HF 3444

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/12/2024 12:00pm

A bill for an act
relating to taxation; corporate franchise; imposing an additional tax on certain
corporations with high principal executive officer to median worker pay ratios;
disqualify certain companies from receiving state subsidies and grants; amending
Minnesota Statutes 2022, section 290.06, by adding a subdivision; Minnesota
Statutes 2023 Supplement, section 16B.981, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2023 Supplement, section 16B.981, is amended by adding
a subdivision to read:

new text begin Subd. 7. new text end

new text begin Disqualification from eligibility to receive grants. new text end

new text begin An entity that is subject
to the additional tax under section 290.06, subdivision 1b, paragraphs (c) to (g), is ineligible
to receive a grant. The agency may require any additional information to make this
determination.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025.
new text end

Sec. 2.

Minnesota Statutes 2022, section 290.06, is amended by adding a subdivision to
read:

new text begin Subd. 1b. new text end

new text begin Additional tax imposed; publicly held companies with qualifying pay
ratios. new text end

new text begin (a) The provisions of this subdivision apply to each entity that is:
new text end

new text begin (1) subject to tax under this section; and
new text end

new text begin (2) a member of a unitary business, as defined under section 290.17, subdivision 4, if
any member of the unitary business is required to file a pay ratio disclosure under Code of
Federal Regulations, title 17, section 229.402(u), during the taxable year and if that pay
ratio meets the requirements of paragraphs (b) to (g).
new text end

new text begin (b) A surtax equal to one-half of one percent of the entity's total wages paid is imposed
for the taxable year if the entity's pay ratio is at least 50:1 but less than 100:1.
new text end

new text begin (c) A surtax equal to one percent of the entity's total wages paid is imposed for the taxable
year if the entity's pay ratio is at least 100:1 but less than 200:1.
new text end

new text begin (d) A surtax equal to two percent of the entity's total wages paid is imposed for the
taxable year if the entity's pay ratio is at least 200:1 but less than 300:1.
new text end

new text begin (e) A surtax equal to three percent of the entity's total wages paid is imposed for the
taxable year if the entity's pay ratio is at least 300:1 but less than 400:1.
new text end

new text begin (f) A surtax equal to four percent of the entity's total wages paid is imposed for the
taxable year if the entity's pay ratio is at least 400:1 but less than 500:1.
new text end

new text begin (g) A surtax equal to five percent of the entity's total wages paid is imposed for the
taxable year if the entity's pay ratio is at least 500:1.
new text end

new text begin (h) The tax imposed under this subdivision is in addition to any tax imposed under
subdivision 1, and section 290.0921.
new text end

new text begin (i) For purposes of this subdivision, the following terms have the meanings given:
new text end

new text begin (1) "pay ratio" means the pay ratio disclosed by the unitary business under Code of
Federal Regulations, title 17, section 229.402(u)(1)(iii), during the taxable year; and
new text end

new text begin (2) "total wages paid" means the amount of wages, tips, or other compensation, reported
by the entity on federal form W-3 for the taxable year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2024.
new text end