1.1 A bill for an act
1.2 relating to taxation; individual income tax and corporate franchise tax; establishing
1.3 a subtraction for global intangible low-taxed income; increasing the corporate net
1.4 operating loss deduction; increasing the dividend received deduction; amending
1.5 Minnesota Statutes 2024, sections 290.0132, by adding a subdivision; 290.0134,
1.6 by adding a subdivision; 290.095, subdivision 2; 290.21, subdivision 4; repealing
1.7 Minnesota Statutes 2024, section 290.21, subdivision 10.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision
1.10to read:
1.11 Subd. 36.Global intangible low-taxed income.The amount of global intangible
1.12low-taxed income included in gross income under section 951A of the Internal Revenue
1.13Code is a subtraction.
1.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1.1531, 2024.
1.16 Sec. 2. Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision
1.17to read:
1.18 Subd. 21.Global intangible low-taxed income.The amount of global intangible
1.19low-taxed income included in gross income under section 951A of the Internal Revenue
1.20Code is a subtraction.
1.21 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1.2231, 2024.
1Sec. 2.
REVISOR EAP/MI 25-0295302/07/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 947
NINETY-FOURTH SESSION
Authored by Davids02/17/2025
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:
2.2 Subd. 2.Defined and limited.(a) The term "net operating loss" as used in this section
2.3shall mean a net operating loss as defined in section 172(c) of the Internal Revenue Code,
2.4with the modifications specified in subdivision 4. The deductions provided in section 290.21
2.5cannot be used in the determination of a net operating loss.
2.6 (b) The term "net operating loss deduction" as used in this section means the aggregate
2.7of the net operating loss carryovers to the taxable year, computed in accordance with
2.8subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating to
2.9the carryback of net operating losses, do not apply.
2.10 (c) The amount of net operating loss deduction under this section must not exceed 70
2.1180 percent of taxable net income in a single taxable year.
2.12 EFFECTIVE DATE.This section is effective for taxable years beginning after December
2.1331, 2024.
2.14 Sec. 4. Minnesota Statutes 2024, section 290.21, subdivision 4, is amended to read:
2.15 Subd. 4.Dividends received from another corporation.(a)(1) Fifty Eighty percent of
2.16dividends received by a corporation during the taxable year from another corporation, in
2.17which the recipient owns 20 percent or more of the stock, by vote and value, not including
2.18stock described in section 1504(a)(4) of the Internal Revenue Code when the corporate
2.19stock with respect to which dividends are paid does not constitute the stock in trade of the
2.20taxpayer or would not be included in the inventory of the taxpayer, or does not constitute
2.21property held by the taxpayer primarily for sale to customers in the ordinary course of the
2.22taxpayer's trade or business, or when the trade or business of the taxpayer does not consist
2.23principally of the holding of the stocks and the collection of the income and gains therefrom;
2.24and
2.25 (2)(i) the remaining 50 20 percent of dividends if the dividends received are the stock
2.26in an affiliated company transferred in an overall plan of reorganization and the dividend
2.27is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
2.28amended through December 31, 1989;
2.29 (ii) the remaining 50 20 percent of dividends if the dividends are received from a
2.30corporation which is subject to tax under section 290.36 and which is a member of an
2.31affiliated group of corporations as defined by the Internal Revenue Code and the dividend
2.32is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
2Sec. 4.
REVISOR EAP/MI 25-0295302/07/25 3.1amended through December 31, 1989, or is deducted under an election under section 243(b)
3.2of the Internal Revenue Code; or
3.3 (iii) the remaining 50 20 percent of the dividends if the dividends are received from a
3.4property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
3.5member of an affiliated group of corporations as defined by the Internal Revenue Code and
3.6either: (A) the dividend is eliminated in consolidation under Treasury Regulation
3.71.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
3.8under an election under section 243(b) of the Internal Revenue Code.
3.9 (b) Forty Seventy percent of dividends received by a corporation during the taxable year
3.10from another corporation in which the recipient owns less than 20 percent of the stock, by
3.11vote or value, not including stock described in section 1504(a)(4) of the Internal Revenue
3.12Code when the corporate stock with respect to which dividends are paid does not constitute
3.13the stock in trade of the taxpayer, or does not constitute property held by the taxpayer
3.14primarily for sale to customers in the ordinary course of the taxpayer's trade or business, or
3.15when the trade or business of the taxpayer does not consist principally of the holding of the
3.16stocks and the collection of income and gain therefrom.
3.17 (c) The dividend deduction provided in this subdivision shall be allowed only with
3.18respect to dividends that are included in a corporation's Minnesota taxable net income for
3.19the taxable year.
3.20 The dividend deduction provided in this subdivision does not apply to a dividend from
3.21a corporation which, for the taxable year of the corporation in which the distribution is made
3.22or for the next preceding taxable year of the corporation, is a corporation exempt from tax
3.23under section 501 of the Internal Revenue Code.
3.24 The dividend deduction provided in this subdivision does not apply to a dividend received
3.25from a real estate investment trust as defined in section 856 of the Internal Revenue Code.
3.26 The dividend deduction provided in this subdivision applies to the amount of regulated
3.27investment company dividends only to the extent determined under section 854(b) of the
3.28Internal Revenue Code.
3.29 The dividend deduction provided in this subdivision shall not be allowed with respect
3.30to any dividend for which a deduction is not allowed under the provisions of section 246(c)
3.31or 246A of the Internal Revenue Code.
3.32 (d) If dividends received by a corporation that does not have nexus with Minnesota under
3.33the provisions of Public Law 86-272 are included as income on the return of an affiliated
3Sec. 4.
REVISOR EAP/MI 25-0295302/07/25 4.1corporation permitted or required to file a combined report under section 290.17, subdivision
4.24, or 290.34, subdivision 2, then for purposes of this subdivision the determination as to
4.3whether the trade or business of the corporation consists principally of the holding of stocks
4.4and the collection of income and gains therefrom shall be made with reference to the trade
4.5or business of the affiliated corporation having a nexus with Minnesota.
4.6 (e) The deduction provided by this subdivision does not apply if the dividends are paid
4.7by a FSC as defined in section 922 of the Internal Revenue Code.
4.8 (f) If one or more of the members of the unitary group whose income is included on the
4.9combined report received a dividend, the deduction under this subdivision for each member
4.10of the unitary business required to file a return under this chapter is the product of: (1) 100
4.11percent of the dividends received by members of the group; (2) the percentage allowed
4.12pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business income
4.13apportionable to this state for the taxable year under section 290.191 or 290.20.
4.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
4.1531, 2024.
4.16 Sec. 5. REPEALER.
4.17 Minnesota Statutes 2024, section 290.21, subdivision 10, is repealed.
4.18 EFFECTIVE DATE.This section is effective for taxable years beginning after December
4.1931, 2024.
4Sec. 5.
REVISOR EAP/MI 25-0295302/07/25 290.21 DEDUCTIONS ALLOWED TO CORPORATIONS.
Subd. 10.Global intangible low-taxed income.Any amounts included in taxable income
pursuant to section 951A of the Internal Revenue Code, are dividend income.
1R
APPENDIX
Repealed Minnesota Statutes: 25-02953