S.F. No. 4034 Summary

• Allows partnerships, limited liability companies, and S-corporations (without qualified subsidiaries) to elect to file as C-option corporations for Minnesota tax purposes.

• The election is binding for four taxable years following the year of election and requires approval from persons holding more than 50 percent ownership interest in the entity.

• Tax liability for C-option corporations is calculated by multiplying Minnesota taxable income by the highest individual income tax rate under Minnesota Statutes section 290.06, subdivision 2c.

• Partners, members, or shareholders receiving income from an entity that elects C-option corporation status may subtract that income amount for purposes of calculating federal taxable income under Minnesota Statutes section 290.0132.

• Provisions are effective for taxable years beginning after December 31, 2017.