| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to taxation; corporation franchise; providing for contingent rate reductions; |
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| 3 | 3 | | 1.3 amending Minnesota Statutes 2024, section 290.06, subdivision 1. |
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| 4 | 4 | | 1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 5 | 5 | | 1.5 Section 1. Minnesota Statutes 2024, section 290.06, subdivision 1, is amended to read: |
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| 6 | 6 | | 1.6 Subdivision 1.Computation, corporations.(a) The franchise tax imposed upon |
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| 7 | 7 | | 1.7corporations shall be computed by applying to their taxable income the rate of 9.8 percent, |
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| 8 | 8 | | 1.8reduced by all prior adjustments made under paragraph (b). |
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| 9 | 9 | | 1.9 (b) The commissioner must adjust the rate under paragraph (a) by reducing the rate by |
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| 10 | 10 | | 1.100.312 percent each time either of the following occur: |
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| 11 | 11 | | 1.11 (1) if the amount of a budget surplus equals or exceeds the amount of net adjusted revenue |
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| 12 | 12 | | 1.12reduction; and |
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| 13 | 13 | | 1.13 (2) if the most recent tax incidence report submitted to the legislature under section |
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| 14 | 14 | | 1.14270C.13 allocates over 70 percent of the corporate franchise tax to consumers. |
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| 15 | 15 | | 1.15 (c) In no case may the commissioner adjust the rate pursuant to paragraph (b) below |
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| 16 | 16 | | 1.168.24 percent. The commissioner must publish notice of a rate reduction by December 31. |
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| 17 | 17 | | 1.17The adjusted rate is effective for taxable years beginning after December 31 of the calendar |
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| 18 | 18 | | 1.18year in which the notice is published. |
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| 19 | 19 | | 1.19 (d) For purposes of this subdivision, the following terms have the meanings given: |
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| 20 | 20 | | 1.20 (1) "budget surplus" means, for the calendar year in which the commissioner is required |
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| 21 | 21 | | 1.21to publish notice of a rate reduction under paragraph (b), the amount of a positive unrestricted |
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| 22 | 22 | | 1Section 1. |
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| 23 | 23 | | REVISOR EAP/ES 25-0305402/10/25 |
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| 24 | 24 | | State of Minnesota |
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| 25 | 25 | | This Document can be made available |
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| 26 | 26 | | in alternative formats upon request |
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| 27 | 27 | | HOUSE OF REPRESENTATIVES |
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| 28 | 28 | | H. F. No. 1131 |
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| 29 | 29 | | NINETY-FOURTH SESSION |
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| 30 | 30 | | Authored by Swedzinski02/19/2025 |
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| 31 | 31 | | 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 |
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| 32 | 32 | | 2.2required under section 16A.152, subdivision 1b; and |
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| 33 | 33 | | 2.3 (2) "net adjusted revenue reduction" means the difference, if any, between: |
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| 34 | 34 | | 2.4 (i) the amount of revenue the commissioner estimates will be collected from the tax |
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| 35 | 35 | | 2.5imposed in paragraph (a), for the taxable year for which a rate reduction under paragraph |
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| 36 | 36 | | 2.6(b) may apply; and |
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| 37 | 37 | | 2.7 (ii) the amount of revenue the commissioner estimates will be collected from the tax |
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| 38 | 38 | | 2.8imposed in paragraph (a) using a rate that is determined by reducing the rate in paragraph |
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| 39 | 39 | | 2.9(a) by 0.312 percent, for the same taxable year. |
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| 40 | 40 | | 2.10 EFFECTIVE DATE.This section is effective for taxable years beginning after December |
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| 41 | 41 | | 2.1131, 2025. |
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| 42 | 42 | | 2Section 1. |
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| 43 | 43 | | REVISOR EAP/ES 25-0305402/10/25 |
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