tax group filing a unitary return, the minimum tax must be
10.28computed on a unitary basis. The following adjustments must be made.
10.29(1) For purposes of the depreciation adjustments under section 56(a)(1) and
10.3056(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
10.31service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
10.32income tax purposes, including any modification made in a taxable year under section
11.2paragraph (c).
11.3For taxable years beginning after December 31, 2000, the amount of any remaining
11.4modification made under section
11.5section
11.6allowance in the first taxable year after December 31, 2000.
11.7(2) The portion of the depreciation deduction allowed for federal income tax
11.8purposes under section 168(k) of the Internal Revenue Code that is required as an
11.9addition under section
11.10alternative minimum taxable income.
11.11(3) The subtraction for depreciation allowed under section
11.12clause (17), is allowed as a depreciation deduction in determining alternative minimum
11.13taxable income.
11.14(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
11.15of the Internal Revenue Code does not apply.
11.16(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
11.17Revenue Code does not apply.
11.18(6) The special rule for dividends from section 936 companies under section
11.1956(g)(4)(C)(iii) does not apply.
11.20(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
11.21Code does not apply.
11.22(8) The tax preference for intangible drilling costs under section 57(a)(2) of the
11.23Internal Revenue Code must be calculated without regard to subparagraph (E) and the
11.24subtraction under section
11.25(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
11.26Revenue Code does not apply.
11.27(10) The tax preference for charitable contributions of appreciated property under
11.28section 57(a)(6) of the Internal Revenue Code does not apply.
11.29(11) For purposes of calculating the tax preference for accelerated depreciation or
11.30amortization on certain property placed in service before January 1, 1987, under section
11.3157(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
11.32deduction allowed under section
11.33For taxable years beginning after December 31, 2000, the amount of any remaining
11.34modification made under section
11.35depreciation or amortization allowance in the first taxable year after December 31, 2004.
12.1(12) For purposes of calculating the adjustment for adjusted current earnings in
12.2section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
12.3income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
12.4minimum taxable income as defined in this subdivision, determined without regard to the
12.5adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
12.6(13) For purposes of determining the amount of adjusted current earnings under
12.7section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
12.856(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
12.9gross-up subtracted as provided in section
12.10amount of refunds of income, excise, or franchise taxes subtracted as provided in section
12.12income subtracted as provided in section
12.13(14) Alternative minimum taxable income excludes the income from operating in a
12.14job opportunity building zone as provided under section
12.15(15) Alternative minimum taxable income excludes the income from operating in a
12.16biotechnology and health sciences industry zone as provided under section
12.17(16) The subtraction under section 290.01, subdivision 19d, paragraph (20), for
12.18amounts received in return for surrendering tax benefits, is allowed in determining
12.19alternative minimum taxable income.
12.20Items of tax preference must not be reduced below zero as a result of the
12.21modifications in this subdivision.
12.22EFFECTIVE DATE.This section is effective for taxable years beginning after
12.23December 31, 2012.
