The bill amends Minnesota Statutes 2024, section 290.06, subdivision 1, to introduce a contingent rate reduction for the corporation franchise tax. The current tax rate of 9.8 percent will be adjusted based on specific conditions outlined in the new provisions. The commissioner is required to reduce the tax rate by 0.312 percent each time there is a budget surplus that meets or exceeds the net adjusted revenue reduction, or when over 70 percent of the corporate franchise tax is allocated to consumers according to the latest tax incidence report. However, the adjusted rate cannot fall below 8.24 percent.

Additionally, the bill defines key terms such as "budget surplus" and "net adjusted revenue reduction" to clarify the conditions under which the rate adjustments will occur. The commissioner must publish notice of any rate reduction by December 31, and the new adjusted rate will take effect for taxable years beginning after December 31, 2025. This legislative change aims to provide a more responsive tax structure for corporations based on the state's financial health and tax distribution impacts.

Statutes affected:
Introduction: 290.06