Section 1, subdivision 1 [Definitions] provides definitions for the program.
Subdivision 2 [Application] requires a business seeking a PROFIT designation to submit an application for approval to each taxing authority that may be affected by the tax benefits under the program. If the affected taxing authorities determine that the increased business activities will benefit the local economy, the taxing authorities may notify the commissioner that the business has received local approval to be designated as a PROFIT business. Allows one or more taxing authorities to act together to provide a general local approval.
Subdivision 3 [PROFIT business designation; requirements] requires a business seeking a PROFIT designation to meet the following:
- the business operates within Minnesota with one of the following as its primary business activity: manufacturing, warehousing, distribution, information technology, finance, insurance, or professional or technical services
- the business must not be primarily engaged in lobbying, political consulting, leisure, hospitality, or professional services provided by attorneys, accountants, business consultants, physicians, or health care consultants
- the business must enter into a job creation and construction agreement with the appropriate local government unit and the commissioner to create at least ten new full-time employee positions within two years of being designated as a PROFIT business.
Requires each new position to pay at least $35,000 in annual wages for businesses located in the seven-county metropolitan area or at least $27,000 in annual wages outside of the metro, and invest at least $500,000 in a construction project that includes a new, expanded, or remodeled facility within two years of being designated as a PROFIT business. Excludes positions or employees moved or relocated from another location of the PROFIT business in Minnesota to be included in determining job creation. Prohibits a PROFIT business from terminating, laying off, or reducing the working hours of an employee to satisfy job creation goals. Allows the agreement to include additional job creation goals.
Prior to designation of a business as a PROFIT business, the commissioner shall also consider: the economic outlook of the industry in which the business engages, the projected sales of the business that will be generated from outside the state, how the business will build on existing regional, national, and international strengths to diversify the state's economy, whether the business activity would occur without financial assistance, the effect of financial assistance on industry competitors; and any other criteria the commissioner deems necessary.
Subdivision 4 [Certification; tax benefits] requires the commissioner to certify a PROFIT business as a qualified PROFIT business if the business has achieved its two-year goals under its job creation and construction agreements. Provides that a business certified as a qualified PROFIT business is eligible for certain tax benefits for up to 12 years from the date the commissioner certifies the business including: a property tax refund for certain improvements, a refund for sales and use tax and any local sales and use taxes on qualifying purchases, and a refund for the state sales tax on motor vehicles and any local sales tax on motor vehicles.
Subdivision 5 [Property tax refund] provides for a property tax refund to a business based on the increase in tax capacity resulting from the value of improvements made to real and personal property that is owned and operated by a qualified PROFIT business. The refund continues annually as long as the qualified PROFIT business continues to meet the job creation goals provided for in its agreement under subdivision 3.
Subdivision 6 [Sales and use tax refund] makes a qualified PROFIT business eligible for a tax refund on the purchase and use of construction materials, services, and supplies used or consumed in, including equipment incorporated into, real property owned by a qualified PROFIT business if used in the conduct of a qualified PROFIT business. Applies the refund whether the purchases are made by the business or a contractor. Subjects any refund to the job creation and construction agreement under subdivision 3.
Subdivision 7 [Motor vehicle tax refund] makes a qualified PROFIT business eligible to receive a tax refund on the purchase of a motor vehicle if the vehicle is primarily used as part of or in direct support of business operations. Applies to purchases made while certified as a qualified PROFIT business. Applies the refund to any local sales and use tax. Subjects any refund to the job creation and construction agreement under subdivision 3.
Subdivision 8 [Appropriation] annually appropriates from the general fund the amount sufficient to pay refunds under the program.
[Effective date] makes this section effective for taxes payable in 2012 and thereafter and for sales and purchases made after July 31, 2011.