MN HF3908

Creates a tax credit under Minnesota Statutes chapter 290 for small businesses that hire qualified employees from low-income communities of color.

Qualified employees must be Minnesota residents at hire, employed for at least six continuous months, and earn wages attributable to Minnesota; excludes relatives of the employer and employees with ownership stakes exceeding 50 percent.

Qualified employers must be small businesses with no more than 60 full-time equivalent employees (or 50 if another business owns at least 20 percent of the business) and must have Minnesota headquarters.

Tax credit equals a specified percentage of wages paid to qualified employees per taxable year, with a maximum dollar amount per employee; credit is limited to the employer's tax liability for that year.

Credits for partnerships, S corporations, limited liability companies, and multiple-owner businesses pass through to partners, members, shareholders, or owners pro rata based on their ownership share as of the last day of the taxable year; effective for taxable years beginning after December 31, 2016.