This bill proposes changes to corporate taxation in Minnesota by introducing an additional tax on corporations with high pay ratios between their principal executive officers and median workers. Specifically, it amends Minnesota Statutes 2024, section 290.06, to impose incremental tax rates based on the pay ratio, starting with an additional 0.2 percent for ratios of 50:1 and increasing up to 1.5 percent for ratios of 500:1 or more. The bill also establishes a new subdivision in section 16B.981, disqualifying corporations subject to this additional tax from receiving state grants and subsidies, effective January 1, 2026.

The bill outlines the specific pay ratio thresholds that trigger the additional tax rates and defines "pay ratio" in accordance with federal regulations. The changes aim to incentivize corporations to maintain more equitable pay structures while also ensuring that those with excessive pay disparities are not eligible for state financial support. The effective date for the tax changes is set for taxable years beginning after December 31, 2025.

Statutes affected:
Introduction: 16B.981, 290.06