1.1 A bill for an act
1.2 relating to taxation; corporation franchise; providing for contingent rate reductions;
1.3 amending Minnesota Statutes 2024, section 290.06, subdivision 1.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2024, section 290.06, subdivision 1, is amended to read:
1.6 Subdivision 1.Computation, corporations.(a) The franchise tax imposed upon
1.7corporations shall be computed by applying to their taxable income the rate of 9.8 percent,
1.8reduced by all prior adjustments made under paragraph (b).
1.9 (b) The commissioner must adjust the rate under paragraph (a) by reducing the rate by
1.100.312 percent each time either of the following occur:
1.11 (1) if the amount of a budget surplus equals or exceeds the amount of net adjusted revenue
1.12reduction; and
1.13 (2) if the most recent tax incidence report submitted to the legislature under section
1.14270C.13 allocates over 70 percent of the corporate franchise tax to consumers.
1.15 (c) In no case may the commissioner adjust the rate pursuant to paragraph (b) below
1.168.24 percent. The commissioner must publish notice of a rate reduction by December 31.
1.17The adjusted rate is effective for taxable years beginning after December 31 of the calendar
1.18year in which the notice is published.
1.19 (d) For purposes of this subdivision, the following terms have the meanings given:
1.20 (1) "budget surplus" means, for the calendar year in which the commissioner is required
1.21to publish notice of a rate reduction under paragraph (b), the amount of a positive unrestricted
1Section 1.
REVISOR EAP/ES 25-0305402/10/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1131
NINETY-FOURTH SESSION
Authored by Swedzinski02/19/2025
The bill was read for the first time and referred to the Committee on Taxes 2.1general fund balance remaining after any transfer is made to the budget reserve account as
2.2required under section 16A.152, subdivision 1b; and
2.3 (2) "net adjusted revenue reduction" means the difference, if any, between:
2.4 (i) the amount of revenue the commissioner estimates will be collected from the tax
2.5imposed in paragraph (a), for the taxable year for which a rate reduction under paragraph
2.6(b) may apply; and
2.7 (ii) the amount of revenue the commissioner estimates will be collected from the tax
2.8imposed in paragraph (a) using a rate that is determined by reducing the rate in paragraph
2.9(a) by 0.312 percent, for the same taxable year.
2.10 EFFECTIVE DATE.This section is effective for taxable years beginning after December
2.1131, 2025.
2Section 1.
REVISOR EAP/ES 25-0305402/10/25