S.F. No. 3526 Summary

• Modifies the research credit structure by adding a tiered approach: 10 percent on the first $2,000,000 of qualifying research expenses over the base amount, and 2.5 percent on excess expenses over $2,000,000.

• Introduces an alternative simplified credit election allowing taxpayers to calculate the base amount as 50 percent of average qualified research expenses for the three preceding taxable years instead of using the federal base amount method.

• Restricts research credit eligibility by excluding expenses for qualified research conducted outside Minnesota and limiting contributions to nonprofits to those promoting Minnesota business establishment and expansion.

• Permits taxpayers to make the alternative simplified credit election on an original return with extensions, with the ability to revoke it without commissioner approval but with a five-year restriction on re-election.

• Applies all modifications to taxable years beginning after December 31, 2015.