Purpose of the Bill

The purpose of this bill is to establish a corporate tax credit system to incentivize companies to set up their headquarters in Minnesota. This initiative aims to promote economic growth and create job opportunities within the state by encouraging corporations to relocate or establish their principal operations there.

Main Provisions

• Corporate Headquarters Credit: The bill creates a tax credit for corporations that establish or relocate their headquarters to Minnesota.
• Eligibility Requirements: To qualify, a corporation must:
  • Have global revenues of at least $250 million from the previous taxable year.
  • Employ at least 250 eligible employees at its Minnesota headquarters.
  • Invest a minimum of $10 million in eligible expenses related to setting up the headquarters.
  • Maintain or create new jobs at the headquarters compared to the previous year.
• Eligible Expenses: Include costs related to relocation, renovation, employee training, and certain infrastructure developments.

Significant Changes to Existing Law

This bill introduces a new corporate tax credit within Minnesota statutes, which did not previously exist. It mandates the Minnesota Department of Revenue to certify corporations as eligible for the tax credit and report annually on the effectiveness of the credit to the state legislature.

Credit Details

• Employee Wage Credit: A corporation may receive a credit of 10% of eligible employee wages, up to $20,000 per employee, per taxable year.
• Maximum Credit: The credit is capped at 60% of the eligible expenses in the first qualifying year.
• Credit Duration: Corporations can claim the credit annually for up to 10 years until the total credit claimed equals the maximum credit amount.

Administrative Process

• Corporations must apply for certification from the commissioner of revenue and submit annual reports to verify continued eligibility.
• The commissioner has 30 days to review applications and decide on certification status.

Reporting to Legislature

Beginning in 2028, the commissioner must submit an annual report to legislative bodies on the number, amount, and impact of the credits issued.

Relevant Terms

• Corporate Franchise
• Minnesota Corporate Headquarters
• Tax Credit
• Eligible Employee
• Relocation Expenses
• Employee Training Expenses
• Certification Process