Purpose of the Bill

The bill aims to modify the existing tax provisions relating to individual income and corporate franchise taxation in Minnesota. It focuses on refining the transfer and certification processes for tax credits related to railroad infrastructure expenditures.

Main Provisions

• Definitions Update: The bill amends definitions crucial for the allocation and utilization of tax credits. It specifies entities such as "Credit certificate," "Eligible taxpayer," "Eligible transferee," and "Qualified railroad reconstruction or replacement expenditures."

• Eligible Taxpayer: An eligible taxpayer is defined as a railroad classified by the United States Surface Transportation Board as a Class II or Class III railroad.

• Qualified Expenditures: These include maintenance, reconstruction, or replacement of railroad infrastructure—like track, roadbed, bridges, industrial leads, and related structures owned or leased by Class II or III railroads active in Minnesota as of January 1, 2021. Furthermore, new construction and extensions of industrial leads, switches, spurs, and sidings by these railroads are also included.

• Certification Process: The bill specifies that credit certificates for these expenditures are issued by the commissioner of transportation. Additionally, transfer credit certificates can also be issued to eligible transferees, which covers any taxpayer liable under the specified chapters.

Significant Changes

The bill updates the procedural language and definitions previously existing in the Minnesota Statutes. The main change involves clearly defining eligible taxpayers and the scope of qualified expenditures for tax credits, focusing particularly on certain classes of railroads and the type of infrastructure projects covered.

Relevant Terms

• Tax Credit
• Corporate Franchise Tax
• Individual Income Tax
• Railroad Infrastructure
• Class II Railroad
• Class III Railroad
• United States Surface Transportation Board
• Eligible Taxpayer
• Transfer Credit Certificate