Occupation Tax Return Instructions - Minnesota Department Of Revenue

M30-I Line Instructions

(continued)

Line 11

Line 14

Line 16

Rents and Leases

Interest Expense

Development

If your company leased or rented vehicles,

Generally, interest related to your mining

Allowed are all costs paid or incurred dur-

enter the total rent or lease expenses for the

operations may be deducted when paid or

ing the calendar year for the development

production year.

accrued. However, do not offset interest

of a mine if the costs are paid or incurred

expense against interest income.

after the discovery of ore in commercially

If you completed federal Form 4562 to

marketable quantities.

claim vehicles such as cars, trucks or vans

Do not include interest that must be capital-

that weigh less than 6,000 pounds and are

ized. You must capitalize interest on debt

Development expenses may be either

primarily manufactured for use on pub-

allocable to the production of the desig-

deducted or deferred, and amortized rat-

lic roadways, also complete Part V on a

nated property by the mining company

ably over a 10-year period. Both options,

separate federal Form 4562 to determine

for its own use or for sale. Interest must

however, are subject to a mandatory

the amount you can claim based on vehicles

also be capitalized on debt allocable to an

amortization of 30 percent of the year’s

used in Minnesota. Write “Minnesota” at

asset used to produce the property. For

development expense over a five-year

the top of this separate Form 4562 and

additional information, see section 263A(f)

period. The remaining 70 percent is then

include it with your return.

and Regulations sections 1.263A-8 through

either deducted or amortized over 10 years.

1.263A-15.

Amortization of the 30 percent amount

If the vehicle is leased for 30 days or more,

begins with the month in which these costs

the lease expense deduction may have to

Also, do not include interest related to tax-

are paid or incurred.

be reduced by an adjustment called the

exempt obligations.

Attach a separate schedule to your Minne-

“inclusion” amount. The inclusion amount

Lines 15a - 15b

sota return detailing the calculation used

is a percentage of the fair market value

Depreciation

to determine your development expense.

of the leased vehicle multiplied by the

For your depreciation deduction, complete

percentage of business use of the vehicle

Line 17

a separate federal Form 4562 listing only

for the tax year. Refer to federal Publication

the assets related to your Minnesota mining

Depletion

463, Travel, Entertainment, Gift, and Car

operation. Fill out all appropriate sections.

Generally, follow federal guidelines in

Expenses, for details.

Write “Minnesota” at the top of this separate

determining the depletion deduction. For

Line 12

Form 4562 and include it with your return.

occupation tax, use the mine value, not the

Royalties

sales figure used for your federal calcula-

Include only the basis of assets used to con-

Include royalties accrued on tonnages

tion. See IRC sections 611 through 614

vert raw iron ore or taconite concentrates

produced during the taxable year. Royalties

and 291 for the limitation on the depletion

to marketable quality. Include depreciable

paid to an equity interest such as a partner,

deduction for iron ore.

assets used in beneficiation and refinement.

joint venturer, owner or stockholder are

Do not include assets used after marketable

Do not include ore or concentrate obtained

allowed only if reasonable.

iron ore or taconite pellets are produced,

from another producer in the percentage

Minimum royalties on nonproducing

such as assets used for transportation, for

depletion calculation. The cost of these ton-

properties that are not part of the reserve

loading stockpiled pellets or ore, or other

nages are considered raw materials for the

estimate for an active mine are not allow-

activities occurring after marketable iron

regular tax calculation, however.

able until production occurs on that prop-

ore or taconite pellets are produced.

All costs relating to any flux added to the

erty. Minimum royalties or leases that are

In addition, include depreciation and the

ore or concentrate must be removed when

temporarily inactive but part of the reserve

cost of certain Minnesota property that the

calculating the deduction for depletion.

estimate for a producing property are allow-

company elected to expense under section

Attach a separate schedule to your Minne-

able in the year accrued.

179. See federal Form 4562 and instruc-

sota return detailing the calculation used

tions.

Line 13

to determine your depletion deduction.

Taxes

Depreciation is calculated using any method

Line 18

Enter the amount of taxes paid or accrued

allowed under federal rules. No Minnesota

during the tax year.

Pension, Profit-Sharing Plans and

modification is necessary on this line for

Deferred Compensation Plans

property placed in service after Dec. 31,

Do not include:

Follow federal guidelines to determine

1987.

• federal corporate income taxes;

pension, profit-sharing or other funded

Amortization. Use Part VI of federal Form

• Minnesota corporate tax on non-mining

deferred compensation plans.

4562 for listing amortizations of organiza-

income;

tion expenses, research and experimenta-

Line 19

• taxes not imposed on the mining opera-

tion costs or other write-offs of capitalized

Employee Benefit Programs

tion; or

expenses.

Enter contributions to employee benefit

• taxes, including sales and use taxes, that

programs not claimed elsewhere on the

are paid or incurred in connection with

See federal rules for other amortizable costs,

return. Examples include insurance, and

an acquisition or disposition of property.

such as carrying charges, research and ex-

health and welfare programs not part of a

In an acquisition, include the tax as part

perimental costs, and exploration costs for

pension or profit-sharing plan on line 18.

of the property’s cost; with dispositions,

new ore deposits. Report all amortizations

include the tax as a reduction in the

on Form M30-I, line 15a. Do not include

amount realized on the disposition.

with depreciation expenses.

Continued

Occupation Tax Return Instructions - Minnesota Department Of Revenue - 2016 Page 5

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