MN HF3537

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

Limits the annual credit to the taxpayer's liability for tax under Minnesota Statutes 2008, section 290.06, subdivision 1, reduced by nonrefundable credits allowed.

Allows unused research credit to be carried forward to each of the 15 succeeding taxable years, with carryforwards applied first to the earliest eligible year.

For partners in partnerships and shareholders in S corporations, allocates the credit according to Internal Revenue Code sections 41(f)(2) and 41(g), based on the taxpayer's interest in the trade or business entity.

Effective for taxable years beginning after December 31, 2009.