Office of the Revisor of Statutes
HF 947
Introduction - 94th Legislature (2025 - 2026)
Posted on 02/17/2025 02:50 p.m.
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Introduction
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Posted on 02/14/2025 |
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A bill for an act
relating to taxation; individual income tax and corporate franchise tax; establishing
a subtraction for global intangible low-taxed income; increasing the corporate net
operating loss deduction; increasing the dividend received deduction; amending
Minnesota Statutes 2024, sections 290.0132, by adding a subdivision; 290.0134,
by adding a subdivision; 290.095, subdivision 2; 290.21, subdivision 4; repealing
Minnesota Statutes 2024, section 290.21, subdivision 10.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision
to read:
new text begin Subd. 36. new text end
new text begin Global intangible low-taxed income. new text end
new text begin
The amount of global intangible
low-taxed income included in gross income under section 951A of the Internal Revenue
Code is a subtraction.
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
Sec. 2.
Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision
to read:
new text begin Subd. 21. new text end
new text begin Global intangible low-taxed income. new text end
new text begin
The amount of global intangible
low-taxed income included in gross income under section 951A of the Internal Revenue
Code is a subtraction.
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
Sec. 3.
Minnesota Statutes 2024, section 290.095, subdivision 2, is amended to read:
Subd. 2.
Defined and limited.
(a) The term "net operating loss" as used in this section
shall mean a net operating loss as defined in section 172(c) of the Internal Revenue Code,
with the modifications specified in subdivision 4. The deductions provided in section 290.21
cannot be used in the determination of a net operating loss.
(b) The term "net operating loss deduction" as used in this section means the aggregate
of the net operating loss carryovers to the taxable year, computed in accordance with
subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating to
the carryback of net operating losses, do not apply.
(c) The amount of net operating loss deduction under this section must not exceed deleted text begin 70deleted text end new text begin
80new text end percent of taxable net income in a single taxable year.
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
Sec. 4.
Minnesota Statutes 2024, section 290.21, subdivision 4, is amended to read:
Subd. 4.
Dividends received from another corporation.
(a)(1) deleted text begin Fiftydeleted text end new text begin Eightynew text end percent of
dividends received by a corporation during the taxable year from another corporation, in
which the recipient owns 20 percent or more of the stock, by vote and value, not including
stock described in section 1504(a)(4) of the Internal Revenue Code when the corporate
stock with respect to which dividends are paid does not constitute the stock in trade of the
taxpayer or would not be included in the inventory of the taxpayer, or does not constitute
property held by the taxpayer primarily for sale to customers in the ordinary course of the
taxpayer's trade or business, or when the trade or business of the taxpayer does not consist
principally of the holding of the stocks and the collection of the income and gains therefrom;
and
(2)(i) the remaining deleted text begin 50deleted text end new text begin 20new text end percent of dividends if the dividends received are the stock
in an affiliated company transferred in an overall plan of reorganization and the dividend
is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
amended through December 31, 1989;
(ii) the remaining deleted text begin 50deleted text end new text begin 20new text end percent of dividends if the dividends are received from a
corporation which is subject to tax under section 290.36 and which is a member of an
affiliated group of corporations as defined by the Internal Revenue Code and the dividend
is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
amended through December 31, 1989, or is deducted under an election under section 243(b)
of the Internal Revenue Code; or
(iii) the remaining deleted text begin 50deleted text end new text begin 20new text end percent of the dividends if the dividends are received from a
property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
member of an affiliated group of corporations as defined by the Internal Revenue Code and
either: (A) the dividend is eliminated in consolidation under Treasury Regulation
1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
under an election under section 243(b) of the Internal Revenue Code.
(b) deleted text begin Fortydeleted text end new text begin Seventynew text end percent of dividends received by a corporation during the taxable year
from another corporation in which the recipient owns less than 20 percent of the stock, by
vote or value, not including stock described in section 1504(a)(4) of the Internal Revenue
Code when the corporate stock with respect to which dividends are paid does not constitute
the stock in trade of the taxpayer, or does not constitute property held by the taxpayer
primarily for sale to customers in the ordinary course of the taxpayer's trade or business, or
when the trade or business of the taxpayer does not consist principally of the holding of the
stocks and the collection of income and gain therefrom.
(c) The dividend deduction provided in this subdivision shall be allowed only with
respect to dividends that are included in a corporation's Minnesota taxable net income for
the taxable year.
The dividend deduction provided in this subdivision does not apply to a dividend from
a corporation which, for the taxable year of the corporation in which the distribution is made
or for the next preceding taxable year of the corporation, is a corporation exempt from tax
under section 501 of the Internal Revenue Code.
The dividend deduction provided in this subdivision does not apply to a dividend received
from a real estate investment trust as defined in section 856 of the Internal Revenue Code.
The dividend deduction provided in this subdivision applies to the amount of regulated
investment company dividends only to the extent determined under section 854(b) of the
Internal Revenue Code.
The dividend deduction provided in this subdivision shall not be allowed with respect
to any dividend for which a deduction is not allowed under the provisions of section 246(c)
or 246A of the Internal Revenue Code.
(d) If dividends received by a corporation that does not have nexus with Minnesota under
the provisions of Public Law 86-272 are included as income on the return of an affiliated
corporation permitted or required to file a combined report under section 290.17, subdivision
4, or 290.34, subdivision 2, then for purposes of this subdivision the determination as to
whether the trade or business of the corporation consists principally of the holding of stocks
and the collection of income and gains therefrom shall be made with reference to the trade
or business of the affiliated corporation having a nexus with Minnesota.
(e) The deduction provided by this subdivision does not apply if the dividends are paid
by a FSC as defined in section 922 of the Internal Revenue Code.
(f) If one or more of the members of the unitary group whose income is included on the
combined report received a dividend, the deduction under this subdivision for each member
of the unitary business required to file a return under this chapter is the product of: (1) 100
percent of the dividends received by members of the group; (2) the percentage allowed
pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business income
apportionable to this state for the taxable year under section 290.191 or 290.20.
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
Sec. 5. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2024, section 290.21, subdivision 10,
new text end
new text begin
is repealed.
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
APPENDIX
Repealed Minnesota Statutes: 25-02953
290.21 DEDUCTIONS ALLOWED TO CORPORATIONS.
Subd. 10.
Global intangible low-taxed income.
Any amounts included in taxable income pursuant to section 951A of the Internal Revenue Code, are dividend income.