HF 2558

as introduced - 91st Legislature (2019 - 2020) Posted on 03/18/2019 02:41pm

A bill for an act
relating to taxation; apportionment of income; requiring equal three-factor
apportionment; amending Minnesota Statutes 2018, section 290.191, subdivisions
2, 3.

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

Section 1.

Minnesota Statutes 2018, section 290.191, subdivision 2, is amended to read:

Subd. 2.

Apportionment formula of general application.

deleted text begin (a) deleted text end Except for those trades
or businesses 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 deleted text begin or under subdivision 4, deleted 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 new text begin the following percentages and dividing by three new text end :

(1) deleted text begin the percent for the sales factor under paragraph (b) of deleted text end 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) deleted text begin the percent for the property factor under paragraph (b) of deleted text end 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) deleted text begin the percent for the payroll factor under paragraph (b) of deleted text end 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.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end

Sec. 2.

Minnesota Statutes 2018, section 290.191, subdivision 3, is amended to read:

Subd. 3.

Apportionment formula for financial institutions.

Except for an investment
company required to apportion its income under section 290.36, a financial institution that
is required to apportion its net income must apportion its net income to this state on the
basis of the percentage obtained by taking the sum of new text begin the following percentages and dividing
by three new text end :

(1) deleted text begin the percent for the sales factor under subdivision 2, paragraph (b), of deleted text end the percentage
which the receipts from within this state in connection with the trade or business during the
tax period are of the total receipts in connection with the trade or business during the tax
period, from wherever derived;

(2) deleted text begin the percent for the property factor under subdivision 2, paragraph (b), of deleted text end the
percentage which the sum of the total tangible property used by the taxpayer in this state
and the intangible property owned by the taxpayer and attributed to this state in connection
with the trade or business during the tax period is of the sum of the total tangible property,
wherever located, used by the taxpayer and the intangible property owned by the taxpayer
and attributed to all states in connection with the trade or business during the tax period;
and

(3) deleted text begin the percent for the payroll factor under subdivision 2, paragraph (b), of deleted text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end