Section 1. [Subtractions from federal taxable income] Provides a Minnesota income tax subtraction for shareholders of S corporation and partners in a partnership for the amount of the federal credit for qualified railroad maintenance expenditures for which the taxpayer is eligible. The credit is 50 percent of the qualified railroad track maintenance expenditures paid or incurred by an eligible taxpayer during the taxable year, and is subject to limitation based on the number of miles of track owned or leased by the taxpayer. Qualifying expenditures are those for maintaining, repairing, and improving a qualifying railroad structure that is owned or leased as of January 1, 2005, by a Class II or Class III railroad. Class II railroads are generally regional railroads; Class III are shorter railroads that link a small number of towns or industries.
The credit may not exceed $3,500, multiplied by: the number of miles of railroad track owned or leased by the eligible taxpayer as of the close of the taxable year, plus the number of miles of railroad track assigned by a Class II or Class III railroad which owns or leases such railroad track as of the close of the taxable year. The subtraction is passed through to shareholders or partners on a pro rata basis relative to the taxpayer’s share of net income of the S corporation or partnership. Effective for tax year 2013 (the federal credit expires as of December 31, 2013).
Section 2. [Corporations; modifications decreasing federal taxable income] Provides corporate franchise taxpayers the subtraction described above for section 1. Effective for tax year 2013.
Section 3. [Definitions] Adds the cross-reference to the subtraction authorized in section 1 for purposes of calculating the individual alternative minimum tax. Effective for tax year 2013.
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