Minnesota's Response to Bonus Depreciation

CCH, 5/22/02:

The Minnesota 2002 omnibus tax bill became law without Governor Jesse Ventura's approval on May 18, 2002. The legislation contains corporate franchise (income) and personal income tax changes.
                                    
The definition of "net income" is amended to conform to the federal definition under the provisions  of the Victims of Terrorism Tax Relief Act of 2001 (P.L. 107-134) and the Job Creation and Worker  Assistance Act of 2002 (P.L. 107-147) (JCWAA), effective at the same time that it is effective for federal purposes.
                                   
 The 30% federal bonus depreciation deduction is subject to an 80% addback provision, and the addback amount is allowed as a subtraction for the five tax years following the addback, effective for corporate franchise (income) and personal income tax years ending after September 10, 2001.
                                   
 Minnesota adopts the provisions of the Internal Revenue Code of 1986 as amended through March 15, 2002 (formerly, June 15, 2002), for income, property tax refund, and administrative tax purposes.
                                    
Personal income tax reciprocity with Wisconsin will be terminated for tax years beginning after 2002 unless interest is included with reciprocity payments due from Wisconsin to Minnesota. Wisconsin must  agree in writing to the interest payments by October 1, 2002, and interest will begin to accrue from July 1  of the taxable year. This provision is effective May 19, 2002. (Ch. 377 (H.F. 2498), Laws 2002, effective as noted above.)

For more information on how the Bonus Depreciation affects Minnesota tax returns click here http://www.state.mn.us/ebranch/mdor/01stimulus.html