Minnesota 2025-2026 Regular Session

Minnesota House Bill HF947 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to taxation; individual income tax and corporate franchise tax; establishing
3	3	1.3 a subtraction for global intangible low-taxed income; increasing the corporate net
4	4	1.4 operating loss deduction; increasing the dividend received deduction; amending
5	5	1.5 Minnesota Statutes 2024, sections 290.0132, by adding a subdivision; 290.0134,
6	6	1.6 by adding a subdivision; 290.095, subdivision 2; 290.21, subdivision 4; repealing
7	7	1.7 Minnesota Statutes 2024, section 290.21, subdivision 10.
8	8	1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
9	9	1.9 Section 1. Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision
10	10	1.10to read:
11	11	1.11 Subd. 36.Global intangible low-taxed income.The amount of global intangible
12	12	1.12low-taxed income included in gross income under section 951A of the Internal Revenue
13	13	1.13Code is a subtraction.
14	14	1.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
15	15	1.1531, 2024.
16	16	1.16 Sec. 2. Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision
17	17	1.17to read:
18	18	1.18 Subd. 21.Global intangible low-taxed income.The amount of global intangible
19	19	1.19low-taxed income included in gross income under section 951A of the Internal Revenue
20	20	1.20Code is a subtraction.
21	21	1.21 EFFECTIVE DATE.This section is effective for taxable years beginning after December
22	22	1.2231, 2024.
23	23	1Sec. 2.
24	24	REVISOR EAP/MI 25-0295302/07/25
25	25	State of Minnesota
26	26	This Document can be made available
27	27	in alternative formats upon request
28	28	HOUSE OF REPRESENTATIVES
29	29	H. F. No. 947
30	30	NINETY-FOURTH SESSION
31	31	Authored by Davids02/17/2025
32	32	The bill was read for the first time and referred to the Committee on Taxes 2.1 Sec. 3. Minnesota Statutes 2024, section 290.095, subdivision 2, is amended to read:
33	33	2.2 Subd. 2.Defined and limited.(a) The term "net operating loss" as used in this section
34	34	2.3shall mean a net operating loss as defined in section 172(c) of the Internal Revenue Code,
35	35	2.4with the modifications specified in subdivision 4. The deductions provided in section 290.21
36	36	2.5cannot be used in the determination of a net operating loss.
37	37	2.6 (b) The term "net operating loss deduction" as used in this section means the aggregate
38	38	2.7of the net operating loss carryovers to the taxable year, computed in accordance with
39	39	2.8subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating to
40	40	2.9the carryback of net operating losses, do not apply.
41	41	2.10 (c) The amount of net operating loss deduction under this section must not exceed 70
42	42	2.1180 percent of taxable net income in a single taxable year.
43	43	2.12 EFFECTIVE DATE.This section is effective for taxable years beginning after December
44	44	2.1331, 2024.
45	45	2.14 Sec. 4. Minnesota Statutes 2024, section 290.21, subdivision 4, is amended to read:
46	46	2.15 Subd. 4.Dividends received from another corporation.(a)(1) Fifty Eighty percent of
47	47	2.16dividends received by a corporation during the taxable year from another corporation, in
48	48	2.17which the recipient owns 20 percent or more of the stock, by vote and value, not including
49	49	2.18stock described in section 1504(a)(4) of the Internal Revenue Code when the corporate
50	50	2.19stock with respect to which dividends are paid does not constitute the stock in trade of the
51	51	2.20taxpayer or would not be included in the inventory of the taxpayer, or does not constitute
52	52	2.21property held by the taxpayer primarily for sale to customers in the ordinary course of the
53	53	2.22taxpayer's trade or business, or when the trade or business of the taxpayer does not consist
54	54	2.23principally of the holding of the stocks and the collection of the income and gains therefrom;
55	55	2.24and
56	56	2.25 (2)(i) the remaining 50 20 percent of dividends if the dividends received are the stock
57	57	2.26in an affiliated company transferred in an overall plan of reorganization and the dividend
58	58	2.27is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
59	59	2.28amended through December 31, 1989;
60	60	2.29 (ii) the remaining 50 20 percent of dividends if the dividends are received from a
61	61	2.30corporation which is subject to tax under section 290.36 and which is a member of an
62	62	2.31affiliated group of corporations as defined by the Internal Revenue Code and the dividend
63	63	2.32is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
64	64	2Sec. 4.
65	65	REVISOR EAP/MI 25-0295302/07/25 3.1amended through December 31, 1989, or is deducted under an election under section 243(b)
66	66	3.2of the Internal Revenue Code; or
67	67	3.3 (iii) the remaining 50 20 percent of the dividends if the dividends are received from a
68	68	3.4property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
69	69	3.5member of an affiliated group of corporations as defined by the Internal Revenue Code and
70	70	3.6either: (A) the dividend is eliminated in consolidation under Treasury Regulation
71	71	3.71.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
72	72	3.8under an election under section 243(b) of the Internal Revenue Code.
73	73	3.9 (b) Forty Seventy percent of dividends received by a corporation during the taxable year
74	74	3.10from another corporation in which the recipient owns less than 20 percent of the stock, by
75	75	3.11vote or value, not including stock described in section 1504(a)(4) of the Internal Revenue
76	76	3.12Code when the corporate stock with respect to which dividends are paid does not constitute
77	77	3.13the stock in trade of the taxpayer, or does not constitute property held by the taxpayer
78	78	3.14primarily for sale to customers in the ordinary course of the taxpayer's trade or business, or
79	79	3.15when the trade or business of the taxpayer does not consist principally of the holding of the
80	80	3.16stocks and the collection of income and gain therefrom.
81	81	3.17 (c) The dividend deduction provided in this subdivision shall be allowed only with
82	82	3.18respect to dividends that are included in a corporation's Minnesota taxable net income for
83	83	3.19the taxable year.
84	84	3.20 The dividend deduction provided in this subdivision does not apply to a dividend from
85	85	3.21a corporation which, for the taxable year of the corporation in which the distribution is made
86	86	3.22or for the next preceding taxable year of the corporation, is a corporation exempt from tax
87	87	3.23under section 501 of the Internal Revenue Code.
88	88	3.24 The dividend deduction provided in this subdivision does not apply to a dividend received
89	89	3.25from a real estate investment trust as defined in section 856 of the Internal Revenue Code.
90	90	3.26 The dividend deduction provided in this subdivision applies to the amount of regulated
91	91	3.27investment company dividends only to the extent determined under section 854(b) of the
92	92	3.28Internal Revenue Code.
93	93	3.29 The dividend deduction provided in this subdivision shall not be allowed with respect
94	94	3.30to any dividend for which a deduction is not allowed under the provisions of section 246(c)
95	95	3.31or 246A of the Internal Revenue Code.
96	96	3.32 (d) If dividends received by a corporation that does not have nexus with Minnesota under
97	97	3.33the provisions of Public Law 86-272 are included as income on the return of an affiliated
98	98	3Sec. 4.
99	99	REVISOR EAP/MI 25-0295302/07/25 4.1corporation permitted or required to file a combined report under section 290.17, subdivision
100	100	4.24, or 290.34, subdivision 2, then for purposes of this subdivision the determination as to
101	101	4.3whether the trade or business of the corporation consists principally of the holding of stocks
102	102	4.4and the collection of income and gains therefrom shall be made with reference to the trade
103	103	4.5or business of the affiliated corporation having a nexus with Minnesota.
104	104	4.6 (e) The deduction provided by this subdivision does not apply if the dividends are paid
105	105	4.7by a FSC as defined in section 922 of the Internal Revenue Code.
106	106	4.8 (f) If one or more of the members of the unitary group whose income is included on the
107	107	4.9combined report received a dividend, the deduction under this subdivision for each member
108	108	4.10of the unitary business required to file a return under this chapter is the product of: (1) 100
109	109	4.11percent of the dividends received by members of the group; (2) the percentage allowed
110	110	4.12pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business income
111	111	4.13apportionable to this state for the taxable year under section 290.191 or 290.20.
112	112	4.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
113	113	4.1531, 2024.
114	114	4.16 Sec. 5. REPEALER.
115	115	4.17 Minnesota Statutes 2024, section 290.21, subdivision 10, is repealed.
116	116	4.18 EFFECTIVE DATE.This section is effective for taxable years beginning after December
117	117	4.1931, 2024.
118	118	4Sec. 5.
119	119	REVISOR EAP/MI 25-0295302/07/25 290.21 DEDUCTIONS ALLOWED TO CORPORATIONS.
120	120	Subd. 10.Global intangible low-taxed income.Any amounts included in taxable income
121	121	pursuant to section 951A of the Internal Revenue Code, are dividend income.
122	122	1R
123	123	APPENDIX
124	124	Repealed Minnesota Statutes: 25-02953