S.F. No. 3516 Summary

• Establishes a tax credit for small businesses with 60 or fewer full-time equivalent employees that hire low-income individuals from communities of color residing in designated low-income areas.

• Qualified employees must be Minnesota residents on hire date, employed for at least six continuous months, with wages attributable to Minnesota, and cannot be related to the employer or hold ownership stakes exceeding specified thresholds.

• Credit amount is calculated as a percentage of wages paid to qualified employees during the taxable year, subject to a maximum per-employee cap (specific percentages and dollar limits left blank in bill text).

• Credits for flow-through entities (partnerships, LLCs, S corporations) pass through pro rata to partners, members, or shareholders based on their ownership share or as specially allocated in organizational documents.

• Effective for taxable years beginning after December 31, 2016.