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S.F. No. 350 - Income and corporate franchise tax subtraction for certain fitness facility fees
 
Author: Senator Sandra L. Pappas
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: February 9, 2015



 

This bill provides a subtraction for qualifying expenses incurred by employers for fitness facilities used by their employees, effective beginning in tax year 2015.  The subtraction is used in calculating Minnesota taxable income for both individual and corporate franchise tax.  Under federal law, to which Minnesota conforms, an employer’s expenses for employees’ use of an on-site fitness facility are generally excluded from employees’ taxable income.  An employer’s payment of membership fees or dues for an off-site fitness facility on behalf of employees are generally considered taxable income. 

Section

Provision

1

Allows a subtraction for individual filers of up to $40 per employee per month for the value of the use of on-site fitness facility provided by an employer or for membership expenses for an off-site fitness facility paid by an employer on behalf of the individual.  For S-corporations, partnerships, and sole proprietors, the subtraction is the value of any membership expenses paid on behalf of its employees to a fitness facility.  The subtraction is allowed to the extent these expenses are included in federal taxable income.  The employee must use the facility at least eight times per month.  The use of the fitness facility, whether on or off-site, must be available to all employees or a group of employees defined under a reasonable classification (i.e., the facility must not be available to executives only). 

Defines “fitness facility” as a facility that provides instruction in a program of physical exercise; offers facilities for the preservation, maintenance, encouragement, or development of physical fitness; or is the site of a state or local government fitness program.  A facility must not be a private club owned and operated by its members; offer golf, hunting, sailing, or horseback riding facilities; must not be incidental to the facility’s overall function and purpose; and must be compliant with state and federal antidiscrimination laws.
 

2

Allows a subtraction for corporate franchise filers of up to $40 per employee per month for membership expenses for a fitness facility paid by an employer on behalf of employees.  The subtraction is allowed to the extent these expenses are included in federal taxable income.  The employee must use the facility at least eight times per month.  The employer’s payment of fitness facility fees must be available to all employees or a group of employees defined under a reasonable classification.

 

 
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