1.1 	A bill for an act
1.2 	relating to taxation; converting the transit pass credit to a refund and extending 
1.3 	it to additional employers;amending Minnesota Statutes 2004, section 290.06, 
1.4 	subdivision 28.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2004, section 290.06, subdivision 28, is amended to read:
1.7 		Subd. 28.Credit Refunds for transit passes. (a) Ataxpayer An employer may 
1.8 	take a credit against the tax due under this chapter claim a refund equal to 30 percent 
1.9 	of the expense incurred by the taxpayer employer to provide transit passes, for use in 
1.10 	Minnesota, to employees of the taxpayer. 
1.11 	(b)As used in this subdivision, the following terms have the meanings given:
1.12 	(1) "employer" means an individual or entity subject to tax under this chapter 
1.13 	or an entity that is exempt from taxation under section 290.05, but excluding entities 
1.14 	enumerated in section 290.05, subdivision 1, clause (b); and
1.15 	(2) "transit pass" has the meaning given in section 132(f)(5)(A) of the Internal 
1.16 	Revenue Code. 
1.17 	(c) If the taxpayer employer purchases the transit passes from the transit system 
1.18 	operator, and resells them to the employees, the credit refund is based on the amount of 
1.19 	the difference between the price paid for the passes by the employer and the amount 
1.20 	charged to employees.
1.21 	(d) The commissioner shall prescribe the forms for and the manner in which the 
1.22 	refund may be claimed. The commissioner must provide for paying refunds at least 
1.23 	quarterly. The commissioner may set a minimum amount of qualifying expenses that must 
1.24 	be incurred before a refund may be claimed.
2.1 	(e) An amount sufficient to pay the refunds required by this subdivision is 
2.2 	appropriated to the commissioner of revenue.

2.3 	EFFECTIVE DATE. This section is effective for transit passes purchased after 
2.4 	June 30, 2006.