HF1480

HF1480 (Legislative Session 94 (2025-2026))

Corporate franchise and unitary taxation; unitary group expanded to foreign corporations.

AI Generated Summary

This bill proposes changes to Minnesota’s corporate franchise and unitary taxation laws, specifically expanding the unitary business group to include foreign corporations. Key aspects include:

Expansion of Unitary Group: Foreign corporations and other foreign entities that have a unitary business relationship with a domestic company would be subject to Minnesota’s corporate franchise tax.
Amendments to Net Income Definition: The bill revises the definition of "net income" for corporations, trusts, estates, partnerships, and passthrough entities, aligning elements with the Internal Revenue Code and establishing specific rules for foreign entities.
Tax Reporting for Foreign Corporations: If determining a foreign corporation’s federal taxable income is deemed impractical, the Commissioner of Revenue may require financial reporting based on generally accepted accounting principles (GAAP) or financial disclosures from the U.S. Securities and Exchange Commission (SEC). The commissioner may also mandate translations and currency conversions.
Repeal of Certain Statutes: The bill repeals provisions in Minnesota Statutes 2024, section 290.21, subdivisions 9 and 10, which likely pertain to exemptions or tax treatment exclusions that conflict with the new approach to unitary taxation.

The bill has been referred to the Committee on Taxes for further review and potential amendments before consideration by the full legislature.

Bill text versions

Introduction PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
February 23, 2025	House	Floor	Action	Introduction and first reading, referred to	Taxes

Citations

[
  {
    "analysis": {
      "added": [
        "Clarifies the application of the definition to different types of entities including trusts, estates, corporations, and regulated investment companies."
      ],
      "removed": [],
      "summary": "The bill amends the definition of 'net income' for various entities under section 290.01 subdivision 19.",
      "modified": [
        "Updates references and aligns the net income definition with changes in the Internal Revenue Code."
      ]
    },
    "citation": "290.01 subdivision 19"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill touches on modifications provided in section 290.0131.",
      "modified": [
        "Referenced multiple additions relevant to determining net income in different scenarios."
      ]
    },
    "citation": "290.0131"
  },
  {
    "analysis": {
      "added": [
        "New subdivisions are being added to 290.0132 per the legislative changes."
      ],
      "removed": [],
      "summary": "Section 290.0132 is cited for various modifications involved in defining net income.",
      "modified": [
        "Several subdivisions are referenced for subtractions applicable to different scenarios."
      ]
    },
    "citation": "290.0132"
  },
  {
    "analysis": {
      "added": [
        "Subdivisions are added, but specific changes aren't detailed in this text."
      ],
      "removed": [],
      "summary": "New provisions are being added to section 290.0134 according to the bill.",
      "modified": []
    },
    "citation": "290.0134"
  },
  {
    "analysis": {
      "added": [
        "Changes to the net income determination for foreign corporations or foreign entities that are unitary under the section."
      ],
      "removed": [],
      "summary": "The amendment affects section 290.17 subdivision 4 in terms of unitary taxation for foreign corporations.",
      "modified": [
        "The process involves alignment with federal taxable income and possible alternative income statements."
      ]
    },
    "citation": "290.17 subdivision 4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section 290.191 is referenced in terms of income allocation and assignment.",
      "modified": [
        "This impacts how income is allocated and assigned for residents and nonresidents."
      ]
    },
    "citation": "290.191"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The section is referenced regarding income allocation and assignment for tax purposes.",
      "modified": [
        "Provides guidance for how income is applied to residents and nonresidents under the state's tax laws."
      ]
    },
    "citation": "290.20"
  }
]