Bill > HF3127

This bill modifies the expiration of the pass-through entity tax in Minnesota, extending it to taxable years beginning after December 31, 2027. The bill maintains the existing framework for pass-through entity taxation, which allows certain business entities like partnerships and S corporations to elect to pay taxes at the entity level. Under this provision, qualifying entities can choose to pay taxes on behalf of their owners, which can be beneficial for owners facing federal tax limitations. The bill preserves key provisions such as calculating tax liability at the highest individual tax rate, disallowing certain deductions, and ensuring that credits and deductions claimed at the entity level are consistent with individual owner tax returns. The legislation also continues to allow a credit for pass-through entity taxes paid to other states. Importantly, the bill maintains the commissioner's authority to audit and assess credits even after the subdivision's expiration, and it will take effect the day after final enactment. This extension provides continued tax planning flexibility for qualifying business entities and their owners in Minnesota.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF3127&ssn=0&y=2025