HF 3270 Summary

• Extends research credit to individual income taxpayers by allowing a credit against franchise tax equal to 5 percent of the first $2,000,000 of excess qualified research expenses plus 2.5 percent of excess expenses over $2,000,000.

• Defines "qualified research expenses" to include research and basic research payments under Internal Revenue Code sections 41(b) and (c), excluding research conducted outside Minnesota, plus contributions to nonprofit corporations for small, technologically innovative enterprises in Minnesota.

• Makes portion of credit refundable by requiring the commissioner to refund an unspecified percentage of excess credits up to a maximum amount when the annual credit exceeds tax liability.

• Allows excess unused research credits to carry forward for up to 15 subsequent taxable years, with carryover amounts limited to the taxpayer's tax liability less the current year research credit.

• Appropriates sufficient funds from the general fund to pay refunds required by the credit provisions, effective for taxable years beginning after December 31, 2009.