The bill amends Minnesota Statutes 2024, section 290.068, to modify the research credit related to income and corporate franchise tax. It introduces new definitions for "qualified research expenses," "qualified research," and "base amount," while specifying that qualified research conducted outside Minnesota is excluded from the credit. The bill also establishes an alternative simplified credit election for taxpayers, allowing them to calculate their base amount based on a percentage of their average qualified Minnesota research expenses from the previous three taxable years. This election is irrevocable for the taxable year in which it is made.

Additionally, the bill clarifies that the average annual gross receipts and aggregate gross receipts for determining the base amount must be calculated using Minnesota sales or receipts. The effective date for these changes is set for taxable years beginning after December 31, 2024. Overall, the bill aims to enhance the research credit framework to better support small, technologically innovative enterprises in Minnesota.

Statutes affected:
Introduction: 290.068