This bill introduces an additional tax on corporations with high pay ratios between their principal executive officers and median workers, as defined by specific thresholds. The tax rates increase progressively based on the pay ratio, starting from an additional 0.2 percent for ratios of 50:1 to 100:1, and reaching up to 1.5 percent for ratios of 500:1 or more. The bill also establishes that corporations subject to this additional tax will be disqualified from receiving state grants and subsidies, with the effective date for this provision set for January 1, 2026.

The bill amends Minnesota Statutes 2024, specifically sections 16B.981 and 290.06, to incorporate these changes. It defines the "pay ratio" based on federal regulations and requires unitary businesses to calculate their pay ratio cumulatively across all members of the group. The effective date for the tax changes is set for taxable years beginning after December 31, 2025.

Statutes affected:
Introduction: 16B.981, 290.06