1.1                          A bill for an act 
  1.2             relating to taxation; conforming to the federal 
  1.3             taxation of S corporation financial institutions; 
  1.4             amending Minnesota Statutes 2000, section 290.9725; 
  1.5             repealing Minnesota Statutes 2000, sections 290.06, 
  1.6             subdivision 26; and 290.9726, subdivision 7. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 290.9725, is 
  1.9   amended to read: 
  1.10     290.9725 [S CORPORATION.] 
  1.11     For purposes of this chapter, the term "S corporation" 
  1.12  means any corporation having a valid election in effect for the 
  1.13  taxable year under section 1362 of the Internal Revenue Code.  
  1.14  An S corporation shall not be subject to the taxes imposed by 
  1.15  this chapter, except~~:~~  
  1.16     ~~(1)~~ the taxes imposed under sections 290.0922, 290.92, 
  1.17  290.9727, 290.9728, and 290.9729~~; and~~ 
  1.18     ~~(2) the tax under sections 290.06, subdivision 1, and~~ 
  1.19  ~~290.0921 apply to a financial institution to which either~~ 
  1.20  ~~section 585 or 593 of the Internal Revenue Code applies or that~~ 
  1.21  ~~has a wholly owned subsidiary as described in section~~ 
  1.22  ~~1361(b)(3)(B) of the Internal Revenue Code which is a financial~~ 
  1.23  ~~institution under section 585 or 593 of the Internal Revenue~~ 
  1.24  ~~Code~~. 
  1.25     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
  1.26  years beginning after December 31, 2000. 
  2.1      Sec. 2.  [REPEALER.] 
  2.2      Minnesota Statutes 2000, sections 290.06, subdivision 26; 
  2.3   and 290.9726, subdivision 7, are repealed. 
  2.4      <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
  2.5   years beginning after December 31, 2000.