This bill amends various sections of the Minnesota Statutes related to corporate franchise taxation, specifically introducing a reduced tax rate for certain eligible corporations. A new subdivision is added to section 290.06, defining "eligible corporation" as one with a pay ratio not greater than 15 to 1. The bill establishes a tax rate of five percent for these eligible corporations, which is a reduction from the standard rate. Additionally, it provides definitions for various compensation types, including contractor, executive, hourly employee, and salaried employee compensation, which are used to determine the pay ratio.

The bill also makes amendments to sections 290.068 and 290.0921, clarifying terms related to tax liability and carryover credits. Specifically, it updates the definition of "liability for tax" to include the new subdivision 1b in section 290.06. Furthermore, it modifies the language regarding the carryover credit for alternative minimum tax, ensuring that the definitions align with the new provisions. All changes are set to take effect for taxable years beginning after December 31, 2025.

Statutes affected:
Introduction: 290.06, 290.068, 290.0921