This bill modifies the expiration date of the pass-through entity tax in Minnesota, specifically amending Minnesota Statutes 2024, sections 289A.08 and 290.06. The expiration of the pass-through entity tax, which was previously aligned with section 164(b)(6)(B) of the Internal Revenue Code, is now set for taxable years beginning after December 31, 2027. Additionally, the bill clarifies that the pass-through entity tax applies to qualifying entities, which include partnerships, limited liability companies taxed as partnerships, and S corporations, and outlines the conditions under which these entities can elect to file and pay the tax.

Furthermore, the bill establishes a credit against the tax imposed on a qualifying entity for pass-through entity tax paid to another state, which can only be claimed by qualifying owners. The language also specifies that the provisions regarding the credit and the pass-through entity tax will take effect the day following final enactment. Overall, the bill aims to provide clarity and extend the timeline for the pass-through entity tax, ensuring that qualifying entities and owners understand their tax obligations and available credits.

Statutes affected:
Introduction: 289A.08, 290.06