This bill proposes the introduction of a new tax on excess credit card interest income for financial institutions in Minnesota, codified as section 290.034 in the Minnesota Statutes. The bill defines key terms such as "annual percentage rate," "credit card," "finance charge," "financial institution," and "excess credit card interest income." Specifically, "excess credit card interest income" is defined as the total interest income from credit card finance charges that exceeds a ten percent annual percentage rate. For institutions that are subject to apportionment, this amount will be adjusted based on their Minnesota apportionment percentage.

The bill imposes a tax rate of 100 percent on this excess credit card interest income, in addition to any existing taxes under section 290.06, subdivision 1. The new tax will take effect for taxable years beginning after December 31, 2026. This legislation aims to regulate and tax the income generated from high-interest credit card charges, potentially impacting the financial practices of institutions that issue credit cards.