Article 1, section 1. Establishes a refundable tax credit for 2012 and 2013 for qualified employers who hire certain veterans, high school or college graduates, or long-term unemployed persons to full time jobs. The credit is $3,000 per employee hired in 2012, and $1,500 per employee hired in 2013, up to a maximum of $50,000 per employer, and is available to employers of the first 14,000 qualified persons hired after March 31, 2012. Qualified employers are eligible to receive the credit after the employee has worked full-time for 12 consecutive months.
For employers that are part of a unitary business, the number of full-time employees and the maximum credit are determined at the group level.
The bill defines “full-time employee” as an employee who, during the first 12 months of work: works for the employer in Minnesota at least 1,820 hours; performs services in at least 50 weeks; and is paid at least $25,000, including benefits not mandated by law. The bill also defines “qualified employer” as an employer that employed at least 5 full-time employees on December 31, 2011, and hired one or more qualified full-time employees after March 31, 2012.
A “qualified full-time employee” is a full-time employee who is a qualified unemployed veteran, a qualified unemployed recent graduate or a qualified unemployed job seeker. The employee must be a Minnesota resident on the date of hire. The bill sets forth criteria for each type of full-time employee:
A “qualified unemployed veteran” is a person who: was in active military service in a designated combat zone after September 11, 2001; was discharged or released from service during the 5 years prior to date of hire; received unemployment compensation for at least 4 weeks during the one-year period prior to date of hire; and was unemployed on the date of hire.
A “qualified unemployed recent graduate” is a person who, in 2011: received a diploma, degree, or certificate of completion for graduating from high school or a certificate, associate, or baccalaureate undergraduate degree from an institute of higher learning, and did not have a full-time job after receiving the diploma, certificate, or degree until the date of hire.
A “qualified unemployed job seeker” is a person who, on the date of hire: has been receiving unemployment compensation for at least three months, or had exhausted eligibility for unemployment compensation and had not had an intervening full time job.
The bill requires the Commissioner of Revenue to develop an Internet application process by July 1, 2012, that allows employers to apply for one or more of the 14,000 available tentative credits. The application must include employer identification information. It must also include the name, social security number, and veteran/recent graduate/job seeker status of the qualified employee.
The credit is available only to employers who receive notice from the commissioner that their application for tentative credit has been approved. The commissioner shall approve the first 14,000 applications received, based on the date of receipt.
Construction trades employers are eligible to apply for tentative credits. The bill requires the employer to file a renewal application six months after the date of hire, confirming that the employee for whom the tentative credit was granted is still employed and that the employer reasonably believes all conditions of eligibility for the credit will be met. If the employer does not file the renewal application within seven months of date of hire, the employer is no longer eligible to receive the credit, and any tentative credits are canceled and may be reissued to other eligible employers.
Credits granted to a partnership, LLC taxed as a partnership, S corporation, or multiple owners of a business are passed through to the partners, members, shareholders, or owners pro rata based on their share of the entity's assets or as specially allocated in their organizational documents.
If the amount of the credit exceeds the employer’s tax liability, the commissioner refunds the excess to the employer, and an appropriation from the general fund is created to pay the refunds.
Article 1, section 1, is effective the day following final enactment.
Article 2, section 1. Reduces the amount of the subtraction for corporate franchise tax from 80 percent to 70 percent of royalties, fees, or other similar income accrued or received from a foreign operating corporation or foreign corporation which is part of the same unitary business as the receiving corporation.
Section 2 adds a reference to the new paragraph (c) in section 3, which allows a deduction for 70 percent of dividends paid from a foreign operating corporation.
The provisions of Article 2 are effective for taxable years beginning after December 31, 2011.
Article 3, section 1. Adds a definition of “solicitor,” for purposes of establishing nexus, to mean a person who directly or indirectly solicits business for a retailer. New language also creates a rebuttable presumption that a retailer maintains a place of business in Minnesota if they enter into an agreement with a solicitor, for a fee, for the referral of Minnesota customers and the gross receipts from the sales resulting from that agreement total at least $10,000. This section is effective for sales and purchases made after June 30, 2012.