SF 2835

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/21/2025 10:45 a.m.

A bill for an act
relating to taxation; corporate franchise; establishing a Minnesota corporate
headquarters credit; requiring a report; proposing coding for new law in Minnesota
Statutes, chapters 116J; 290.

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

Section 1.

new text begin [116J.8739] MINNESOTA CORPORATE HEADQUARTERS CREDIT.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Corporate headquarters" means any of the following, located in Minnesota:
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new text begin (1) the principal offices of the principal executive officers of a qualified corporation;
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new text begin (2) the principal offices of a division or subdivision of a qualified corporation; or
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new text begin (3) a research and development facility of a qualified corporation.
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new text begin (c) "Corporation" has the meaning given in section 290.01, subdivision 4.
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new text begin (d) "Eligible employee" means an employee whose position and duties involve the
performance of corporate headquarters functions.
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new text begin (e) "Eligible expenses" means relocation or renovation expenses or employee training
expenses.
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new text begin (f) "Employee" means an employee whose wages are subject to withholding under
section 290.92.
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new text begin (g) "Employee training expenses" means:
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new text begin (1) training and materials costs;
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new text begin (2) trainees' wages while in a classroom setting; or
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new text begin (3) the costs of a trainer and wages of a trainee while in an on-the-job or job shadowing
setting.
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new text begin (h) "Employee wage credit amount" means ten percent of eligible employee wages paid
in a taxable year, up to $20,000 per eligible employee.
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new text begin (i) "Maximum credit amount" means the amount of eligible expenses incurred in the
taxable year in which a qualified corporation is certified under subdivision 2, multiplied by
60 percent.
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new text begin (j) "Provisional certification" means certification of a corporation that has not yet
relocated to Minnesota at the time of the application submitted under subdivision 2.
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new text begin (k) "Qualified corporation" means a corporation that has been certified by the
commissioner under subdivision 2.
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new text begin (l) "Qualified research" has the meaning given in section 290.068, subdivision 2,
paragraph (b).
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new text begin (m) "Relocation or renovation expenses" means:
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new text begin (1) moving costs and related expenses;
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new text begin (2) purchases of new or replacement equipment;
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new text begin (3) leasehold and building improvements;
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new text begin (4) renewable energy improvements;
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new text begin (5) property assembly and development expenses, including:
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new text begin (i) purchase, lease, or construction of buildings;
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new text begin (ii) purchase or lease of land;
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new text begin (iii) infrastructure improvements; and
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new text begin (iv) site development costs; and
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new text begin (6) any other costs related to the qualified corporation's relocation or renovation.
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new text begin (n) "Research and development facility" means a facility where qualified research is
conducted.
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new text begin Subd. 2. new text end

new text begin Certification of qualified corporations. new text end

new text begin (a) A corporation may apply to the
commissioner for certification or provisional certification as a qualified corporation for a
taxable year. The commissioner must prescribe the form and manner for the application.
Applications for certification and provisional certification must be made available on the
department's website by November 1 of the preceding year.
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new text begin (b) Within 30 days of receiving an application for certification or provisional certification
under this subdivision, the commissioner must either certify or provisionally certify the
corporation as satisfying the conditions required of a qualified corporation, request additional
information from the corporation, or reject the application for certification or provisional
certification. If the commissioner requests additional information from the corporation, the
commissioner must either certify or provisionally certify the corporation or reject the
application within 30 days of receiving the additional information. If the commissioner
neither certifies or provisionally certifies the corporation nor rejects the application within
30 days of receiving the original application or within 30 days of receiving the additional
information requested, whichever is later, then the application is deemed rejected. A
corporation that applies for certification or provisional certification and is rejected may
reapply.
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new text begin (c) To receive certification or provisional certification as a qualified corporation, a
corporation must satisfy all of the following conditions:
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new text begin (1) the corporation had worldwide revenues of at least $250,000,000 in the immediately
preceding taxable year;
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new text begin (2) the corporation's corporate headquarters are located in Minnesota in the taxable year
or will be located in Minnesota in the next taxable year;
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new text begin (3) the corporation employs at least 250 eligible employees at its corporate headquarters
in the taxable year or, if the corporation is relocating to Minnesota, will employ at least 250
eligible employees at its corporate headquarters in Minnesota in the next taxable year;
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new text begin (4) the corporation has made a minimum investment of $10,000,000 in eligible expenses
related to the corporate headquarters project; and
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new text begin (5) the corporation has created new jobs or maintained the current level of positions at
the corporate headquarters in the taxable year as compared to the immediately preceding
taxable year.
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new text begin (d) A corporation that has received provisional certification under this subdivision must
apply for and receive certification as a qualified corporation for the year the credit is first
claimed.
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new text begin Subd. 3. new text end

new text begin Credit allowed. new text end

new text begin (a) A qualified corporation located in Minnesota is eligible
for a credit as provided in this subdivision.
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new text begin (b) In the first year the credit is claimed, the credit is equal to the lesser of:
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new text begin (1) the employee wage credit amount; or
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new text begin (2) the maximum credit amount.
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new text begin (c) If the maximum credit amount exceeds the employee credit amount in the first year
the credit is claimed, a qualified corporation may claim a credit equal to the employee wage
credit amount for each taxable year, for up to ten years, until the total of employee wage
credit amounts claimed equals the maximum credit amount.
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new text begin Subd. 4. new text end

new text begin Annual reporting to commissioner; continuing certification. new text end

new text begin (a) By March
1 of each year immediately following the year in which a qualified corporation was first
certified under subdivision 2, the qualified corporation must submit a report to the
commissioner affirming that it meets the requirements of subdivision 2 for each year a credit
is claimed under subdivision 3. If the commissioner determines that a corporation meets
the requirements of subdivision 2, the commissioner must issue a credit certificate stating
the amount of credit that the qualified corporation may claim for the taxable year.
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new text begin (b) If a corporation does not meet the requirements of subdivision 2 for a taxable year,
the commissioner must notify the corporation within 30 days of receipt of the report, and
the corporation is not allowed a credit for that taxable year.
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new text begin Subd. 5. new text end

new text begin Report to legislature. new text end

new text begin Beginning in 2028, the commissioner must annually
report by March 15 to the chairs and ranking minority members of the legislative committees
with jurisdiction over taxes and economic development in compliance with sections 3.195
and 3.197, on the tax credits issued under this section. The report must include:
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new text begin (1) the number and amount of the credits issued;
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new text begin (2) the total amount of eligible expenses resulting in certification of tax credits; and
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new text begin (3) any other information relevant to evaluating the effect of these credits.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2025.
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Sec. 2.

new text begin [290.0696] MINNESOTA CORPORATE HEADQUARTERS CREDIT.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the terms used in this section
have the meanings given in section 116J.8739.
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new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin A qualified corporation is allowed a credit against the tax
imposed under this chapter equal to the amount determined under section 116J.8739,
subdivision 3, and, if applicable, certified by the commissioner of employment and economic
development under section 116J.8739, subdivision 2 or 4.
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new text begin Subd. 3. new text end

new text begin Credit refundable; appropriation. new text end

new text begin If the amount of the credit under this
section for any taxable year exceeds the claimant's liability for tax under this chapter, the
commissioner must refund the excess to the claimant. An amount sufficient to pay the
refunds required by this section is appropriated to the commissioner from the general fund.
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new text begin Subd. 4. new text end

new text begin Audit powers. new text end

new text begin Notwithstanding the certification eligibility issued by the
commissioner of employment and economic development under section 116J.8739, the
commissioner may utilize any audit and examination powers under chapter 270C or 289A
to the extent necessary to verify that the taxpayer is eligible for the credit and to assess for
the amount of any improperly claimed credit.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2025.
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