Bill > HF173

This bill modifies the research credit for income and corporate franchise tax in Minnesota by introducing an alternative method for calculating the base amount for research expenses. Specifically, the bill allows taxpayers to elect an alternative simplified credit calculation method, where the base amount is defined as 50 percent of the average qualified Minnesota research expenses from the three preceding taxable years, instead of using the traditional method defined in the Internal Revenue Code. The bill maintains the existing requirement that qualified research expenses must be conducted within Minnesota, excluding expenses incurred for research performed outside the state. The alternative simplified credit election is irrevocable for the taxable year and must be made at the time of filing the tax return, with special provisions for partnerships requiring the election to be made on the partnership return and applying to all partners. The changes will take effect for taxable years beginning after December 31, 2024, providing businesses with a more flexible approach to calculating their research tax credit while incentivizing research activities conducted within Minnesota.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF0173&ssn=0&y=2025