HF 4604

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/07/2024 02:43pm

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;
disqualifying certain companies from receiving state subsidies and grants; amending
Minnesota Statutes 2022, section 290.06, subdivision 1; 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 A corporation that is
subject to the additional tax under section 290.06, subdivision 1, paragraphs (b) to (j), 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, subdivision 1, is amended to read:

Subdivision 1.

Computation, corporations.

new text begin (a) new text end The franchise tax imposed upon
corporations shall be computed by applying to their taxable income the rate of 9.8 percent.

new text begin (b) The tax rate under paragraph (a) is increased as provided in paragraphs (c) to (i) if
the corporation's pay ratio meets the requirements of paragraphs (c) to (j).
new text end

new text begin (c) An additional tax equal to 0.2 percent is imposed for the taxable year if the
corporation's pay ratio is at least 50:1 but less than 100:1.
new text end

new text begin (d) An additional tax equal to 0.4 percent is imposed for the taxable year if the
corporation's pay ratio is at least 100:1 but less than 200:1.
new text end

new text begin (e) An additional tax equal to 0.6 percent is imposed for the taxable year if the
corporation's pay ratio is at least 200:1 but less than 300:1.
new text end

new text begin (f) An additional tax equal to 0.8 percent is imposed for the taxable year if the
corporation's pay ratio is at least 300:1 but less than 400:1.
new text end

new text begin (h) An additional tax equal to one percent is imposed for the taxable year if the
corporation's pay ratio is at least 400:1 but less than 500:1.
new text end

new text begin (i) An additional tax equal to 1.5 percent is imposed for the taxable year if the
corporation's pay ratio is at least 500:1.
new text end

new text begin (j) For purposes of this subdivision, "pay ratio" means the pay ratio disclosed under
Code of Federal Regulations, title 17, section 229.402(u)(1)(iii), during the taxable year,
except that a unitary business must determine its pay ratio by calculating the cumulative
pay ratio of all members of the unitary group.
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