SF 4960

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/08/2026 09:23 a.m.

A bill for an act
relating to taxation; apportionment of trade or business income; requiring foreign
sales factors in the apportionment percentage of certain taxpayers; amending
Minnesota Statutes 2024, sections 290.191, subdivision 2, by adding a subdivision;
290.21, subdivision 10.

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

Section 1.

Minnesota Statutes 2024, section 290.191, subdivision 2, is amended to read:

Subd. 2.

Apportionment formula of general application.

(a) Except for those trades
or businesses deleted text begin required to use a different formula under subdivision 3 or section 290.36, and
for those trades or businesses that receive permission to use some other method under section
290.20 or under subdivision 4 deleted text end new text begin listed in paragraph (c) new text end , a trade or business required to apportion
its net income must apportion its income to this state on the basis of the percentage obtained
by taking the sum of:

(1) the percent for the sales factor under paragraph (b) of the percentage which the sales
made within this state in connection with the trade or business during the tax period are of
the total sales wherever made in connection with the trade or business during the tax period;

(2) the percent for the property factor under paragraph (b) of the percentage which the
total tangible property used by the taxpayer in this state in connection with the trade or
business during the tax period is of the total tangible property, wherever located, used by
the taxpayer in connection with the trade or business during the tax period; and

(3) the percent for the payroll factor under paragraph (b) of the percentage which the
taxpayer's total payrolls paid or incurred in this state or paid in respect to labor performed
in this state in connection with the trade or business during the tax period are of the taxpayer's
total payrolls paid or incurred in connection with the trade or business during the tax period.

(b) For purposes of paragraph (a) and subdivision 3, the following percentages apply
for the taxable years specified:

Taxable years beginning during calendar year			Sales factor percent			Property factor percent		Payroll factor percent
2007			78			11		11
2008			81			9.5		9.5
2009			84			8		8
2010			87			6.5		6.5
2011			90			5		5
2012			93			3.5		3.5
2013			96			2		2
2014 and later calendar years			100			0		0

new text begin (c) Paragraphs (a) and (b) do not apply to a trade or business that:
new text end

new text begin (1) is required to use a different formula under subdivision 3 or section 290.36;
new text end

new text begin (2) received permission to use a different method under section 290.20; or
new text end

new text begin (3) includes foreign pro rata sales under subdivision 13, but only to the extent that the
inclusion is inconsistent with paragraphs (a) and (b).
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, 2025.
new text end

Sec. 2.

Minnesota Statutes 2024, section 290.191, is amended by adding a subdivision to
read:

new text begin Subd. 13. new text end

new text begin Factor relief for global intangible low-taxed income. new text end

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

new text begin (1) notwithstanding any provision to the contrary in this section and section 290.17,
subdivision 4, "foreign pro rata sales" means a qualified controlled foreign corporation's
total sales factor, regardless of where the sales are made, multiplied by its foreign sales
ratio;
new text end

new text begin (2) "foreign sales ratio" means the amount of global intangible low-taxed income included
in a qualified shareholder's net income divided by the net income of the qualified controlled
foreign corporation;
new text end

new text begin (3) "global intangible low-taxed income" has the meaning given in section 951A of the
Internal Revenue Code of 1986, as amended through May 1, 2023;
new text end

new text begin (4) "qualified controlled foreign corporation" means a controlled foreign corporation,
as provided in section 975(a) of the Internal Revenue Code, owned in whole or in part by
a qualified shareholder;
new text end

new text begin (5) "qualified manufacturer" means a qualified shareholder that is:
new text end

new text begin (i) primarily engaged in the business of manufacturing, which for purposes of this
paragraph means the taxpayer's activities are classified under sector 31, 32, or 33 of the
North American Industry Classification System; and
new text end

new text begin (ii) including global intangible low-taxed income in the taxpayer's net income; and
new text end

new text begin (6) "qualified shareholder" means the shareholder of a controlled foreign corporation
that must include any amount of global intangible low-taxed income in the shareholder's
gross income under section 951A of the Internal Revenue Code.
new text end

new text begin (b) A qualified manufacturer's foreign pro rata sales must be included in the
manufacturer's sales factor for purposes of determining the denominator of the qualified
manufacturer's apportionment percentage under this section.
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, 2025.
new text end

Sec. 3.

Minnesota Statutes 2024, section 290.21, subdivision 10, is amended to read:

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. new text begin This
subdivision does not apply to a qualified manufacturer as defined in section 290.191,
subdivision 13.
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, 2025.
new text end