1.1.................... moves to amend H.F. No. 1914 as follows:
1.2Delete the H1914A12 and H1914A13 amendments
1.3Page 1, delete sections 1 to 3 and insert:

1.4    "Section 1. Minnesota Statutes 2011 Supplement, section 273.1384, subdivision 3,
1.5is amended to read:
1.6    Subd. 3. Credit reimbursements. The county auditor shall determine the tax
1.7reductions allowed under subdivision 2 this section within the county for each taxes
1.8payable year and shall certify that amount to the commissioner of revenue as a part of the
1.9abstracts of tax lists submitted by the county auditors under section 275.29. Any prior
1.10year adjustments shall also be certified on the abstracts of tax lists. The commissioner
1.11shall review the certifications for accuracy, and may make such changes as are deemed
1.12necessary, or return the certification to the county auditor for correction. The credit credits
1.13under this section must be used to proportionately reduce the net tax capacity-based
1.14property tax payable to each local taxing jurisdiction as provided in section 273.1393.
1.15EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
1.16thereafter.

1.17    Sec. 2. Minnesota Statutes 2011 Supplement, section 273.1384, subdivision 4, is
1.18amended to read:
1.19    Subd. 4. Payment. (a) The commissioner of revenue shall reimburse each local
1.20taxing jurisdiction, other than school districts, for the tax reductions granted under
1.21subdivision 2 this section in two equal installments on October 31 and December 26 of
1.22the taxes payable year for which the reductions are granted, including in each payment
1.23the prior year adjustments certified on the abstracts for that taxes payable year. The
1.24reimbursements related to tax increments shall be issued in one installment each year on
1.25December 26.
2.1(b) The commissioner of revenue shall certify the total of the tax reductions granted
2.2under subdivision 2 this section for each taxes payable year within each school district to
2.3the commissioner of the Department of Education and the commissioner of education shall
2.4pay the reimbursement amounts to each school district as provided in section 273.1392.
2.5EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
2.6thereafter.

2.7    Sec. 3. Minnesota Statutes 2010, section 273.1384, is amended by adding a subdivision
2.8to read:
2.9    Subd. 7. Residential homestead market value credit. Each county auditor shall
2.10determine a homestead credit for each class 1a, 1b, and 2a homestead property within the
2.11county equal to 0.4 percent of the first $76,000 of market value of the property minus .09
2.12percent of the market value in excess of the $76,000. The credit amount may not be less
2.13than $0. In the case of an agricultural or resort homestead, only the market value of the
2.14house, garage, and immediately surrounding one acre of land is eligible in determining the
2.15property's homestead credit. In the case of a property that is classified as part homestead
2.16and part nonhomestead, (1) the credit shall apply only to the homestead portion of the
2.17property, but (2) if a portion of a property is classified as nonhomestead solely because not
2.18all the owners occupy the property, not all the owners have qualifying relatives occupying
2.19the property, or solely because not all the spouses of owners occupy the property, the
2.20credit amount shall be initially computed as if that nonhomestead portion were also in
2.21the homestead class and then prorated to the owner-occupant's percentage of ownership.
2.22For the purpose of this section, when an owner-occupant's spouse does not occupy the
2.23property, the percentage of ownership for the owner-occupant spouse is one-half of the
2.24couple's ownership percentage.
2.25EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
2.26thereafter.

2.27    Sec. 4. Minnesota Statutes 2011 Supplement, section 273.1393, is amended to read:
2.28273.1393 COMPUTATION OF NET PROPERTY TAXES.
2.29    Notwithstanding any other provisions to the contrary, "net" property taxes are
2.30determined by subtracting the credits in the order listed from the gross tax:
2.31    (1) disaster credit as provided in sections 273.1231 to 273.1235;
2.32    (2) powerline credit as provided in section 273.42;
2.33    (3) agricultural preserves credit as provided in section 473H.10;
3.1    (4) enterprise zone credit as provided in section 469.171;
3.2    (5) disparity reduction credit;
3.3    (6) conservation tax credit as provided in section 273.119;
3.4    (7) homestead and agricultural credit credits as provided in section 273.1384;
3.5    (8) taconite homestead credit as provided in section 273.135;
3.6    (9) supplemental homestead credit as provided in section 273.1391; and
3.7    (10) the bovine tuberculosis zone credit, as provided in section 273.113.
3.8    The combination of all property tax credits must not exceed the gross tax amount.
3.9EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
3.10thereafter.

3.11    Sec. 5. Minnesota Statutes 2011 Supplement, section 276.04, subdivision 2, is
3.12amended to read:
3.13    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the
3.14printing of the tax statements. The commissioner of revenue shall prescribe the form of
3.15the property tax statement and its contents. The tax statement must not state or imply
3.16that property tax credits are paid by the state of Minnesota. The statement must contain
3.17a tabulated statement of the dollar amount due to each taxing authority and the amount
3.18of the state tax from the parcel of real property for which a particular tax statement is
3.19prepared. The dollar amounts attributable to the county, the state tax, the voter approved
3.20school tax, the other local school tax, the township or municipality, and the total of
3.21the metropolitan special taxing districts as defined in section 275.065, subdivision 3,
3.22paragraph (i), must be separately stated. The amounts due all other special taxing districts,
3.23if any, may be aggregated except that any levies made by the regional rail authorities in the
3.24county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
3.25398A shall be listed on a separate line directly under the appropriate county's levy. If the
3.26county levy under this paragraph includes an amount for a lake improvement district as
3.27defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
3.28must be separately stated from the remaining county levy amount. In the case of Ramsey
3.29County, if the county levy under this paragraph includes an amount for public library
3.30service under section 134.07, the amount attributable for that purpose may be separated
3.31from the remaining county levy amount. The amount of the tax on homesteads qualifying
3.32under the senior citizens' property tax deferral program under chapter 290B is the total
3.33amount of property tax before subtraction of the deferred property tax amount. The
3.34amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any,
3.35must also be separately stated. The dollar amounts, including the dollar amount of any
4.1special assessments, may be rounded to the nearest even whole dollar. For purposes of this
4.2section whole odd-numbered dollars may be adjusted to the next higher even-numbered
4.3dollar. The amount of market value excluded under section 273.11, subdivision 16, if any,
4.4must also be listed on the tax statement.
4.5    (b) The property tax statements for manufactured homes and sectional structures
4.6taxed as personal property shall contain the same information that is required on the
4.7tax statements for real property.
4.8    (c) Real and personal property tax statements must contain the following information
4.9in the order given in this paragraph. The information must contain the current year tax
4.10information in the right column with the corresponding information for the previous year
4.11in a column on the left:
4.12    (1) the property's estimated market value under section 273.11, subdivision 1;
4.13(2) the property's homestead market value exclusion under section 273.13,
4.14subdivision 35;
4.15    (3) the property's taxable market value after reductions under sections 273.11,
4.16subdivisions 1a and 16, and 273.13, subdivision 35;
4.17    (4) (3) the property's gross tax, before credits;
4.18    (5) (4) for homestead residential and agricultural properties, the credit credits under
4.19section 273.1384;
4.20    (6) (5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
4.21273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
4.22credit received under section 273.135 must be separately stated and identified as "taconite
4.23tax relief"; and
4.24    (7) (6) the net tax payable in the manner required in paragraph (a).
4.25    (d) If the county uses envelopes for mailing property tax statements and if the county
4.26agrees, a taxing district may include a notice with the property tax statement notifying
4.27taxpayers when the taxing district will begin its budget deliberations for the current
4.28year, and encouraging taxpayers to attend the hearings. If the county allows notices to
4.29be included in the envelope containing the property tax statement, and if more than
4.30one taxing district relative to a given property decides to include a notice with the tax
4.31statement, the county treasurer or auditor must coordinate the process and may combine
4.32the information on a single announcement.
4.33EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
4.34thereafter.

4.35    Sec. 6. Minnesota Statutes 2010, section 289A.08, subdivision 3, is amended to read:
5.1    Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
5.2tax under section 290.014, subdivision 5, must file a return, except that a foreign operating
5.3corporation as defined in section 290.01, subdivision 6b, is not required to file a return.
5.4(b) Members of a unitary business that are required to file a combined report on one
5.5return must designate a member of the unitary business to be responsible for tax matters,
5.6including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
5.7or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
5.8taxes lawfully due. The designated member must be a member of the unitary business that
5.9is filing the single combined report and either:
5.10(1) a corporation that is subject to the taxes imposed by chapter 290; or
5.11(2) a corporation that is not subject to the taxes imposed by chapter 290:
5.12(i) Such corporation consents by filing the return as a designated member under this
5.13clause to remit taxes, penalties, interest, or additions to tax due from the members of the
5.14unitary business subject to tax, and receive refunds or other payments on behalf of other
5.15members of the unitary business. The member designated under this clause is a "taxpayer"
5.16for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
5.17on the unitary business under this chapter and chapter 290.
5.18(ii) If the state does not otherwise have the jurisdiction to tax the member designated
5.19under this clause, consenting to be the designated member does not create the jurisdiction
5.20to impose tax on the designated member, other than as described in item (i).
5.21(iii) The member designated under this clause must apply for a business tax account
5.22identification number.
5.23(c) The commissioner shall adopt rules for the filing of one return on behalf of the
5.24members of an affiliated group of corporations that are required to file a combined report.
5.25All members of an affiliated group that are required to file a combined report must file one
5.26return on behalf of the members of the group under rules adopted by the commissioner.
5.27(d) If a corporation claims on a return that it has paid tax in excess of the amount of
5.28taxes lawfully due, that corporation must include on that return information necessary for
5.29payment of the tax in excess of the amount lawfully due by electronic means.
5.30EFFECTIVE DATE.This section is effective for taxable years beginning after
5.31December 31, 2011.

5.32    Sec. 7. Minnesota Statutes 2010, section 290.01, subdivision 5, is amended to read:
5.33    Subd. 5. Domestic corporation. The term "domestic" when applied to a corporation
5.34means a corporation:
6.1(1) created or organized in the United States, or under the laws of the United States
6.2or of any state, the District of Columbia, or any political subdivision of any of the
6.3foregoing but not including the Commonwealth of Puerto Rico, or any possession of
6.4the United States;
6.5(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
6.6Code; or
6.7(3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.;
6.8    (4) which is incorporated in a tax haven;
6.9    (5) which is engaged in activity in a tax haven sufficient for the tax haven to impose
6.10a net income tax under United States constitutional standards and section 290.015, and
6.11which reports that 20 percent or more of its income is attributable to business in the tax
6.12haven; or
6.13    (6) which has 20 percent or more of the average of its property, payroll, and sales
6.14factors, as defined under section 290.191, within the 50 states of the United States and
6.15the District of Columbia.
6.16EFFECTIVE DATE.This section is effective for returns filed for taxable years
6.17beginning after December 31, 2011.

6.18    Sec. 8. Minnesota Statutes 2010, section 290.01, is amended by adding a subdivision
6.19to read:
6.20    Subd. 5c. Tax haven. (a) "Tax haven" means the following foreign jurisdictions,
6.21unless the listing of the jurisdiction does not apply under paragraph (b):
6.22(1) Andorra;
6.23(2) Anguilla;
6.24(3) Antigua and Barbuda;
6.25(4) Aruba;
6.26(5) Bahamas;
6.27(6) Bahrain;
6.28(7) Belize;
6.29(8) British Virgin Islands;
6.30(9) Cayman Islands;
6.31(10) Cook Islands;
6.32(11) Costa Rica;
6.33(12) Dominica;
6.34(13) Gibraltar;
6.35(14) Grenada;
7.1(15) Guernsey-Sark-Alderney;
7.2(16) Jersey;
7.3(17) Jordan;
7.4(18) Lebanon;
7.5(19) Liberia;
7.6(20) Liechtenstein;
7.7(21) Maldives;
7.8(22) Marshall Islands;
7.9(23) Monaco;
7.10(24) Montserrat;
7.11(25) Nauru;
7.12(26) Netherlands Antilles;
7.13(27) Niue;
7.14(28) Panama;
7.15(29) St. Kitts and Nevis;
7.16(30) St. Lucia;
7.17(31) St. Vincent and Grenadines;
7.18(32) Tonga;
7.19(33) Turks and Caicos; and
7.20(34) Vanuatu.
7.21(b) A foreign jurisdiction's listing under paragraph (a) does not apply to the first
7.22taxable year after the United States enters into a tax treaty or other agreement with the
7.23foreign jurisdiction that provides for prompt, obligatory, and automatic exchange of
7.24information with the United States government relevant to enforcing the provisions of
7.25federal tax laws and the treaty or other agreement was in effect for the taxable year.
7.26EFFECTIVE DATE.This section is effective for returns filed for taxable years
7.27beginning after December 31, 2011.

7.28    Sec. 9. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19c, is
7.29amended to read:
7.30    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
7.31there shall be added to federal taxable income:
7.32    (1) the amount of any deduction taken for federal income tax purposes for income,
7.33excise, or franchise taxes based on net income or related minimum taxes, including but not
7.34limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
8.1another state, a political subdivision of another state, the District of Columbia, or any
8.2foreign country or possession of the United States;
8.3    (2) interest not subject to federal tax upon obligations of: the United States, its
8.4possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
8.5state, any of its political or governmental subdivisions, any of its municipalities, or any
8.6of its governmental agencies or instrumentalities; the District of Columbia; or Indian
8.7tribal governments;
8.8    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
8.9Revenue Code;
8.10    (4) the amount of any net operating loss deduction taken for federal income tax
8.11purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
8.12deduction under section 810 of the Internal Revenue Code;
8.13    (5) the amount of any special deductions taken for federal income tax purposes
8.14under sections 241 to 247 and 965 of the Internal Revenue Code;
8.15    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
8.16clause (a), that are not subject to Minnesota income tax;
8.17    (7) the amount of any capital losses deducted for federal income tax purposes under
8.18sections 1211 and 1212 of the Internal Revenue Code;
8.19    (8) the exempt foreign trade income of a foreign sales corporation under sections
8.20921(a) and 291 of the Internal Revenue Code;
8.21    (9) the amount of percentage depletion deducted under sections 611 through 614 and
8.22291 of the Internal Revenue Code;
8.23    (10) for certified pollution control facilities placed in service in a taxable year
8.24beginning before December 31, 1986, and for which amortization deductions were elected
8.25under section 169 of the Internal Revenue Code of 1954, as amended through December
8.2631, 1985, the amount of the amortization deduction allowed in computing federal taxable
8.27income for those facilities;
8.28    (11) the amount of any deemed dividend from a foreign operating corporation
8.29determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
8.30shall be reduced by the amount of the addition to income required by clauses (20), (21),
8.31(22), and (23);
8.32    (12) (11) the amount of a partner's pro rata share of net income which does not flow
8.33through to the partner because the partnership elected to pay the tax on the income under
8.34section 6242(a)(2) of the Internal Revenue Code;
8.35    (13) (12) the amount of net income excluded under section 114 of the Internal
8.36Revenue Code;
9.1    (14) (13) any increase in subpart F income, as defined in section 952(a) of the
9.2Internal Revenue Code, for the taxable year when subpart F income is calculated without
9.3regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
9.4    (15) (14) 80 percent of the depreciation deduction allowed under section
9.5168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
9.6the taxpayer has an activity that in the taxable year generates a deduction for depreciation
9.7under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
9.8year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
9.9allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
9.10of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
9.11over the amount of the loss from the activity that is not allowed in the taxable year. In
9.12succeeding taxable years when the losses not allowed in the taxable year are allowed, the
9.13depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
9.14    (16) (15) 80 percent of the amount by which the deduction allowed by section 179 of
9.15the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
9.16Revenue Code of 1986, as amended through December 31, 2003;
9.17    (17) (16) to the extent deducted in computing federal taxable income, the amount of
9.18the deduction allowable under section 199 of the Internal Revenue Code;
9.19    (18) (17) for taxable years beginning before January 1, 2013, the exclusion allowed
9.20under section 139A of the Internal Revenue Code for federal subsidies for prescription
9.21drug plans;
9.22    (19) (18) the amount of expenses disallowed under section 290.10, subdivision 2;
9.23    (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
9.24accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
9.25of a corporation that is a member of the taxpayer's unitary business group that qualifies
9.26as a foreign operating corporation. For purposes of this clause, intangible expenses and
9.27costs include:
9.28    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
9.29use, maintenance or management, ownership, sale, exchange, or any other disposition of
9.30intangible property;
9.31    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
9.32transactions;
9.33    (iii) royalty, patent, technical, and copyright fees;
9.34    (iv) licensing fees; and
9.35    (v) other similar expenses and costs.
10.1For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
10.2applications, trade names, trademarks, service marks, copyrights, mask works, trade
10.3secrets, and similar types of intangible assets.
10.4This clause does not apply to any item of interest or intangible expenses or costs paid,
10.5accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
10.6to such item of income to the extent that the income to the foreign operating corporation
10.7is income from sources without the United States as defined in subtitle A, chapter 1,
10.8subchapter N, part 1, of the Internal Revenue Code;
10.9    (21) except as already included in the taxpayer's taxable income pursuant to clause
10.10(20), any interest income and income generated from intangible property received or
10.11accrued by a foreign operating corporation that is a member of the taxpayer's unitary
10.12group. For purposes of this clause, income generated from intangible property includes:
10.13    (i) income related to the direct or indirect acquisition, use, maintenance or
10.14management, ownership, sale, exchange, or any other disposition of intangible property;
10.15    (ii) income from factoring transactions or discounting transactions;
10.16    (iii) royalty, patent, technical, and copyright fees;
10.17    (iv) licensing fees; and
10.18    (v) other similar income.
10.19For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
10.20applications, trade names, trademarks, service marks, copyrights, mask works, trade
10.21secrets, and similar types of intangible assets.
10.22This clause does not apply to any item of interest or intangible income received or accrued
10.23by a foreign operating corporation with respect to such item of income to the extent that
10.24the income is income from sources without the United States as defined in subtitle A,
10.25chapter 1, subchapter N, part 1, of the Internal Revenue Code;
10.26    (22) the dividends attributable to the income of a foreign operating corporation that
10.27is a member of the taxpayer's unitary group in an amount that is equal to the dividends
10.28paid deduction of a real estate investment trust under section 561(a) of the Internal
10.29Revenue Code for amounts paid or accrued by the real estate investment trust to the
10.30foreign operating corporation;
10.31    (23) the income of a foreign operating corporation that is a member of the taxpayer's
10.32unitary group in an amount that is equal to gains derived from the sale of real or personal
10.33property located in the United States;
10.34    (24) (19) for taxable years beginning before January 1, 2010, the additional amount
10.35allowed as a deduction for donation of computer technology and equipment under section
10.36170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
11.1(25) (20) discharge of indebtedness income resulting from reacquisition of business
11.2indebtedness and deferred under section 108(i) of the Internal Revenue Code.
11.3EFFECTIVE DATE.This section is effective for taxable years beginning after
11.4December 31, 2011.

11.5    Sec. 10. Minnesota Statutes 2010, section 290.01, subdivision 19d, is amended to read:
11.6    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
11.7corporations, there shall be subtracted from federal taxable income after the increases
11.8provided in subdivision 19c:
11.9    (1) the amount of foreign dividend gross-up added to gross income for federal
11.10income tax purposes under section 78 of the Internal Revenue Code;
11.11    (2) the amount of salary expense not allowed for federal income tax purposes due to
11.12claiming the work opportunity credit under section 51 of the Internal Revenue Code;
11.13    (3) any dividend (not including any distribution in liquidation) paid within the
11.14taxable year by a national or state bank to the United States, or to any instrumentality of
11.15the United States exempt from federal income taxes, on the preferred stock of the bank
11.16owned by the United States or the instrumentality;
11.17    (4) amounts disallowed for intangible drilling costs due to differences between
11.18this chapter and the Internal Revenue Code in taxable years beginning before January
11.191, 1987, as follows:
11.20    (i) to the extent the disallowed costs are represented by physical property, an amount
11.21equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
11.22subdivision 7 , subject to the modifications contained in subdivision 19e; and
11.23    (ii) to the extent the disallowed costs are not represented by physical property, an
11.24amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
11.25290.09, subdivision 8 ;
11.26    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
11.27Internal Revenue Code, except that:
11.28    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
11.29capital loss carrybacks shall not be allowed;
11.30    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
11.31a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
11.32allowed;
11.33    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
11.34capital loss carryback to each of the three taxable years preceding the loss year, subject to
11.35the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
12.1    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
12.2a capital loss carryover to each of the five taxable years succeeding the loss year to the
12.3extent such loss was not used in a prior taxable year and subject to the provisions of
12.4Minnesota Statutes 1986, section 290.16, shall be allowed;
12.5    (6) an amount for interest and expenses relating to income not taxable for federal
12.6income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
12.7expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
12.8291 of the Internal Revenue Code in computing federal taxable income;
12.9    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
12.10which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
12.11reasonable allowance for depletion based on actual cost. In the case of leases the deduction
12.12must be apportioned between the lessor and lessee in accordance with rules prescribed
12.13by the commissioner. In the case of property held in trust, the allowable deduction must
12.14be apportioned between the income beneficiaries and the trustee in accordance with the
12.15pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
12.16of the trust's income allocable to each;
12.17    (8) for certified pollution control facilities placed in service in a taxable year
12.18beginning before December 31, 1986, and for which amortization deductions were elected
12.19under section 169 of the Internal Revenue Code of 1954, as amended through December
12.2031, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
12.211986, section 290.09, subdivision 7;
12.22    (9) amounts included in federal taxable income that are due to refunds of income,
12.23excise, or franchise taxes based on net income or related minimum taxes paid by the
12.24corporation to Minnesota, another state, a political subdivision of another state, the
12.25District of Columbia, or a foreign country or possession of the United States to the extent
12.26that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
12.27clause (1), in a prior taxable year;
12.28    (10) 80 percent of royalties, fees, or other like income accrued or received from a
12.29foreign operating corporation or a foreign corporation which is part of the same unitary
12.30business as the receiving corporation, unless the income resulting from such payments or
12.31accruals is income from sources within the United States as defined in subtitle A, chapter
12.321, subchapter N, part 1, of the Internal Revenue Code;
12.33    (11) (10) income or gains from the business of mining as defined in section 290.05,
12.34subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
13.1    (12) (11) the amount of disability access expenditures in the taxable year which are
13.2not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue
13.3Code;
13.4    (13) (12) the amount of qualified research expenses not allowed for federal income
13.5tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
13.6that the amount exceeds the amount of the credit allowed under section 290.068;
13.7    (14) (13) the amount of salary expenses not allowed for federal income tax purposes
13.8due to claiming the Indian employment credit under section 45A(a) of the Internal
13.9Revenue Code;
13.10    (15) (14) for a corporation whose foreign sales corporation, as defined in section
13.11922 of the Internal Revenue Code, constituted a foreign operating corporation during any
13.12taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
13.13claiming the deduction under section 290.21, subdivision 4, for income received from
13.14the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
13.15income excluded under section 114 of the Internal Revenue Code, provided the income is
13.16not income of a foreign operating company;
13.17    (16) (15) any decrease in subpart F income, as defined in section 952(a) of the
13.18Internal Revenue Code, for the taxable year when subpart F income is calculated without
13.19regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
13.20    (17) (16) in each of the five tax years immediately following the tax year in which an
13.21addition is required under subdivision 19c, clause (15) (14), an amount equal to one-fifth
13.22of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
13.23amount of the addition made by the taxpayer under subdivision 19c, clause (15) (14). The
13.24resulting delayed depreciation cannot be less than zero;
13.25    (18) (17) in each of the five tax years immediately following the tax year in which an
13.26addition is required under subdivision 19c, clause (16) (15), an amount equal to one-fifth
13.27of the amount of the addition; and
13.28(19) (18) to the extent included in federal taxable income, discharge of indebtedness
13.29income resulting from reacquisition of business indebtedness included in federal taxable
13.30income under section 108(i) of the Internal Revenue Code. This subtraction applies only
13.31to the extent that the income was included in net income in a prior year as a result of the
13.32addition under section 290.01, subdivision 19c, clause (25) (20).
13.33EFFECTIVE DATE.This section is effective for taxable years beginning after
13.34December 31, 2011.

13.35    Sec. 11. Minnesota Statutes 2010, section 290.0921, subdivision 3, is amended to read:
14.1    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
14.2income" is Minnesota net income as defined in section 290.01, subdivision 19, and
14.3includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
14.4(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
14.5Minnesota tax return, the minimum tax must be computed on a separate company basis.
14.6If a corporation is part of a tax group filing a unitary return, the minimum tax must be
14.7computed on a unitary basis. The following adjustments must be made.
14.8(1) For purposes of the depreciation adjustments under section 56(a)(1) and
14.956(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
14.10service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
14.11income tax purposes, including any modification made in a taxable year under section
14.12290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
14.13paragraph (c).
14.14For taxable years beginning after December 31, 2000, the amount of any remaining
14.15modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
14.16section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
14.17allowance in the first taxable year after December 31, 2000.
14.18(2) The portion of the depreciation deduction allowed for federal income tax
14.19purposes under section 168(k) of the Internal Revenue Code that is required as an addition
14.20under section 290.01, subdivision 19c, clause (15) (14), is disallowed in determining
14.21alternative minimum taxable income.
14.22(3) The subtraction for depreciation allowed under section 290.01, subdivision 19d,
14.23clause (17), is allowed as a depreciation deduction in determining alternative minimum
14.24taxable income.
14.25(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
14.26of the Internal Revenue Code does not apply.
14.27(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
14.28Revenue Code does not apply.
14.29(6) The special rule for dividends from section 936 companies under section
14.3056(g)(4)(C)(iii) does not apply.
14.31(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
14.32Code does not apply.
14.33(8) The tax preference for intangible drilling costs under section 57(a)(2) of the
14.34Internal Revenue Code must be calculated without regard to subparagraph (E) and the
14.35subtraction under section 290.01, subdivision 19d, clause (4).
15.1(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
15.2Revenue Code does not apply.
15.3(10) The tax preference for charitable contributions of appreciated property under
15.4section 57(a)(6) of the Internal Revenue Code does not apply.
15.5(11) For purposes of calculating the tax preference for accelerated depreciation or
15.6amortization on certain property placed in service before January 1, 1987, under section
15.757(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
15.8deduction allowed under section 290.01, subdivision 19e.
15.9For taxable years beginning after December 31, 2000, the amount of any remaining
15.10modification made under section 290.01, subdivision 19e, not previously deducted is a
15.11depreciation or amortization allowance in the first taxable year after December 31, 2004.
15.12(12) For purposes of calculating the adjustment for adjusted current earnings in
15.13section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
15.14income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
15.15minimum taxable income as defined in this subdivision, determined without regard to the
15.16adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
15.17(13) For purposes of determining the amount of adjusted current earnings under
15.18section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
15.1956(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
15.20gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), or (ii) the
15.21amount of refunds of income, excise, or franchise taxes subtracted as provided in section
15.22290.01, subdivision 19d , clause (9), or (iii) the amount of royalties, fees or other like
15.23income subtracted as provided in section 290.01, subdivision 19d, clause (10).
15.24(14) Alternative minimum taxable income excludes the income from operating in a
15.25job opportunity building zone as provided under section 469.317.
15.26(15) Alternative minimum taxable income excludes the income from operating in a
15.27biotechnology and health sciences industry zone as provided under section 469.337.
15.28(16) Alternative minimum taxable income excludes the income from operating in an
15.29international economic development zone as provided under section 469.326.
15.30Items of tax preference must not be reduced below zero as a result of the
15.31modifications in this subdivision.
15.32EFFECTIVE DATE.This section is effective for taxable years beginning after
15.33December 31, 2011.

15.34    Sec. 12. Minnesota Statutes 2010, section 290.17, subdivision 4, is amended to read:
16.1    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
16.2within this state or partly within and partly without this state is part of a unitary business,
16.3the entire income of the unitary business is subject to apportionment pursuant to section
16.4290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
16.5business is considered to be derived from any particular source and none may be allocated
16.6to a particular place except as provided by the applicable apportionment formula. The
16.7provisions of this subdivision do not apply to business income subject to subdivision 5,
16.8income of an insurance company, or income of an investment company determined under
16.9section 290.36.
16.10(b) The term "unitary business" means business activities or operations which
16.11result in a flow of value between them. The term may be applied within a single legal
16.12entity or between multiple entities and without regard to whether each entity is a sole
16.13proprietorship, a corporation, a partnership or a trust.
16.14(c) Unity is presumed whenever there is unity of ownership, operation, and use,
16.15evidenced by centralized management or executive force, centralized purchasing,
16.16advertising, accounting, or other controlled interaction, but the absence of these
16.17centralized activities will not necessarily evidence a nonunitary business. Unity is also
16.18presumed when business activities or operations are of mutual benefit, dependent upon or
16.19contributory to one another, either individually or as a group.
16.20(d) Where a business operation conducted in Minnesota is owned by a business
16.21entity that carries on business activity outside the state different in kind from that
16.22conducted within this state, and the other business is conducted entirely outside the state, it
16.23is presumed that the two business operations are unitary in nature, interrelated, connected,
16.24and interdependent unless it can be shown to the contrary.
16.25(e) Unity of ownership is not deemed to exist when a corporation is involved unless
16.26that corporation is a member of a group of two or more business entities and more than 50
16.27percent of the voting stock of each member of the group is directly or indirectly owned
16.28by a common owner or by common owners, either corporate or noncorporate, or by one
16.29or more of the member corporations of the group. For this purpose, the term "voting
16.30stock" shall include membership interests of mutual insurance holding companies formed
16.31under section 66A.40.
16.32(f) The net income and apportionment factors under section 290.191 or 290.20 of
16.33foreign corporations and other foreign entities which are part of a unitary business shall
16.34not be included in the net income or the apportionment factors of the unitary business.
16.35A foreign corporation or other foreign entity which is required to file a return under this
16.36chapter shall file on a separate return basis. The net income and apportionment factors
17.1under section 290.191 or 290.20 of foreign operating corporations shall not be included in
17.2the net income or the apportionment factors of the unitary business except as provided in
17.3paragraph (g). The provisions of this paragraph are not severable from the provisions of
17.4section 290.01, subdivision 5, clauses (4) to (6); if any of those provisions are found to be
17.5unconstitutional, the provisions of this paragraph are void for the respective taxable years.
17.6(g) The adjusted net income of a foreign operating corporation shall be deemed to
17.7be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
17.8proportion to each shareholder's ownership, with which such corporation is engaged in
17.9a unitary business. Such deemed dividend shall be treated as a dividend under section
17.10290.21, subdivision 4.
17.11Dividends actually paid by a foreign operating corporation to a corporate shareholder
17.12which is a member of the same unitary business as the foreign operating corporation shall
17.13be eliminated from the net income of the unitary business in preparing a combined report
17.14for the unitary business. The adjusted net income of a foreign operating corporation
17.15shall be its net income adjusted as follows:
17.16(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
17.17Rico, or a United States possession or political subdivision of any of the foregoing shall
17.18be a deduction; and
17.19(2) the subtraction from federal taxable income for payments received from foreign
17.20corporations or foreign operating corporations under section 290.01, subdivision 19d,
17.21clause (10), shall not be allowed.
17.22If a foreign operating corporation incurs a net loss, neither income nor deduction
17.23from that corporation shall be included in determining the net income of the unitary
17.24business.
17.25(h) (g) For purposes of determining the net income of a unitary business and the
17.26factors to be used in the apportionment of net income pursuant to section 290.191 or
17.27290.20 , there must be included only the income and apportionment factors of domestic
17.28corporations or other domestic entities other than foreign operating corporations that are
17.29determined to be part of the unitary business pursuant to this subdivision, notwithstanding
17.30that foreign corporations or other foreign entities might be included in the unitary
17.31business, except that foreign corporations or other foreign entities that are included on a
17.32federal income tax return must be included on the combined report. Income of a foreign
17.33partnership or other foreign entity treated as a partnership included in federal taxable
17.34income, as defined in section 63 of the Internal Revenue Code of 1986, as amended
17.35through the date named in section 290.01, subdivision 19, and the proportionate amount of
17.36apportionment factors, must be included in the combined report.
18.1(i) (h) Deductions for expenses, interest, or taxes otherwise allowable under
18.2this chapter that are connected with or allocable against dividends, deemed dividends
18.3described in paragraph (g), or royalties, fees, or other like income described in section
18.4290.01, subdivision 19d, clause (10), shall not be disallowed.
18.5(j) (i) Each corporation or other entity, except a sole proprietorship, that is part of
18.6a unitary business must file combined reports as the commissioner determines. On the
18.7reports, all intercompany transactions between entities included pursuant to paragraph
18.8(h) (g) must be eliminated and the entire net income of the unitary business determined in
18.9accordance with this subdivision is apportioned among the entities by using each entity's
18.10Minnesota factors for apportionment purposes in the numerators of the apportionment
18.11formula and the total factors for apportionment purposes of all entities included pursuant
18.12to paragraph (h) (g) in the denominators of the apportionment formula. All sales of the
18.13unitary business made within Minnesota pursuant to section 290.191 or 290.20 must be
18.14included on the separate combined report of a corporation that is a member of the unitary
18.15business and is subject to the jurisdiction of this state to impose tax under this chapter.
18.16(k) (j) If a corporation has been divested from a unitary business and is included in a
18.17combined report for a fractional part of the common accounting period of the combined
18.18report:
18.19(1) its income includable in the combined report is its income incurred for that part
18.20of the year determined by proration or separate accounting; and
18.21(2) its sales, property, and payroll included in the apportionment formula must
18.22be prorated or accounted for separately.
18.23EFFECTIVE DATE.This section is effective for returns filed for taxable years
18.24beginning after December 31, 2011.

18.25    Sec. 13. Minnesota Statutes 2010, section 290.191, subdivision 5, is amended to read:
18.26    Subd. 5. Determination of sales factor. For purposes of this section, the following
18.27rules apply in determining the sales factor.
18.28    (a) The sales factor includes all sales, gross earnings, or receipts received in the
18.29ordinary course of the business, except that the following types of income are not included
18.30in the sales factor:
18.31    (1) interest;
18.32    (2) dividends;
18.33    (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;
18.34    (4) sales of property used in the trade or business, except sales of leased property of
18.35a type which is regularly sold as well as leased; and
19.1    (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
19.2Code or sales of stock; and.
19.3    (6) royalties, fees, or other like income of a type which qualify for a subtraction from
19.4federal taxable income under section 290.01, subdivision 19d(10).
19.5    (b) Sales of tangible personal property are made within this state if the property is
19.6received by a purchaser at a point within this state, and the taxpayer is taxable in this state,
19.7regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination
19.8of the property.
19.9    (c) Tangible personal property delivered to a common or contract carrier or foreign
19.10vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
19.11regardless of f.o.b. point or other conditions of the sale.
19.12    (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
19.13fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
19.14licensed by a state or political subdivision to resell this property only within the state of
19.15ultimate destination, the sale is made in that state.
19.16    (e) Sales made by or through a corporation that is qualified as a domestic
19.17international sales corporation under section 992 of the Internal Revenue Code are not
19.18considered to have been made within this state.
19.19    (f) Sales, rents, royalties, and other income in connection with real property is
19.20attributed to the state in which the property is located.
19.21    (g) Receipts from the lease or rental of tangible personal property, including finance
19.22leases and true leases, must be attributed to this state if the property is located in this
19.23state and to other states if the property is not located in this state. Receipts from the
19.24lease or rental of moving property including, but not limited to, motor vehicles, rolling
19.25stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
19.26factor to the extent that the property is used in this state. The extent of the use of moving
19.27property is determined as follows:
19.28    (1) A motor vehicle is used wholly in the state in which it is registered.
19.29    (2) The extent that rolling stock is used in this state is determined by multiplying
19.30the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
19.31which is the miles traveled within this state by the leased or rented rolling stock and the
19.32denominator of which is the total miles traveled by the leased or rented rolling stock.
19.33    (3) The extent that an aircraft is used in this state is determined by multiplying the
19.34receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
19.35the number of landings of the aircraft in this state and the denominator of which is the
19.36total number of landings of the aircraft.
20.1    (4) The extent that a vessel, mobile equipment, or other mobile property is used in
20.2the state is determined by multiplying the receipts from the lease or rental of the property
20.3by a fraction, the numerator of which is the number of days during the taxable year the
20.4property was in this state and the denominator of which is the total days in the taxable year.
20.5    (h) Royalties and other income not described in paragraph (a), clause (6), received
20.6for the use of or for the privilege of using intangible property, including patents,
20.7know-how, formulas, designs, processes, patterns, copyrights, trade names, service names,
20.8franchises, licenses, contracts, customer lists, or similar items, must be attributed to the
20.9state in which the property is used by the purchaser. If the property is used in more
20.10than one state, the royalties or other income must be apportioned to this state pro rata
20.11according to the portion of use in this state. If the portion of use in this state cannot be
20.12determined, the royalties or other income must be excluded from both the numerator
20.13and the denominator. Intangible property is used in this state if the purchaser uses the
20.14intangible property or the rights therein in the regular course of its business operations in
20.15this state, regardless of the location of the purchaser's customers.
20.16    (i) Sales of intangible property are made within the state in which the property is
20.17used by the purchaser. If the property is used in more than one state, the sales must be
20.18apportioned to this state pro rata according to the portion of use in this state. If the
20.19portion of use in this state cannot be determined, the sale must be excluded from both the
20.20numerator and the denominator of the sales factor. Intangible property is used in this
20.21state if the purchaser used the intangible property in the regular course of its business
20.22operations in this state.
20.23    (j) Receipts from the performance of services must be attributed to the state where
20.24the services are received. For the purposes of this section, receipts from the performance
20.25of services provided to a corporation, partnership, or trust may only be attributed to a state
20.26where it has a fixed place of doing business. If the state where the services are received is
20.27not readily determinable or is a state where the corporation, partnership, or trust receiving
20.28the service does not have a fixed place of doing business, the services shall be deemed
20.29to be received at the location of the office of the customer from which the services were
20.30ordered in the regular course of the customer's trade or business. If the ordering office
20.31cannot be determined, the services shall be deemed to be received at the office of the
20.32customer to which the services are billed.
20.33    (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
20.34from management, distribution, or administrative services performed by a corporation
20.35or trust for a fund of a corporation or trust regulated under United States Code, title 15,
20.36sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
21.1the fund resides. Under this paragraph, receipts for services attributed to shareholders are
21.2determined on the basis of the ratio of: (1) the average of the outstanding shares in the
21.3fund owned by shareholders residing within Minnesota at the beginning and end of each
21.4year; and (2) the average of the total number of outstanding shares in the fund at the
21.5beginning and end of each year. Residence of the shareholder, in the case of an individual,
21.6is determined by the mailing address furnished by the shareholder to the fund. Residence
21.7of the shareholder, when the shares are held by an insurance company as a depositor for
21.8the insurance company policyholders, is the mailing address of the policyholders. In
21.9the case of an insurance company holding the shares as a depositor for the insurance
21.10company policyholders, if the mailing address of the policyholders cannot be determined
21.11by the taxpayer, the receipts must be excluded from both the numerator and denominator.
21.12Residence of other shareholders is the mailing address of the shareholder.
21.13EFFECTIVE DATE.This section is effective for taxable years beginning after
21.14December 31, 2011.

21.15    Sec. 14. Minnesota Statutes 2010, section 290.21, subdivision 4, is amended to read:
21.16    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
21.17of dividends received by a corporation during the taxable year from another corporation,
21.18in which the recipient owns 20 percent or more of the stock, by vote and value, not
21.19including stock described in section 1504(a)(4) of the Internal Revenue Code when the
21.20corporate stock with respect to which dividends are paid does not constitute the stock in
21.21trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
21.22constitute property held by the taxpayer primarily for sale to customers in the ordinary
21.23course of the taxpayer's trade or business, or when the trade or business of the taxpayer
21.24does not consist principally of the holding of the stocks and the collection of the income
21.25and gains therefrom; and
21.26    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
21.27an affiliated company transferred in an overall plan of reorganization and the dividend
21.28is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
21.29amended through December 31, 1989;
21.30    (ii) the remaining 20 percent of dividends if the dividends are received from a
21.31corporation which is subject to tax under section 290.36 and which is a member of an
21.32affiliated group of corporations as defined by the Internal Revenue Code and the dividend
21.33is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
21.34amended through December 31, 1989, or is deducted under an election under section
21.35243(b) of the Internal Revenue Code; or
22.1    (iii) the remaining 20 percent of the dividends if the dividends are received from a
22.2property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
22.3member of an affiliated group of corporations as defined by the Internal Revenue Code
22.4and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
22.51.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
22.6under an election under section 243(b) of the Internal Revenue Code.
22.7    (b) Seventy percent of dividends received by a corporation during the taxable year
22.8from another corporation in which the recipient owns less than 20 percent of the stock,
22.9by vote or value, not including stock described in section 1504(a)(4) of the Internal
22.10Revenue Code when the corporate stock with respect to which dividends are paid does not
22.11constitute the stock in trade of the taxpayer, or does not constitute property held by the
22.12taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
22.13business, or when the trade or business of the taxpayer does not consist principally of the
22.14holding of the stocks and the collection of income and gain therefrom.
22.15    (c) The dividend deduction provided in this subdivision shall be allowed only with
22.16respect to dividends that are included in a corporation's Minnesota taxable net income
22.17for the taxable year.
22.18    The dividend deduction provided in this subdivision does not apply to a dividend
22.19from a corporation which, for the taxable year of the corporation in which the distribution
22.20is made or for the next preceding taxable year of the corporation, is a corporation exempt
22.21from tax under section 501 of the Internal Revenue Code.
22.22The dividend deduction provided in this subdivision does not apply to a dividend
22.23received from a real estate investment trust, as defined in section 856 of the Internal
22.24Revenue Code.
22.25    The dividend deduction provided in this subdivision applies to the amount of
22.26regulated investment company dividends only to the extent determined under section
22.27854(b) of the Internal Revenue Code.
22.28    The dividend deduction provided in this subdivision shall not be allowed with
22.29respect to any dividend for which a deduction is not allowed under the provisions of
22.30section 246(c) of the Internal Revenue Code.
22.31    (d) If dividends received by a corporation that does not have nexus with Minnesota
22.32under the provisions of Public Law 86-272 are included as income on the return of
22.33an affiliated corporation permitted or required to file a combined report under section
22.34290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the
22.35determination as to whether the trade or business of the corporation consists principally
22.36of the holding of stocks and the collection of income and gains therefrom shall be made
23.1with reference to the trade or business of the affiliated corporation having a nexus with
23.2Minnesota.
23.3    (e) The deduction provided by this subdivision does not apply if the dividends are
23.4paid by a FSC as defined in section 922 of the Internal Revenue Code.
23.5    (f) If one or more of the members of the unitary group whose income is included on
23.6the combined report received a dividend, the deduction under this subdivision for each
23.7member of the unitary business required to file a return under this chapter is the product
23.8of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
23.9allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
23.10income apportionable to this state for the taxable year under section 290.191 or 290.20.
23.11EFFECTIVE DATE.This section is effective for taxable years beginning after
23.12December 31, 2011."
23.13Page 5, after line 11, insert:
23.14"(a) Minnesota Statutes 2010, sections 290.01, subdivision 6b; and 290.0921,
23.15subdivision 7, are repealed.
23.16(b) Minnesota Statutes 2011 Supplement, section 273.13, subdivision 35, is repealed.
23.17EFFECTIVE DATE.Paragraph (a) is effective for taxable years beginning after
23.18December 31, 2011. Paragraph (b) is effective to taxes payable in 2013 and thereafter."
23.19Renumber the sections in sequence and correct the internal references
23.20Amend the title accordingly