SF 2445

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; increasing the weight of the 
  1.3             sales factor in the apportionment formula used in the 
  1.4             corporate franchise tax; amending Minnesota Statutes 
  1.5             2002, section 290.191, subdivisions 2, 3; repealing 
  1.6             Minnesota Statutes 2002, section 290.191, subdivision 
  1.7             4. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2002, section 290.191, 
  1.10  subdivision 2, is amended to read: 
  1.11     Subd. 2.  [APPORTIONMENT FORMULA OF GENERAL APPLICATION.] 
  1.12  (a) Except for those trades or businesses required to use a 
  1.13  different formula under subdivision 3 or section 290.36, and for 
  1.14  those trades or businesses that receive permission to use some 
  1.15  other method under section 290.20 or under subdivision 4, a 
  1.16  trade or business required to apportion its net income must 
  1.17  apportion its income to this state on the basis of the 
  1.18  percentage obtained by taking the sum of:  
  1.19     (1) 75 percent the applicable percentage under paragraph (b)
  1.20  of the percentage which the sales made within this state in 
  1.21  connection with the trade or business during the tax period are 
  1.22  of the total sales wherever made in connection with the trade or 
  1.23  business during the tax period; 
  1.24     (2) 12.5 percent the applicable percentage under paragraph 
  1.25  (b) of the percentage which the total tangible property used by 
  1.26  the taxpayer in this state in connection with the trade or 
  2.1   business during the tax period is of the total tangible 
  2.2   property, wherever located, used by the taxpayer in connection 
  2.3   with the trade or business during the tax period; and 
  2.4      (3) 12.5 percent the applicable percentage under paragraph 
  2.5   (b) of the percentage which the taxpayer's total payrolls paid 
  2.6   or incurred in this state or paid in respect to labor performed 
  2.7   in this state in connection with the trade or business during 
  2.8   the tax period are of the taxpayer's total payrolls paid or 
  2.9   incurred in connection with the trade or business during the tax 
  2.10  period.  
  2.11     (b) For the sales factor under paragraph (a), clause (1), 
  2.12  the applicable percentage for taxable years beginning after 
  2.13  December 31, 2005, and before January 1, 2007, is 78 percent; 
  2.14  the applicable percentage for taxable years beginning after 
  2.15  December 31, 2006, and before January 1, 2008, is 82 percent; 
  2.16  the applicable percentage for taxable years beginning after 
  2.17  December 31, 2007, and before January 1, 2009, is 86 percent; 
  2.18  the applicable percentage for taxable years beginning after 
  2.19  December 31, 2008, and before January 1, 2010, is 90 percent; 
  2.20  the applicable percentage for taxable years beginning after 
  2.21  December 31, 2009, and before January 1, 2011, is 95 percent; 
  2.22  and the applicable percentage for taxable years beginning after 
  2.23  December 31, 2010, is 100 percent. 
  2.24     For each of the property factor under paragraph (a), clause 
  2.25  (2), and the payroll factor under paragraph (a), clause (3), the 
  2.26  applicable percentage for taxable years beginning after December 
  2.27  31, 2005, and before January 1, 2007, is 11 percent; the 
  2.28  applicable percentage for taxable years beginning after December 
  2.29  31, 2006, and before January 1, 2008, is 9 percent; the 
  2.30  applicable percentage for taxable years beginning after December 
  2.31  31, 2007, and before January 1, 2009, is 7 percent; the 
  2.32  applicable percentage for taxable years beginning after December 
  2.33  31, 2008, and before January 1, 2010, is 5 percent; the 
  2.34  applicable percentage for taxable years beginning after December 
  2.35  31, 2009, and before January 1, 2011, is 2.5 percent; and for 
  2.36  taxable years beginning after December 31, 2010, the property 
  3.1   and payroll factors are zero. 
  3.2      Sec. 2.  Minnesota Statutes 2002, section 290.191, 
  3.3   subdivision 3, is amended to read: 
  3.4      Subd. 3.  [APPORTIONMENT FORMULA FOR FINANCIAL 
  3.5   INSTITUTIONS.] (a) Except for an investment company required to 
  3.6   apportion its income under section 290.36, a financial 
  3.7   institution that is required to apportion its net income must 
  3.8   apportion its net income to this state on the basis of the 
  3.9   percentage obtained by taking the sum of:  
  3.10     (1) 75 percent the applicable percentage under paragraph 
  3.11  (b) of the percentage which the receipts from within this state 
  3.12  in connection with the trade or business during the tax period 
  3.13  are of the total receipts in connection with the trade or 
  3.14  business during the tax period, from wherever derived; 
  3.15     (2) 12.5 percent the applicable percentage under paragraph 
  3.16  (b) of the percentage which the sum of the total tangible 
  3.17  property used by the taxpayer in this state and the intangible 
  3.18  property owned by the taxpayer and attributed to this state in 
  3.19  connection with the trade or business during the tax period is 
  3.20  of the sum of the total tangible property, wherever located, 
  3.21  used by the taxpayer and the intangible property owned by the 
  3.22  taxpayer and attributed to all states in connection with the 
  3.23  trade or business during the tax period; and 
  3.24     (3) 12.5 percent the applicable percentage under paragraph 
  3.25  (b) of the percentage which the taxpayer's total payrolls paid 
  3.26  or incurred in this state or paid in respect to labor performed 
  3.27  in this state in connection with the trade or business during 
  3.28  the tax period are of the taxpayer's total payrolls paid or 
  3.29  incurred in connection with the trade or business during the tax 
  3.30  period. 
  3.31     (b) For the sales factor under paragraph (a), clause (1), 
  3.32  the applicable percentage for taxable years beginning after 
  3.33  December 31, 2005, and before January 1, 2007, is 78 percent; 
  3.34  the applicable percentage for taxable years beginning after 
  3.35  December 31, 2006, and before January 1, 2008, is 82 percent; 
  3.36  the applicable percentage for taxable years beginning after 
  4.1   December 31, 2007, and before January 1, 2009, is 86 percent; 
  4.2   the applicable percentage for taxable years beginning after 
  4.3   December 31, 2008, and before January 1, 2010, is 90 percent; 
  4.4   the applicable percentage for taxable years beginning after 
  4.5   December 31, 2009, and before January 1, 2011, is 95 percent; 
  4.6   and the applicable percentage for taxable years beginning after 
  4.7   December 31, 2010, is 100 percent. 
  4.8      For each of the property factor under paragraph (a), clause 
  4.9   (2), and the payroll factor under paragraph (a), clause (3), the 
  4.10  applicable percentage for taxable years beginning after December 
  4.11  31, 2005, and before January 1, 2007, is 11 percent; the 
  4.12  applicable percentage for taxable years beginning after December 
  4.13  31, 2006, and before January 1, 2008, is 9 percent; the 
  4.14  applicable percentage for taxable years beginning after December 
  4.15  31, 2007, and before January 1, 2009, is 7 percent; the 
  4.16  applicable percentage for taxable years beginning after December 
  4.17  31, 2008, and before January 1, 2010, is 5 percent; the 
  4.18  applicable percentage for taxable years beginning after December 
  4.19  31, 2009, and before January 1, 2011, is 2.5 percent; and for 
  4.20  taxable years beginning after December 31, 2010, the property 
  4.21  and payroll factors are zero. 
  4.22     Sec. 3.  [REPEALER.] 
  4.23     Minnesota Statutes 2002, section 290.191, subdivision 4, is 
  4.24  repealed. 
  4.25     [EFFECTIVE DATE.] This section is effective for taxable 
  4.26  years beginning after December 31, 2010.