The bill amends Minnesota Statutes 2024, section 290.033, to expand the net investment income tax to include all trade or business income that is exempt from self-employment taxes. Specifically, it modifies the definition of "net investment income" to include income from a trade or business that is not excluded under the Internal Revenue Code, while also clarifying that certain exemptions apply. The tax will be imposed on individuals, estates, and trusts with net investment income exceeding $1,000,000 at a rate of one percent.

Additionally, the bill establishes that the changes will take effect for taxable years beginning after December 31, 2025. This means that individuals and entities will need to account for the expanded tax implications starting in the 2026 tax year. The adjustments aim to ensure that a broader range of income is subject to the net investment income tax, thereby potentially increasing state revenue from this tax category.

Statutes affected:
Introduction: 290.033