Bill > HF1533

This bill modifies Minnesota's corporate franchise tax laws to more comprehensively address how foreign corporations are treated for tax purposes. The bill expands the definition of a "domestic corporation" to include corporations incorporated in a "tax haven" (a foreign jurisdiction with favorable tax avoidance conditions), corporations with significant business activities in tax havens, and corporations with at least 20% of their property, payroll, and sales factors within the United States. The bill introduces a detailed definition of a "tax haven" based on criteria such as lack of tax information transparency, exclusionary tax regimes, and favorable conditions for tax avoidance. Additionally, the bill allows corporations to subtract certain types of foreign income from their state tax calculations, specifically Global Intangible Low-Taxed Income (GILTI) and Subpart F income, which are complex international tax categories related to foreign subsidiary earnings. The bill also modifies rules about how unitary businesses (interconnected business operations) report and apportion income, particularly concerning foreign entities. These changes are set to take effect for taxable years beginning after December 31, 2025, and aim to create more comprehensive and precise tax reporting requirements for corporations with international business activities.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF1533&ssn=0&y=2025