Subdivision 1. Application. An individual, estate, or trust operating a trade or business in a job opportunity building zone, and an individual, estate, or trust making a qualifying investment in a qualified business operating in a job opportunity building zone qualifies for the exemptions from taxes imposed under chapter 290, as provided in this section. The exemptions provided under this section apply only to the extent that the income otherwise would be taxable under chapter 290. Subtractions under this section from federal adjusted gross income, federal taxable income, alternative minimum taxable income, or any other base subject to tax are limited to the amount that otherwise would be included in the tax base absent the exemption under this section. This section applies only to taxable years beginning during the duration of the job opportunity building zone.
Subd. 2. Rents. An individual, estate, or trust is exempt from the taxes imposed under chapter 290 on net rents derived from real or tangible personal property used by a qualified business and located in a zone for a taxable year in which the zone was designated a job opportunity building zone. If tangible personal property was used both within and outside of the zone by the qualified business, the exemption amount for the net rental income must be multiplied by a fraction, the numerator of which is the number of days the property was used in the zone and the denominator of which is the total days the property is rented by the qualified business.
Subd. 3. Business income. An individual, estate, or trust is exempt from the taxes imposed under chapter 290 on net income from the operation of a qualified business in a job opportunity building zone. If the trade or business is carried on within and without the zone and the individual is not a resident of Minnesota, or the taxpayer is an estate or trust, the exemption must be apportioned based on the zone percentage and the relocation payroll percentage for the taxable year. If the trade or business is carried on within and without the zone and the individual is a resident of Minnesota, the exemption must be apportioned based on the zone percentage and the relocation payroll percentage for the taxable year, except the ratios under section 469.310, subdivision 7, clause (1), items (i) and (ii), must use the denominators of the property and payroll factors determined under section 290.191. No subtraction is allowed under this section in excess of 20 percent of the sum of the job opportunity building zone payroll and the adjusted basis of the property at the time that the property is first used in the job opportunity building zone by the business.
Subd. 4. Capital gains. (a) An individual, estate, or trust is exempt from the taxes imposed under chapter 290 on:
(1) net gain derived on a sale or exchange of real property located in the zone and used by a qualified business. If the property was held by the individual, estate, or trust during a period when the zone was not designated, the gain must be prorated based on the percentage of time, measured in calendar days, that the real property was held by the individual, estate, or trust during the period the zone designation was in effect to the total period of time the real property was held by the individual;
(2) net gain derived on a sale or exchange of tangible personal property used by a qualified business in the zone. If the property was held by the individual, estate, or trust during a period when the zone was not designated, the gain must be prorated based on the percentage of time, measured in calendar days, that the property was held by the individual, estate, or trust during the period the zone designation was in effect to the total period of time the property was held by the individual. If the tangible personal property was used outside of the zone during the period of the zone's designation, the exemption must be multiplied by a fraction, the numerator of which is the number of days the property was used in the zone during the time of the designation and the denominator of which is the total days the property was held during the time of the designation; and
(3) net gain derived on a sale of an ownership interest in a qualified business operating in the job opportunity building zone, meeting the requirements of paragraph (b). The exemption on the gain must be multiplied by the zone percentage of the business for the taxable year prior to the sale.
(b) A qualified business meets the requirements of paragraph (a), clause (3), if it is a corporation, an S corporation, or a partnership, and for the taxable year its job opportunity building zone percentage exceeds 25 percent. For purposes of paragraph (a), clause (3), the zone percentage must be calculated by modifying the ratios under section 469.310, subdivision 7, clause (1), items (i) and (ii), to use the denominators of the property and payroll factors determined under section 290.191. Upon the request of an individual, estate, or trust holding an ownership interest in the entity, the entity must certify to the owner, in writing, the job opportunity building zone percentage needed to determine the exemption.
1Sp2003 c 21 art 1 s 21; 1Sp2005 c 3 art 7 s 14; 1Sp2019 c 6 art 1 s 71
Structure Minnesota Statutes
Chapters 466A - 470 — Local Economic Development
Chapter 469 — Economic Development
Section 469.002 — Definitions.
Section 469.003 — City Housing And Redevelopment Authority.
Section 469.004 — County And Multicounty Authorities.
Section 469.005 — Area Of Operation.
Section 469.006 — Appointment, Qualifications, Tenure Of Commissioners.
Section 469.007 — Powers Of County And Multicounty Authorities.
Section 469.008 — Effect Upon City Housing And Redevelopment Authorities.
Section 469.009 — Conflict Of Interest; Penalties For Failure To Disclose.
Section 469.010 — Removal; Hearing; Notice.
Section 469.011 — Authority Operations.
Section 469.012 — Public Body; Powers, Duties, Programs; Taxes Limited.
Section 469.014 — Liable In Contract Or Tort.
Section 469.015 — Letting Of Contracts; Performance Bonds.
Section 469.016 — Low-rent Housing.
Section 469.017 — Housing Development Projects.
Section 469.0171 — Housing Plan, Program, And Review.
Section 469.019 — Rentals, Tenant Admissions.
Section 469.020 — Discrimination Prohibited, Displaced Families.
Section 469.021 — Preferences.
Section 469.022 — Establishment Of Income Restriction.
Section 469.023 — Periodic Investigation Of Tenant.
Section 469.024 — Power Of Authority.
Section 469.025 — Demolition Of Unsafe Or Unsanitary Buildings.
Section 469.026 — Existing Buildings; Acquisition, Repair.
Section 469.027 — Redevelopment Plan.
Section 469.028 — Municipal Governing Body.
Section 469.029 — Disposal Of Property.
Section 469.030 — Temporary Relocation Of Displaced Families.
Section 469.0305 — Report On Loss Of Housing.
Section 469.031 — Provisional Acceptance By Authority Of Fund, Property.
Section 469.033 — Public Redevelopment Cost; Proceeds; Financing.
Section 469.034 — Bond Issue For Corporate Purposes.
Section 469.035 — Manner Of Bond Issuance; Sale.
Section 469.036 — When Bond Allocation Act Applies.
Section 469.037 — Enforcement By Obligee Of Contracts.
Section 469.038 — Bonds, A Legal Investment.
Section 469.039 — Exemption From Process.
Section 469.041 — State Public Bodies, Powers As To Projects.
Section 469.042 — Agreement On Tax Increments; Equivalents.
Section 469.044 — Bond Pending Litigation.
Section 469.045 — Appearance Of Public Corporation; Bond.
Section 469.046 — Advance Of Litigation On Calendar.
Section 469.047 — Suit For Civil Damages.
Section 469.048 — Definitions.
Section 469.049 — Establishment; Characteristics.
Section 469.050 — Commissioners; Terms, Vacancies, Pay, Continuity.
Section 469.051 — Officers; Duties; Organizational Matters.
Section 469.052 — Depositories; Default; Collateral.
Section 469.0521 — Liable In Contract Or Tort.
Section 469.053 — Tax Levies; Fiscal Matters.
Section 469.054 — Use Of City Property, Services By Authority.
Section 469.055 — Powers And Duties.
Section 469.056 — Employees; Contracts; Audits.
Section 469.057 — Port Control By Others; Petition; Intervention.
Section 469.058 — Industrial Development Districts.
Section 469.059 — Development District Powers.
Section 469.060 — General Obligation Bonds.
Section 469.061 — Revenue Bonds; Pledge; Covenants.
Section 469.062 — Other Bonds.
Section 469.063 — When Bond Allocation Act Applies.
Section 469.064 — Port Authority Activities.
Section 469.065 — Sale Of Property.
Section 469.066 — Advances By Port Authority.
Section 469.067 — Finding Land Is Marginal Is Prima Facie Evidence.
Section 469.0671 — No State Bailout Of Port Authorities.
Section 469.068 — Bid Law For Construction Contracts.
Section 469.071 — Bloomington.
Section 469.072 — Breckenridge.
Section 469.0721 — Cannon Falls; Redwood Falls; Port Authority.
Section 469.0722 — Limitation Of Powers.
Section 469.0723 — Procedural Requirement.
Section 469.0724 — General Obligation Bonds.
Section 469.0726 — Removal Of Commissioners For Cause.
Section 469.073 — Detroit Lakes.
Section 469.075 — Fergus Falls.
Section 469.076 — Granite Falls.
Section 469.0772 — Koochiching County; Port Authority.
Section 469.0775 — Mankato; Port Authority.
Section 469.078 — Minneapolis.
Section 469.079 — North Mankato.
Section 469.0813 — Rosemount; Port Authority.
Section 469.082 — Roseville; Port Authority.
Section 469.085 — South Saint Paul.
Section 469.0856 — Ortonville.
Section 469.088 — White Bear Lake.
Section 469.090 — Definitions.
Section 469.091 — Economic Development Authority.
Section 469.092 — Limit Of Powers.
Section 469.093 — Procedural Requirement.
Section 469.094 — Transfer Of Authority.
Section 469.095 — Commissioners; Appointment, Terms, Vacancies, Pay, Removal.
Section 469.096 — Officers; Duties; Organizational Matters.
Section 469.097 — Employees; Services; Supplies.
Section 469.098 — Conflict Of Interest.
Section 469.099 — Depositories; Default; Collateral.
Section 469.100 — Obligations.
Section 469.102 — General Obligation Bonds.
Section 469.103 — Revenue Bonds; Pledge; Covenants.
Section 469.104 — Sections That Apply If Federal Limit Applies.
Section 469.105 — Sale Of Property.
Section 469.106 — Advances By Authority.
Section 469.107 — City May Levy Taxes For Economic Development Authority.
Section 469.108 — Special Law; Optional Use.
Section 469.1081 — Liable In Contract Or Tort.
Section 469.110 — Definitions.
Section 469.111 — Local Or Area Agencies; Establishment.
Section 469.112 — Municipalities May Join Together.
Section 469.113 — Conflict Of Interest.
Section 469.114 — Agencies; Meetings, Expenses.
Section 469.115 — Powers Of Agencies.
Section 469.116 — Bond Issue For Redevelopment Purposes.
Section 469.117 — Eminent Domain Proceedings.
Section 469.118 — Loans To Redevelopment Agencies.
Section 469.119 — Loan Application Requirements.
Section 469.122 — Limitation Of Powers.
Section 469.123 — Examination And Audit Of Local Agency.
Section 469.125 — Definitions.
Section 469.126 — Authority Granted.
Section 469.130 — Maintenance And Operation.
Section 469.131 — Administration.
Section 469.132 — Advisory Board.
Section 469.141 — Regulation To Protect Mined Underground Space.
Section 469.143 — Definitions.
Section 469.144 — Establishment; Board.
Section 469.145 — Financing Projects And Facilities.
Section 469.146 — Issuance Of Bonds And Notes.
Section 469.147 — Processing Agreement.
Section 469.148 — Applications For Loan Guaranties.
Section 469.149 — Agreements For Reservation Of Tax Increments.
Section 469.151 — State And County Not Liable On Bonds.
Section 469.153 — Definitions.
Section 469.154 — Department Of Employment And Economic Development Duties.
Section 469.156 — Authorization Of Projects And Bonds.
Section 469.157 — Determination Of Cost Of Project.
Section 469.158 — Manner Of Issuance Of Bonds; Interest Rate.
Section 469.159 — Temporary Loans.
Section 469.160 — Validity Of Bonds; Presumption.
Section 469.161 — Limitation Of Powers By Resolution Or Ordinance.
Section 469.162 — Source Of Payment For Bonds.
Section 469.163 — Bondholders' Rights And Remedies.
Section 469.164 — Powers Added To Application Of Existing Laws And Rules.
Section 469.165 — Applicability Of Hra Provisions.
Section 469.1655 — Qualified Green Building And Sustainable Design Projects.
Section 469.166 — Definitions.
Section 469.167 — Border City Enterprise Zone; Duration.
Section 469.169 — Additional Border City Zone Allocations.
Section 469.171 — Border City Enterprise Zones; State Tax Reductions.
Section 469.172 — Development And Redevelopment Powers.
Section 469.173 — Administration.
Section 469.1731 — Border City Development Zones.
Section 469.1732 — Tax Incentives Within Development Zones.
Section 469.1733 — Disqualified Taxpayers.
Section 469.1734 — Tax Incentives Outside Zones.
Section 469.1735 — Limit On Tax Reductions; Applications Required.
Section 469.174 — Definitions.
Section 469.175 — Establishing, Changing Plan, Annual Accounts.
Section 469.176 — Limitations.
Section 469.1761 — Income Requirements; Housing Districts.
Section 469.1762 — Arbitration Of Disputes Over County Costs.
Section 469.1763 — Restrictions On Pooling; Five-year Limit.
Section 469.177 — Computation Of Tax Increment.
Section 469.1771 — Violations.
Section 469.178 — Tax Increment Bonding.
Section 469.1781 — Required Spending For Neighborhood Revitalization.
Section 469.1782 — Special Law Provisions.
Section 469.179 — Existing Projects; Effective Dates Of Amendments.
Section 469.1792 — Special Deficit Authority.
Section 469.1793 — Developer Obligations Continued.
Section 469.1794 — Duration Extension To Offset Deficits.
Section 469.180 — Development Pacts With Entities Of Other States.
Section 469.1811 — Property Tax Exempt; Agricultural Processing Facility.
Section 469.1812 — Definitions.
Section 469.1813 — Abatement Authority.
Section 469.1814 — Bonding Authority.
Section 469.1815 — Administrative.
Section 469.182 — Employment Bureaus; First Class Cities.
Section 469.183 — Bonds For Municipal Market; First Class Cities.
Section 469.1831 — Neighborhood Revitalization Program; First Class City.
Section 469.184 — Municipal Commercial Rehabilitation Loan Program.
Section 469.185 — Conveying Land To Promote Industry, Employment.
Section 469.186 — Bureau Of Information And Publicity; Statutory Cities.
Section 469.187 — First Class City Spending For Publicity; Publicity Board.
Section 469.188 — 2nd, 3rd Class City May Levy To Advertise Its Resources.
Section 469.189 — Spend To Advertise City; Statutory, 2nd, 3rd, 4th Class City.
Section 469.190 — Local Lodging Tax.
Section 469.191 — Contributions To Regional Or Local Organizations.
Section 469.192 — Economic Development Loans.
Section 469.193 — Foreign Trade Zones.
Section 469.194 — Lewis And Clark Water Project Bonding.
Section 469.201 — Definitions.
Section 469.202 — Designation Of Targeted Communities.
Section 469.203 — Targeted Community Revitalization And Financing.
Section 469.204 — Payment; Revolving Fund.
Section 469.205 — City Powers; Uses Of Targeted Community Money.
Section 469.206 — Hazardous Property Penalty.
Section 469.207 — Annual Audit And Report.
Section 469.309 — Rural Job Creation Grants.
Section 469.310 — Definitions.
Section 469.311 — Development Plan.
Section 469.312 — Job Opportunity Building Zones; Limitations.
Section 469.313 — Application For Designation.
Section 469.314 — Designation Of Job Opportunity Building Zones.
Section 469.315 — Tax Incentives Available In Zones.
Section 469.316 — Individual Income Tax Exemption.
Section 469.317 — Corporate Franchise Tax Exemption.
Section 469.318 — Jobs Credit.
Section 469.3181 — Create Automotive Recovery Jobs Credit.
Section 469.319 — Repayment Of Tax Benefits By Businesses That No Longer Operate In A Zone.
Section 469.3191 — Breach Of Agreements By Businesses That Continue To Operate In Zone.
Section 469.3192 — Prohibition Against Amendments To Business Subsidy Agreement.
Section 469.3193 — Certification Of Continuing Eligibility For Jobz Benefits.
Section 469.320 — Zone Performance; Remedies.
Section 469.35 — Transit Improvement Area Accounts.
Section 469.351 — Transit Improvement Area Loan Program.
Section 469.41 — Destination Medical Center Corporation Established.
Section 469.42 — Officers; Duties; Organizational Matters.
Section 469.43 — Development Plan.
Section 469.44 — City Powers, Duties; Authority To Issue Bonds.
Section 469.45 — City Tax Authority.
Section 469.46 — County Tax Authority.
Section 469.47 — State Infrastructure Aid.
Section 469.51 — Regional Exchange District.
Section 469.52 — City Powers; Duties.
Section 469.53 — Regional Exchange District Public Infrastructure Projects.