Purpose of the Bill

The purpose of this bill is to provide a tax benefit to certain financial institutions, specifically S corporations, by allowing a subtraction from income for specific commercial loans. This aims to incentivize lending activities to businesses and agricultural entities within Minnesota.

Main Provisions

• Income Subtraction for Loans: The bill introduces a provision where income derived from certain commercial loans can be subtracted from the taxable income of S corporations.
• Loan Criteria:
  • Eligible loans must be valued at $5,000,000 or less.
  • Loans must be made to individuals or entities that reside or are located in Minnesota.
  • The primary use of the loan must be for business or agricultural purposes.

Significant Changes to Existing Law

• Amendment to Tax Code: The bill adds new subdivisions to the Minnesota Statutes, specifically sections 290.0132 and 290.0134, to integrate these provisions, thereby altering how taxable income is calculated for financial institutions categorized as S corporations.

Relevant Terms

• Subtraction from income
• Commercial loans
• Financial institutions
• S corporation
• Business or agricultural purpose
• Minnesota tax law