1.1 A bill for an act
1.2 relating to taxation; corporate franchise; imposing an additional tax on certain
1.3 corporations with high principal executive officer to median worker pay ratios;
1.4 disqualifying certain companies from receiving state subsidies and grants; amending
1.5 Minnesota Statutes 2024, sections 16B.981, by adding a subdivision; 290.06,
1.6 subdivision 1.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2024, section 16B.981, is amended by adding a subdivision
1.9to read:
1.10 Subd. 7.Disqualification from eligibility to receive grants.A corporation that is
1.11subject to the additional tax under section 290.06, subdivision 1, paragraphs (b) to (j), is
1.12ineligible to receive a grant. The agency may require any additional information to make
1.13this determination.
1.14 EFFECTIVE DATE.This section is effective January 1, 2026.
1.15 Sec. 2. Minnesota Statutes 2024, section 290.06, subdivision 1, is amended to read:
1.16 Subdivision 1.Computation, corporations.(a) The franchise tax imposed upon
1.17corporations shall be computed by applying to their taxable income the rate of 9.8 percent.
1.18 (b) The tax rate under paragraph (a) is increased as provided in paragraphs (c) to (i) if
1.19the corporation's pay ratio meets the requirements of paragraphs (c) to (j).
1.20 (c) An additional tax equal to 0.2 percent is imposed for the taxable year if the
1.21corporation's pay ratio is at least 50:1 but less than 100:1.
1Sec. 2.
25-01500 as introduced01/21/25 REVISOR EAP/BM
SENATE
STATE OF MINNESOTA
S.F. No. 1936NINETY-FOURTH SESSION
(SENATE AUTHORS: DIBBLE, Boldon, Marty and McEwen)
OFFICIAL STATUSD-PGDATE
Introduction and first reading02/27/2025
Referred to Taxes 2.1 (d) An additional tax equal to 0.4 percent is imposed for the taxable year if the
2.2corporation's pay ratio is at least 100:1 but less than 200:1.
2.3 (e) An additional tax equal to 0.6 percent is imposed for the taxable year if the
2.4corporation's pay ratio is at least 200:1 but less than 300:1.
2.5 (f) An additional tax equal to 0.8 percent is imposed for the taxable year if the
2.6corporation's pay ratio is at least 300:1 but less than 400:1.
2.7 (h) An additional tax equal to one percent is imposed for the taxable year if the
2.8corporation's pay ratio is at least 400:1 but less than 500:1.
2.9 (i) An additional tax equal to 1.5 percent is imposed for the taxable year if the
2.10corporation's pay ratio is at least 500:1.
2.11 (j) For purposes of this subdivision, "pay ratio" means the pay ratio disclosed under
2.12Code of Federal Regulations, title 17, section 229.402(u)(1)(iii), during the taxable year,
2.13except that a unitary business must determine its pay ratio by calculating the cumulative
2.14pay ratio of all members of the unitary group.
2.15 EFFECTIVE DATE.This section is effective for taxable years beginning after December
2.1631, 2025.
2Sec. 2.
25-01500 as introduced01/21/25 REVISOR EAP/BM