1.1 .................... moves to amend H. F. No. 464 as follows:
1.2Delete everything after the enacting clause and insert:
1.3 "Section 1. Minnesota Statutes 2006, section 289A.12, is amended by adding a
1.4subdivision to read:
1.5 Subd. 8a. Employer providing health benefits. An employer paying health
1.6insurance or other benefits, as defined in section 290.01, subdivision 19a, clause (11), on
1.7behalf of an employee or an employee's family must file a return with the commissioner
1.8each year and provide a copy to the employee by the first day of February following the
1.9end of calendar year in which the benefits were paid. The return must enumerate the
1.10amount paid for the employee and the name, address, and Social Security number of the
1.11employee on whose behalf the payments were made, as well as any other information the
1.12commissioner may require. The return must be filed in the form and manner specified by
1.13the commissioner.
1.14EFFECTIVE DATE.This section is effective for taxable years beginning after
1.15December 31, 2006.
1.16 Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19a, is amended to read:
1.17 Subd. 19a.
Additions to federal taxable income. For individuals, estates, and
1.18trusts, there shall be added to federal taxable income:
1.19 (1)(i) interest income on obligations of any state other than Minnesota or a political
1.20or governmental subdivision, municipality, or governmental agency or instrumentality
1.21of any state other than Minnesota exempt from federal income taxes under the Internal
1.22Revenue Code or any other federal statute; and
1.23 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
1.24Code, except the portion of the exempt-interest dividends derived from interest income
1.25on obligations of the state of Minnesota or its political or governmental subdivisions,
1.26municipalities, governmental agencies or instrumentalities, but only if the portion of the
2.1exempt-interest dividends from such Minnesota sources paid to all shareholders represents
2.295 percent or more of the exempt-interest dividends that are paid by the regulated
2.3investment company as defined in section 851(a) of the Internal Revenue Code, or the
2.4fund of the regulated investment company as defined in section 851(g) of the Internal
2.5Revenue Code, making the payment; and
2.6 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
2.7government described in section 7871(c) of the Internal Revenue Code shall be treated as
2.8interest income on obligations of the state in which the tribe is located;
2.9 (2) the amount of income or sales and use taxes paid or accrued within the taxable
2.10year under this chapter and the amount of taxes based on net income paid or sales and use
2.11taxes paid to any other state or to any province or territory of Canada, to the extent allowed
2.12as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not
2.13be more than the amount by which the itemized deductions as allowed under section 63(d)
2.14of the Internal Revenue Code exceeds the amount of the standard deduction as defined
2.15in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the
2.16disallowance of itemized deductions under section 68 of the Internal Revenue Code of
2.171986, income or sales and use tax is the last itemized deduction disallowed;
2.18 (3) the capital gain amount of a lump sum distribution to which the special tax under
2.19section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
2.20 (4) the amount of income taxes paid or accrued within the taxable year under this
2.21chapter and taxes based on net income paid to any other state or any province or territory
2.22of Canada, to the extent allowed as a deduction in determining federal adjusted gross
2.23income. For the purpose of this paragraph, income taxes do not include the taxes imposed
2.24by sections
290.0922, subdivision 1, paragraph (b),
290.9727,
290.9728, and
290.9729;
2.25 (5) the amount of expense, interest, or taxes disallowed pursuant to section
290.10
2.26other than expenses or interest used in computing net interest income for the subtraction
2.27allowed under subdivision 19b, clause (1);
2.28 (6) the amount of a partner's pro rata share of net income which does not flow
2.29through to the partner because the partnership elected to pay the tax on the income under
2.30section 6242(a)(2) of the Internal Revenue Code;
2.31 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
2.32Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
2.33in the taxable year generates a deduction for depreciation under section 168(k) and the
2.34activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
2.35the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
2.36limited to excess of the depreciation claimed by the activity under section 168(k) over the
3.1amount of the loss from the activity that is not allowed in the taxable year. In succeeding
3.2taxable years when the losses not allowed in the taxable year are allowed, the depreciation
3.3under section 168(k) is allowed;
3.4 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
3.5Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
3.6Revenue Code of 1986, as amended through December 31, 2003;
3.7 (9) to the extent deducted in computing federal taxable income, the amount of the
3.8deduction allowable under section 199 of the Internal Revenue Code;
and
3.9 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
3.10federal subsidies for prescription drug plans
; and
3.11 (11) to the extent excluded or deducted in computing federal taxable income, the
3.12following amounts:
3.13 (i) employer contributions to an accident or health plan on behalf of the taxpayer or
3.14family members under section 106 of the Internal Revenue Code;
3.15 (ii) amounts contributed to a cafeteria plan for health or medical benefits, including
3.16salary reductions under a flexible spending arrangements, under section 125 of the Internal
3.17Revenue Code;
3.18 (iii) the deduction for self-employed health insurance under section 162(l) of the
3.19Internal Revenue;
3.20 (iv) the itemized deduction for medical care under section 213 of the Internal
3.21Revenue Code to the extent it exceeds the amount of the standard deduction as defined in
3.22section 63(c) of the Internal Revenue Code; and
3.23 (v) any other amount of employer provided health insurance or care benefits, but
3.24excluding any amount contributed to a health savings account under section 223 of the
3.25Internal Revenue Code.
3.26EFFECTIVE DATE.This section is effective for taxable years beginning after
3.27December 31, 2006.
3.28 Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19b, is amended to read:
3.29 Subd. 19b.
Subtractions from federal taxable income. For individuals, estates,
3.30and trusts, there shall be subtracted from federal taxable income:
3.31 (1) net interest income on obligations of any authority, commission, or
3.32instrumentality of the United States to the extent includable in taxable income for federal
3.33income tax purposes but exempt from state income tax under the laws of the United States;
4.1 (2) if included in federal taxable income, the amount of any overpayment of income
4.2tax to Minnesota or to any other state, for any previous taxable year, whether the amount
4.3is received as a refund or as a credit to another taxable year's income tax liability;
4.4 (3) the amount paid to others, less the amount used to claim the credit allowed under
4.5section
290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
4.6to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
4.7transportation of each qualifying child in attending an elementary or secondary school
4.8situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
4.9resident of this state may legally fulfill the state's compulsory attendance laws, which
4.10is not operated for profit, and which adheres to the provisions of the Civil Rights Act
4.11of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
4.12tuition as defined in section
290.0674, subdivision 1, clause (1). As used in this clause,
4.13"textbooks" includes books and other instructional materials and equipment purchased
4.14or leased for use in elementary and secondary schools in teaching only those subjects
4.15legally and commonly taught in public elementary and secondary schools in this state.
4.16Equipment expenses qualifying for deduction includes expenses as defined and limited in
4.17section
290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
4.18books and materials used in the teaching of religious tenets, doctrines, or worship, the
4.19purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
4.20or materials for, or transportation to, extracurricular activities including sporting events,
4.21musical or dramatic events, speech activities, driver's education, or similar programs. For
4.22purposes of the subtraction provided by this clause, "qualifying child" has the meaning
4.23given in section 32(c)(3) of the Internal Revenue Code;
4.24 (4) income as provided under section
290.0802;
4.25 (5) to the extent included in federal adjusted gross income, income realized on
4.26disposition of property exempt from tax under section
290.491;
4.27 (6) to the extent not deducted in determining federal taxable income by an individual
4.28who does not itemize deductions for federal income tax purposes for the taxable year, an
4.29amount equal to 50 percent of the excess of charitable contributions over $500 allowable
4.30as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
4.31under the provisions of Public Law 109-1;
4.32 (7) for taxable years beginning before January 1, 2008, the amount of the federal
4.33small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
4.34which is included in gross income under section 87 of the Internal Revenue Code;
4.35 (8) for individuals who are allowed a federal foreign tax credit for taxes that do not
4.36qualify for a credit under section
290.06, subdivision 22, an amount equal to the carryover
5.1of subnational foreign taxes for the taxable year, but not to exceed the total subnational
5.2foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
5.3"federal foreign tax credit" means the credit allowed under section 27 of the Internal
5.4Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
5.5under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
5.6the extent they exceed the federal foreign tax credit;
5.7 (9) in each of the five tax years immediately following the tax year in which an
5.8addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
5.9of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
5.10of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
5.11the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
5.12subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
5.13positive value of any net operating loss under section 172 of the Internal Revenue Code
5.14generated for the tax year of the addition. The resulting delayed depreciation cannot be
5.15less than zero;
5.16 (10) job opportunity building zone income as provided under section
469.316;
5.17 (11) the amount of compensation paid to members of the Minnesota National Guard
5.18or other reserve components of the United States military for active service performed
5.19in Minnesota, excluding compensation for services performed under the Active Guard
5.20Reserve (AGR) program. For purposes of this clause, "active service" means (i) state
5.21active service as defined in section
190.05, subdivision 5a, clause (1); (ii) federally
5.22funded state active service as defined in section
190.05, subdivision 5b; or (iii) federal
5.23active service as defined in section
190.05, subdivision 5c, but "active service" excludes
5.24services performed exclusively for purposes of basic combat training, advanced individual
5.25training, annual training, and periodic inactive duty training; special training periodically
5.26made available to reserve members; and service performed in accordance with section
5.27190.08, subdivision 3
;
5.28 (12) the amount of compensation paid to Minnesota residents who are members
5.29of the armed forces of the United States or United Nations for active duty performed
5.30outside Minnesota;
5.31 (13) an amount, not to exceed $10,000, equal to qualified expenses related to a
5.32qualified donor's donation, while living, of one or more of the qualified donor's organs
5.33to another person for human organ transplantation. For purposes of this clause, "organ"
5.34means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
5.35"human organ transplantation" means the medical procedure by which transfer of a human
5.36organ is made from the body of one person to the body of another person; "qualified
6.1expenses" means unreimbursed expenses for both the individual and the qualified donor
6.2for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
6.3may be subtracted under this clause only once; and "qualified donor" means the individual
6.4or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
6.5individual may claim the subtraction in this clause for each instance of organ donation for
6.6transplantation during the taxable year in which the qualified expenses occur;
6.7 (14) in each of the five tax years immediately following the tax year in which an
6.8addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
6.9shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
6.10addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
6.11case of a shareholder of a corporation that is an S corporation, minus the positive value of
6.12any net operating loss under section 172 of the Internal Revenue Code generated for the
6.13tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
6.14subtraction is not allowed under this clause;
6.15 (15) to the extent included in federal taxable income, compensation paid to a
6.16nonresident who is a service member as defined in United States Code, title 10, section
6.17101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
6.18Law 108-189, section 101(2);
and
6.19 (16) international economic development zone income as provided under section
6.20469.325
; and
6.21 (17) $15,000 for a married individuals filing joint returns, surviving spouses as
6.22defined in section 2(a) of the Internal Revenue, and unmarried individuals qualifying aa a
6.23head of household as defined in section 2(b) of the Internal Revenue Code, and $5,000
6.24for all other filers, if taxpayer, spouse, and dependents are covered by qualifying health
6.25insurance for six or more months of the taxable year.
6.26EFFECTIVE DATE.This section is effective for taxable years beginning after
6.27December 31, 2006.
6.28 Sec. 4. Minnesota Statutes 2006, section 290.01, is amended by adding a subdivision
6.29to read:
6.30 Subd. 33. Qualifying health insurance. "Qualifying health insurance" means
6.31health insurance providing a minimum level of benefits at least equal to a comparable
6.32qualified plan under chapter 62E.
6.33EFFECTIVE DATE.This section is effective for taxable years beginning after
6.34December 31, 2006."
6.35Amend the title accordingly