Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF519 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to taxation; income; proposing a credit for graduates of aerospace and
3	3	1.3 aviation-related educational programs and employers of program graduates;
4	4	1.4 requiring reports; proposing coding for new law in Minnesota Statutes, chapter
5	5	1.5 290.
6	6	1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
7	7	1.7 Sec. 1. [290.0687] AEROSPACE AND AVIATION CREDIT.
8	8	1.8 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
9	9	1.9the meanings given them.
10	10	1.10 (b) "Aerospace" means relating to vehicles or objects for the purpose of suborbital,
11	11	1.11orbital, or space flight, whether for private or public, or civil or defense-related purposes.
12	12	1.12 (c) "Aviation" means relating to vehicles or objects, except parachutes, for the purpose
13	13	1.13of controlled flight through the air, regardless of how propelled or controlled, whether
14	14	1.14manned or unmanned, whether for private or public, or civil or defense-related purposes,
15	15	1.15or whether equipped with parachute systems.
16	16	1.16 (d) "Aviation and aerospace sector" means a private or public organization engaged in
17	17	1.17the manufacture of aviation or aerospace hardware or software, aviation or aerospace
18	18	1.18maintenance, aviation or aerospace repair and overhaul, supply of parts to the aviation or
19	19	1.19aerospace industry, provision of services and support relating to the aviation or aerospace
20	20	1.20industry, research and development of aviation or aerospace technology and systems, or
21	21	1.21the education and training of aviation or aerospace personnel.
22	22	1.22 (e) "Compensation" means payments for performance of services for which the payor
23	23	1.23is required to provide a return pursuant to the Internal Revenue Code, section 6041, or a
24	24	1Section 1.
25	25	25-01100 as introduced12/17/24 REVISOR EAP/CH
26	26	SENATE
27	27	STATE OF MINNESOTA
28	28	S.F. No. 519NINETY-FOURTH SESSION
29	29	(SENATE AUTHORS: HAUSCHILD, McEwen and Farnsworth)
30	30	OFFICIAL STATUSD-PGDATE
31	31	Introduction and first reading01/23/2025
32	32	Referred to Taxes 2.1statement pursuant to the Internal Revenue Code, section 6051, to the person paid.
33	33	2.2Compensation includes wages, salary, or other remuneration, paid to a qualified employee.
34	34	2.3Compensation does not include employer-provided retirement, medical or health care
35	35	2.4benefits, or reimbursement for travel, meals, lodging, or any other expense.
36	36	2.5 (f) "Eligible institution" means any postsecondary institution that participates in the
37	37	2.6federal Pell Grant Program under Title IV of the Higher Education Act of 1965, Public Law
38	38	2.789-329, as amended.
39	39	2.8 (g) "Full-time basis" means at least 40 hours per week.
40	40	2.9 (h) "Qualified employee" means any person who meets the following requirements:
41	41	2.10 (1) was newly employed by a qualified employer on a full-time basis, or first contracted
42	42	2.11with a qualified employer on a full-time basis, on or after January 1, 2026; and
43	43	2.12 (2) has been awarded, within one year before or after the beginning date of employment,
44	44	2.13an undergraduate degree, graduate degree, technical degree, or certificate in a qualified
45	45	2.14program by an qualified institution.
46	46	2.15 (i) "Qualified employer" means a sole proprietorship, general partnership, limited
47	47	2.16partnership, limited liability company, corporation, other legally recognized business entity,
48	48	2.17or public entity whose principal business activity involves the aviation and aerospace sector
49	49	2.18and who employs a qualified employee.
50	50	2.19 (j) "Qualified program" means a program at an eligible institution that:
51	51	2.20 (1) has been accredited by the Engineering Accreditation Commission of the Accreditation
52	52	2.21Board for Engineering and Technology, the Federal Aviation Administration, or a regional
53	53	2.22accrediting body and that awards an undergraduate or graduate degree;
54	54	2.23 (2) is within the meaning of an associate of applied science degree program or career
55	55	2.24technical education program that results in the awarding of a degree or certificate that
56	56	2.25prepares the graduate for gainful employment with a qualified employer; or
57	57	2.26 (3) results in obtaining a certification or rating which directly relates to the aviation and
58	58	2.27aerospace sector and is granted through the Federal Aviation Administration or regional
59	59	2.28accredited body.
60	60	2.29 (k) "Tuition" means the amount paid for enrollment, program-specific course fees, and
61	61	2.30instruction in a qualified program that includes both amounts paid during participation in
62	62	2.31a qualified program and amounts paid for tuition debt upon completion of a qualified
63	63	2Section 1.
64	64	25-01100 as introduced12/17/24 REVISOR EAP/CH 3.1program. Tuition does not include the cost of books, fees that are not program-specific
65	65	3.2course fees, or room and board.
66	66	3.3 Subd. 2.Credit for qualified employees; carryover.(a) A qualified employee is allowed
67	67	3.4a credit against the tax imposed under this chapter in an amount equal to $5,000 each year
68	68	3.5in the first through fifth consecutive years of employment with a qualified employer. A
69	69	3.6qualified employee may claim the credit for the taxable year in which the qualified employee
70	70	3.7first became eligible for the credit under this section and for each of the four taxable years
71	71	3.8following the taxable year in which the credit was first allowed. The credit each year is
72	72	3.9limited to the qualified employee's liability for tax.
73	73	3.10 (b) If the amount of the credit under this subdivision for any taxable year exceeds the
74	74	3.11limitations under paragraph (a), the excess is a credit carryover to each of the four succeeding
75	75	3.12taxable years. The entire amount of the excess unused credit for the taxable year must be
76	76	3.13carried first to the earliest of the taxable years to which the credit may be carried. The
77	77	3.14amount of the unused credit that may be added under this paragraph may not exceed the
78	78	3.15qualified employee's liability for tax, less the credit for the taxable year. The credit may not
79	79	3.16be carried over to any taxable year after the fourth taxable year following the taxable year
80	80	3.17in which the credit was first allowed.
81	81	3.18 Subd. 3.Credit for tuition paid by qualified employers; limitation.(a) A qualified
82	82	3.19employer is allowed a credit against the tax imposed under this chapter for tuition reimbursed
83	83	3.20each year to a qualified employee in the first through fifth consecutive years of employment.
84	84	3.21 (b) The credit equals 50 percent of the amount of tuition reimbursed by the qualified
85	85	3.22employer to each qualified employee except that the credit must not exceed 50 percent of
86	86	3.23the average annual amount paid by a qualified employee for enrollment and instruction in
87	87	3.24a qualified program. The credit is limited to the qualified employer's liability for tax. The
88	88	3.25credit is not refundable and may not be carried forward.
89	89	3.26 Subd. 4.Credit for compensation paid by qualified employers; limitation.(a) A
90	90	3.27qualified employer is allowed a credit against the tax for compensation paid during the
91	91	3.28taxable year to a qualified employee. The credit is allowed in the first through fifth
92	92	3.29consecutive years of employment. No credit may be claimed for compensation paid to a
93	93	3.30qualified employee after the fifth year of employment of the qualified employee.
94	94	3.31 (b) The credit equals ten percent of the compensation paid to a qualified employee each
95	95	3.32year. The credit must not exceed $15,000 each year for each qualified employee. The credit
96	96	3.33is limited to the qualified employer's liability for tax. The credit is not refundable and may
97	97	3.34not be carried forward.
98	98	3Section 1.
99	99	25-01100 as introduced12/17/24 REVISOR EAP/CH 4.1 Subd. 5.Qualified employer credits; pass through entities.Credits under subdivisions
100	100	4.23 and 4 allowed to a partnership, a limited liability company taxed as a partnership, an S
101	101	4.3corporation, or multiple owners of property are passed through to the partners, members,
102	102	4.4shareholders, or owners, respectively, pro rata to each based on the partner's, member's,
103	103	4.5shareholder's, or owner's share of the entity's assets or as specially allocated in the
104	104	4.6organizational documents or any other executed agreement, as of the last day of the taxable
105	105	4.7year.
106	106	4.8 Subd. 6.Reports.Beginning January 15, 2028, and each year thereafter, the
107	107	4.9commissioner must submit a written report to the chairs and ranking minority members of
108	108	4.10the legislative committees with jurisdiction over taxes, in compliance with sections 3.195
109	109	4.11and 3.197, on the tax credits issued under this section. The report must include information
110	110	4.12regarding the cost and effectiveness of the tax credit program. The report may also include
111	111	4.13any recommendations for changes to law necessary to implement the credit.
112	112	4.14 Subd. 7.Expiration.No new credits may be earned for taxable years beginning after
113	113	4.15December 31, 2030. Credits allowed under this section may be claimed for taxable years
114	114	4.16beginning before January 1, 2035. This section expires January 1, 2035, for taxable years
115	115	4.17beginning after December 31, 2034.
116	116	4.18 EFFECTIVE DATE.This section is effective for taxable years beginning after December
117	117	4.1931, 2025.
118	118	4Section 1.
119	119	25-01100 as introduced12/17/24 REVISOR EAP/CH