The bill amends Minnesota Statutes 2024, section 290.06, subdivision 1, to introduce a contingent rate reduction for the corporation franchise tax. It establishes a base tax rate of 9.8 percent on corporate taxable income, which can be adjusted downward by the commissioner under specific conditions. These conditions include the occurrence of a budget surplus that meets or exceeds the net adjusted revenue reduction and a tax incidence report indicating that over 70 percent of the corporate franchise tax is allocated to consumers. The rate can be reduced by 0.312 percent for each qualifying event, but it cannot fall below 8.24 percent.

Additionally, the bill defines key terms such as "budget surplus" and "net adjusted revenue reduction" to clarify the criteria for rate adjustments. The commissioner is required to publish notice of any rate reduction by December 31, and the adjusted rate will take effect for taxable years beginning after December 31 of the year the notice is published. The provisions of this bill will be effective for taxable years starting after December 31, 2025.

Statutes affected:
Introduction: 290.06