Bill Text: MN SF603 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Income and franchise tax provisions internal revenue code conformance; working family credit phaseout for married filers extension; individual income tax returns for certain IRA rollovers of airline payments modification
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2013-02-21 - Referred to Taxes [SF603 Detail]
Download: Minnesota-2013-SF603-Introduced.html
1.2relating to taxes; income; franchise; conforming to changes in the Internal
1.3Revenue Code; extending the working family credit phaseout for married
1.4filers;amending Minnesota Statutes 2012, sections 289A.02, subdivision 7;
1.5290.01, subdivisions 19, 19a, 19b, 19c, 31, by adding a subdivision; 290.0671,
1.6subdivision 1; 290A.03, subdivision 15; 291.005, subdivision 1.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2012, section 289A.02, subdivision 7, is amended to read:
1.9 Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal
1.10Revenue Code" means the Internal Revenue Code of 1986, as amended throughApril
1.1114, 2011 January 3, 2013.
1.12EFFECTIVE DATE.This section is effective the day following final enactment.
1.13 Sec. 2. Minnesota Statutes 2012, section 290.01, subdivision 19, is amended to read:
1.14 Subd. 19. Net income. The term "net income" means the federal taxable income,
1.15as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
1.16date named in this subdivision, incorporating the federal effective dates of changes to the
1.17Internal Revenue Code and any elections made by the taxpayer in accordance with the
1.18Internal Revenue Code in determining federal taxable income for federal income tax
1.19purposes, and with the modifications provided in subdivisions 19a to 19f.
1.20 In the case of a regulated investment company or a fund thereof, as defined in section
1.21851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
1.22company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
1.23except that:
2.1 (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
2.2Revenue Code does not apply;
2.3 (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
2.4Revenue Code must be applied by allowing a deduction for capital gain dividends and
2.5exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
2.6Revenue Code; and
2.7 (3) the deduction for dividends paid must also be applied in the amount of any
2.8undistributed capital gains which the regulated investment company elects to have treated
2.9as provided in section 852(b)(3)(D) of the Internal Revenue Code.
2.10 The net income of a real estate investment trust as defined and limited by section
2.11856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
2.12taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
2.13 The net income of a designated settlement fund as defined in section 468B(d) of
2.14the Internal Revenue Code means the gross income as defined in section 468B(b) of the
2.15Internal Revenue Code.
2.16 The Internal Revenue Code of 1986, as amended throughApril 14, 2011 January
2.173, 2013, shall be in effect for taxable years beginning after December 31, 1996.The
2.18provisions of the act of January 22, 2010, Public Law 111-126, to accelerate the benefits
2.19for charitable cash contributions for the relief of victims of the Haitian earthquake, are
2.20effective at the same time they became effective for federal purposes and apply to the
2.21subtraction under subdivision 19b, clause (6). The provisions of title II, section 2112, of
2.22the act of September 27, 2010, Public Law 111-240, rollovers from elective deferral plans
2.23to designated Roth accounts, are effective at the same time they became effective for
2.24federal purposes and taxable rollovers are included in net income at the same time they are
2.25included in gross income for federal purposes.
2.26 Except as otherwise provided, references to the Internal Revenue Code in
2.27subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
2.28the applicable year.
2.29EFFECTIVE DATE.This section is effective the day following final enactment,
2.30except the changes incorporated by federal changes are effective at the same time as the
2.31changes were effective for federal purposes.
2.32 Sec. 3. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
2.33 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
2.34trusts, there shall be added to federal taxable income:
3.1 (1)(i) interest income on obligations of any state other than Minnesota or a political
3.2or governmental subdivision, municipality, or governmental agency or instrumentality
3.3of any state other than Minnesota exempt from federal income taxes under the Internal
3.4Revenue Code or any other federal statute; and
3.5 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
3.6Code, except:
3.7(A) the portion of the exempt-interest dividends exempt from state taxation under
3.8the laws of the United States; and
3.9(B) the portion of the exempt-interest dividends derived from interest income
3.10on obligations of the state of Minnesota or its political or governmental subdivisions,
3.11municipalities, governmental agencies or instrumentalities, but only if the portion of the
3.12exempt-interest dividends from such Minnesota sources paid to all shareholders represents
3.1395 percent or more of the exempt-interest dividends, including any dividends exempt
3.14under subitem (A), that are paid by the regulated investment company as defined in section
3.15851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
3.16defined in section 851(g) of the Internal Revenue Code, making the payment; and
3.17 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
3.18government described in section 7871(c) of the Internal Revenue Code shall be treated as
3.19interest income on obligations of the state in which the tribe is located;
3.20 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
3.21accrued within the taxable year under this chapter and the amount of taxes based on net
3.22income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state
3.23or to any province or territory of Canada, to the extent allowed as a deduction under
3.24section 63(d) of the Internal Revenue Code, but the addition may not be more than the
3.25amount by which theitemized deductions as allowed under section 63(d) of the Internal
3.26Revenue Code state itemized deduction exceeds the amount of the standard deduction as
3.27defined in section 63(c) of the Internal Revenue Code, disregarding the amounts allowed
3.28undersections 63(c)(1)(C) and section 63(c)(1)(E) of the Internal Revenue Code, minus
3.29any addition that would have been required under clause (21) if the taxpayer had claimed
3.30the standard deduction.For the purpose of this paragraph, the disallowance of itemized
3.31deductions under section 68 of the Internal Revenue Code of 1986, income, sales and
3.32use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed For
3.33purposes of this paragraph, income, sales and use, motor vehicle sales, or excise taxes are
3.34the last itemized deductions disallowed under subdivision 19a, clause (19);
3.35 (3) the capital gain amount of a lump-sum distribution to which the special tax under
3.36section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
4.1 (4) the amount of income taxes paid or accrued within the taxable year under this
4.2chapter and taxes based on net income paid to any other state or any province or territory
4.3of Canada, to the extent allowed as a deduction in determining federal adjusted gross
4.4income. For the purpose of this paragraph, income taxes do not include the taxes imposed
4.5by sections290.0922, subdivision 1 , paragraph (b),
290.9727 ,
290.9728 , and
290.9729 ;
4.6 (5) the amount of expense, interest, or taxes disallowed pursuant to section290.10
4.7other than expenses or interest used in computing net interest income for the subtraction
4.8allowed under subdivision 19b, clause (1);
4.9 (6) the amount of a partner's pro rata share of net income which does not flow
4.10through to the partner because the partnership elected to pay the tax on the income under
4.11section 6242(a)(2) of the Internal Revenue Code;
4.12 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
4.13Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
4.14in the taxable year generates a deduction for depreciation under section 168(k) and the
4.15activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
4.16the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
4.17limited to excess of the depreciation claimed by the activity under section 168(k) over the
4.18amount of the loss from the activity that is not allowed in the taxable year. In succeeding
4.19taxable years when the losses not allowed in the taxable year are allowed, the depreciation
4.20under section 168(k) is allowed;
4.21 (8) for taxable years beginning before January 1, 2012, 80 percent of the amount by
4.22which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
4.23deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
4.24through December 31, 2003;
4.25 (9) to the extent deducted in computing federal taxable income, the amount of the
4.26deduction allowable under section 199 of the Internal Revenue Code;
4.27 (10) for taxable years beginning before January 1, 2013, the exclusion allowed under
4.28section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
4.29(11) the amount of expenses disallowed under section 290.10, subdivision 2;
4.30 (12) for taxable years beginning before January 1, 2010, the amount deducted for
4.31qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
4.32the extent deducted from gross income;
4.33 (13) for taxable years beginning before January 1, 2010, the amount deducted for
4.34certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
4.35of the Internal Revenue Code, to the extent deducted from gross income;
5.1(14) the additional standard deduction for property taxes payable that is allowable
5.2under section 63(c)(1)(C) of the Internal Revenue Code;
5.3(15) the additional standard deduction for qualified motor vehicle sales taxes
5.4allowable under section 63(c)(1)(E) of the Internal Revenue Code;
5.5(16) discharge of indebtedness income resulting from reacquisition of business
5.6indebtedness and deferred under section 108(i) of the Internal Revenue Code;
5.7(17) the amount of unemployment compensation exempt from tax under section
5.885(c) of the Internal Revenue Code;
5.9(18) changes to federal taxable income attributable to a net operating loss that the
5.10taxpayer elected to carry back for more than two years for federal purposes but for which
5.11the losses can be carried back for only two years under section290.095, subdivision
5.1211, paragraph (c);
5.13(19) to the extent included in the computation of federal taxable income in taxable
5.14years beginning after December 31, 2010, the amount of disallowed itemized deductions,
5.15but the amount of disallowed itemized deductions plus the addition required under clause
5.16(2) may not be more than the amount by which the itemized deductions as allowed under
5.17section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction
5.18as defined in section 63(c) of the Internal Revenue Code, disregarding the amounts
5.19allowed undersections 63(c)(1)(C) and section 63(c)(1)(E) of the Internal Revenue Code,
5.20and reduced by any addition that would have been required under clause (21) if the
5.21taxpayer had claimed the standard deduction:
5.22(i) the amount of disallowed itemized deductions is equal to the lesser of:
5.23(A) three percent of the excess of the taxpayer's federal adjusted gross income
5.24over the applicable amount; or
5.25(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
5.26taxpayer under the Internal Revenue Code for the taxable year;
5.27(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
5.28married individual filing a separate return. Each dollar amount shall be increased by
5.29an amount equal to:
5.30(A) such dollar amount, multiplied by
5.31(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
5.32Revenue Code for the calendar year in which the taxable year begins, by substituting
5.33"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
5.34(iii) the term "itemized deductions" does not include:
5.35(A) the deduction for medical expenses under section 213 of the Internal Revenue
5.36Code;
6.1(B) any deduction for investment interest as defined in section 163(d) of the Internal
6.2Revenue Code; and
6.3(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
6.4theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
6.5Code or for losses described in section 165(d) of the Internal Revenue Code;
6.6(20) to the extent included in federal taxable income in taxable years beginning after
6.7December 31, 2010, the amount of disallowed personal exemptions for taxpayers with
6.8federal adjusted gross income over the threshold amount:
6.9(i) the disallowed personal exemption amount is equal to the dollar amount of the
6.10personal exemptions claimed by the taxpayer in the computation of federal taxable income
6.11multiplied by the applicable percentage;
6.12(ii) "applicable percentage" means two percentage points for each $2,500 (or
6.13fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
6.14year exceeds the threshold amount. In the case of a married individual filing a separate
6.15return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
6.16no event shall the applicable percentage exceed 100 percent;
6.17(iii) the term "threshold amount" means:
6.18(A) $150,000 in the case of a joint return or a surviving spouse;
6.19(B) $125,000 in the case of a head of a household;
6.20(C) $100,000 in the case of an individual who is not married and who is not a
6.21surviving spouse or head of a household; and
6.22(D) $75,000 in the case of a married individual filing a separate return; and
6.23(iv) the thresholds shall be increased by an amount equal to:
6.24(A) such dollar amount, multiplied by
6.25(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
6.26Revenue Code for the calendar year in which the taxable year begins, by substituting
6.27"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and
6.28(21) to the extent deducted in the computation of federal taxable income, for taxable
6.29years beginning after December 31, 2010, and before January 1,2013 2012, the difference
6.30between the standard deduction allowed under section 63(c) of the Internal Revenue Code
6.31and the standard deduction allowed for 2011and 2012 under the Internal Revenue Code
6.32as amended through December 1, 2010.
6.33EFFECTIVE DATE.This section is effective retroactively for taxable years
6.34beginning after December 31, 2011.
6.35 Sec. 4. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
7.1 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
7.2and trusts, there shall be subtracted from federal taxable income:
7.3 (1) net interest income on obligations of any authority, commission, or
7.4instrumentality of the United States to the extent includable in taxable income for federal
7.5income tax purposes but exempt from state income tax under the laws of the United States;
7.6 (2) if included in federal taxable income, the amount of any overpayment of income
7.7tax to Minnesota or to any other state, for any previous taxable year, whether the amount
7.8is received as a refund or as a credit to another taxable year's income tax liability;
7.9 (3) the amount paid to others, less the amount used to claim the credit allowed under
7.10section290.0674 , not to exceed $1,625 for each qualifying child in grades kindergarten
7.11to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
7.12transportation of each qualifying child in attending an elementary or secondary school
7.13situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
7.14resident of this state may legally fulfill the state's compulsory attendance laws, which
7.15is not operated for profit, and which adheres to the provisions of the Civil Rights Act
7.16of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
7.17tuition as defined in section290.0674, subdivision 1 , clause (1). As used in this clause,
7.18"textbooks" includes books and other instructional materials and equipment purchased
7.19or leased for use in elementary and secondary schools in teaching only those subjects
7.20legally and commonly taught in public elementary and secondary schools in this state.
7.21Equipment expenses qualifying for deduction includes expenses as defined and limited in
7.22section290.0674, subdivision 1 , clause (3). "Textbooks" does not include instructional
7.23books and materials used in the teaching of religious tenets, doctrines, or worship, the
7.24purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
7.25or materials for, or transportation to, extracurricular activities including sporting events,
7.26musical or dramatic events, speech activities, driver's education, or similar programs. No
7.27deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
7.28the qualifying child's vehicle to provide such transportation for a qualifying child. For
7.29purposes of the subtraction provided by this clause, "qualifying child" has the meaning
7.30given in section 32(c)(3) of the Internal Revenue Code;
7.31 (4) income as provided under section290.0802 ;
7.32 (5) to the extent included in federal adjusted gross income, income realized on
7.33disposition of property exempt from tax under section290.491 ;
7.34 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
7.35of the Internal Revenue Code in determining federal taxable income by an individual
7.36who does not itemize deductions for federal income tax purposes for the taxable year, an
8.1amount equal to 50 percent of the excess of charitable contributions over $500 allowable
8.2as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
8.3under the provisions of Public Law 109-1 and Public Law 111-126;
8.4 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
8.5qualify for a credit under section290.06, subdivision 22 , an amount equal to the carryover
8.6of subnational foreign taxes for the taxable year, but not to exceed the total subnational
8.7foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
8.8"federal foreign tax credit" means the credit allowed under section 27 of the Internal
8.9Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
8.10under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
8.11the extent they exceed the federal foreign tax credit;
8.12 (8) in each of the five tax years immediately following the tax year in which an
8.13addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case of a
8.14shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
8.15delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
8.16of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
8.17clause (15), in the case of a shareholder of an S corporation, minus the positive value of
8.18any net operating loss under section 172 of the Internal Revenue Code generated for the
8.19tax year of the addition. The resulting delayed depreciation cannot be less than zero;
8.20 (9) job opportunity building zone income as provided under section469.316 ;
8.21 (10) to the extent included in federal taxable income, the amount of compensation
8.22paid to members of the Minnesota National Guard or other reserve components of the
8.23United States military for active service, excluding compensation for services performed
8.24under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
8.25service" means (i) state active service as defined in section190.05, subdivision 5a , clause
8.26(1); or (ii) federally funded state active service as defined in section190.05, subdivision
8.275b , but "active service" excludes service performed in accordance with section
190.08,
8.28subdivision 3 ;
8.29 (11) to the extent included in federal taxable income, the amount of compensation
8.30paid to Minnesota residents who are members of the armed forces of the United States
8.31or United Nations for active duty performed under United States Code, title 10; or the
8.32authority of the United Nations;
8.33 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
8.34qualified donor's donation, while living, of one or more of the qualified donor's organs
8.35to another person for human organ transplantation. For purposes of this clause, "organ"
8.36means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
9.1"human organ transplantation" means the medical procedure by which transfer of a human
9.2organ is made from the body of one person to the body of another person; "qualified
9.3expenses" means unreimbursed expenses for both the individual and the qualified donor
9.4for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
9.5may be subtracted under this clause only once; and "qualified donor" means the individual
9.6or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
9.7individual may claim the subtraction in this clause for each instance of organ donation for
9.8transplantation during the taxable year in which the qualified expenses occur;
9.9 (13) in each of the five tax years immediately following the tax year in which an
9.10addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
9.11shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
9.12addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
9.13case of a shareholder of a corporation that is an S corporation, minus the positive value of
9.14any net operating loss under section 172 of the Internal Revenue Code generated for the
9.15tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
9.16subtraction is not allowed under this clause;
9.17 (14) to the extent included in the federal taxable income of a nonresident of
9.18Minnesota, compensation paid to a service member as defined in United States Code, title
9.1910, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
9.20Act, Public Law 108-189, section 101(2);
9.21 (15) to the extent included in federal taxable income, the amount of national service
9.22educational awards received from the National Service Trust under United States Code,
9.23title 42, sections 12601 to 12604, for service in an approved Americorps National Service
9.24program;
9.25(16) to the extent included in federal taxable income, discharge of indebtedness
9.26income resulting from reacquisition of business indebtedness included in federal taxable
9.27income under section 108(i) of the Internal Revenue Code. This subtraction applies only
9.28to the extent that the income was included in net income in a prior year as a result of the
9.29addition under section290.01, subdivision 19a , clause (16); and
9.30(17) the amount of the net operating loss allowed under section290.095, subdivision
9.3111 , paragraph (c).;
9.32(18) the amount of the limitation on itemized deductions under section 68(b) of
9.33the Internal Revenue Code; and
9.34(19) the amount of the phaseout of personal exemptions under section 151(d) of the
9.35Internal Revenue Code.
10.1EFFECTIVE DATE.This section is effective for taxable years beginning after
10.2December 31, 2012.
10.3 Sec. 5. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
10.4 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
10.5there shall be added to federal taxable income:
10.6 (1) the amount of any deduction taken for federal income tax purposes for income,
10.7excise, or franchise taxes based on net income or related minimum taxes, including but not
10.8limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
10.9another state, a political subdivision of another state, the District of Columbia, or any
10.10foreign country or possession of the United States;
10.11 (2) interest not subject to federal tax upon obligations of: the United States, its
10.12possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
10.13state, any of its political or governmental subdivisions, any of its municipalities, or any
10.14of its governmental agencies or instrumentalities; the District of Columbia; or Indian
10.15tribal governments;
10.16 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
10.17Revenue Code;
10.18 (4) the amount of any net operating loss deduction taken for federal income tax
10.19purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
10.20deduction under section 810 of the Internal Revenue Code;
10.21 (5) the amount of any special deductions taken for federal income tax purposes
10.22under sections 241 to 247 and 965 of the Internal Revenue Code;
10.23 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
10.24clause (a), that are not subject to Minnesota income tax;
10.25 (7) the amount of any capital losses deducted for federal income tax purposes under
10.26sections 1211 and 1212 of the Internal Revenue Code;
10.27 (8) the exempt foreign trade income of a foreign sales corporation under sections
10.28921(a) and 291 of the Internal Revenue Code;
10.29 (9) the amount of percentage depletion deducted under sections 611 through 614 and
10.30291 of the Internal Revenue Code;
10.31 (10) for certified pollution control facilities placed in service in a taxable year
10.32beginning before December 31, 1986, and for which amortization deductions were elected
10.33under section 169 of the Internal Revenue Code of 1954, as amended through December
10.3431, 1985, the amount of the amortization deduction allowed in computing federal taxable
10.35income for those facilities;
11.1 (11) the amount of any deemed dividend from a foreign operating corporation
11.2determined pursuant to section290.17, subdivision 4 , paragraph (g). The deemed dividend
11.3shall be reduced by the amount of the addition to income required by clauses (20), (21),
11.4(22), and (23);
11.5 (12) the amount of a partner's pro rata share of net income which does not flow
11.6through to the partner because the partnership elected to pay the tax on the income under
11.7section 6242(a)(2) of the Internal Revenue Code;
11.8 (13) the amount of net income excluded under section 114 of the Internal Revenue
11.9Code;
11.10 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
11.11Revenue Code, for the taxable year when subpart F income is calculated without regard to
11.12the provisions of Division C, title III, section 303(b) of Public Law 110-343;
11.13 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
11.14and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
11.15has an activity that in the taxable year generates a deduction for depreciation under
11.16section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
11.17that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
11.18under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
11.19depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
11.20amount of the loss from the activity that is not allowed in the taxable year. In succeeding
11.21taxable years when the losses not allowed in the taxable year are allowed, the depreciation
11.22under section 168(k)(1)(A) and (k)(4)(A) is allowed;
11.23 (16) for taxable years beginning before January 1, 2012, 80 percent of the amount by
11.24which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
11.25deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
11.26through December 31, 2003;
11.27 (17) to the extent deducted in computing federal taxable income, the amount of the
11.28deduction allowable under section 199 of the Internal Revenue Code;
11.29 (18) for taxable years beginning before January 1, 2013, the exclusion allowed under
11.30section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
11.31 (19) the amount of expenses disallowed under section290.10, subdivision 2 ;
11.32 (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
11.33accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
11.34of a corporation that is a member of the taxpayer's unitary business group that qualifies
11.35as a foreign operating corporation. For purposes of this clause, intangible expenses and
11.36costs include:
12.1 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
12.2use, maintenance or management, ownership, sale, exchange, or any other disposition of
12.3intangible property;
12.4 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
12.5transactions;
12.6 (iii) royalty, patent, technical, and copyright fees;
12.7 (iv) licensing fees; and
12.8 (v) other similar expenses and costs.
12.9For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
12.10applications, trade names, trademarks, service marks, copyrights, mask works, trade
12.11secrets, and similar types of intangible assets.
12.12This clause does not apply to any item of interest or intangible expenses or costs paid,
12.13accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
12.14to such item of income to the extent that the income to the foreign operating corporation
12.15is income from sources without the United States as defined in subtitle A, chapter 1,
12.16subchapter N, part 1, of the Internal Revenue Code;
12.17 (21) except as already included in the taxpayer's taxable income pursuant to clause
12.18(20), any interest income and income generated from intangible property received or
12.19accrued by a foreign operating corporation that is a member of the taxpayer's unitary
12.20group. For purposes of this clause, income generated from intangible property includes:
12.21 (i) income related to the direct or indirect acquisition, use, maintenance or
12.22management, ownership, sale, exchange, or any other disposition of intangible property;
12.23 (ii) income from factoring transactions or discounting transactions;
12.24 (iii) royalty, patent, technical, and copyright fees;
12.25 (iv) licensing fees; and
12.26 (v) other similar income.
12.27For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
12.28applications, trade names, trademarks, service marks, copyrights, mask works, trade
12.29secrets, and similar types of intangible assets.
12.30This clause does not apply to any item of interest or intangible income received or accrued
12.31by a foreign operating corporation with respect to such item of income to the extent that
12.32the income is income from sources without the United States as defined in subtitle A,
12.33chapter 1, subchapter N, part 1, of the Internal Revenue Code;
12.34 (22) the dividends attributable to the income of a foreign operating corporation that
12.35is a member of the taxpayer's unitary group in an amount that is equal to the dividends
13.1paid deduction of a real estate investment trust under section 561(a) of the Internal
13.2Revenue Code for amounts paid or accrued by the real estate investment trust to the
13.3foreign operating corporation;
13.4 (23) the income of a foreign operating corporation that is a member of the taxpayer's
13.5unitary group in an amount that is equal to gains derived from the sale of real or personal
13.6property located in the United States;
13.7 (24) for taxable years beginning before January 1, 2010, the additional amount
13.8allowed as a deduction for donation of computer technology and equipment under section
13.9170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
13.10(25) discharge of indebtedness income resulting from reacquisition of business
13.11indebtedness and deferred under section 108(i) of the Internal Revenue Code.
13.12EFFECTIVE DATE.This section is effective retroactively for taxable years
13.13beginning after December 31, 2011.
13.14 Sec. 6. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision
13.15to read:
13.16 Subd. 29a. State itemized deduction. The term "state itemized deduction" means
13.17federal itemized deductions, as defined in section 63(d) of the Internal Revenue Code,
13.18disregarding any limitation under section 68 of the Internal Revenue Code, and reduced
13.19by the amount of the addition required under subdivision 19a, clause (19).
13.20EFFECTIVE DATE.This section is effective for taxable years beginning after
13.21December 31, 2012.
13.22 Sec. 7. Minnesota Statutes 2012, section 290.01, subdivision 31, is amended to read:
13.23 Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal
13.24Revenue Code" means the Internal Revenue Code of 1986, as amended throughApril 14,
13.252011 January 3, 2013. Internal Revenue Code also includes any uncodified provision in
13.26federal law that relates to provisions of the Internal Revenue Code that are incorporated
13.27into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1,
13.28subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as
13.29amended through March 18, 2010.
13.30EFFECTIVE DATE.This section is effective the day following final enactment,
13.31except the changes incorporated by federal changes are effective at the same time as the
13.32changes were effective for federal purposes.
14.1 Sec. 8. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
14.2 Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
14.3imposed by this chapter equal to a percentage of earned income. To receive a credit, a
14.4taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
14.5(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
14.6the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
14.7income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
14.8case is the credit less than zero.
14.9(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
14.10$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
14.11$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
14.12whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
14.13(d) For individuals with two or more qualifying children, the credit equals ten percent
14.14of the first $9,720 of earned income and 20 percent of earned income over $14,860 but less
14.15than $16,800. The credit is reduced by 10.3 percent of earned income or adjusted gross
14.16income, whichever is greater, in excess of $17,890, but in no case is the credit less than zero.
14.17(e) For a nonresident or part-year resident, the credit must be allocated based on the
14.18percentage calculated under section290.06, subdivision 2c , paragraph (e).
14.19(f) For a person who was a resident for the entire tax year and has earned income
14.20not subject to tax under this chapter, including income excluded under section290.01,
14.21subdivision 19b , clause (9), the credit must be allocated based on the ratio of federal
14.22adjusted gross income reduced by the earned income not subject to tax under this chapter
14.23over federal adjusted gross income. For purposes of this paragraph, the subtractions
14.24for military pay under section290.01, subdivision 19b , clauses (10) and (11), are not
14.25considered "earned income not subject to tax under this chapter."
14.26For the purposes of this paragraph, the exclusion of combat pay under section 112
14.27of the Internal Revenue Code is not considered "earned income not subject to tax under
14.28this chapter."
14.29(g) For tax years beginning after December 31, 2007, and before December 31,
14.302010, and for the tax year beginning after December 31, 2017, the $5,770 in paragraph (b),
14.31the $15,080 in paragraph (c), and the $17,890 in paragraph (d), after being adjusted for
14.32inflation under subdivision 7, are each increased by $3,000 for married taxpayers filing joint
14.33returns. For tax years beginning after December 31, 2008, the commissioner shall annually
14.34adjust the $3,000 by the percentage determined pursuant to the provisions of section 1(f)
14.35of the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2007" shall be
14.36substituted for the word "1992." For 2009, the commissioner shall then determine the
15.1percent change from the 12 months ending on August 31, 2007, to the 12 months ending on
15.2August 31, 2008, and in each subsequent year, from the 12 months ending on August 31,
15.32007, to the 12 months ending on August 31 of the year preceding the taxable year. The
15.4earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
15.5amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
15.6commissioner under this subdivision is not a rule under the Administrative Procedure Act.
15.7(h) For tax years beginning after December 31, 2010, and before January 1,2012
15.8 2018, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
15.9paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
15.10$5,000 for married taxpayers filing joint returns. For tax years beginning after December
15.1131, 2010, and before January 1,2012 2018, the commissioner shall annually adjust
15.12the $5,000 by the percentage determined pursuant to the provisions of section 1(f) of
15.13the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be
15.14substituted for the word "1992." For 2011, the commissioner shall then determine the
15.15percent change from the 12 months ending on August 31, 2008, to the 12 months ending on
15.16August 31, 2010, and in each subsequent year, from the 12 months ending on August 31,
15.172008, to the 12 months ending on August 31 of the year preceding the taxable year. The
15.18earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
15.19amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
15.20commissioner under this subdivision is not a rule under the Administrative Procedure Act.
15.21(i) The commissioner shall construct tables showing the amount of the credit at
15.22various income levels and make them available to taxpayers. The tables shall follow
15.23the schedule contained in this subdivision, except that the commissioner may graduate
15.24the transition between income brackets.
15.25EFFECTIVE DATE.This section is effective retroactively for taxable years
15.26beginning after December 31, 2011.
15.27 Sec. 9. Minnesota Statutes 2012, section 290A.03, subdivision 15, is amended to read:
15.28 Subd. 15. Internal Revenue Code. "Internal Revenue Code" means the Internal
15.29Revenue Code of 1986, as amended throughApril 14, 2011 January 3, 2013.
15.30EFFECTIVE DATE.This section is effective for property tax refunds based on
15.31property taxes payable after December 31, 2012, and rent paid after December 31, 2011.
15.32 Sec. 10. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
16.1 Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
16.2terms used in this chapter shall have the following meanings:
16.3 (1) "Commissioner" means the commissioner of revenue or any person to whom the
16.4commissioner has delegated functions under this chapter.
16.5 (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
16.6and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
16.7 (3) "Internal Revenue Code" means the United States Internal Revenue Code of
16.81986, as amended throughApril 14, 2011 January 3, 2013, but without regard to the
16.9provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law
16.10111-312, and section 301(c) of Public Law 111-312.
16.11 (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
16.12defined by section 2011(b)(3) of the Internal Revenue Code, plus
16.13(i) the amount of deduction for state death taxes allowed under section 2058 of
16.14the Internal Revenue Code; less
16.15(ii)(A) the value of qualified small business property under section291.03,
16.16subdivision 9 , and the value of qualified farm property under section
291.03, subdivision
16.1710 , or (B) $4,000,000, whichever is less.
16.18 (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
16.19excluding therefrom any property included therein which has its situs outside Minnesota,
16.20and (b) including therein any property omitted from the federal gross estate which is
16.21includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
16.22authorities.
16.23 (6) "Nonresident decedent" means an individual whose domicile at the time of
16.24death was not in Minnesota.
16.25 (7) "Personal representative" means the executor, administrator or other person
16.26appointed by the court to administer and dispose of the property of the decedent. If there
16.27is no executor, administrator or other person appointed, qualified, and acting within this
16.28state, then any person in actual or constructive possession of any property having a situs in
16.29this state which is included in the federal gross estate of the decedent shall be deemed
16.30to be a personal representative to the extent of the property and the Minnesota estate tax
16.31due with respect to the property.
16.32 (8) "Resident decedent" means an individual whose domicile at the time of death
16.33was in Minnesota.
16.34 (9) "Situs of property" means, with respect to real property, the state or country in
16.35which it is located; with respect to tangible personal property, the state or country in which
16.36it was normally kept or located at the time of the decedent's death; and with respect to
17.1intangible personal property, the state or country in which the decedent was domiciled
17.2at death.
17.3EFFECTIVE DATE.This section is effective at the same time as the changes in
17.4federal law are effective.
17.5 Sec. 11. AMENDED RETURNS; CERTAIN IRA ROLLOVERS.
17.6An individual who excludes an amount from net income in a prior taxable year
17.7through rollover of an airline payment amount to a traditional IRA, as authorized under
17.8Public Law 112-95, section 1106, may file an amended individual income tax return and
17.9claim for refund of state taxes as provided under Minnesota Statutes, section 289A.40,
17.10subdivision 1, or, if later, by April 15, 2013.
17.11EFFECTIVE DATE.This section is effective the day following final enactment.
1.3Revenue Code; extending the working family credit phaseout for married
1.4filers;amending Minnesota Statutes 2012, sections 289A.02, subdivision 7;
1.5290.01, subdivisions 19, 19a, 19b, 19c, 31, by adding a subdivision; 290.0671,
1.6subdivision 1; 290A.03, subdivision 15; 291.005, subdivision 1.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2012, section 289A.02, subdivision 7, is amended to read:
1.9 Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal
1.10Revenue Code" means the Internal Revenue Code of 1986, as amended through
1.11
1.12EFFECTIVE DATE.This section is effective the day following final enactment.
1.13 Sec. 2. Minnesota Statutes 2012, section 290.01, subdivision 19, is amended to read:
1.14 Subd. 19. Net income. The term "net income" means the federal taxable income,
1.15as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
1.16date named in this subdivision, incorporating the federal effective dates of changes to the
1.17Internal Revenue Code and any elections made by the taxpayer in accordance with the
1.18Internal Revenue Code in determining federal taxable income for federal income tax
1.19purposes, and with the modifications provided in subdivisions 19a to 19f.
1.20 In the case of a regulated investment company or a fund thereof, as defined in section
1.21851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
1.22company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
1.23except that:
2.1 (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
2.2Revenue Code does not apply;
2.3 (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
2.4Revenue Code must be applied by allowing a deduction for capital gain dividends and
2.5exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
2.6Revenue Code; and
2.7 (3) the deduction for dividends paid must also be applied in the amount of any
2.8undistributed capital gains which the regulated investment company elects to have treated
2.9as provided in section 852(b)(3)(D) of the Internal Revenue Code.
2.10 The net income of a real estate investment trust as defined and limited by section
2.11856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
2.12taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
2.13 The net income of a designated settlement fund as defined in section 468B(d) of
2.14the Internal Revenue Code means the gross income as defined in section 468B(b) of the
2.15Internal Revenue Code.
2.16 The Internal Revenue Code of 1986, as amended through
2.173, 2013, shall be in effect for taxable years beginning after December 31, 1996.
2.18
2.19
2.20
2.21
2.22
2.23
2.24
2.25
2.26 Except as otherwise provided, references to the Internal Revenue Code in
2.27subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
2.28the applicable year.
2.29EFFECTIVE DATE.This section is effective the day following final enactment,
2.30except the changes incorporated by federal changes are effective at the same time as the
2.31changes were effective for federal purposes.
2.32 Sec. 3. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
2.33 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
2.34trusts, there shall be added to federal taxable income:
3.1 (1)(i) interest income on obligations of any state other than Minnesota or a political
3.2or governmental subdivision, municipality, or governmental agency or instrumentality
3.3of any state other than Minnesota exempt from federal income taxes under the Internal
3.4Revenue Code or any other federal statute; and
3.5 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
3.6Code, except:
3.7(A) the portion of the exempt-interest dividends exempt from state taxation under
3.8the laws of the United States; and
3.9(B) the portion of the exempt-interest dividends derived from interest income
3.10on obligations of the state of Minnesota or its political or governmental subdivisions,
3.11municipalities, governmental agencies or instrumentalities, but only if the portion of the
3.12exempt-interest dividends from such Minnesota sources paid to all shareholders represents
3.1395 percent or more of the exempt-interest dividends, including any dividends exempt
3.14under subitem (A), that are paid by the regulated investment company as defined in section
3.15851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
3.16defined in section 851(g) of the Internal Revenue Code, making the payment; and
3.17 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
3.18government described in section 7871(c) of the Internal Revenue Code shall be treated as
3.19interest income on obligations of the state in which the tribe is located;
3.20 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
3.21accrued within the taxable year under this chapter and the amount of taxes based on net
3.22income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state
3.23or to any province or territory of Canada, to the extent allowed as a deduction under
3.24section 63(d) of the Internal Revenue Code, but the addition may not be more than the
3.25amount by which the
3.26
3.27defined in section 63(c) of the Internal Revenue Code, disregarding the amounts allowed
3.28under
3.29any addition that would have been required under clause (21) if the taxpayer had claimed
3.30the standard deduction.
3.31
3.32
3.33purposes of this paragraph, income, sales and use, motor vehicle sales, or excise taxes are
3.34the last itemized deductions disallowed under subdivision 19a, clause (19);
3.35 (3) the capital gain amount of a lump-sum distribution to which the special tax under
3.36section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
4.1 (4) the amount of income taxes paid or accrued within the taxable year under this
4.2chapter and taxes based on net income paid to any other state or any province or territory
4.3of Canada, to the extent allowed as a deduction in determining federal adjusted gross
4.4income. For the purpose of this paragraph, income taxes do not include the taxes imposed
4.5by sections
4.6 (5) the amount of expense, interest, or taxes disallowed pursuant to section
4.8allowed under subdivision 19b, clause (1);
4.9 (6) the amount of a partner's pro rata share of net income which does not flow
4.10through to the partner because the partnership elected to pay the tax on the income under
4.11section 6242(a)(2) of the Internal Revenue Code;
4.12 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
4.13Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
4.14in the taxable year generates a deduction for depreciation under section 168(k) and the
4.15activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
4.16the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
4.17limited to excess of the depreciation claimed by the activity under section 168(k) over the
4.18amount of the loss from the activity that is not allowed in the taxable year. In succeeding
4.19taxable years when the losses not allowed in the taxable year are allowed, the depreciation
4.20under section 168(k) is allowed;
4.21 (8) for taxable years beginning before January 1, 2012, 80 percent of the amount by
4.22which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
4.23deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
4.24through December 31, 2003;
4.25 (9) to the extent deducted in computing federal taxable income, the amount of the
4.26deduction allowable under section 199 of the Internal Revenue Code;
4.27 (10) for taxable years beginning before January 1, 2013, the exclusion allowed under
4.28section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
4.29(11) the amount of expenses disallowed under section 290.10, subdivision 2;
4.30 (12) for taxable years beginning before January 1, 2010, the amount deducted for
4.31qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
4.32the extent deducted from gross income;
4.33 (13) for taxable years beginning before January 1, 2010, the amount deducted for
4.34certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
4.35of the Internal Revenue Code, to the extent deducted from gross income;
5.1(14) the additional standard deduction for property taxes payable that is allowable
5.2under section 63(c)(1)(C) of the Internal Revenue Code;
5.3(15) the additional standard deduction for qualified motor vehicle sales taxes
5.4allowable under section 63(c)(1)(E) of the Internal Revenue Code;
5.5(16) discharge of indebtedness income resulting from reacquisition of business
5.6indebtedness and deferred under section 108(i) of the Internal Revenue Code;
5.7(17) the amount of unemployment compensation exempt from tax under section
5.885(c) of the Internal Revenue Code;
5.9(18) changes to federal taxable income attributable to a net operating loss that the
5.10taxpayer elected to carry back for more than two years for federal purposes but for which
5.11the losses can be carried back for only two years under section
5.13(19) to the extent included in the computation of federal taxable income in taxable
5.14years beginning after December 31, 2010, the amount of disallowed itemized deductions,
5.15but the amount of disallowed itemized deductions plus the addition required under clause
5.16(2) may not be more than the amount by which the itemized deductions as allowed under
5.17section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction
5.18as defined in section 63(c) of the Internal Revenue Code, disregarding the amounts
5.19allowed under
5.20and reduced by any addition that would have been required under clause (21) if the
5.21taxpayer had claimed the standard deduction:
5.22(i) the amount of disallowed itemized deductions is equal to the lesser of:
5.23(A) three percent of the excess of the taxpayer's federal adjusted gross income
5.24over the applicable amount; or
5.25(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
5.26taxpayer under the Internal Revenue Code for the taxable year;
5.27(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
5.28married individual filing a separate return. Each dollar amount shall be increased by
5.29an amount equal to:
5.30(A) such dollar amount, multiplied by
5.31(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
5.32Revenue Code for the calendar year in which the taxable year begins, by substituting
5.33"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
5.34(iii) the term "itemized deductions" does not include:
5.35(A) the deduction for medical expenses under section 213 of the Internal Revenue
5.36Code;
6.1(B) any deduction for investment interest as defined in section 163(d) of the Internal
6.2Revenue Code; and
6.3(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
6.4theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
6.5Code or for losses described in section 165(d) of the Internal Revenue Code;
6.6(20) to the extent included in federal taxable income in taxable years beginning after
6.7December 31, 2010, the amount of disallowed personal exemptions for taxpayers with
6.8federal adjusted gross income over the threshold amount:
6.9(i) the disallowed personal exemption amount is equal to the dollar amount of the
6.10personal exemptions claimed by the taxpayer in the computation of federal taxable income
6.11multiplied by the applicable percentage;
6.12(ii) "applicable percentage" means two percentage points for each $2,500 (or
6.13fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
6.14year exceeds the threshold amount. In the case of a married individual filing a separate
6.15return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
6.16no event shall the applicable percentage exceed 100 percent;
6.17(iii) the term "threshold amount" means:
6.18(A) $150,000 in the case of a joint return or a surviving spouse;
6.19(B) $125,000 in the case of a head of a household;
6.20(C) $100,000 in the case of an individual who is not married and who is not a
6.21surviving spouse or head of a household; and
6.22(D) $75,000 in the case of a married individual filing a separate return; and
6.23(iv) the thresholds shall be increased by an amount equal to:
6.24(A) such dollar amount, multiplied by
6.25(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
6.26Revenue Code for the calendar year in which the taxable year begins, by substituting
6.27"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and
6.28(21) to the extent deducted in the computation of federal taxable income, for taxable
6.29years beginning after December 31, 2010, and before January 1,
6.30between the standard deduction allowed under section 63(c) of the Internal Revenue Code
6.31and the standard deduction allowed for 2011
6.32as amended through December 1, 2010.
6.33EFFECTIVE DATE.This section is effective retroactively for taxable years
6.34beginning after December 31, 2011.
6.35 Sec. 4. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
7.1 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
7.2and trusts, there shall be subtracted from federal taxable income:
7.3 (1) net interest income on obligations of any authority, commission, or
7.4instrumentality of the United States to the extent includable in taxable income for federal
7.5income tax purposes but exempt from state income tax under the laws of the United States;
7.6 (2) if included in federal taxable income, the amount of any overpayment of income
7.7tax to Minnesota or to any other state, for any previous taxable year, whether the amount
7.8is received as a refund or as a credit to another taxable year's income tax liability;
7.9 (3) the amount paid to others, less the amount used to claim the credit allowed under
7.10section
7.11to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
7.12transportation of each qualifying child in attending an elementary or secondary school
7.13situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
7.14resident of this state may legally fulfill the state's compulsory attendance laws, which
7.15is not operated for profit, and which adheres to the provisions of the Civil Rights Act
7.16of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
7.17tuition as defined in section
7.18"textbooks" includes books and other instructional materials and equipment purchased
7.19or leased for use in elementary and secondary schools in teaching only those subjects
7.20legally and commonly taught in public elementary and secondary schools in this state.
7.21Equipment expenses qualifying for deduction includes expenses as defined and limited in
7.22section
7.23books and materials used in the teaching of religious tenets, doctrines, or worship, the
7.24purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
7.25or materials for, or transportation to, extracurricular activities including sporting events,
7.26musical or dramatic events, speech activities, driver's education, or similar programs. No
7.27deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
7.28the qualifying child's vehicle to provide such transportation for a qualifying child. For
7.29purposes of the subtraction provided by this clause, "qualifying child" has the meaning
7.30given in section 32(c)(3) of the Internal Revenue Code;
7.31 (4) income as provided under section
7.32 (5) to the extent included in federal adjusted gross income, income realized on
7.33disposition of property exempt from tax under section
7.34 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
7.35of the Internal Revenue Code in determining federal taxable income by an individual
7.36who does not itemize deductions for federal income tax purposes for the taxable year, an
8.1amount equal to 50 percent of the excess of charitable contributions over $500 allowable
8.2as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
8.3under the provisions of Public Law 109-1 and Public Law 111-126;
8.4 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
8.5qualify for a credit under section
8.6of subnational foreign taxes for the taxable year, but not to exceed the total subnational
8.7foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
8.8"federal foreign tax credit" means the credit allowed under section 27 of the Internal
8.9Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
8.10under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
8.11the extent they exceed the federal foreign tax credit;
8.12 (8) in each of the five tax years immediately following the tax year in which an
8.13addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case of a
8.14shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
8.15delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
8.16of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
8.17clause (15), in the case of a shareholder of an S corporation, minus the positive value of
8.18any net operating loss under section 172 of the Internal Revenue Code generated for the
8.19tax year of the addition. The resulting delayed depreciation cannot be less than zero;
8.20 (9) job opportunity building zone income as provided under section
8.21 (10) to the extent included in federal taxable income, the amount of compensation
8.22paid to members of the Minnesota National Guard or other reserve components of the
8.23United States military for active service, excluding compensation for services performed
8.24under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
8.25service" means (i) state active service as defined in section
8.26(1); or (ii) federally funded state active service as defined in section
8.275b
8.28subdivision 3
8.29 (11) to the extent included in federal taxable income, the amount of compensation
8.30paid to Minnesota residents who are members of the armed forces of the United States
8.31or United Nations for active duty performed under United States Code, title 10; or the
8.32authority of the United Nations;
8.33 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
8.34qualified donor's donation, while living, of one or more of the qualified donor's organs
8.35to another person for human organ transplantation. For purposes of this clause, "organ"
8.36means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
9.1"human organ transplantation" means the medical procedure by which transfer of a human
9.2organ is made from the body of one person to the body of another person; "qualified
9.3expenses" means unreimbursed expenses for both the individual and the qualified donor
9.4for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
9.5may be subtracted under this clause only once; and "qualified donor" means the individual
9.6or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
9.7individual may claim the subtraction in this clause for each instance of organ donation for
9.8transplantation during the taxable year in which the qualified expenses occur;
9.9 (13) in each of the five tax years immediately following the tax year in which an
9.10addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
9.11shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
9.12addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
9.13case of a shareholder of a corporation that is an S corporation, minus the positive value of
9.14any net operating loss under section 172 of the Internal Revenue Code generated for the
9.15tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
9.16subtraction is not allowed under this clause;
9.17 (14) to the extent included in the federal taxable income of a nonresident of
9.18Minnesota, compensation paid to a service member as defined in United States Code, title
9.1910, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
9.20Act, Public Law 108-189, section 101(2);
9.21 (15) to the extent included in federal taxable income, the amount of national service
9.22educational awards received from the National Service Trust under United States Code,
9.23title 42, sections 12601 to 12604, for service in an approved Americorps National Service
9.24program;
9.25(16) to the extent included in federal taxable income, discharge of indebtedness
9.26income resulting from reacquisition of business indebtedness included in federal taxable
9.27income under section 108(i) of the Internal Revenue Code. This subtraction applies only
9.28to the extent that the income was included in net income in a prior year as a result of the
9.29addition under section
9.30(17) the amount of the net operating loss allowed under section
9.3111
9.32(18) the amount of the limitation on itemized deductions under section 68(b) of
9.33the Internal Revenue Code; and
9.34(19) the amount of the phaseout of personal exemptions under section 151(d) of the
9.35Internal Revenue Code.
10.1EFFECTIVE DATE.This section is effective for taxable years beginning after
10.2December 31, 2012.
10.3 Sec. 5. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
10.4 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
10.5there shall be added to federal taxable income:
10.6 (1) the amount of any deduction taken for federal income tax purposes for income,
10.7excise, or franchise taxes based on net income or related minimum taxes, including but not
10.8limited to the tax imposed under section
10.9another state, a political subdivision of another state, the District of Columbia, or any
10.10foreign country or possession of the United States;
10.11 (2) interest not subject to federal tax upon obligations of: the United States, its
10.12possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
10.13state, any of its political or governmental subdivisions, any of its municipalities, or any
10.14of its governmental agencies or instrumentalities; the District of Columbia; or Indian
10.15tribal governments;
10.16 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
10.17Revenue Code;
10.18 (4) the amount of any net operating loss deduction taken for federal income tax
10.19purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
10.20deduction under section 810 of the Internal Revenue Code;
10.21 (5) the amount of any special deductions taken for federal income tax purposes
10.22under sections 241 to 247 and 965 of the Internal Revenue Code;
10.23 (6) losses from the business of mining, as defined in section
10.24clause (a), that are not subject to Minnesota income tax;
10.25 (7) the amount of any capital losses deducted for federal income tax purposes under
10.26sections 1211 and 1212 of the Internal Revenue Code;
10.27 (8) the exempt foreign trade income of a foreign sales corporation under sections
10.28921(a) and 291 of the Internal Revenue Code;
10.29 (9) the amount of percentage depletion deducted under sections 611 through 614 and
10.30291 of the Internal Revenue Code;
10.31 (10) for certified pollution control facilities placed in service in a taxable year
10.32beginning before December 31, 1986, and for which amortization deductions were elected
10.33under section 169 of the Internal Revenue Code of 1954, as amended through December
10.3431, 1985, the amount of the amortization deduction allowed in computing federal taxable
10.35income for those facilities;
11.1 (11) the amount of any deemed dividend from a foreign operating corporation
11.2determined pursuant to section
11.3shall be reduced by the amount of the addition to income required by clauses (20), (21),
11.4(22), and (23);
11.5 (12) the amount of a partner's pro rata share of net income which does not flow
11.6through to the partner because the partnership elected to pay the tax on the income under
11.7section 6242(a)(2) of the Internal Revenue Code;
11.8 (13) the amount of net income excluded under section 114 of the Internal Revenue
11.9Code;
11.10 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
11.11Revenue Code, for the taxable year when subpart F income is calculated without regard to
11.12the provisions of Division C, title III, section 303(b) of Public Law 110-343;
11.13 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
11.14and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
11.15has an activity that in the taxable year generates a deduction for depreciation under
11.16section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
11.17that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
11.18under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
11.19depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
11.20amount of the loss from the activity that is not allowed in the taxable year. In succeeding
11.21taxable years when the losses not allowed in the taxable year are allowed, the depreciation
11.22under section 168(k)(1)(A) and (k)(4)(A) is allowed;
11.23 (16) for taxable years beginning before January 1, 2012, 80 percent of the amount by
11.24which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
11.25deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
11.26through December 31, 2003;
11.27 (17) to the extent deducted in computing federal taxable income, the amount of the
11.28deduction allowable under section 199 of the Internal Revenue Code;
11.29 (18) for taxable years beginning before January 1, 2013, the exclusion allowed under
11.30section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
11.31 (19) the amount of expenses disallowed under section
11.32 (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
11.33accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
11.34of a corporation that is a member of the taxpayer's unitary business group that qualifies
11.35as a foreign operating corporation. For purposes of this clause, intangible expenses and
11.36costs include:
12.1 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
12.2use, maintenance or management, ownership, sale, exchange, or any other disposition of
12.3intangible property;
12.4 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
12.5transactions;
12.6 (iii) royalty, patent, technical, and copyright fees;
12.7 (iv) licensing fees; and
12.8 (v) other similar expenses and costs.
12.9For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
12.10applications, trade names, trademarks, service marks, copyrights, mask works, trade
12.11secrets, and similar types of intangible assets.
12.12This clause does not apply to any item of interest or intangible expenses or costs paid,
12.13accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
12.14to such item of income to the extent that the income to the foreign operating corporation
12.15is income from sources without the United States as defined in subtitle A, chapter 1,
12.16subchapter N, part 1, of the Internal Revenue Code;
12.17 (21) except as already included in the taxpayer's taxable income pursuant to clause
12.18(20), any interest income and income generated from intangible property received or
12.19accrued by a foreign operating corporation that is a member of the taxpayer's unitary
12.20group. For purposes of this clause, income generated from intangible property includes:
12.21 (i) income related to the direct or indirect acquisition, use, maintenance or
12.22management, ownership, sale, exchange, or any other disposition of intangible property;
12.23 (ii) income from factoring transactions or discounting transactions;
12.24 (iii) royalty, patent, technical, and copyright fees;
12.25 (iv) licensing fees; and
12.26 (v) other similar income.
12.27For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
12.28applications, trade names, trademarks, service marks, copyrights, mask works, trade
12.29secrets, and similar types of intangible assets.
12.30This clause does not apply to any item of interest or intangible income received or accrued
12.31by a foreign operating corporation with respect to such item of income to the extent that
12.32the income is income from sources without the United States as defined in subtitle A,
12.33chapter 1, subchapter N, part 1, of the Internal Revenue Code;
12.34 (22) the dividends attributable to the income of a foreign operating corporation that
12.35is a member of the taxpayer's unitary group in an amount that is equal to the dividends
13.1paid deduction of a real estate investment trust under section 561(a) of the Internal
13.2Revenue Code for amounts paid or accrued by the real estate investment trust to the
13.3foreign operating corporation;
13.4 (23) the income of a foreign operating corporation that is a member of the taxpayer's
13.5unitary group in an amount that is equal to gains derived from the sale of real or personal
13.6property located in the United States;
13.7 (24) for taxable years beginning before January 1, 2010, the additional amount
13.8allowed as a deduction for donation of computer technology and equipment under section
13.9170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
13.10(25) discharge of indebtedness income resulting from reacquisition of business
13.11indebtedness and deferred under section 108(i) of the Internal Revenue Code.
13.12EFFECTIVE DATE.This section is effective retroactively for taxable years
13.13beginning after December 31, 2011.
13.14 Sec. 6. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision
13.15to read:
13.16 Subd. 29a. State itemized deduction. The term "state itemized deduction" means
13.17federal itemized deductions, as defined in section 63(d) of the Internal Revenue Code,
13.18disregarding any limitation under section 68 of the Internal Revenue Code, and reduced
13.19by the amount of the addition required under subdivision 19a, clause (19).
13.20EFFECTIVE DATE.This section is effective for taxable years beginning after
13.21December 31, 2012.
13.22 Sec. 7. Minnesota Statutes 2012, section 290.01, subdivision 31, is amended to read:
13.23 Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal
13.24Revenue Code" means the Internal Revenue Code of 1986, as amended through
13.25
13.26federal law that relates to provisions of the Internal Revenue Code that are incorporated
13.27into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1,
13.28subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as
13.29amended through March 18, 2010.
13.30EFFECTIVE DATE.This section is effective the day following final enactment,
13.31except the changes incorporated by federal changes are effective at the same time as the
13.32changes were effective for federal purposes.
14.1 Sec. 8. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
14.2 Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
14.3imposed by this chapter equal to a percentage of earned income. To receive a credit, a
14.4taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
14.5(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
14.6the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
14.7income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
14.8case is the credit less than zero.
14.9(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
14.10$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
14.11$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
14.12whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
14.13(d) For individuals with two or more qualifying children, the credit equals ten percent
14.14of the first $9,720 of earned income and 20 percent of earned income over $14,860 but less
14.15than $16,800. The credit is reduced by 10.3 percent of earned income or adjusted gross
14.16income, whichever is greater, in excess of $17,890, but in no case is the credit less than zero.
14.17(e) For a nonresident or part-year resident, the credit must be allocated based on the
14.18percentage calculated under section
14.19(f) For a person who was a resident for the entire tax year and has earned income
14.20not subject to tax under this chapter, including income excluded under section
14.21subdivision 19b
14.22adjusted gross income reduced by the earned income not subject to tax under this chapter
14.23over federal adjusted gross income. For purposes of this paragraph, the subtractions
14.24for military pay under section
14.25considered "earned income not subject to tax under this chapter."
14.26For the purposes of this paragraph, the exclusion of combat pay under section 112
14.27of the Internal Revenue Code is not considered "earned income not subject to tax under
14.28this chapter."
14.29(g) For tax years beginning after December 31, 2007, and before December 31,
14.302010, and for the tax year beginning after December 31, 2017, the $5,770 in paragraph (b),
14.31the $15,080 in paragraph (c), and the $17,890 in paragraph (d), after being adjusted for
14.32inflation under subdivision 7, are each increased by $3,000 for married taxpayers filing joint
14.33returns. For tax years beginning after December 31, 2008, the commissioner shall annually
14.34adjust the $3,000 by the percentage determined pursuant to the provisions of section 1(f)
14.35of the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2007" shall be
14.36substituted for the word "1992." For 2009, the commissioner shall then determine the
15.1percent change from the 12 months ending on August 31, 2007, to the 12 months ending on
15.2August 31, 2008, and in each subsequent year, from the 12 months ending on August 31,
15.32007, to the 12 months ending on August 31 of the year preceding the taxable year. The
15.4earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
15.5amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
15.6commissioner under this subdivision is not a rule under the Administrative Procedure Act.
15.7(h) For tax years beginning after December 31, 2010, and before January 1,
15.8 2018, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
15.9paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
15.10$5,000 for married taxpayers filing joint returns. For tax years beginning after December
15.1131, 2010, and before January 1,
15.12the $5,000 by the percentage determined pursuant to the provisions of section 1(f) of
15.13the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be
15.14substituted for the word "1992." For 2011, the commissioner shall then determine the
15.15percent change from the 12 months ending on August 31, 2008, to the 12 months ending on
15.16August 31, 2010, and in each subsequent year, from the 12 months ending on August 31,
15.172008, to the 12 months ending on August 31 of the year preceding the taxable year. The
15.18earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
15.19amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
15.20commissioner under this subdivision is not a rule under the Administrative Procedure Act.
15.21(i) The commissioner shall construct tables showing the amount of the credit at
15.22various income levels and make them available to taxpayers. The tables shall follow
15.23the schedule contained in this subdivision, except that the commissioner may graduate
15.24the transition between income brackets.
15.25EFFECTIVE DATE.This section is effective retroactively for taxable years
15.26beginning after December 31, 2011.
15.27 Sec. 9. Minnesota Statutes 2012, section 290A.03, subdivision 15, is amended to read:
15.28 Subd. 15. Internal Revenue Code. "Internal Revenue Code" means the Internal
15.29Revenue Code of 1986, as amended through
15.30EFFECTIVE DATE.This section is effective for property tax refunds based on
15.31property taxes payable after December 31, 2012, and rent paid after December 31, 2011.
15.32 Sec. 10. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
16.1 Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
16.2terms used in this chapter shall have the following meanings:
16.3 (1) "Commissioner" means the commissioner of revenue or any person to whom the
16.4commissioner has delegated functions under this chapter.
16.5 (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
16.6and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
16.7 (3) "Internal Revenue Code" means the United States Internal Revenue Code of
16.81986, as amended through
16.9provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law
16.10111-312, and section 301(c) of Public Law 111-312.
16.11 (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
16.12defined by section 2011(b)(3) of the Internal Revenue Code, plus
16.13(i) the amount of deduction for state death taxes allowed under section 2058 of
16.14the Internal Revenue Code; less
16.15(ii)(A) the value of qualified small business property under section
16.16subdivision 9
16.1710
16.18 (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
16.19excluding therefrom any property included therein which has its situs outside Minnesota,
16.20and (b) including therein any property omitted from the federal gross estate which is
16.21includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
16.22authorities.
16.23 (6) "Nonresident decedent" means an individual whose domicile at the time of
16.24death was not in Minnesota.
16.25 (7) "Personal representative" means the executor, administrator or other person
16.26appointed by the court to administer and dispose of the property of the decedent. If there
16.27is no executor, administrator or other person appointed, qualified, and acting within this
16.28state, then any person in actual or constructive possession of any property having a situs in
16.29this state which is included in the federal gross estate of the decedent shall be deemed
16.30to be a personal representative to the extent of the property and the Minnesota estate tax
16.31due with respect to the property.
16.32 (8) "Resident decedent" means an individual whose domicile at the time of death
16.33was in Minnesota.
16.34 (9) "Situs of property" means, with respect to real property, the state or country in
16.35which it is located; with respect to tangible personal property, the state or country in which
16.36it was normally kept or located at the time of the decedent's death; and with respect to
17.1intangible personal property, the state or country in which the decedent was domiciled
17.2at death.
17.3EFFECTIVE DATE.This section is effective at the same time as the changes in
17.4federal law are effective.
17.5 Sec. 11. AMENDED RETURNS; CERTAIN IRA ROLLOVERS.
17.6An individual who excludes an amount from net income in a prior taxable year
17.7through rollover of an airline payment amount to a traditional IRA, as authorized under
17.8Public Law 112-95, section 1106, may file an amended individual income tax return and
17.9claim for refund of state taxes as provided under Minnesota Statutes, section 289A.40,
17.10subdivision 1, or, if later, by April 15, 2013.
17.11EFFECTIVE DATE.This section is effective the day following final enactment.
