MN HF3912

Modifies the research credit rate structure for corporations, partnerships, and S-corporations by establishing a tiered system: 10 percent on the first $2,000,000 of excess qualified research expenses over the base amount, and 2.5 percent on excess expenses over $2,000,000.

Adds an alternative simplified credit election option allowing taxpayers to calculate the base amount at 50 percent of average qualified research expenses for the three preceding taxable years, with a 6 percent credit rate on all qualifying expenses over that base amount.

Restricts the definition of "qualified research expenses" to research conducted within Minnesota, excluding out-of-state research conducted outside Minnesota under IRC section 41(d) and (e).

Permits taxpayers to elect the alternative simplified credit on their original return with extensions and allows revocation without commissioner approval, but prohibits re-election for five taxable years following revocation.

For partnerships, requires the alternative simplified credit election to be made on the partnership return and applies the election to all partners.

Effective for taxable years beginning after December 31, 2015.