Minnesota Senate Bill SF4663

Minnesota 2023-2024 Regular Session

• Introduced: 3/7/24
• Refer: 3/7/24

Caption

Department of Revenue report requirement on corporate tax base erosion

Summary

SF4663 is a legislative bill that mandates the Minnesota Department of Revenue to conduct a comprehensive study on corporate tax base erosion. By January 1, 2025, the Department is required to submit a report to key legislative committees detailing the extent of tax base erosion occurring within the state. The bill specifically explores various international corporate structures and transactions that negatively impact Minnesota's corporate tax revenue, focusing on identifying the types and sources of these methods of erosion. One of the critical components of the bill involves examining the potential benefits and administrative implications of adopting worldwide combined reporting for corporate earnings. The report is expected to provide insights into how Minnesota's current tax framework interacts with federal laws, particularly section 951A of the Internal Revenue Code, which could play a significant role in addressing tax base erosion. The findings will include recommendations for addressing issues related to revenue collection and compliance. The impact of SF4663 could be substantial, as it aims to provide lawmakers with a clearer understanding of the fiscal risks associated with corporate tax base erosion and the potential options available to tackle these challenges. This could lead to future enhancements in Minnesota's corporate tax policy to bolster revenue and ensure that corporations contribute their fair share to the state's economy. While supporters of the bill may view it as a necessary step towards maintaining the integrity of Minnesota’s tax base, there could be points of contention regarding the implications of implementing worldwide combined reporting. Concerns may arise over the added compliance burden on businesses and potential litigation risks that could emerge from any changes to the state's tax laws. The discussions surrounding SF4663 are likely to spark debate on balancing effective tax collection with creating a favorable business environment.