Bill > SF1237

This bill modifies Minnesota's research income and corporate franchise tax credit by introducing an alternative method for calculating the base amount of qualified research expenses. Currently, the base amount is calculated using federal Internal Revenue Code guidelines and Minnesota sales, but the bill now provides a second option for businesses: they can calculate their base amount as 50 percent of their average qualified Minnesota research expenses from the previous three tax years. The bill also establishes a new provision allowing corporations, partnerships, and other taxpayers to elect this alternative simplified credit calculation method when filing their tax return, with the election being irrevocable for that specific tax year. For partnerships, the election must be made on the partnership return and will apply to all partners. The bill defines "qualified research expenses" as research conducted within Minnesota, excluding expenses for research performed outside the state, and specifically aims to promote technological innovation and business development within Minnesota. These changes will take effect for taxable years beginning after December 31, 2024, providing businesses with more flexibility in calculating their research tax credits.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF1237&ssn=0&y=2025