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SF3449 (Legislative Session 94 (2025-2026))

Contingent increase in the corporate franchise tax rate authorization

AI Generated Summary

Purpose of the Bill

The bill aims to adjust the corporate franchise tax rate in Minnesota based on certain federal tax legislation changes. It plans to implement a contingent increase in the corporate tax rate depending on federal tax rate modifications.

Main Provisions

  • Tax Rate Adjustment: The bill proposes that for taxable years starting after December 31, 2024, the state’s corporate franchise tax will be calculated using the greater of two options: the existing rate of 9.8% or a newly calculated rate.
  • Federal Tax Legislation Impact: Should legislation be enacted that reduces the corporate franchise tax rate federally, the commissioner is tasked with calculating the percentage decrease in the federal rate.
  • Rate Calculation: Upon a decrease in the federal tax rate, the Minnesota corporate tax rate will be adjusted. The adjustment would involve increasing the state’s rate by the same percentage decrease observed in the federal legislation, rounded to the nearest twentieth of a percent.

Significant Changes to Existing Law

  • This bill will amend the Minnesota Statutes concerning corporate franchise tax computation, allowing for a dynamic adjustment in response to changes in federal corporate tax legislation.

Relevant Terms

corporate franchise tax, tax rate, Internal Revenue Code, federal legislation, tax computation, percentage decrease, taxable income

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
April 27, 2025SenateFloorActionIntroduction and first reading
April 27, 2025SenateFloorActionIntroduction and first reading
April 27, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "A provision for adjusting the tax rate contingent on federal law changes."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill provides for a contingent increase in the corporate franchise tax rate under section 290.06, subdivision 1.",
      "modified": [
        "Changes in the tax rate computation method for corporations."
      ]
    },
    "citation": "290.06",
    "subdivision": "subdivision 1"
  }
]

Sponsors