MN HF3285

Allows corporations a deduction equal to 80 percent of royalties, fees, or other like income received from foreign corporations that are part of the same unitary business, unless the income is from U.S. sources.

Deduction applies only to foreign royalties included in a corporation's Minnesota taxable net income and does not apply to royalties from tax-exempt corporations.

Adds the foreign royalties deduction to the list of modifications decreasing federal taxable income for corporate tax purposes under Minnesota Statutes section 290.01.

Excludes foreign royalties qualifying for the deduction from the sales factor in apportionment formulas and prohibits disallowance of deductions for expenses, interest, or taxes connected to such royalty income.

Effective for taxable years beginning after December 31, 2013.