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SF2879 (Legislative Session 94 (2025-2026))

Certain small business investment credit requirements modifications

Related bill: HF2723

AI Generated Summary

Purpose of the Bill

The bill aims to modify certain requirements for the small business investment tax credit in Minnesota, extending the credit allocation and making it more accessible for small businesses within the state, particularly those in high-technology fields or located in Greater Minnesota.

Main Provisions

  • Certification Requirements: Small businesses can apply to be certified as "qualified small businesses" or "qualified greater Minnesota small businesses" to benefit from tax credits. To qualify, businesses must meet specific conditions, such as having their headquarters in Minnesota and fulfilling employee and payroll criteria.
  • Employee and Payroll Criteria: At least 51% of a business’s employees must work in Minnesota, and 51% of the total payroll must be within the state. Similar conditions apply for businesses in Greater Minnesota.
  • Innovative Areas: Businesses must engage in innovation within certain fields, including high-technology areas like biotechnology, aerospace, and renewable energy, or industries such as agriculture and transportation.
  • Employee Wage Requirements: Businesses must pay their full-time employees annual wages that are at least 175% of the federal poverty guideline for a family of four.
  • Operational Age Limit: To qualify, businesses must not have been operating for more than 10 years, or 20 years for those involved in medical devices or pharmaceuticals needing FDA approval.
  • Investment Limits: Businesses must not have received private equity investments exceeding $15 million.

Significant Changes

  • Extended Eligibility: The bill increases the maximum allowable private equity investment from $4 million to $15 million, allowing more businesses access to the credit.
  • Streamlined Process: The bill mandates the Department of Economic Development to make applications available online by a set date and respond within specific timeframes to streamline the certification process.
  • Waivers: Businesses unable to fulfill certain contract performance requirements within Minnesota may apply for waivers, acknowledging that some services cannot be provided locally.

Relevant Terms

small business investment credit, tax credit, qualified small business, Greater Minnesota, high-technology, private equity investment, employee payroll, certification requirements, proprietary technology, innovation, economic development.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 23, 2025SenateFloorActionIntroduction and first reading
March 23, 2025SenateFloorActionReferred toTaxes
April 01, 2025SenateFloorActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Expanded conditions for certification as a qualified greater Minnesota business."
      ],
      "removed": [
        "Requirement for municipal matching funds."
      ],
      "summary": "This bill modifies certification requirements for qualified small businesses under Minnesota Statutes section 116J.8737.",
      "modified": [
        "Adjustment in the application process and fee refund policy."
      ]
    },
    "citation": "116J.8737",
    "subdivision": "subdivision 2"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This section is referenced to define 'greater Minnesota' concerning business certifications.",
      "modified": []
    },
    "citation": "473.121",
    "subdivision": "subdivision 2"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Includes employees of unitary business members in employee count limits for business certifications.",
      "modified": []
    },
    "citation": "290.17",
    "subdivision": "subdivision 4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Referenced for disqualifying conditions under section 80A.50.",
      "modified": []
    },
    "citation": "80A.50",
    "subdivision": ""
  }
]

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